The Norris Group Blog

Today’s News Synopsis:

The NAHB’s monthly survey shows builder confidence remained at the previous month’s low level. Trepp claims that commercial real estate loans were the cause of 5 of the 6 bank failures that occurred over the weekend. FHA insured mortgages accounted for 37% of all originations last year, according to the Federal Financial Institutions Examination Council. In a recent survey, nearly 50% of economists claimed that economic growth in 2011 would be below the Fed’s estimated 2.5% annual pace. GMAC is denying the claim that it instituted a foreclosure moratorium in 23 states.

In The News:

Calculated Risk - “Q2 Flow of Funds: Household Net Worth off $12.3 Trillion from Peak” (9-18-10)

“According to the Fed, household net worth is now off $12.3 Trillion from the peak in 2007, but up $4.7 trillion from the trough in Q1 2009.”

Mish’s Global Economic Trend Analysis - “One Sided Policies” (9-18-10)

“The bailouts did not produce inflation, but the middle class bailed out the banks and got nothing in return but higher taxes, fewer services, and looking ahead, years of stagnation. Moreover, the bondholders (such as China, Japan, and PIMCO) were made whole, while the homeowners are still mired in debt. Adding to the misery, banks lord it over on homeowners with total nonsense about the morality of walking away.”

Wall Street Journal – “Defaults Account for Most of Pared Down Debt” (9-18-10)

“Over the two years ending June 2010, the total value of home-mortgage debt and consumer credit outstanding has fallen by about $610 billion, to $12.6 trillion, according to the Federal Reserve. That’s an annualized decline of about 2.3%, which is pretty impressive given the fact that such debts grew at an annualized rate in excess of 10% over the previous decade.”

CBIA - “Energy Efficiency and Solar Incentives” (9-20-10)

“A number of federal, state and local entities have made available incentives and rebates that promote renewable energy and energy efficiency in new construction. This section is intended to be a one-stop shop for information on state, federal, local and utility incentives and policies that promote such standards.”

NAHB - “Builder Confidence Unchanged in September” (9-20-10)

“Builder confidence in the market for newly built, single-family homes held unchanged in September from the previous month’s low level of 13, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.”

Bloomberg - “Ally’s GMAC Mortgage Halts Home Foreclosures in 23 States” (9-20-10)

“Ally Financial Inc.’s GMAC Mortgage unit told brokers and agents to halt foreclosures on homeowners in 23 states including Florida, Connecticut and New York.”

Business Journal – “GMAC Mortgage denies foreclosure moratorium” (9-20-10)

“GMAC Mortgage said Monday that recent media reports stating that the lender has instituted a moratorium on all residential foreclosures in Minnesota and 22 other states are not true.”

Reuters - “Recession ended in June 2009: NBER” (9-20-10)

“The recession ended in June 2009, making it the longest downturn since the Great Depression of the 1930s, the National Bureau of Economic Research said on Monday.”

Housing Wire – “Commercial real estate problems lead to latest bank failures: Trepp” (9-20-10)

“Troubled commercial real estate loans brought down five of the six bank failures reported by the FDIC over the weekend, according Trepp, an analytics firm. There were six bank closings over the weekend, totaling 126 for the year. The Federal Deposit Insurance Corp. estimated the six closings this week to cost the Deposit Insurance Fund (DIF) a total of $347.6 million.”

Housing Wire – “SEC calls for more transparency about short-term borrowing” (9-20-10)

“The Securities Exchange Commission voted unanimously over the weekend to propose regulation that would increase transparency between investors and public companies about short-term borrowing arrangements. The SEC wants companies to disclose short-term transactions as they happen instead of the current reporting standard where the info is delivered at the end of the period.”

Housing Wire - “FHA insured 37% of mortgage originations in 2009: Fed survey” (9-20-10)

“Mortgages insured by the Federal Housing Administration accounted for 37% of all originations in 2009, up from 26% in 2008 and 7% in 2007, according to the Federal Financial Institutions Examination Council.”

Housing Wire – “Survey finds house prices still stable in August as buyer interest hits ‘brick wall’” (9-20-10)

“Average prices increased 6.3% for damaged REO and 2.5% for refurbished REO. Prices also increased 3.8% for short sales. Non-distressed home prices showed a slight 0.9% decline for the month.”

Housing Wire – “One year of First Look: Fannie Mae sells 29,000 REOs to owner occupants” (9-20-10)

“A year into its First Look program, Fannie Mae vendors have sold 29,000 REO properties to owner-occupants and 5,000 to public entities under the Neighborhood Stabilization Program. Fannie launched First Look in August 2009 to allow both owner occupants and those using NSP grants to submit offers 15 days ahead of investors.”

Housing Wire – “Servicers: Sometimes leasing makes sense” (9-20-10)

“Servicers are beginning to see the benefits of keeping properties occupied with cost-savings such as lower property preservation expenses. Rentals allow the servicer to have more control over when they decide to release the property onto the market for sale because property deterioration that comes with vacancies becomes less of a concern.”

Housing Wire – “MBA economists predict new refinancings to cut in half in 2011″ (9-20-10)

“Expect another year of somewhat depressing economic outlooks, as we’re in a time of great uncertainty in the mortgage industry and the country as a whole, according to economists of the Mortgage Bankers Association. And leading up the list, the MBA expects that the rate of new refinancings, which currently account for the majority of current mortgage originations, will be cut in half by 2012.”

Bloomberg - “Escaping Double Dip to Growth Recession Means No Job Relief” (9-20-10)

“While the economy isn’t so weak that it’s clearly in need of more monetary stimulus, it may not be strong enough to keep unemployment from increasing. Twenty seven of 58 economists polled by Bloomberg News this month see growth in 2011 below the 2.5 percent to 2.8 percent pace Fed policy makers peg as the long-term trend. Twenty eight see the jobless rate rising above last month’s 9.6 percent sometime in the next nine months. That combination would constitute a growth recession.”

Looking Back:

One year ago, Laurence Fink warned that government programs to help homeowners would slow the recovery in the mortgage market. The FHA announced that its reserves would fall below congressional requirements. MDA DataQuick reported that fifteen percent of the homes sold in August were bought by investors. Statistics from Trulia showed that price cuts in Irvine were more likely to occur in luxurious areas rather than popular areas.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor event calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.