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The Norris Group Real Estate News Roundup 1/13/10

Wednesday, January 13th, 2010

Today’s News Synopsis:

According to the CBIA, condominium sales were 39 percent higher from last year. The MBA’s weekly survey shows that mortgage loan application volume increased by 14.3 percent from last week. Jumbo residential mortgage-backed securities increased to 9.2 percent from December 2008 to December 2009. All but two of the Federal Reserve districts reported increased activity or improved conditions.

In The News:

CBIA - “California New-Home Market Dips Slightly in November, CBIA Announces” (1-13-10)

“The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New-Home Sales and Pricing Report showed that sales in new-home communities of 10 units or more were 4 percent below November 2008, representing a less impressive result than last month’s year-over-year increase, but was nevertheless an improvement from most months in 2009. During November, 1,860 new homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 1,934 in November 2008. Sales of single-family homes were down by 18 percent, while sales of townhomes and “plexes” – duplexes, triplexes, etc. – were up 8 percent and sales of condominiums were 39 percent higher than a year ago thanks to strong sales at projects in the Los Angeles and San Diego areas.”

Mortgage Bankers Association – “Mortgage Refinance Applications Increase While Purchase Applications Remain Flat in Latest MBA Weekly Survey” (1-13-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 8, 2010.  The Market Composite Index, a measure of mortgage loan application volume, increased 14.3 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 66.0 percent compared with the previous week, which was a shortened week due to the New Year’s holiday.”

San Francisco Chronicle – “State adopts greenest building codes in U.S.” (1-13-10)

“The new code, dubbed Calgreen, will take effect next January and requires builders to install plumbing that cuts indoor water use, divert 50 percent of construction waste from landfills to recycling, use low-pollutant paints, carpets and floorings and, in nonresidential buildings, install separate water meters for different uses. It mandates the inspection of energy systems by local officials to ensure that heaters, air conditioners and other mechanical equipment in nonresidential buildings are working efficiently. And it will allow local jurisdictions, such as San Francisco, to retain their stricter existing green building standards, or adopt more stringent versions of the state code if they choose.”

Housing Wire – “Prime Jumbo RMBS Delinquencies Swell to 9.2%: Fitch” (1-13-10)

“Delinquency of more than 60 days among prime jumbo residential mortgage-backed securities (RMBS) nearly tripled to 9.2% in December 2009, from 3.2% at the end of 2008, according to Fitch Ratings.”

Housing Wire – “GSEs Could Lose $448bn of MBS Guarantee Business, Says Amherst” (1-13-10)

“Losses on the combined credit-guarantee books of government-sponsored enterprises (GSEs) Freddie Mac (FRE: 1.41 +2.17%) and Fannie Mae (FNM: 1.14 +1.79%) could reach 9.6% – or $448bn – according to market analysis by Amherst Securities Group.”

Housing Wire – “Housing Sales Up, Prices Remain Steady: Beige Book” (1-13-10)

“All but two Fed districts reported increased activity or improved conditions, with Philadelphia and Richmond seeing mixed results. In the December 2 edition of the Summary of Commentary on Current Economic Conditions, commonly called the Beige Book, eight districts reported an uptick in their perspectives economy. The book is published eight times a year and is a nationwide economic indicator compiled from the 12 Fed districts.”

Housing Wire – “Government to Earn Billions on Bailouts” (1-13-10)

“The US Treasury Department expects profits of at least $19bn from bank investment programs under the Troubled Asset Relief Program (TARP), according to market commentary Wednesday by the American Bankers Association (ABA). Originally projected to cost $76bn according to the ABA, the outlook for TARP bank programs was updated in December in anticipation of actual profits.”

Housing Wire – “FinestExperts Ranks Top 2010 Real Estate Investment Markets” (1-13-10)

“FinestExpert.com named Dallas-Fort Worth as the hottest real estate investment market for 2010. After analyzing more than 10,000 real estate markets to identify stable, growth-oriented for investors, San Francisco-based FinestExpert.com formed its first top-20 hottest real estate investment market list for 2010.”

