New Jersey Real Estate Report

(Karen Weaver from Deutsche Bank provided a similar forecast a little over two weeks ago.)

From CNBC:

US Home Prices Seen Falling 40% Overall: Analyst

U.S. housing prices will fall by a double-digit percentage from already beaten-down levels, resulting in an overall 40 percent plunge by the time foreclosures peak in the second half of 2010, Barclays Capital economist Michelle Meyer said.

Meyer issued her forecast two days after the Standard & Poor’s/Case-Shiller Home Price Indexes showed for April an 18.1 percent year-to-year decline, compared with 18.7 percent in March, in the rate of home price declines in 20 major U.S. metropolitan areas.

The indexes have tracked the prices of U.S. single-family homes since 1987.

“While the early signs of improvement are in place for housing, the market will likely remain out of balance for some time, given the flood of foreclosures,” Meyer wrote.

“Home prices are likely to continue to fall, albeit at a slowing pace, even after the economy technically emerges from the recession.” Home prices have fallen 32.6 percent from their peak three years ago, S&P/Case-Shiller said.

On that basis, they would need to fall another 11 percent for an overall 40 percent peak-to-trough decline. Further declines could imperil metropolitan areas that have yet to experience the worst of the nation’s housing slump.

According to S&P/Case-Shiller, New York was the only major market to have above-average, month-over-month housing price declines in both March and April and also have a below-average decline for the year ended in April.

From Bloomberg:

U.S. Foreclosures to Peak in Late 2010, Meyer Says

U.S. foreclosures will peak in the second half of 2010 and home prices will continue to decline through the end of that year, according to Barclays Capital.

“Home prices are likely to continue to fall, albeit at a slowing pace, even after the economy technically emerges from the recession,” Michelle Meyer, an economist at Barclays Capital in New York, said in a report today. Prices may drop another 7 percent, she said, based on the S&P/Case-Shiller home price index of 20 U.S. cities.

The three-year-old housing slump has slashed U.S. home prices 33 percent since their July 2006 peak, according to S&P/Case-Shiller. Prospective buyers are constrained by rising mortgage rates, the highest unemployment since 1983 and the longest recession of the post-World War II era.

U.S. homeowners trying to sell are competing with a glut of discounted foreclosures. It would take about 9.6 months to sell the nation’s 3.8 million unsold homes at the current sales pace, according to the Chicago-based National Association of Realtors.

From Bloomberg:

Manhattan Apartment Prices Drop as Lehman Effect Hits Home

Manhattan apartment prices dropped for the first time since 2002 in the second quarter as the collapse of Lehman Brothers Holdings Inc. and Bear Stearns Cos. caught up to property owners in the nation’s most expensive urban market.

The median price fell 18.5 percent from a year earlier to $835,700, New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today. The number of sales plunged by half, the most since Miller Samuel began keeping data in 1989.

“The standstill that existed after Lehman Brothers has been broken, and it was the sellers that cried ‘Uncle,’” Pamela Liebman, chief executive officer of New York-based property broker the Corcoran Group, said in an interview.

Values are falling broadly in Manhattan for the first time in the almost four-year U.S. housing recession, with declines now seen in co-operatives and condominiums of every size and price. Private-sector employment in the city dropped by 91,200 jobs, or 2.8 percent in the 12 months through May as Wall Street losses and asset writedowns topped $1.4 trillion.

The price of studio apartments declined 16 percent from a year ago to a median of $405,000, according to Miller Samuel. One-bedrooms dropped 17 percent to $650,000 and two-bedrooms fell 23 percent to $1.27 million. Three-bedroom units fell 37 percent to $2.35 million and four-bedrooms plummeted 47 percent to a median of $3.92 million.

The Miller Samuel-Prudential data reflect for the first time what sellers have known for at least six months: The way to lure a buyer in the current market is to cut your price.
…
About 32 percent of second-quarter listings included discounts from the original asking price, according to StreetEasy.com, a Web site that gathers Manhattan property listings from brokers. The deepest concessions were on Central Park South and in the Financial District, where list prices were pared by an average of 10 percent.

“The sellers who want to sell are reducing their prices,” Liebman said. “The ones that aren’t, are either sitting on them overpriced or waiting for another day.”

