Market News Feed: New Tax Breaks for Landlords
MSNBC: Stimulus Act Offers Hidden Perks for Landlords
The new federal Economic Stimulus Act offers a provision for landlords and commercial tenants that has not yet been widely publicized. Congress has increased the amount of construction costs that can be written off in the first year for improvements on commercial or residential rental properties. With the change, landlords and commercial tenants can now write off 50 percent of “qualified leasehold improvements” in the first year alone, if the improvements are completed by the end of this year; the rest can be written off in declining increments over 15 years. In previous years, only 2.5 percent of the costs of those improvements could be written off in the first year and the declining increments spanned over three decades. The new “bonus depreciation” schedule provides faster relief by reviving the more generous depreciation rules that were in place after the turmoil that followed the terrorist attacks on Sept. 11, 2001.
New York Times: JP Morgan Feeds the Bear
JP Morgan has quintupled its offer to buy troubled investment bank Bear Stearns. The sweetened offer of about $1 billion, is intended to win over stockholders who vowed to fight the original fire-sale deal, brokered last week by the Fed. Under the new terms, JP Morgan would pay $10 a share in stock for Bear, up from its initial $2 a share — a figure that represented an estimated one-fifteenth of Bear’s going market price.
Reuters: Newly Formed Penny Mac to Feast on Distressed Mortgages
Money management firm BlackRock Inc., and hedge fund Highfields Capital Management are backing a new firm that will buy up distressed mortgages, betting that investors are ready to snap up bargains in the beaten down sector. The new company, Private National Mortgage Acceptance Company, which will be known as PennyMac, plans to raise capital from private investors and will help borrowers restructure loans to avoid foreclosure. Penny Mac will star Stanford Kurland, who spent 27 years at mortgage giant Countrywide Financial Corp., as its chief executive officer and Morgan Stanley global residential mortgage veteran David Spector as its chief investment officer.
U.S. News and World Report: Fed Frees Mac to Supersize Mortgage-Backed Value Meals
A week after restrictions were eased on Fannie Mae and Freddie Mac to allow them to gobble up a minimum of $200 billion in mortgage-backed securities, the federal home loan banks have been freed to follow suit.
Forbes.com: Bank of England Snubs Mortgage-Backed Securities from Ailing Banks
The Bank of England has rejected pressure to follow the U.S. Federal Reserve in buying beleaguered mortgage-backed securities from banks that have been hard hit by the credit crisis.
Bloomberg: Existing U.S. Home Sales Rise In February
In defiance of many analysts’ predictions, existing home sales rose in February for the first time in more than six months. For some, his unexpected spike in activity eases concerns that credit restrictions and falling prices would diminish market demand.
Tags: broker, depreciation, Economic Stimulus Act, Fannie Mae, Forbes, Freddie Mac, home sales, jpmorgan, landlords, New York Times, Penny Mac, tax break, U.S. Federal Reserve