Housing Wire – “Cancelled Foreclosures Outnumber Sales in California: ForeclosureRadar” (1-13-10)

“The amount of California foreclosure cancellations increased 26.5% in December to 13,243, primarily due to loan modifications. And for the first time this number overtook foreclosures reaching real-estate owned (REO) status, according to ForeclosureRadar, which tracks foreclosure activity in the state. In December, the amount of foreclosures heading back to the banks, REO, dropped 11.9% from the previous month to 12,437. Significant declines in foreclosure discounts by lenders drove the decrease in sales to third parties, according to the report.”

Bloomberg - “Obama to Announce Fee on 20 Banks to Recoup TARP” (1-13-10)

“President Barack Obama will announce tomorrow his intention to impose a fee on roughly 20 of the country’s largest banks and financial institutions to help recoup taxpayer bailout money and trim the federal budget deficit. Obama will outline his proposal to raise as much as $120 billion at 11:45 a.m. local time at the White House, Obama’s press secretary, Robert Gibbs, told reporters. Gibbs said the president’s economic team has worked on a structure to prevent the levy from being passed onto consumers.”

Bloomberg - “Real Estate Bull Laub Sees Unprecedented Workout From Bad Debt” (1-13-10)

“Kenneth Laub has been through three commercial real estate boom and bust cycles during almost five decades as a broker and consultant to corporations such as Hess Corp. and International Paper Co. He says the current downturn will overshadow all of the others, Bloomberg Markets reports in its February 2010 issue.”

Looking Back:

One year ago, the NAHB encouraged congress to use a portion of the $700 billion bailout to increase credit for home purchases, and to stem foreclosures. California lost a total of 144,000 people from 2008 to 2009. Ben Bernanke warned that a fiscal stimulus would not cause an economic recovery. In November of 2008, 4 percent of homes were bought with adjustable rate mortgages.

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The Norris Group Real Estate News Roundup 12/09/09

Wednesday, December 9th, 2009

Today’s News Synopsis:

Gov. Schwarzenegger signed a bill which ensures that consumers may choose their own real estate service provider when purchasing a foreclosure. According to Zillow, Bay Area properties have lost 3 percent of their value during the first 11 months of 2009. 18 percent of FHA loans are either delinquent or in foreclosure. Statistics from Freddie Mac show that national home prices increased by .9 percent during the second quarter of this year.

In The News:

Managing REO – “Buyer’s Choice Act Signed Into Law” (12-10-09)

“Gov. Arnold Schwarzenegger has signed an assembly bill into law that protects consumers by ensuring that they have the right to choose their own real estate service providers when purchasing foreclosed properties. Also known as the Buyer’s Choice Act, the law prohibits sellers of REO properties from requiring the buyer to use a particular title company, escrow settlement or other real estate service provider. The Escrow Institute of California says this ‘unethical, anti-competitive practice’ drives up costs for homebuyers and takes business away from locally owned companies.”

San Francisco Chronicle – “Decline in home values levels off” (12-9-09)

“Homes in the nine-county Bay Area lost $38.1 billion in value in the first 11 months of this year, a 3 percent drop, according to real estate site Zillow.com. Gargantuan though that sounds, it’s a pittance compared with the $233.1 billion in home values wiped out in 2008, which was a 15.7 percent plunge from the previous year.”

Los Angeles Times – “Geithner: bailout program extended to October” (12-9-09)

“Money from the $700 billion taxpayer-funded bailout program has helped rescue big Wall Street firms, auto companies and others. That’s angered many Americans, who feel the government hasn’t provided them with relief from high unemployment and rising home foreclosures. Geithner said the Troubled Asset Relief Program that Congress passed in October 2008, will be extended until Oct. 3, 2010. He has the authority to extend the TARP simply by notifying lawmakers.”

Inman - “Home prices rise 0.9% in Q3″ (12-9-09)

“Home prices rose for the second quarter this year, according to Freddie Mac’s quarterly national Conventional Home Price Index (CMHPI) Purchase-Only Series released Tuesday, adding evidence the nation’s housing market is warming up. The government mortgage entity’s home-price-growth index rose 0.9 percent in the third quarter, following an upwardly revised 2 percent pickup in the second quarter. The increases of the past two quarters made up for about two-fifths of the declines registered during the final quarter of 2008 and the first quarter of 2009. U.S. home-sale prices were down 3.9 percent year-over-year.”

