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The Norris Group Real Estate News Roundup 10/7/09

Wednesday, October 7th, 2009

Today’s News Synopsis:

New housing regulations set for 2010 will increase the required down payment for FHA loans to 5 percent. According to John Burns Real Estate Consulting, home prices will likely decrease again as delayed REOs hit the market. Both the NAR and the MBA are in favor of extending the first time home buyer tax credit, and have expressed their concerns to Congress. A survey from the California Association of Realtors shows that 46 percent of California Realtors use some sort of social networking website in their work. Another article focuses on vacancies in the market.

In The News:

Housing Wire – “FHA Confusion Surrounds Mortgage Finance Regulation Change” (10-7-09)

“As new housing finance regulations take effect and even more are set for the beginning of 2010, a number of questions have arisen on the impact to Federal Housing Administration (FHA)-insured loans. A bill that calls for an increase to the down payment requirement for FHA loans from 3.5% to 5% would also prohibit borrowers from including closing costs in the principal of the mortgage.”

Housing Wire – “Startup Wholesale Lender Tops $1bn Origination Volume” (10-7-09)

“NetMore America, a two-year-old wholesale and retail mortgage lender based in Walla Walla, Washington, announced it funded more than $1bn in loans during the fiscal year ending on Sept. 30. The company, which operates a wholesale channel in 22 states that accounts for 60% of its business, as well as retail branch system with 18 locations. Netmore said its origination business is 40% purchase loans and 60% refinancings, split evenly between Federal Housing Administration (FHA) loans and government-sponsored enterprise (GSE) mortgages.”

Housing Wire – “REO Module Added to Portfolio Management Software” (10-7-09)

“San Diego-based servicing software developer xplair Technology updated its Web-based mortgage portfolio management platform, illumair Management System (iMS). The illumair platform connects financial institutions and investors with servicers and loss mitigation agents, where all parties can access comparative analytics, risk metrics and interactive charts on the mortgages that comprise a portfolio.”

Housing Wire – “Delayed REO Sales will Drive Down House Prices, Says John Burns” (10-7-09)

“Despite recent projections that the housing market reached its trough and will recover in as little as 24 months, observers should expect a second leg down in what may shape up to be a “W”-shaped recovery, according to John Burns Real Estate Consulting.”

NAR - “Homebuyer Tax Credit Best Tool for Sustaining Housing Recovery, Says NAR” (10-7-09)

“The best available tool for sustaining the still-fragile housing market is the $8,000 homebuyer tax credit, and it is essential that Congress extend the credit into 2010, the National Association of Realtors® testified at a hearing of the U.S. House Small Business Committee today.”

Mortgage Bankers Association – “Mortgage Applications Increase in Latest MBA Weekly Survey; Third Consecutive Week 30-Year Fixed Rates Below Five Percent” (10-7-09)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending October 2, 2009. The Market Composite Index, a measure of mortgage loan application volume, increased 16.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index also increased 16.4 percent compared with the previous week.”

Bloomberg - “U.S. Office Vacancies Reach Five-Year High of 16.5%, Reis Says” (10-7-09)

“U.S. office vacancies rose to a five- year high in the third quarter, as job losses deepened and employers abandoned space in the recession, property research firm Reis Inc. said. Vacancies climbed to 16.5 percent from 13.7 percent in the year since Lehman Brothers Holdings Inc. filed for bankruptcy, New York-based Reis said in a report. Effective rents, the amount actually paid by tenants, fell 8.5 percent, the biggest year-over-year drop since 1995.”

Bloomberg - “Starwood Makes Winning Corus Bid in Jostle for Loans” (10-7-09)

“A group led by Starwood Capital LLC and TPG beat out seven other bidders to buy the assets of failed lender Corus Bankshares Inc. as investors vie to acquire commercial real estate loans at a fraction of their face value. The winning consortium, which also includes Perry Capital and WLR Lefrak, paid 60 cents on the dollar, the Federal Deposit Insurance Corp. said yesterday. The group will spend $554.4 million for a 40 percent managing stake in a company set up by the FDIC to hold $4.5 billion in mostly condominium loans, while the regulator will keep a 60 percent holding. ”

CAR - “C.A.R. releases ‘Use of Technology Survey’” (10-7-09)

“Forty-six percent of California REALTORS® surveyed report they use some type of social networking Web site to stay on top of trends in their business, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) annual ‘Use of Technology Survey,’ released today at Tech Tuesday. The most popular social networking site among REALTORS® surveyed was LinkedIn (34 percent), followed by YouTube (13 percent) and MySpace (12 percent).”

