California Real Estate Headline Roundup

The Norris Group Real Estate News Roundup 4/5/10

Today’s News Synopsis:

Pending home sales increased by 8.2 percent from January to February. A new rule will require all new lender applicants for FHA programs to possess a minimum net worth of $1 million. According to LPS, the average loan in foreclosure is 401 days delinquent.  A proposed bill, House Resolution 4935, will prohibit mortgage servicers from holding another mortgage on a property that also secures the serviced mortgage.

In The News:

NAR - “Pending Home Sales Show Healthy Gain, Hint at Spring Surge” (4-5-10)

“The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in February, rose 8.2 percent to 97.6 from a downwardly revised 90.2 in January, and remains 17.3 percent above February 2009 when it was 83.2. The data reflects contracts and not closings, which usually occur with a lag time of one or two months.”

Housing Wire“HUD Foreclosure Prevention Funds Taking Longer to Reach Housing Markets” (4-5-10)

“State and local governments drew up plans to spend 37.9% of the $3.92bn granted through the Neighborhood Stabilization Program first-round of awards (NSP1), according to data from the US Department of Housing and Development (HUD), sparking assessment of some programs struggling to get the funds in action.”

Housing Wire“Freddie to Allow Mezzanine Debt on Multifamily Mortgage Refinancings” (4-5-10)

“In an attempt to bridge the gap in capital needed to refinance debt on overleveraged multifamily properties, Freddie Mac (FRE: 1.30 +3.17%) announced it will accept mezzanine debt on the qualifying senior multifamily mortgages it purchases. Under the terms of the new plan, Freddie Mac seller/servicers of multifamily loans will originate a first lien mortgage with a loan to value (LTV) of up to 75%, then work with the mezzanine lender to provide additional leverage, up to another 15% for their borrower, allowing the property owner to borrow up to 90% of a property’s value. The program requires the property owner hold a 10% cash equity position in the property.”

Housing Wire“FHA Raises Mortgage Lender Capital, Liability Requirements” (4-5-10)

“The final rule, to be published in the next few days, will require all new lender applicants for FHA programs to possess a minimum net worth of $1m, four times the $250,000 required since 1993. FHA said in a statement today the final rule will also strengthen lender approval criteria, and make lenders liable for the oversight of mortgage brokers.”

Housing Wire - “For Consumers, Time to Shop (Until the Mortgage Drops)” (4-5-10)

“In fact, as I’ve shown in previous columns, most Americans behind on their mortgage have gone more than a year without making any payments. The average age of a loan in foreclosure is now 410 days delinquent, after all, according to LPS; and that’s just the average. Many delinquent borrowers are able to stay in their homes for even longer than that.”

Housing Wire“House Bill Would Bar Mortgage Servicers from Holding Additional Mortgages” (4-5-10)

“House Resolution (HR) 4953, the Mortgage Servicing Conflict of Interest Elimination Act, would prohibit mortgage servicers from holding another mortgage on a property that also secures the serviced mortgage, Miller and Ellison said in a joint statement last week.”

Bloomberg - “Small Commercial Mortgages Present ‘Under-the-Radar’ Threat” (4-5-10)

“Loans of under $10 million account for $167.8 billion of the $651 billion commercial mortgage-backed securities market, analysts Gail G. Lee and Serif Ustun wrote in an April 2 report. About 5.95 percent of those loans are now at least 60 days behind on payment, the analysts said. The problems in this area are likely to increase and may not be getting adequate attention as loan servicers focus on high-profile properties.”

About

Bruce Norris is an active investor, hard money lender, and real estate educator with over 30 years experience. Bruce has been involved in over 2,000 real estate transactions as a buyer, seller, builder and money partner.

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