San Francisco Chronicle – “Condo rules could shut out buyers, hit builders” (12-9-09)

“The tighter lending standards are designed to protect the financial health of the FHA. Roughly 18 percent of loans insured by the FHA are either delinquent or in foreclosure and the agency’s financial cushion has dipped below the federal minimum. But the move is a blow to condo buyers because the FHA has become a key source of mortgage financing. The agency insures roughly one in four new loans today because buyers need only have a 3.5 percent down payment.”

Housing Wire – “‘Toxic Titles’ Worth Less than Cost of Foreclosure: Fed’s Duke” (12-9-09)

“‘In the most devastated neighborhoods, some lenders do not even complete the foreclosure process or record the outcome of foreclosure sales because the cost of foreclosing exceeds the value of the property,’ Duke said. These ‘toxic titles,’ she added, have placed a large number of properties in legal limbo. High rates of abandonment pushed many cities such as Flint, Mich. and Cleveland to pursue plans to ‘right size’ by demolishing vacant properties and create land banks, Duke said.”

Housing Wire – “Deutsche Sees New Year’s Surge of Fannie, Freddie Buyouts” (12-9-09)

“The pace of buyouts in delinquent loans in Fannie Mae (FNM: 0.92 0.00%) and Freddie Mac (FRE: 1.11 0.00%) mortgage-backed securities portfolios (MBS) is set to boom in 2010 as new accountancy rules come into effect, changing the nature of securitization.”

Mortgage Bankers Association – “Mortgage Applications Increase in Latest MBA Weekly Survey” (12-9-09)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending December 4, 2009. The Market Composite Index, a measure of mortgage loan application volume, increased 8.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 54.0 percent compared with the previous week, which was a shortened week due to the Thanksgiving holiday.”

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The Norris Group Real Estate News Roundup 12/08/09

Tuesday, December 8th, 2009

Today’s News Synopsis:

Chase Home Finance reports that 29 percent of its HAMP trial plans failed to become permanent. Research from Altos Research shows that home prices decreased in 24 of the 25 markets that the company observes. A credit analysis of 27 million consumers lead TransUnion to estimate that delinquencies of 60 days or more will drop 3 percent by the end of 2010.

In The News:

Housing Wire – “HAMP Must Address Second Liens, Congress Hears” (12-8-09)

“Mortgage servicing firms make money off servicing fees, which are based on the principal amount — a disincentive for reducing principal, Goodman said. Servicers are often owned by large financial institutions that hold second liens. If principal reduction is left up to the banks’ discretion, she said, the conflicting financial interests will likely restrict principal reduction, she said.”

Housing Wire – “Chase Converts 2% of Offered HAMP Trials into Permanency” (12-8-09)

“For every 100 HAMP trial plans initiated by Chase Home Finance from April to through September, 29 borrowers did not make the required payments and failed to reach a permanent status, according to testimony from Molly Sheehan, senior vice president at Chase Home Finance.”

Housing Wire - “List Prices Declined in 25 of 26 Markets: Altos Research Index” (12-8-09)

“The Altos Research 10-city index of home listing prices decreased 0.4% from October to November, and prices fell in 25 of the 26 major markets the Mountain View, Calif.-based real estate market research firm tracks.”

Housing Wire – “Prices Up For Second Straight Quarter in Freddie Index” (12-8-09)

“Home prices increased for the second straight quarter in Freddie Mac’s (FRE: 1.11 +2.78%) Conventional Mortgage Home Price Index (CMHPI). The purchase-only index increased 0.9% from Q209 to Q309, following a 2% increase from Q109 to Q209. The two quarters of increases are equal to about 40% of the declines experienced in Q408 and Q109. For the 12-month period ending in Q309, home sales prices were down 3.9%.”

Housing Wire – “Mortgage Delinquencies to Decrease in 2010: TransUnion” (12-8-09)

“Based on credit performance of 27m consumers, national credit bureau TransUnion projects mortgage delinquencies of 60 or more days to drop nearly 3% by year-end 2010 to 6.39%, from an expected 6.56% at year-end 2009.”