Bloomberg - “California House Prices Forecast to Rise in 2010, Realtors Say” (10-7-09)

“The median price for detached, single-family homes in the most populous U.S. state likely will rise 3.3 percent to $280,000 next year, the California Association of Realtors said in its annual housing forecast, issued today. The number of sales will probably drop 2.3 percent to 527,500, following an estimated 23 percent increase this year.”

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The Norris Group Real Estate News Roundup 10/6/09

Tuesday, October 6th, 2009

Today’s News Synopsis:

Reis Inc. reports that the U.S. apartment vacancy rate rose to 7.8 percent from the previous season. The US Treasury Department increased the cap of HAMP by $4.7 billion after previously cutting the cap down. Hayman Advisors LP recently bought mortgage bonds worth 50 percent of their assets. According to statistics from Altera Real Estate, the average home in Laguna Beach will currently take 11.03 months to sell.

In The News:

Wall Street Journal – “Apartment Glut Expands” (10-6-09)

“The U.S. vacancy rate reached 7.8%, a 23-year high, according to Reis Inc., a New York real-estate research firm that tracks vacancies and rents in the top 79 U.S. markets. The rate is expected to climb further in the fall and winter, when rental demand is weaker, pushing vacancies to the highest levels since Reis began its count in 1980.”

Housing Wire – “CA State Bar Files Petitions on Alleged Modification Fraud” (10-6-09)

“The State Bar of California filed petitions against two attorneys that would render them involuntarily inactive during investigations into their involvement in alleged loan modification fraud. In September, the State Bar identified 16 attorneys that allegedly took fees for the promise of getting a loan modified and then failed to perform the modifications, notify the client or return the fees, according to a release.”

Housing Wire – “Treasury Grants Another $4.7bn to HAMP Servicers” (10-6-09)

“The US Treasury Department made another round of adjustments the total capped incentives to servicers participating in the Home Affordable Modification Program (HAMP). Treasury granted a total $4.7bn of incentive funds from the previously downwardly adjusted cap amount. The recent adjustments, made in late September, bring the total capped amount to to $27bn, according to the Troubled Asset Relief Program’s (TARP) latest transaction report. The latest round of adjustments comes after several adjustments in June and July, which took a total $1.13bn in cuts off the original amount allotted.”

Housing Wire – “Bill Raises Required Down Payment to 5% for FHA Loans” (10-6-09)

“A bill introduced in Congress Monday would increase the minimum down payment for Federal Housing Administration (FHA)-insured mortgages from 3.5% to 5%. The FHA Taxpayer Protection Act of 2009 — HR 3706 — would also prohibit financing initial service charges, appraisals, inspections, or other fees or closing costs with any part of an FHA mortgage.”

Bloomberg - “Bass Buys Mortgages, Metals on Hyperinflation Fear” (10-6-09)

“Kyle Bass, the hedge-fund manager who made $500 million in 2007 betting against subprime securities, is buying shorter-term debt and precious metals, anticipating hyperinflation will lead to higher interest rates. Funds advised by Hayman Advisors LP bought mortgage bonds equal to about 50 percent of assets, Bass wrote in a letter to investors Oct. 2. The Dallas-based investment firm added corporate debt, primarily high-yield loans and bonds, equal to approximately 25 percent of assets. ”

Bloomberg - “California Hotel Foreclosures Triple in Travel Slump” (10-6-09)

“Hotel foreclosures in California more than tripled in the first nine months of this year as business travelers and vacationers cut spending. Foreclosures including the 400-room St. Regis Monarch Beach resort in Dana Point climbed to 47 in January through September from 15 a year earlier. Properties in default more than quadrupled to 259, Irvine, California-based Atlas Hospitality Group said in a statement. Atlas specializes in selling hotels. The survey didn’t include states other than California. ”

Bloomberg - “U.S. Economy on Mend, Housing Poised for Rebound, LaVorgna Says” (10-6-09)

“The U.S. economy is on the mend and housing is poised for a rebound, said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York. ”

Orange County Register – “How many Irvine homes sold in September?” (10-6-09)

“Gunther tracked 170 home resales that closed escrow, or a rate of 5.67 sales per day; that’s similar to the 175 sales in July. The median sales price for September was $539,488, down from $585,000 in August. There were 225 leases signed during the month of September, and monthly rents averaged $1.54 per square foot.”

