Monday Morning Cup of Coffee

A look at stories across HousingWire’s weekend desk…with more coverage to come on bigger issues: The piling on has already begun, and it’s probably just getting started. After the Securities and Exchange Commission (SEC) charged Goldman Sachs (GS) with fraud for subprime investments, the U.K. and Germany could be set to take legal steps of their own against the investment bank, according to Reuters. Prime Minister Gordon Brown, who is in the middle of an election campaign, told BBC News Sunday he wants Britain’s own investigation into the dealings. “”I want a special investigation done into the entanglement of Goldman Sachs and the companies there with other banks and what happened,” Brown said. “There are hundreds of millions of pounds have been traded here and it looks as if people were misled about what happened. I want the Financial Services Authority (FSA) to investigate it immediately.” In Germany, a spokesperson for the government told a German newspaper it too will seek information from the SEC before it takes its own legal steps. According to a weekly report from Barclays Capital, housing starts increased 1.6% to 626,000 in March and above early expectations of 610,000. Broken down, single-family starts did slip 0.9% but it follows a 5.7% gain in February and a 5.4% jump in January. Single-family permits did increase 5.6% in March and have grown 51% from March 2009, which could mean an upward trend in starts could be more than temporary. Completions are now below permits, which Barclays analysts suggest inventories could start to pick up unless they are met with “greater-than-expected demand.” According Barclays, builders will add cautiously to inventories as housing demand returns to higher levels. Barclays analysts also expect home sales to jump to 5.2m in March from 5.02m in February, which could reverse some of the declines over the previous two months. “We expect the improvement in sales to continue through the spring, peaking in June when the tax credit expires for closed contracts. Similar to the first version of the tax credit, some of the sales will be pulled forward from future months, leaving sales to revert in the second half of the year,” according to the report. A new real estate auction company is up and running. Saul Waranch and Michael Brown formed Dynamic Auction Solutions, an auction company with headquarters in Dallas and Houston. DAS will specialize in auctioning commercial properties throughout Texas. Waranch and Brown combine for more than 50 years experience in real estate and business. Waranch said that their network of associates will give clients a program to market their real or personal property. In bleaker news on the real estate auction front, Anthony Ghio, a California real estate executive, plead guilty in the US District Court in Sacremento, Calif. to allegedly conspiring to rig bids at public real estate foreclosure auctions held in San Joaquin County. Ghio is charged with bid rigging, a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1m fine. More movement continues at GMAC Financial Services. The company appointed Jack Stack as an independent director to the board of directors and will also serve on the Audit Committee and Risk and Compliance Committee. Stack served as chairman and CEO of Ceska Sporitelna, the largest bank in the Czech Republic, from 2000 to 2007. The Executives’ Club of Chicago announced Jaime Dimon, chairman and CEO of JPMorgan Chase (JPM) as the International Executive of the Year. Dimon played a key role in early efforts to quell the financial crisis, absorbing the troubled Bear Stearns and Washington Mutual. Heading up JPMorgan Chase, he leads the management of $2trn in assets. In all, eight banks were shut down by regulators over the weekend. TD Bank, based in Delaware assumed all deposits and agreed to purchase all assets of three failed banks in Florida. The Office of the Comptroller of the Currency closed Riverside National Bank of Florida with its $2.76bn in deposits and $3.42bn in total assets. The Florida Office of Financial Regulation closed AmericanFirst Bank with $81.9m in deposits and $90.5m in total assets. The Office of Thrift Supervision closed First Federal Bank of North Florida with $324.2m in deposits and $393.3m in assets. The Federal Deposit Insurance Corp. (FDIC) estimated a $491.8m cost to its Deposit Insurance Fund (DIF) for the closing of Riverside National Bank of Florida, $10.5m for AmericanFirst Bank, and $6m for First Federal Bank of North Florida. The Washington Department of Financial Institutions closed City Bank. Whidbey Island Bank will assume all $1.02bn in deposits and agreed to purchase $704.1m of the $1.13bn in failed bank’s assets. The FDIC and Whidbey Island Bank entered into a loss-share transaction on $455.6m of the assets. The FDIC estimated the cost to the DIF to be $323.4m. The California Department of Financial Institutions closed Tamalpais Bank. Union Bank, based in San Francisco, will assume all $487.6m in deposits and entered into a loss-share transaction with the FDIC on $522.3m of the failed bank’s $628.9m in total assets. The FDIC estimated the cost to the DIF to be $81.1m. The California Department of Financial Institutions also closed Innovative Bank, based in Oakland. Center Bank, in Los Angeles, will assume all $225.2m in total deposits and will purchase all $268.9m in total assets. The FDIC estimated the cost to the DIF to be $37.8m. The Massachusetts Division of Banks closed Butler Bank. People’s United Bank, based in Connecticut, will assume all $233.2m in deposits and will purchase all $268m in total assets. The FDIC estimated the cost of the DIF to be $22.9m. Write to Jon Prior. Disclosure: the author holds no relevant investment positions.

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