Housing Wire – “House Prices Lose 0.5% in October, IAS Says” (12-8-09)

“House prices continued to decline in October, falling 0.5% across the US, according to the latest data compiled by default management and residential collateral valuation service provider Integrated Asset Services (IAS). The Northeast and Midwest census regions both slipped (1.6% and 0.3% respectively) and the South and West regions gained a respective 1.1% and 0.5%.”

Bloomberg – “Calpers Real-Estate Holdings Decline 30% During First Quarter“ (12-8-09)

“The California Public Employees’ Retirement System, the largest state-run U.S. public pension, saw the value of first-quarter real estate holdings decline 30 percent and is terminating contracts with some investment firms behind the loss, a consultant for the fund said.”

Bloomberg – “Citigroup Said to Push for Bailout-Payback Agreement This Week” (12-8-09)

“Citigroup Inc. Chief Executive Officer Vikram Pandit is pressing the U.S. Treasury Department and regulators to agree as soon as this week on a plan to pay back $20 billion remaining from a government bailout, people familiar with the matter said.”

Inman - “SEC charges former New Century execs” (12-8-09)

“Three former executives of New Century Financial Corp. — one of the most prominent subprime lenders during the housing boom — have been charged with securities fraud for allegedly misleading investors.”

Orange County Register – “Will new appraisal rules hurt FHA borrowers?” (12-8-09)

“On January 1, 2010 FHA will require the Home Valuation Code of Conduct (HVCC) process for all appraisals, falling in line with Fannie Mae and Freddie Mac. For a multitude of reasons this will be tremendously negative for the market, for buyers and for sellers.  It will further depress property values, it will hinder sellers ability to get open offers and most importantly it will prohibit many FHA buyers from even having their offers looked at by sellers in multiple offer situations-even if they have higher offers.”

Looking Back:

One year ago, data from the 14 largest banks revealed that 53 percent of borrowers with modified mortgages were more than 30 days late on their payments after six months.  Statistics from DataQuick showed that Orange County home prices declined by 18 percent from 2007 to 2008. Delinquency rates for mortgage loans rose to 3.96 percent.

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The Norris Group Real Estate News Roundup 11/23/09

Monday, November 23rd, 2009

Today’s News Synopsis:

The NAR reports that existing-home sales increased by 10.1 percent in October. Statistics show that California workers, who earn the national median income, can afford 59.1 percent of the new and existing homes during the 3rd quarter. According to the MBA, multifamily lenders provided $88 billion in new financing for apartment buildings with 5 or more units during 2008.

In The News:

NAR - “Existing-Home Sales Record Another Big Gain, Inventories Continue to Shrink” (11-23-09)

“Existing-home sales – including single-family, townhomes, condominiums and co-ops – surged 10.1 percent to a seasonally adjusted annual rate1 of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, and are 23.5 percent above the 4.94 million-unit level in October 2008. Sales activity is at the highest pace since February 2007 when it hit 6.55 million.”

CBIA - “California Housing Affordability Continues to Decrease, CBIA Announces” (11-23-09)

“On a statewide basis, the HOI found that a family earning the median-income could have afforded 59.1 percent of the new and existing homes that were sold during the third quarter, down from 62.7 percent in the second quarter.”

Mortgage Bankers Association – “MBA Reports Multifamily Lending 40 Percent Lower in 2008 Than 2007; Market Remained Broad and Diverse” (11-23-09)

“In 2008, 2,877 different multifamily lenders provided a total of more than $88 billion in new financing for apartment buildings with five or more units, according to an annual report from the Mortgage Bankers Association (MBA). The 2008 dollar volume represents a 40 percent decline from 2007 levels.”

Bloomberg - “Commercial Property Prices to Fall Up to 55%” (11-23-09)

“Commercial real estate prices may fall as much as 55 percent from October 2007’s peak and the recovery will be slow amid rising unemployment and tepid consumer spending, Moody’s Investors Service said.”

Inman - “Front-loaded loans: bad for borrowers?” (11-23-09)

“A necessary consequence of full amortization with equal monthly payments is that the composition of the payment between interest and principal changes over time. In the early years, the payment is mostly interest; in the later years, it is mostly principal. At 6 percent, it does indeed take 21 years to pay down the balance of the $100,000 loan to $50,000. This is the factual foundation of the front-end-loading argument.”