The New Jersey Home Price Index Tracker has been updated to include:
* April S&P Case Shiller (Aggregate, Tiered, Condo)

(click to enlarge)

(click to enlarge)

S&P Case Shiller NY Metro Commutable Area Home Price Index

Low Tier (Under $283721) - Peaked in October 2006 and is down 24.5% from peak

Mid Tier ($283721 - $416284) - Peaked in September 2006 and is down 22.42% from peak

High Tier (Over $416284) - Peaked in June 2006 and is down 17.39% from peak

Aggregate (Overall Market) - Peaked in June 2006 and is down 21.08% from peak

Condo-Only Index - Peaked in February 2006 and is down 12.85% from peak

NY Metro Area Aggregate Year over Year Changes

Apr 08 -7.98%
May 08 -7.74%
Jun 08 -7.04%
Jul 08 -7.04%
Aug 08 -6.61%
Sep 08 -7.13%
Oct 08 -7.71%
Nov 08 -8.72%
Dec 08 -9.17%
Jan 09 -9.74%
Feb 09-10.33%
Mar 09 -11.85%
Apr 09 -12.53%

The NY Metro Area saw price declines continue to accelerate to the fastest pace yet this cycle.

Bonus Graphs from Veto and Kettle:

(click to enlarge)

More can be found here: http://tinyurl.com/nsgq2f

Due out at 9am this morning, post will be updated as news/info becomes available.

From Bloomberg:

Home-Price Declines in 20 U.S. Cities Eased in April

Home prices in 20 major U.S. metropolitan areas fell in April at a slower pace than forecast, a sign the plunge in real-estate values is abating.

The S&P/Case-Shiller home-price index decreased 18.1 percent from a year earlier following an 18.7 percent drop in March. The measure declined 19 percent in January, the most since the data began in 2001.

Price declines are likely to keep moderating as demand steadies and distressed properties account for a smaller share of transactions. Still, the highest jobless rate in 25 years is contributing to record foreclosures, which are likely to keep depressing values for months to come even as home sales steady.

“It is looking a little bit better,” said Mark Vitner, a senior economist at Wachovia Corp. in Charlotte, North Carolina. “The largest declines are probably past. When prices stop falling the erosion in household wealth will come to an end.”

Economists forecast the index would drop 18.6 percent, according to the estimates of 33 economists surveyed by Bloomberg. Estimates ranged from drops of 17.7 percent to 19.4 percent.

From MarketWatch:

U.S. home prices down 18.1% in past year

U.S. home prices were down 18.1% in the year ended April, according to the national Case-Shiller home price index released Tuesday. On a month-to-month basis, prices in 20 selected cities fell 0.6% in April, with declines in 11 cities. Still, the overall pace of decline slowed in April, said David Blitzer, chairman of the index committee for Standard & Poor’s, which compiles the Case-Shiller index. “Every metro area, except for Charlotte, recorded an improvement in monthly returns over March,” Blitzer said. “While one month’s data cannot determine if a turnaround has begun, it seems that some stabilization may be appearing in some of the regions.”

From the WSJ:

Home Prices Drop at Slower Pace

U.S. home prices continued their multiyear tumble in April, according to the S&P Case-Shiller home-price indexes, although the indexes showed their third-straight month of slightly smaller declines.

Seventeen of 20 major metropolitan areas posted price declines of more than 10% from a year earlier, with the Sun Belt continuing to be hit hardest. Nationally, home prices are at levels similar to the middle of 2003.

From the AP:

Home prices post 18.1 percent annual drop in April

A key housing index shows a clear trend that home price declines are moderating.

The Standard & Poor’s/Case-Shiller index released Tuesday showed home prices in 20 major cities tumbled by 18.1 percent from April 2008. The 10-city index fell 18 percent from the year before.

April, however, marked the third straight month both indexes didn’t set record price declines. And yearly losses in 13 metros improved compared to March.

Still, the 20-city index is off almost 33 percent from its peak in the second quarter of 2006, and the 10-city has dropped by almost 34 percent, which means home values are now around 2003-levels.

From the Star Ledger:

Bad weather, bad economy bring down shore rentals

Is it the weather or the economy keeping Jersey Shore rentals vacant? Both have been dreary, but only one has a shot of turning around within 24 hours.

Homeowners hope the sun will finally show up for good and prompt the untanned masses to pick up their phones and look for last-minute deals — of which there are plenty.

