Today’s News Synopsis:
Gov. Arnold Schwarzenegger signed SB 94, which prevents prohibits any person from collecting an advance fee from a consumer for loan modification. According to Campbell Surveys, the national average home price rose 6% from August to September. MetroStudy anticipates a total of 562,000 housing starts in 2009.
In The News:
The Business Insider – “The FHA Is A Looming Disaster” (10-17-09)
“The FHA has expanded from guaranteeing just 2% of mortgages to over 20% in just a couple of years, dramatically raising its exposure to the still declining US housing market. The FHA still backs toxic, almost-no-money down mortgages. It will currently guarantee mortgages with as low as 3.5% downpayments.”
Inman – “State bans advance fees for loan mod help” (10-19-09)
“California has joined nearly two dozen other states in prohibiting foreclosure rescue companies from collecting advance fees for helping homeowners negotiate mortgage loan modifications. Gov. Arnold Schwarzenegger on Oct. 11 signed into law a bill, SB 94, that prohibits any person from demanding or collecting an advance fee from a consumer for loan modification or mortgage loan forbearance services.”
Associated Press – “Government unveils new mortgage help” (10-19-09)
“The administration said the new program would help to support low mortgage rates and expand resources for low and middle income borrowers who want to buy or rent a home. The program will feature two parts – a new bond purchase program to support new lending by housing finance agencies and a temporary credit and liquidity program to improve access by housing agencies to credit sources for their existing bonds.”
Housing Wire – “BarCap Expects $2bn of CMBS TALF Requests” (10-19-09)
“The October 21 Term Asset-Backed Securities Loan Facility (TALF) for commercial mortgage-backed securities (CMBS) will likely see an increase in subscription volume over last month, BarCap said in a research report Friday. Bid list activity of $4.8bn since the last CMBS-eligible TALF subscription date points to a likely increase in subscription volume over last month. Of this activity, $2.6bn — or 55% — is TALF-eligible, BarCap researchers said.”
Housing Wire – “REO Demand Pushes Sept. Prices Up: Campbell Survey” (10-19-09)
“National average home prices rose 6% from August to September, driven by an increase in real estate owned (REO) sales prices and transaction counts, according to a monthly real estate market survey conducted by Campbell Surveys. Increased demand REO property increased in September. The average price of distressed REO property was $124,500 in September, up from $106,700 in August. Combined with move-in ready REO, distressed properties accounted for 31% of purchase transactions during the month”
Housing Wire – “Housing Start Projection Falls 37.9% in 2009, Says Metrostudy” (10-19-09)
“While housing start projections for 2009 are down 37.9% from the same period of 2008, research firm Metrostudy expects steady increases in construction starts next year. Metrostudy expects a total 562,000 housing starts for 2009, down 37.9% from 2008. That includes 438,000 single-family starts, which are down 30% from 622,000 in 2008.”
Housing Wire – “59% of New Home Sales Use Government Loans: John Burns” (10-19-09)
“Federally backed mortgages account for 59% of new home sales transactions with 96.5% to 100% loan-to-value (LTV) so far in 2009, according to the latest John Burns Real Estate Consulting homebuilder survey.”
New York Times – “Foreclosures Force Ex-Homeowners to Turn to Shelters” (10-18-09)
“Only three years ago, foreclosure was rarely a factor in how people became homeless. But among the homeless people that social service agencies have helped over the last year, an average of 10 percent lost homes to foreclosure, according to ‘Foreclosure to Homelessness 2009,’ a survey produced by the National Coalition for the Homeless and six other advocacy groups.”
Fort Wayne – “Adjustable mortgage rates to rise, raising foreclosure fears” (10-19-09)
“About 10 percent of all mortgages in this country are scheduled to adjust in the next few years, with the numbers peaking in mid- to late 2011, according to First American CoreLogic. Those loans are worth about $1 trillion, and nearly 20 percent of the borrowers who have them are already seriously behind on their monthly payments.”
DSNews – “California Bank Marks 99th Failure in 2009″ (10-19-09)
“San Joaquin brings the FDIC’s tally of failed banks in 2009 to just one away from the 100-mark. But the single collapse last week follows no bank closures the week prior – the first time that has happened since the week of June 8th. So, does the lull in the FDIC’s closure announcements mean the pace of bank failures is subsiding? Not likely.”
Reuters – “In wake of housing crisis, what lessons learned?” (10-16-09)
“Riverside, part of the thickly populated area known as the Inland Empire east of Los Angeles, has become synonymous with all the worst lending and spending practices of a property boom that busted and pushed the world’s No. 1 economy into its longest slump since the 1930s.”
IBTimesFX – “U.S. housing risks still lurk even as buyers return” (10-12-09)
“Bruce Norris, president of property investment firm The Norris Group, said inventory levels are ‘completely artificial, completely baloney … The delinquency rate (in California) has exploded, but inventory levels have gone down. In many of these cases the banks have simply avoided foreclosure.’”
CREJ – “NSP Funds’ Benefits Limited For California Municipalities” (10-12-09)
“According to Rick Sharga, senior vice president of RealtyTrac, there is a shadow inventory of 400,000 to 500,000 homes taken back by the banks but not yet processed for market sale. ‘Those properties are sitting on the sidelines and God forbid the banks decide one day to flood the market with them – that won’t happen – but they’re there and we’re going to have to get through them,’ Sharga said at a September real estate event hosted by The Norris Group.”
Reuters – “More Rough Times are Ahead for the U.S. Economy, Despite Recent Improvements in Durable…” (9-24-09)
“Thornberg cited real estate as a case in point. While home sales are up in some areas of the country, 6 to 7 percent of home mortgages nationally are 60 to 90 days delinquent. In California alone, 250,000 mortgages are 60 to 90 days late. And there’s more economic trouble on the horizon, he said, with rising unemployment and additional waves of foreclosures.”