Orange County Register – “New sign of weakness in O.C. high-end housing” (10-6-09)

“The Balboa Island Price Index, or the BIPI, is the brainchild of Girling Real Estate Investment Group. Broker David Girling said the inland lots on Balboa Island lend themselves particularly well to measuring real estate price changes because of the uniformity of lot sizes. Nearly 1,100 of the island’s 1,498 parcels are 30 feet by 85 feet. Yet, Balboa’s 2,550-square-foot lots still remain pricey — with an average price of $1.4 million this past quarter (and that’s the lowest in 5 1/2 years).”

Orange County Register – “Homes selling a bit slower in south coast cities” (10-6-09)

“Laguna Beach’s expected market time has increased to 11.03 months from 10.32 months, according to a biweekly report by Steven Thomas of Altera Real Estate. This makes Laguna the third slowest housing market in the county – behind Corona Del Mar with an 11.53-month market time and Newport Beach with an 11.05-month market time.”

Wall Street Journal – “U.S. Data Show High Mortgage-Denial Rate for Blacks” (10-6-09)

“A Federal Reserve report on home mortgage data showed that blacks and Hispanic whites were far more likely than non-Hispanic whites to be denied last year in applying to refinance. The annual report is based on data collected from more than 8,000 mortgage lenders nationwide under the Home Mortgage Disclosure Act of 1975, known as HMDA.”

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The Norris Group Real Estate News Roundup 10/5/09

Monday, October 5th, 2009

Today’s News Synopsis:

First American CoreLogic expects about 10 percent of all U.S. mortgages to adjust within the next few years. FHA plans to reduce the maximum lending amount that seniors can receive for reverse mortgages. Consumers are claiming that Wells Fargo is guilty of cutting their credit lines for no apparent reason. Whitehouse spokesman Robert Gibbs has confirmed that president Obama is in favor of extending the first time home buyer tax credit.

In The News:

Chron - “New round of foreclosures looms in U.S.” (10-5-09)

“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.”

San Francisco Chronicle – “Declining home values squeeze reverse mortgages” (10-5-09)

“In a letter to reverse mortgage lenders Sept. 23, FHA Commissioner David Stevens said his agency must reduce the maximum amounts seniors can receive on reverse mortgages because of a $798 million estimated deficit in the program in the coming fiscal year.”

Calculated Risk – “The Impact of the Declining Homeownership Rate” (10-5-09)

“Since about 2/3s of all households are owner occupied, an increase of 1.25 million households per year would imply an increase in homes owned of about 800K+ per year. If an additional 500K per year moved to homeownership – as indicated by the increase in the homeownership rate from 1995 to 2005 – then the U.S. would have needed 1.3 million additional owner occupied homes per year.”

Los Angeles Times – “Too many palatial homes, too few princely buyers” (10-5-09)

“Spec mansions are now amassed in some areas like rising floodwater behind a dam. A search of homes for sale built since 2007 and priced above $3 million shows 39 such properties in Newport Beach and Newport Coast, 27 in Laguna Beach, 19 in Manhattan Beach, 18 in Irvine and 11 on the Palos Verdes Peninsula.”

San Francisco Chronicle – “Wells Fargo cutting customers’ lines of credit” (10-4-09)

“This is not the first time I’ve heard from readers saying banks have cut off their credit for no apparent good reason, and sometimes without warning. Officers at the Wells Fargo branch in question said they could not comment. A corporate spokesman would not confirm that the bank had sent out letters last week, except to say the reader’s e-mail ‘isn’t accurate about the purported quantity of letters suggested.’”

Inman - “Obama backs extension of tax credit” (10-5-09)

“White House spokesman Robert Gibbs today confirmed that President Obama supports an extension of the first-time homebuyer tax credit, along with prolonging jobless benefits and health care subsidies for unemployed workers.”