Orange County Register – “Weakest home market in O.C.? Garden Grove” (11-23-09)

“How’d Garden Grove 92844 do so poorly? It ranked 82nd of 83 for pricing; 67th for sales; and 69th in terms of foreclosures frequency in the community. In the previous quarter, this ZIP ranked 56 of 83 overall.”

Orange County Register – “Will ‘good faith’ be bad for borrowers?” (11-23-09)

“Another purpose of the GFE2010 is to ‘bring clarity’ to the market ‘through a simpler and better understanding of their costs.’ To do this HUD took the previous 1 page Good Faith Estimate that clearly delineates all charges and tailored perfectly into the HUD/RESPA required Truth In Lending disclosure (which discloses APR) and created a three page form that does not delineate any fees, lumps charges for non-related services together, separates out services required by the loan process from those the borrower can select and has no relation to the Truth In Lending disclosure or the Good Faith Estimate required under Reg Z by the Fed.”

Realty Times – “Washington Report: Congress Pressures FHA” (11-23-09)

“Congressman Spencer Bachus of Alabama said FHA’s declining capital reserves, estimated by independent auditors as barely one quarter of the congressionally-mandated minimum, raises the possibility that FHA could come hat in hand to Congress seeking a bailout. ”

Realty Times – “The Cost of the Home Buyer Tax Credit” (11-23-09)

“If the stats hold true, and that is about half of all buyers are first-timers, then there were 2.25 million buyers that qualified (assuming they didn’t go beyond the income limits – which many did). But for simplicity, we’ll say they all qualified. Simple math puts the tax credits at $18 billion for 2009 that doesn’t have to be paid back. For all the money that’s being floated out there to stimulate the economy, this is probably the best plan in play.”

Looking Back:

Wells Fargo made plans to cut 80 percent of all of its wholesale mortgage jobs. Citigroup’s year losses had reached $20 billion, and the company cut 52,000 jobs. A study showed that borrowers who attended home ownership education programs were 20 times less likely to foreclose.

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The Norris Group Real Estate News Roundup 10/28/09

Wednesday, October 28th, 2009

Today’s News Synopsis:

According to the MBA, mortgage application volume decreased by 12.3 percent, on a seasonally adjusted basis, from the previous week. Sources have confirmed that the Senate does intend to extend the home buyer tax credit with some modifications. The Commerce Department reports that the pace of new home sales decreased by 3.6 percent in September.

In The News:

Mortgage Bankers Association – “Mortgage Applications Decrease in Latest MBA Weekly Survey” (10-28-09)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending October 23, 2009. The Market Composite Index, a measure of mortgage loan application volume, decreased 12.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2.8 percent compared with the previous week, which included the Columbus Day holiday.”

Housing Wire – “San Francisco Fed Sees FHA Revive Subprime Segment” (10-28-09)

“Around 10% of originations in the San Francisco Fed’s Q406 sample were labeled by originators as ‘subprime,’ according to Krainer. In the total US mortgage market, subprime loans accounted for about 20% of originations in 2006. Despite a nearly zero market share of subprime by Q108, Krainer said, increased FHA lending — identified in the securitization industry by Ginnie Mae’s share — revived the subprime segment of the market.”

Housing Wire – “31% of BAI Survey Respondents Find Mortgage Access Worsening” (10-28-09)

“Of those surveyed, nearly one-third — or 31% — indicated access to mortgages is worse now than six months ago, while only 5% said it improved. The projections indicate 12% of respondents expected access to improve in another six months, while 15% expect access to worsen.”

Housing Wire – “Senate Will Agree to Extend Homebuyer Tax Credit: Sources” (10-28-09)

“Some reports indicate the extension would run through June 2010 and expanded to include all homebuyers, not just first-time purchasers. Another option would extend the full credit to first-time buyers until April 1, with $2,000 reductions every quarter until it dissolved at the end of 2010.”