“Some owners are saying, ‘I still have Fourth of July open,’ and that was never the case before,” said Maria Kirk, owner of shoresummerrentals.com which lists rentals. “Most of my owners are really happy, saying they’re really booked, but some have a couple weeks left, and they’re offering specials.”

With vacationers across America committing ever-later to travel arrangements, real estate agents and tourism officials say it’s still too early to tell whether the summer business season will be as washed out as the beach was in June. To try to fill in those few empty weeks, owners are willing to negotiate or are even starting out at lower rental rates.

Jimmy Brusca is offering a $100 discount off his weekly rate of $1,690 for a house in Lavallette to get that last week in August wrapped up.

“Usually we’re booked by March,” he said. “It’s already June.”

After a strong spring rental market, things have cooled off instead of heated up, said Barbara Shirvanian, the owner of Shore Homes in Monmouth Beach. She worries some properties have reached the point of no return.

“The leftovers won’t get rented,” she said. “It will be more difficult.”
…
The doleful housing market has pushed would-be sellers to put their homes up for rent, agents say.

Shirvanian, of Shore Homes, said a mansion for sale in Monmouth Beach had sat on the market for a year while the asking price dropped from $3.4 million to $2.9 million. A deal fell apart in April, so Shirvanian rented furniture and got professionals from Hoboken in for the summer.

She shaved $10,000 off the $60,000 price the place could have pulled in, hoping the renters will want to become owners. “That’s the idea,” she said.

Jim Flynn says the property he’s owned in Long Beach Island since 1998 is off 30 percent from most summers, but he is optimistic.

“When the weather gets sunnier, which it probably will be this weekend, people will say, ‘Gee, I really want to get to the beach,’ ” Flynn said.

From CNBC:

Five Reasons Housing Market Still Hasn’t Recovered Yet

What happened to the housing recovery?

Despite hopes that the market would begin showing signs of life this spring, the latest housing data suggests otherwise. Instead, the sector remains stubbornly moribund—trapped in a spiral of declining prices, increasing mortgage rates, unemployment and several unforeseen factors.

And with many experts believing that a real estate rebound is critical for the overall economy to recover, patience with housing is beginning to wear thin.

“We’re dealing with a problem that probably took us eight years to get into and expecting to get out of it in eight minutes, and it’s just not going to happen,” says Rick Sharga, analyst for RealtyTrac, which follows real estate trends. “The frustration might be more self-induced or self-inflicted than necessarily something the real world would create.”

Experts cite various reasons for the continuing problems with housing and say it’s unrealistic to expect a full recovery anytime soon.

Economists have all been pretty consistent in that they expect the housing market to bottom out at the end of this year or the beginning of next year,” Sharga adds. “It’s not going to be a rapid recovery.”

Experts break housing’s problems into five key areas.

1) Unemployment
…
2) Credit Availability
…
3) Price Pressures
…
4) Appraisals
…
5) Short Sales

I don’t care if you have plans, cancel them.

What: GTG/Meet-up/Whatever
When: Friday June 26th, 7:30ish (Tonight!)
Where: Fitzgerald’s 1928 http://www.fitzgeralds1928.com
13 Herman Street (off Bloomfield Ave)
Glen Ridge, NJ 07028
Google Maps Link

For drivers, this is right off exit 148 on the Parkway.
For those looking for mass transit, Fitzgeralds is 2 blocks away from the Glen Ridge Station on the Montclair Boonton Line.

—————————-

From the Press of Atlantic City:

Age-restricted communities popular, but still a bust in N.J.

Linda Telli needed some convincing when her husband, Ron, first suggested uprooting their lives in Bergen County to retire at the Four Seasons at Historic Smithville, an age-restricted community in Galloway Township.

While Ron liked the idea of being around people their age, Linda preferred being closer to New York City and their family. A lower cost of living in Atlantic County, however, became a major selling point. The couple bought property at the Four Seasons nearly four years ago.

“Our taxes are down about $1,500 to $2,000,” said Ron, 67.

As for Linda, “Living here is like camp for adults,” said the 60-year-old.

The popularity of adult retirement communities with the baby boomer set has grown through much of the decade, although modestly.
…
But housing market expert Jeffrey Otteau says boomers may not be so quick to flood those communities now - at least not in New Jersey.