Housing Wire – “FHA is Replacing Securitization in Mortgage Financing” (10-5-09)

“The collapse of the private securitization market in 2007 and retrenchment by the private mortgage insurers led to a huge funding gap in mortgage finance, especially in the higher loan-to-value (LTV) sector. That gap that is quickly being filled by Federal Housing Administration (FHA)-insured loans, according to a panel of regulators and enforcers speaking at the CRA & Fair Lending Colloquium, hosted by Wolters Kluwer Financial Services and now underway in New Orleans.”

Wall Street Journal – “A Return to Real Estate” (10-5-09)

“Individuals looking to dip their toes into real-estate securities should consider buying a mutual fund that invests both in the U.S. and abroad, says Dave Yeske, a financial planner in San Francisco. When buying risky assets like real estate, it’s best to spread your bets across companies and countries, he says.”

National Mortgage News – “Panel May Look at New FHA Net Worth Requirements” (10-5-09)

“One topic a panel titled ‘The Recent Evolution of Independent Mortgage Bankers’ may end up covering is the Federal Housing Administration’s plan for a $1 million net-worth lender requirement. Net worth may be a ‘significant’ problem for the smaller nondepository, said Tim Stern, co-founder and president of Lenders One, St. Louis, in a phone interview. He said his cooperative group, which helps mortgage bankers collectively achieve scale, also requires at least $1 million in net worth.”

Housing Wire – “IBM to Purchase Wilshire Credit from BofA” (10-5-09)

“Global IT services giant IBM (IBM: 119.75 +0.61%) is in the process of acquiring mortgage servicer Wilshire Credit Corp. from Bank of America (BAC: 16.96 +3.79%), numerous sources with knowledge of the transaction confirmed to Housing Wire over the weekend.”

Bloomberg – “General Growth Proposes $11.6 Million Bonus Pool” (10-5-09)

“General Growth Properties Inc., the second-largest shopping mall owner in the U.S., asked for court permission to pay as much as $11.6 million in incentive bonuses to 12 executives including Chief Executive Officer Adam Metz and Chief Operating Officer Thomas Nolan.”

Bloomberg - “Mortgage-Bond Prices Double From March Lows in Rally” (10-5-09)

“Typical prices for the most-senior prime-jumbo securities rose 2 cents on the dollar last week to 84 cents, according to Barclays Capital data. Similar bonds backed by Alt-A loans with a few years of fixed rates increased 2 cents to 60 cents. The jumbo bonds are up from about 75 cents three months earlier, while the Alt-A bonds have climbed from 47 cents.”

Bloomberg - “Treasury Says Three More Money Managers Receive PPIP Funding” (10-5-09)

“The U.S. Treasury Department said AllianceBernstein Holding LP, BlackRock Inc. and Wellington Management Co. have raised a combined $1.94 billion for their funds participating in the U.S. effort to buy toxic assets from banks. By getting that money from private investors, the three firms qualify for federal funds under the Public Private Investment Program. The U.S. will match the funds each money manager raised, and provide debt financing that will give them a combined purchasing power of $7.74 billion.”

Orange County Register – “Brightwater developer misses $1.7 million payment” (10-5-09)

“The troubled builder of the Brightwater development by the Bolsa Chica wetlands announced today that it skipped a $1.7 million debt payment that was due this week but is working with the lender to restructure its loans.”

Orange County Register – “Foreclosures total 4% of houses for sale” (10-5-09)

“Steve Thomas at Altera Real Estate in Aliso Viejo reports that the number of O.C. distressed properties (homes listed by agents as foreclosures or short sales) was 2,346 last week, -38 vs. two weeks earlier or a -1.6% change.”

Looking Back:

The Hope for Homeowners program gave permission to FHA to guarantee $300 billion dollars worth of 30 year, fixed rate home loans. Countrywide Financial Corp. settled fraud complaints in 11 states by cutting interest rates and borrowers’ owed amounts. The Federal Reserve boosted its auctions of cash to banks up to $900 billion.

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142-TNG Radio – I Survived Real Estate 2009 10-3-09

Friday, October 2nd, 2009

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I Survived Real Estate 2009

Fundraiser for the Orange County Affiliate for Susan G. Komen for the Cure

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This week The Norris Group Real Estate Radio Show and Podcast presents Part 3 of I Survived Real Estate 2009.