Housing Wire – “VIEWPOINT: Ginnie Buyouts Rattle Investor Nerves” (10-28-09)

“tradable supply – is being repaired in the current environment. FHA lending and its corollary, Ginnie Mae production are currently going gangbusters. FHA’s share of mortgage lending has revived from a moribund 3% in 2006 to about 25% currently. Ginnie production, as low as 5% to 10% of monthly agency pass-through issuance 2005-7, has popped above 40% in recent months and is currently running at 20 to 25% of monthly supply.”

Bloomberg – “Las Vegas Leads U.S. With Highest Foreclosure Rate” (10-28-09)

“Las Vegas had the highest U.S. foreclosure rate in the third quarter, followed by cities in California and Florida, as unemployment left more borrowers unable to make their mortgage payments, RealtyTrac Inc. said.”

Bloomberg – “U.S. Economy: New-Home Sales Drop as Credit Nears End” (10-28-09)

“Purchases dropped 3.6 percent to a 402,000 annual pace that was lower than the most pessimistic economist’s forecast, according to Commerce Department figures issued today in Washington. Other data showed orders for durable goods climbed 1 percent in September, the fourth gain in the last six months.”

Wall Street Journal – “‘Civil Gideon’ Law Gets Off Ground in Golden State” (10-28-09)

“Those advocates have gotten their wish, at least in California. A new California law, signed this month by Gov. Arnold Schwarzenegger, gives poor residents the right to an attorney in civil matters such as child custody and foreclosure.”

New York Times – “GMAC Asks for More U.S. Aid” (10-28-09)

“GMAC, the troubled consumer finance company, is seeking billions of dollars in additional federal aid, a move that would be its third taxpayer bailout and could give the government a majority stake in the company, according to people briefed on the situation.”

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The Norris Group Real Estate News Roundup 10/14/09

Wednesday, October 14th, 2009

Today’s News Synopsis:

Citigroup and other banks are being accountable for fraudulent loans which will cost them more than $688 million. The Mortgage Bankers Association reports that mortgage loan application volume has decreased by 1.8 percent from last week.  JP Morgan Chase has approved of trial modifications for 90 percent of its borrowers.

In The News:

DSNews – “Feds to Offer Easier Aid, Incentives for Modifications and Short Sales” (10-13-09)

“concerns have grown over whether HAMP reaches enough borrowers to make a difference in the wider housing-based economy. The MBA in particular, as well as the servicers’ advocacy group HOPE NOW, has argued that too many homeowners are – or ought to be – ineligible for HAMP modifications, and so far the government has done very little to assist that population.”

Bloomberg – “Citigroup Loans Ruled Fraudulent; Tousa Bonds Surge” (10-14-09)

“Citigroup Inc. and other lenders made fraudulent transfers when they gave Tousa Inc. secured loans six months before its bankruptcy filing, a judge ruled in a decision that may cost the banks more than $688 million. Tousa notes more than tripled.”

Housing Wire – “California Laws Get Tough on Mortgage Finance” (10-14-09)

“Senate Bill (SB) 36 regulates the licensing requirements for residential loan originators in compliance with the federal Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act. SB 237 requires appraisal management companies (AMCs) and appraisers register with the Office of Real Estate Appraisers and subjects appraisers to the provisions of the Real Estate Appraisers’ Licensing and Certification Law.”

Housing Wire – “JP Morgan Beats the Street, Earns $3.6bn” (10-14-09)

“JP Morgan Chase approved 262,000 new trial modifications between the Making Home Affordable Modification Program (HAMP) and its own modification program, resulting in lowered payments for 90% of borrowers with modified mortgages. In the bank’s retail financial services (RFS) division, net income was $7m, down from $57m in Q208 and $15m from Q209, due to a decrease in mortgage origination revenue, an increase in the provision for credit losses, higher non interest expense and lower loan balances, JP Morgan said.”

Housing Wire – “First American CoreLogic Creates National Fraud Database” (10-14-09)

“The National Fraud Database includes application and transaction data of more than 80m loan applications, representing 65% of all loan annual applications, aggregate fraud reports from 35 lenders and investors, with performance data history dating back to 2005.”