For one, retirees here are choosing to move to lower-cost states, leaving a glut of age-restricted housing in the Garden State equivalent to a 16-year supply, said Otteau, president of Otteau Valuation Group, a real estate research and appraisal firm in East Brunswick.

Legislation now is moving through Trenton that would allow developers to petition municipalities to remove age restrictions on already approved projects, instead favoring more affordable housing.

Otteau added that because of the economic meltdown, seniors may decide to save money by simply “aging in place.” So instead of retiring to an age-restricted community, they’ll retire in their current home.

The building of age-restricted housing, however, still is appealing to many towns: Seniors contribute to the local tax base without increasing school enrollment.

From the AP/APP:

Northeast home sales, prices drop in May

Home sales in the Northeast declined more than 13 percent in May from year-ago levels, the worst showing in the country, as the specter of job losses loomed over the region.

The median sales price in the Northeast dropped almost 13 percent to $243,600, the National Association of Realtors said Tuesday.

Nationally, sales of existing homes tumbled 6.6 percent in May from the previous year, without adjusting for seasonal factors. The U.S. median sales price slid almost 17 percent to $173,000.

But James Diffley, group managing director of IHS Global Insight’s regional services group, focused more on the 7.6 month-to-month sales gain in the Northeast.

“The numbers are giving some comfort that we’re at the bottom,” Diffley said. “We have a more optimistic view than just a few months ago.”

In fact, all nine major Northeast cities tracked in the Associated Press-Re/Max Monthly Housing Report showed monthly gains in home sales. But compared to last May, sales were down across the board with with seven metro areas recording double-digit declines.
…
Jitters are still running high in the suburbs of New York, where sales fell by 30 percent, the worst decline in the region. Excluding New York City, the median price in the area fell almost 8 percent to $388,000 as job losses on Wall Street rippled through the local economy.

Mark your calendars, the long awaited GTG

When: Friday June 26th, 7:30ish

Location: Fitzgerald’s 1928 http://www.fitzgeralds1928.com
13 Herman Street (off Bloomfield Ave)
Glen Ridge, NJ 07028
Google Maps Link

For drivers, this is right off exit 148 on the Parkway.
For those looking for mass transit, Fitzgeralds is 2 blocks away from the Glen Ridge Station on the Montclair Boonton Line.

————————————

From the Record:

Report: Housing market suffered “massive shock”

The housing market has suffered a “massive shock” and faces a difficult recovery in the face of job losses, foreclosures and tight credit, according to a report released today by Harvard’s Joint Center for Housing Studies.

“It’s difficult to overstate the challenges in the housing market today,” said Nicholas Retsinas, director of the center, who presented the annual State of the Nation’s Housing report in New York City. “While there are some positive signs in the marketplace, the macroeconomic forces are still overwhelmingly negative.”

The good news is that the bursting of the housing bubble has made real estate more affordable. And, looking over the next 10 years, the huge “echo boomer” generation will soon start establishing their own households in large numbers, increasing demand for homes.

In North Jersey and the rest of the New York metropolitan area, homes have held their value better than in many regions of the nation as the housing bubble burst over the past several years. But price declines in the New York area have begun to accelerate, partly as a result of job cuts in financial services, a major economic engine for the region.

Eric Belsky, executive director of the housing center, said the home price declines are likely to continue in the area for some time — though they will not drop as much as in areas such as Florida, Nevada, Arizona and California, where developers overbuilt during the housing boom. Because this area is already largely developed, and state and local governments tightly regulate construction, builders did not overbuild in North Jersey.

(Yes, this is a repost. The media finally caught on to what DB was saying.)

From Time:

New York Home Prices Forecast to Drop 40%

What’s it feel like to survive one hurricane only to be told that another is on the way? New York City–area homeowners are in just that spot. After the region suffered the brunt of financial-industry cutbacks, the next big wave of woe could be a nor’easter of collapsing home prices. That’s the forecast of an extensive new report on residential real estate by Deutsche Bank, which calls for home prices in metropolitan New York City (which includes Westchester, northern New Jersey and other nearby areas) to fall 40.6% from the prices that prevailed in March.