This week starts with a continuation of  John Young’s segment. He is the founding partner of Young Homes which is located in Rancho Cucamonga, and he is the Vice President of the California Building Industry Association (CBIA). He has been associated with the real estate business for 30 years.

Many home builders have had to reduce staff in this down turn. John Young has always worked in the first time home buyers industry. His business has picked up because these people can get FHA loans, they have good FICA scores, they have a job, and they have decent credit. There are buyers who couldn’t buy a few years ago who can buy today. In the Inland Empire, prices are still going down because of the large volume that is in those markets.

The California Builders Industry Association (CBIA) is working with the National Association of Home Builders (NAHB) to address the inappropriate appraisal practices, and also the acquisition, development, and construction lending crisis that is damaging home builders. Additional credit resources could help home builders greatly.

The inappropriate use of distressed and foreclosed sales in determining new home values is driving down home prices and stalling an economic recovery. NAHB has found that twenty-six percent of builders are losing sales because the appraisals are continuously going below the contract sale price. These appraisal practices are contributing to the credit crisis. Falling appraised home values have lead some financial institutions to stop lending to home builders.

The CBIA and NAHB are calling on government regulators to develop clear and concise regulatory guidelines, which will allow appraisers to develop realistic expectations by accurately comparing homes. CBIA and NAHB supports ideas to help resolve issues pertaining to expiring subdivision maps, reducing unsold inventory, and extending the first time buyer tax credit.

New home builders are now focusing on building on smaller lots with less square footage. They are trying to control the amount of standing inventory, and they are controlling costs and demand less waste. Most private home builders have survived because they had some left over cash from the good times.

Young Homes anticipates that this market will stabilize in two years. John admits that home builders are by nature very optimistic, and that sometimes gets them in trouble.

The next speaker on the show is Pat V. Combs. She is a Realtor with Coldwell Banker. She has worked as a Realtor for 35 years, and she was the 2007 President of the National Association of Realtors.

All real estate is local. Pat can give you a national report, but that is about as accurate as a national weather report. The nation has witnessed 4 straight months of rising existing home sales. The national inventory has decreased from a year ago. These statistics show that recovery is occurring on a broad scale, but not necessarily a regional scale.

The federal tax credit has encouraged 350,000 first time home buyers, around the nation, to buy a home. Pat has been encouraging her children without homes to buy houses right now. Pat has noticed, in Michigan, a lot of entry level buyers getting into the home business. She is not encouraging everyone to buy a house, but anyone who has been “sitting on the fence”, who can qualify for a mortgage, should buy.

When Pat holds open houses, around 5 to 10 people come. Of those 5 to 10 people, 75 percent of them have houses to sell.

Pat expects the total impact of the home buyer tax credit to be somewhere between 300,000 and 650,000 additional home sales in 2009. When you consider that each home sale generates roughly 62,000 dollars in economic activity, that means that around $18.6 to $40 billion dollars are being pumped through the national and local economies.

Cash for Clunkers injected roughly $20 million into the economy. Realtors and home builders are encouraging the tax credit to be extended through 2010, and hopefully the credit will be extended to all home buyers, not just first time buyers.

There is some concern that another wave of foreclosures is going to hit the market place. Pat hopes that the other panelists will be able to give us some options for helping with those foreclosures. We need to resolve problems that have come up because of the new appraisal rules. Realtors are concerned by the out of town appraisers being used, and because of the higher costs that consumers must now pay, and because of the loss of transactions that home sellers and buyers are experiencing because of the appraisal problems. NAR has met with New York attorneys to discuss these problems, but little effort has been made to make changes.

Realtors continue to complain that good credit is not available to good buyers. Fannie Mae and Freddie Mac are still needed because we need to make the increased loan limits permanent. The current limit is capped at $729.750, and this higher limit will expire on December 31, 2009. It is important for people in high costs states to keep these loan limits high.

Two years ago, FHA was used less than 3 percent of the time. Today, FHA is used over 36 percent of the time. NAR submitted a testimony to the House Financial Services Committee expressing support for increased FHA staffing, and for increased resources to meet rising demand.

President Obama’s proposed Consumer Financial Protection Agency offers the potential to protect consumers from fraud and other deceptive practices, but experts in the real estate industry need to work with Congress to make sure that such an agency supports efficient and effect markets, while protecting consumers at the same time.