Mortgage Bankers Association – “MBA Releases Model Whole Loan Sale and Servicing Agreement” (10-14-09)

“The Mortgage Bankers Association (MBA) today adopted a model sale and servicing agreement it anticipates will become the standard form for industry participants to use voluntarily for whole loan purchases and sales made with an eye toward potential securitization. The Agreement was adopted yesterday by MBA’s Residential Board of Governors (RESBOG) as an MBA supported best practice.”

Mortgage Bankers Association – “Mortgage Applications Decrease in Latest MBA Weekly Survey” (10-14-09)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending October 9, 2009. The Market Composite Index, a measure of mortgage loan application volume, decreased 1.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1.7 percent compared with the previous week.”

CNN – “Push on to expand $8,000 tax credit” (10-14-09)

“Congress is considering proposals to greatly expand a soon-to-expire $8,000 tax credit for first-time homebuyers — potentially applying it to all but the wealthiest homebuyers. Supporters say doing so would further boost home sales, stabilize housing prices and generate jobs. Opponents say extending and expanding the credit would be a waste of money and only temporarily stave off further price declines”

Bloomberg – “Bank of America to Target More Mortgage Share, Desoer Says” (10-14-09)

“Bank of America Corp., seeking to avoid a plunge in mortgage-lending profits in coming years as the business shrinks, will strive to expand its more than 20 percent market share, the head of the company’s home-loan unit said.”

Bloomberg – “GMAC’s Ally Bank Builds Deposits by Needling Rivals” (10-14-09)

“GMAC Inc., the lender that received two U.S. bailouts, has attracted $2.9 billion of new deposits and riled its rivals by offering the highest interest rates and running advertisements that portray bankers as deceptive.”

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The Norris Group Real Estate News Roundup 10/9/09

Friday, October 9th, 2009

Today’s News Synopsis:

The House of Representatives unanimously passed a one-year extension of the first time homebuyer $8,000 tax credit.  A new Wells Fargo report projects big losses due to ALT-A and Option ARM recasts. Congress doubts that Treasury Department’s $50 billion loan-modification program will help 3-4 million foreclosures. The OC Register reports the smallest home-price loss in two years. Keep in mind a number of larger properties are now foreclosing which will make the median price number skewed. This week along we watched at trustee sale as a home worth $1.1 million got sold in the inalnd empire at $400,000.   

In The News:

Housing Wire – “House Extends Homebuyer Tax Credit for Service Members” (10-9-09)

“The House of Representatives unanimously passed a bill that calls for a one-year extension of the first time homebuyer tax credit for service members serving overseas. The bill passed 416-0, and is now in the Senate for consideration.”

Housing Wire – “Wells Sees 60-70% Loss Severity in Option-ARMs” (10-9-09)

“expect heavy losses among Option adjustable-rate mortgages (ARMs), a product that allowed negative amortization by letting borrowers choose to pay only the minimum monthly payment. Fitch Ratings expects significant payment shocks over the next several years as a wave of Option-ARMs recast from the minimum amount to a fully amortizing principle and interest payment. These recasts are expected to drive substantial losses among the Option-ARM sector.”

Housing Wire – “MBA, CMSA Urge Capital Relief under New Accountancy Rules” (10-9-09)

“The letter raises industry concerns over the Financial Accounting Standards (FAS) 166 and 167, which were drafted by the Financial Accounting Standards Board (FASB) in June. The proposed changes take effect Jan. 1, 2010 and will require assets and liabilities of special purpose entities (SPEs) like mortgage-backed securities (MBS) to come onto the balance sheet of the issuer, servicer or special servicer. The standards will immediately apply to all existing MBS and commercial MBS, as well new MBS and CMBS issued after January 1.”

San Francisco Chronicle – “Banks help Habitat for Humanity buy empty homes” (10-9-09)

“Habitat for Humanity Greater San Francisco said Thursday that three banks had stepped up to help fund its plans to acquire and renovate foreclosed homes for use as low-income housing.”

CNN - “Predatory-lending lawsuits on the rise” (10-9-09)

“To be sure, banks have faced unfair lending lawsuits for years and have paid millions of dollars in settlements. But the recent housing boom was fueled by questionable and exotic loans that many borrowers had no hope of repaying. Some of the cases involve the classic predatory lending schemes, where certain borrowers were given mortgages with high interest rates, while other suits are combating loans that are ultimately unaffordable.”

