Comments for 0 at http://boombustblog.com , comment 1 to 6 out of 6 comments http://boombustblog.com Thu, 08 Jan 2009 08:27:13 +0100 FeedCreator 1.7.2 http://boombustblog.com/index.php/20080207152/More-Centex-funding-issues-coming-down-the-pike.html#comment-296 According to ML implode, CTX has sold their mortgage company as of last night [url]http://ml-implode.com/ailing/lender_CTXMortgageCompany(Retail)_2008-02-06.html[/url] - Reggie Middleton Fri, 08 Feb 2008 04:45:47 +0100 http://boombustblog.com/index.php/20080207152/More-Centex-funding-issues-coming-down-the-pike.html#comment-292 Builder's must be in a real cash crunch right now. I think book loss is irrelevant to them at this point in time. It appears they are willing to sell land and home inventory at monumental discounts so they can get cash in the door to pay the bills. Survival mode. - MSM Thu, 07 Feb 2008 13:59:26 +0100 http://boombustblog.com/index.php/20080207152/More-Centex-funding-issues-coming-down-the-pike.html#comment-289 See [url]http://online.wsj.com/article/SB120226192363046249.html[/url] Lennar Corp. has found a way to salvage something from the huge losses it incurred by overpaying for land during the housing boom. Late last year, the Miami-based home builder sold a big swath of land -- about 11,000 home sites -- for $525 million to a partnership that it formed with Morgan Stanley. At first glance, the deal seemed terrible for Lennar, which had the land valued on its books at about $1.3 billion. But the deal's structure allowed Lennar to recognize a big loss that it applied against taxes paid the previous two years. The result: Lennar is expecting a tax refund of more than $800 million, according to the company's annual results filed in late January. As an added bonus, because of the way Lennar and Morgan Stanley structured their partnership, Lennar still effectively owns 20% of the land, according to the company. It also has a 50% voting interest in the partnership, meaning it will have a say in how the land is developed. - Reggie Middleton Thu, 07 Feb 2008 09:48:22 +0100 http://boombustblog.com/index.php/20080207152/More-Centex-funding-issues-coming-down-the-pike.html#comment-288 Question for fredw...how exactly would the proposed stimulus plan allow builders to go back 5 years? From what I've seen the stimulus plan does nothing but give consumers one more temporary bang. How will it prevent continued defaults, a continued drop in home values, and a continued increase in the supply glut of houses available? No amount of stimulus can reverse the fact that no one is buying homes or will be soon, meaning homebuilders will continue to have lower and lower earnings. What am I missing? - Justin B Thu, 07 Feb 2008 09:36:06 +0100 http://boombustblog.com/index.php/20080207152/More-Centex-funding-issues-coming-down-the-pike.html#comment-287 The risk with that is that it can be disallowed, since there weren't any "no action" letters granted. The Senate may not pass it since the dems and repubs are bickering (the latest stimulus package was struck down) - and the most significant risk to this strategy, you have to sell at a loss. That marks your entire inventory to market, and reveals the insolvency of most homebuilders, which would cause the prudent lenders to start enforcing covenants and pulling financing. - Reggie Middleton Thu, 07 Feb 2008 08:44:50 +0100 http://boombustblog.com/index.php/20080207152/More-Centex-funding-issues-coming-down-the-pike.html#comment-284 It would appear homebuilders are in the tax loss business these days. Sell land or homes at a major loss and take the loss and apply against prior earnings.... For their sake , they better hope the Senate stimulus plan passes.... the homebuilders will be able to go back 5 years under that plan. - fredw Thu, 07 Feb 2008 07:38:21 +0100