Realtors are discovering a new way to do business through the internet, social media, and new applications to methods used in the past. The old mantra “location, location, location” is being pushed into “price, location, price”. Our market places are becoming global. Tweets on new listings are sometimes being answered from China.

The next speaker was Tommy Williams. Tommy has over 40 years experience in real estate auctions, land development, and real estate investments. He is the founding partner of Williams and Williams Auctions, and he is the immediate past president of the National Auctioneers’ Association. He has conducted over 10,000 auctions in 48 states, and has even auctioned for Bruce Norris.

We have two economic systems that are flourishing in the world. One is the China system, which is completely government controlled; all individuals and businesses operate on the government’s direction. We once had the exact opposite of that. The U.S. has risen to the place that it is at, because it has always placed the individual as number one. It has always placed private business as number one with government interference.

The video of the live event is not being aired online HERE.

The Susan G. Komen “Walk for the Cure” is this Sunday, September 27th at Newport Beach. Donations both small and large are appreciated. You can visit isurvived2009.com to learn how you can still get involved.

Here are the speakers involved in the event:

Bruce Norris of the Norris Group

Bruce Norris

President

The Norris Group

David Kittle, President of the Mortgage Bankers Association

David Kittle

2009 Chairman

Mortgage Bankers Association

2007 President, National Association of Realtors

Pat Vredevoogd Combs

2007 President

National Association of Realtors

Tommy Williams, 2008 President National Auctioneers Association

Tommy Williams

2008 President

National Auctioneers Association

Christopher Thornberg, Principal and Beacon Economics

Christopher Thornberg

Principal

Beacon Economics

 

John Young

Vice President

California Builders Industry Association

Joseph Magdziarz, VP Appraisal Institute

Joseph Magdziarz

Vice President

Appraisal Institute

Rick Sharga, Senior VP RealtyTrac

Rick Sharga

Senior Vice President

RealtyTrac

To Benefit:

I Survived Real Estate 2009 Sponsors

A huge thank you to all of our sponsors who made this event possible.

Platinum Sponsors
San Diego Creative Investors Association
investClub for Women
Investors Workshop
Frye / Wiles - Web Design in Southern California
Entrust California
MVT Productions - Audio and Video
JK Short Sale
The Business Press
White House Catering
 
National Fix and Flip Network
  

Gold Sponsors
1 m 1 Properties
 Appraisal Institute of Southern California
Dalmae
Thank you Elite Auctions for being Gold Sponsors!
Inland Empire Investors Forum
Las Brisas Escrow
Los Angeles Meeting and Event Center
Mortgage Equity Group
Northern California Real Estate Investors Association
Northern San Diego Real Estate Investors Association
Real Wealth Network
RE 411 Magazine
San Jose Real Estate Investors Association
Daniel Dear
Women\'s Council of Realtors - Inland Valley Chapter
Westin South Coast Plaza
Saddleback Valley Communities Petere Apostolos Awesome Limousines
RealtyTrac National Association of Real Estate Investors Far Below Market

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The Norris Group Real Estate News Roundup 10/2/09

Friday, October 2nd, 2009

Today’s News Synopsis:

Interthinx’s employment and income fraud index decreased  by 33 percent from Q2 of 2008 to Q2 of 2009. Real estate expert John Burns believes that the new short sale incentive program will be helpful in clearing up excess inventory. According to the American Bankruptcy Institute and National Bankruptcy Research Center,  U.S. consumer bankruptcies passed 1 million during the first 9 months of 2009. The U.S. government could lose nearly 80 percent of its $2.33 billion investment in CIT, should the company choose to exchange its debt.

In The News:

Housing Wire – “First American Studies Neighborhood Spread of Delinquency” (10-2-09)

“With the delinquency rates of prime and subprime mortgages trending upward across the nation, individual markets show different patterns of where those delinquencies gather within the city limits. A study by First American CoreLogic examines the spatial distribution of serious mortgage delinquencies across neighborhoods in the 30 largest US cities. Five patterns emerge from the data.”

Housing Wire – “Risk Retention May Backfire in Down Market, Says IMF” (10-2-09)

“The return of activity to private-label securitization markets will be a crucial part of economic recovery, but going forward, new measures must be put in place to ensure the markets positively contribute to financial stability and sustainable economic growth, according to the International Monetary Fund’s (IMF) Global Financial Stability Report.”