Ironically, that dire forecast is wrapped in an improving forecast for nationwide home prices. Back in March, Deutsche Bank analysts had expected national home prices to decline 16.5%; now they foresee just a 14% decline. That mildly upbeat news does not hold true for the New York City area, however, which is expected to see a 40.6% drop. While that is also a slight improvement from the March forecast, it is dire
…
New York City’s big problem is not so much the financial-industry meltdown as it is an intense lack of affordability. As the report notes, metropolitan-area New York home prices peaked in the second quarter of 2007 at $552,000. By the first quarter of 2009, the median price had dropped 19%, to $446,000, but the market swoon was less than half the drop recorded in many other areas of the country. Today among the 10 biggest metropolitan areas, New York ranks as the least affordable.

From the Wall Street Journal:

Deutsche Bank Predicts 40% Drop in New York Home Prices

How much further could home prices tumble in the New York City metro area? Deutsche Bank predicts a decline of 40.6% from the first quarter of 2009.

That’s a slight improvement over the 47.4% decline that the bank’s analysts had forecast in March, and it reflects in part the fact that prices have dropped since then. Still, prices would have to drop another 32% from the first quarter of 2009 to return the New York market to levels of affordability not seen since 1998.
…
Median prices in the first quarter of 2009 dropped to $446,000 in New York, down 19% from the peak of $552,000 set in the second quarter of 2007. Deutsche Bank forecasts a total peak-to-trough decline of 52.1%.

From the NJ Department of Labor and Workforce Development:

New Jersey Employment Declined in May by 6,200 Jobs; Unemployment Rate at 8.8 Percent Remained Below the National Level

Job losses slowed in May as New Jersey employers reduced employment by 6,200 over the month, the smallest monthly drop since September 2008. The state’s unemployment rate moved to 8.8 percent while remaining lower than the national rate of 9.4 percent.

According to preliminary estimates from the New Jersey Department of Labor and Workforce Development’s monthly survey of employers, nonfarm wage and salary employment in the Garden State decreased by 6,200 jobs in May, to a total of 3,935,100. The loss was less than half the average monthly drop over the most recent six-month period (-16,000) and mirrors the employment pattern nationally. The previously released April estimate was revised lower by -4,300 for a revised March-to- April loss of 18,700.

“In May, New Jersey’s employment losses somewhat moderated from those of previous months,” said New Jersey Labor Commissioner David J. Socolow. “Through Governor Corzine’s leadership New Jersey is investing state and federal resources in needed infrastructure upgrades. These important projects will help generate jobs for our citizens and help the economy rebound from the global economic recession.”

Over the month, six of ten private industry sectors realized losses while four recorded gains. Public sector employment was higher by 400. The largest losses occurred in trade, transportation and utilities (-5,800), construction (-4,900) and information (-1,100). Increasing jobs in heavy and civil engineering construction, mainly due to infrastructure projects getting underway, were not enough to offset contractions in commercial and residential construction. In trade, transportation and utilities the majority of the loss was in retail trade.

Job gains were concentrated in leisure and hospitality (+5,200) and other services (+1,300). Hiring was evident in both the accommodation and food services, and arts, recreation, and amusements components of leisure and hospitality as businesses ramp up for the summer season. The gain in other services was due to higher payrolls at businesses such as automotive repair services, personal care services and business/professional organizations.

From Bloomberg:

U.S. Home Prices to Fall 14% More, Deutsche Says

U.S. home prices may fall another 14 percent, led by the New York and Orange County, California, metropolitan areas, before reaching a bottom as an increase in unemployment offsets lower prices, Deutsche Bank AG said.

“Affordability is no longer the driving issue in the housing market, and we believe prices still have a ways to fall in many areas before home prices reach their trough,” Deutsche Bank analysts led by Karen Weaver, wrote in a report yesterday. “The bottom is getting closer, but we are not there yet.”

Home prices are forecast to fall 41.7 percent from their peak, Weaver said. That’s higher than a forecast she released in March and reflects “the actual declines to date and the expected future impact on home prices from rising foreclosure inventory and unemployment.”

In March, Deutsche Bank had forecast a 16.5 percent decline in “current-to-trough” prices. While today’s projection is less than that, many metropolitan areas will still see steep declines, the report said.

In the New York metropolitan area they may drop 40.6 percent from the first quarter to the bottom, the report said, less than Deutsche Bank’s March estimate of 47.4 percent.