Housing Wire – “Mortgage Fraud Declines: Interthinx” (10-2-09)

“Mortgage fraud may be on the decline, according to the latest results of a quarterly index. Interthinx’s employment and income fraud index decreased 33% in Q209 from Q208, according to the latest Interthinx Mortgage Fraud Risk Report. Interthinx said the decline is due in part to lenders increased use of the Internal Revenue Service’s (IRS) 4506-T income verification form.”

Housing Wire – “$2,500 Incentive Will Spur Short Sales, Says John Burns” (10-2-09)

“A Treasury Department spokeswoman confirmed an incentive program for servicers that pursue short sales is on its way, according to John Burns Real Estate Consulting. The subsidy program will provide $1,000 to the servicer and $1,500 to the seller in each short sale transaction for a total incentive of $2,500 per short sale, the spokesperson told the consulting firm. This strategy should help ‘clear excess inventory,’ according to market commentary by John Burns Real Estate.”

Housing Wire – “2008 Mortgage Data Illustrates 31% Drop in Originations” (10-2-09)

“Mortgage lending data from 8,388 US financial institutions covered by the Home Mortgage Disclosure Act (HMDA) showed a decline in both lenders and originations in 2008 from levels seen in 2007. The data, released this week by the Federal Financial Institutions Examination Council (FFIEC), illustrate a 3% decrease in the number of reporting institutions and loans, primarily reflecting a large decline in the number of independent mortgage companies. Warehouse mortgage funding continued to dry up at the same time, a problem that led to the recently proposed legislation that aims to support and facilitate increased warehouse credit capacity for qualified lenders.”

Bloomberg – “U.S. Consumer Bankruptcies Top 1 Million, Group Says” (10-2-09)

“U.S. consumer bankruptcies rose past 1 million through the first nine months of the year, the highest since 2005 changes to bankruptcy laws. Personal bankruptcies totaled 1,046,449 for the period, according to the American Bankruptcy Institute and National Bankruptcy Research Center. For the first nine months of 2005, the figure was 1.35 million.”

Inman - “Turbulence seen for reverse mortgages” (10-2-09)

“A reverse mortgage, which is available only to those 62 and older, allows homeowners to use the equity that has built up in a residence. In effect, the homeowner gets a loan in the form of a lump sum or multiple payments. Repayment, with interest, is deferred until the owner dies, or goes into aged care, and the home is sold. Or, in a worst-case scenario, if the homeowner fails to pay property taxes or homeowners insurance.”

Reuters - “CIT debt swap could cost U.S. more than $1.8 billion” (10-2-09)

“If CIT Group (CIT.N) exchanges its debt under an offer aimed at averting a bankruptcy filing, the U.S. government could lose nearly 80 percent of its $2.33 billion investment in the troubled commercial lender. A likely $1.8 billion loss would be another black eye for the United States’ Troubled Asset Relief Program. A government official said last week that TARP has saved the financial system from collapse, but fell short of some of its other goals.”

Looking Back:

One year ago, the MBA reported that its Government Purchase Index decreased by 14.1 percent. Mark Finerman of Greenwich Capital began to raise 3 billion dollars for a fund to make senior property loans. A study from Radar Logic showed that home prices had dropped in 24 of 25 major metropolitan markets in the United States.

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The Norris Group Real Estate News Roundup 10/1/09

Thursday, October 1st, 2009

Today’s News Synopsis:

The NAR’s Pending Home Sales Index shows that sales increased by 6.4 percent in August. Research from Deutsche Bank Securities shows that 26 percent of borrowers owe more than their home is worth. A $250,000, four-bedroom, 1700 square feet, three-bathroom house in Los Angeles made the nation’s list of most searched for homes. A survey shows that realtors are in favor of expanding the $8,000 dollar tax credit. Regulation Z changes are now in effect. FHA first-time borrowers may see hike in down payment requirements according to new legislation introduced.  Realtors are also interested in expanding first-time tax credit to repeat buyers. Does that mean investors? One could only be so hopeful.

In The News:

NAR - “Record Streak Continues for Pending Home Sales” (10-1-09)

“The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in August, rose 6.4 percent to 103.8 from a reading of 97.6 in July, and is 12.4 percent above August 2008 when it was 92.4. The index is at the highest level since March 2007 when it was 104.5.”

Bloomberg - “Leaving Affordable Mortgage May Become Winning Gambit” (10-1-09)

“In the U.S., 26 percent of borrowers owe more than their home is worth, said Karen Weaver, global head of securitization research for New York-based Deutsche Bank Securities. In parts of California, Florida and Nevada, it’s as high as 75 percent.”

Inman - “30-year fixed rate below 5% again” (10-1-09)

“Rates on 30-year fixed-rate mortgages for borrowers with good credit fell below 5 percent this week for the first time since May, Freddie Mac said in releasing the results of its Primary Mortgage Market Survey.”

Inman - “Lenders want one set of rules” (10-1-09)

“A draft bill floated by Rep. Barney Frank, D-Mass., would create an agency along the lines of the proposal put forward by the Obama administration in June, while attempting to address some lending-industry concerns. Unlike the Obama administration’s proposal, for example, Frank’s bill would not give the agency the power to require that lenders offer ‘plain vanilla’ mortgages.”

Orange County Register – “Property tax revenues flat nationwide” (10-1-09)

“The Census Bureau’s quarterly count of state and local government collections nationwide of taxes shows property-related taxes (that on land and structures) as well as personal propert levies) for the second quarter at $81.86 billion — the largest slice tracked by Census — and flat vs. a year ago.”

Realty Times – “Title, Escrow Services Necessary” (10-1-09)

“Title companies are hired, in part, to issue title insurance protection for home buyers and lenders. Lenders require the service to protect them against loss resulting from claims by others against your new home. The title company investigates the title to make sure it is clear of any encumbrances, such as liens or judgments, forgeries or fraud and any other title anomalies and then issues a policy to protect you from any claims that turn up later. Because title searches are conducted each time the home changes hands or, perhaps, during a refinancing, the searches rarely turn up title claims, but you have to pay for the search.”

Los Angeles Times – “Long Beach property joins the list of most-searched-for U.S. homes online” (10-1-09)

“Priced at $250,000, the four-bedroom, three-bathroom house with 1,768 square feet on 0.15 acres (6,650 square feet) continues to make the list.”

Housing Wire – “Regulation Z Changes Are Here” (10-1-09)

“The Federal Reserve’s new Regulation Z statutes went into effect Thursday, after more than a year of preparations by the mortgage industry. Regulation Z is a truth in lending regulation meant to protect consumers who buy higher-priced mortgages — those loans with annual percentage rates (APR) above the average prime offer rate for a comparable transaction by at least 1.5 percentage points for first mortgages or 3.5 percentage points for second mortgages.”

Housing Wire – “GSE REO Portfolio Near 100,000″ (10-1-09)

“Freddie’s portfolio is nearly 35,000 properties, while Fannie’s is closing in on double that figure at nearly 64,000. While the rate of growth in the two portfolios has declined, Freddie acknowledges it expects to experience further losses from REO properties.”

Housing Wire – “Realtors Favor Expansion of Tax Credit to Repeat Buyers” (10-1-09)

“Realtors indicated in a recent survey the first-time homebuyer tax credit up to $8,000 has had a significant impact on spurring consumer interest in getting into the housing market. Some even called for an expansion of the program past its current expiration date and to homeowners that do not yet qualify.”

Bloomberg - “FHA Borrowers May Need Bigger Down Payments in Bill” (10-1-09)

“Legislation introduced in the U.S. House of Representatives would require higher down payments from borrowers seeking federally backed loans as lawmakers try to prop up the Federal Housing Administration’s insurance fund.”

The Atlantic – “OCC Report Shows Mortgage Modification Trend And Woes” (10-1-09)

“As the chart below shows, in the first quarter of 2009 principal reduction was only used 3.1% of the time. In the second quarter, however, that percentage increased to 10%. That’s a pretty drastic increase, with one-in-ten modifications now reducing principal.”

Looking Back:

One year ago, FHA was given $300 billion dollars for a new foreclosure prevention program. The MBA’s weekly survey showed that mortgage applications had decreased by 28.4 percent from the prior year. Warren Buffett invested $3 billion dollars into General Electric. Foreclosures tripled in Los Angles during the third quarter.

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