Financial firms have cut more than 183,000 jobs in the Americas in the global credit crisis, driving down prices and rents in the New York area. In New York City, Manhattan co-op prices slid the most since 1995 in the first quarter, according to data from Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate.

From Reuters:

Is the housing bust about to take Manhattan?

New York City real estate prices are looking increasingly shaky as instability in two of the city’s sexier submarkets — second homes in the Hamptons, and new condos in Manhattan — register the latest signs of a housing downturn.

Property prices in the Hamptons, a fabled playground of the rich on nearby Long Island, rose steadily for almost two decades, but the prices on almost 1-in-3 of current listings have been cut an average 11 percent from the initial asking, said Sofia Kim of real estate website StreetEasy.com.

Back in town, the number of sales in new developments dropped a whopping 71 percent in April from a year earlier as condo developers enmeshed in complicated financing arrangements have been slow to slash prices even as the market corrected all around them, Kim said.

But if prices on these new condo towers do not fall to match the rest of the market and stay empty as a result, then it could eventually trigger foreclosures of entire properties, forcing much bigger price cuts as lenders seek to reduce their liability.

“If you have a property not priced at market, is it going to sell? Something has to give,” said Jonathan Miller, author of real estate broker Prudential Douglas Elliman’s market reports.
…
The elite in the real estate industry had once hoped Manhattan could escape relatively unhurt as other housing markets suffered. But the collapses of financial powerhouses such as Lehman and Bear Stearns destroyed such thinking.

“What ended up killing us was the foreclosure crisis because that’s what killed Wall Street,” said Rick Hoffman, a regional senior vice president in the Hamptons for the Corcoran Group, a high-end brokerage. “It bit us in the end.”

From the NY Times:

At the Shore, Trying to Add ‘Corndog Fryer’ to a Long Résumé

As the unemployment rate climbed this spring, thousands of recently laid-off workers descended upon the resort communities along the Jersey Shore looking for summer work, hoping for an infusion of cash and a brief respite from job hunting.

But for many of the applicants who are older and have extensive résumés, finding work along the boardwalk can be as elusive as winning one of those deceptively easy-looking ring toss games.

The annual job fair here for Jenkinson’s Pier in March attracted more than 1,000 people in the first hour, as many applicants as it had in all of last summer, said Marilou Halvorsen, a company spokeswoman.

In Cape May, business owners have seen “the kind of résumés and applicants with the kinds of experience they rarely see in good times,” said Vicki Clark, president of the county chamber of commerce.

At the Shrimp Box restaurant in Point Pleasant Beach, so many people come in looking for work that the bartenders often joke about serving more job seekers than customers.

“Computer programmers, people from casinos, factory workers, salesmen, everything,” said Nick Gyftakis, the owner. “I’ve been in business more than 30 years, and we’ve never seen things like this before.”

Employers said the surge in applications was a drastic shift from recent years, when public pools and beaches in New Jersey occasionally had to close because there were not enough people willing to work as lifeguards.

From Fitch Ratings:

Fitch Takes Various Actions on 543 2005-2008 U.S. Subprime RMBS Deals

Fitch Ratings has taken various rating actions on 543 2005 through 2008 vintage U.S. subprime RMBS transactions in the course of its ongoing review of subprime RMBS.
…
The updated expected collateral losses incorporate performance trends since the last rating revisions which relied on September 2008 remittance data. The projected losses also reflect an assumption that from the first quarter of 2009, home prices will fall an additional 12.5% nationally and 36% in California, with home prices not exhibiting stability until the second half of 2010. To date, national home prices have declined by 27%. Fitch Rating’s revised peak-to-trough expectation is for prices to decline by 36% from the peak price achieved in mid-2006. The additional 9% decline represents a 12.5% decline from today’s levels.

The home price declines to date have resulted in negative equity for approximately 50% of the remaining performing borrowers in the 2005-2007 vintages. In addition to continued home price deterioration, unemployment has risen significantly since the third quarter of last year, particularly in California where the unemployment rate has jumped from 7.8% to 11%.

The combination of continued home price and employment decline has kept negative pressure on the roll-rates of performing borrowers into a delinquency status. Although net roll-rates have moderated from the seasonal high in January, the most recent month’s performing-to-delinquent net roll-rate of 3.17% remained modestly higher than that exhibited in the third quarter of 2008 when modified loans are excluded.