Bloomberg - “TARP Oversight Group Says Treasury Mortgage Plan Not Effective” (10-9-09)

“The group Congress created to oversee the U.S.’s $700 billion financial bailout said the government needs to increase its efforts to help struggling homeowners modify their mortgages. A split Congressional Oversight Panel said in a report issued today that it has doubts that the Treasury Department’s $50 billion loan-modification program will help prevent an estimated 3 million to 4 million foreclosures. The group’s two Republican members dissented from the Democratic appointees’ findings.”

Bloomberg - “Goldman Sachs Seeks to Restart Commercial-Backed Debt” (10-9-09)

“Goldman Sachs Group Inc. may sell the first commercial-mortgage bond since June 2008, taking advantage of an untapped Federal Reserve program. The five-year, $400 million loan to Developers Diversified Realty Corp. made by a unit of the New York-based bank is secured by 28 shopping centers. Developers Diversified Realty Corp. It will be used to repay debt on those properties and others, and to reduce the outstanding amounts of credit facilities, Developers Diversified said yesterday in a statement.”

Orange County Register – “O.C. home-price loss smallest in 2 years” (10-9-09)

“Current median is -33% below June 2007’s peak of $645,000 but 17% above the cyclical low hit in January 2009. Single-family homes resell for 32% less than their peak pricing (June ‘07) while condos sell 37% below their peak in March 2006. Builder prices for new homes are 43% below their February ‘05 top.”

Inman - “Real estate Twitter tips” (10-9-09)

“DemandSpot is a Twitter real estate search tool designed to help folks find buyers (and sellers). Simply enter a geographic area, a search radius up to 200 miles, and select a real estate keyword from a list. DemandSpot will return tweets that contain those keywords, together with the link to the person who tweeted it.

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93-TNG Radio – Michael Pines 10-25-08

Thursday, October 16th, 2008

REventures

Michael Pines

President of REventures

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This week Bruce Norris is joined this week by Michael Pines, President of REventures. Michael is a licensed attorney, a licensed broker, and has first hand experience with the RTC in the 1990s.

Bruce asks Michael about his involvement with the RTC. He got involved originally with the RTC by working with a client who was dividing land to do manufactured housing. There was a legal dispute and the owner lost the property and the RTC got the property and inherited the litigation.

Michael and Bruce discuss the differences and similarities between now and the S&L crisis. Michael feels like he’s reliving the same scenario. It’s been 20 years since deregulation and you think we would have learned. The parallels are remarkable he says.

In the mid 90s the stock market did OK and real estate did horrible. Back then, real estate wasn’t as tied to the stock market as it is today. Michael says this time it’s intertwined and it’s impossible to separate. This time foreign counties are also much more involved.

When the RTC started it was thought it was going to be a $30-$50 billion dollar problem and then shortly there after it was much more expensive. Bruce thinks the government’s $700 billion is just the down payment. This is going to be a multi-trillion dollar solution. Telling people this would cause tremendous political fallout if they were honest upfront. Bruce talks about the story he read about a Congress woman being asked about where they came up with the $700 billion number and she replied they just needed a large number.

Michael says he doesn’t see it as a bailout. Michael says the people who made money said they got it and they are gone. There will be people who went to jail and some people will be forced to give money back. Michael thinks the major players who acted dishonestly will be tracked down and be used as an example. So many people were involved it will be hard to track everyone down. Those that profited will not be profiting from the solution.

No one knows quite yet where the money will go. Congress is not full of experts. There’s still much research that needs to be done. Institutions need to be studied and they know these institutions need money. They need the authority to buy some of these institutions.

The new bailout said the golden parachutes of the past will now be gone and some will be forced to give back unearned bonuses. Michael doesn’t think they will go down quietly.

In the RTC days, the first two years was a mess as the government tried to do it itself. They weren’t equipped. The office for disposing of California real estate was located in Dallas. They hired attorney in California but negotiations required people flying out from out of state. These individuals had no clue about the state. The RTC got taken advantage of because of the set up so it began to change. As the RTC went more into the 90s, property values kept going down.

RTC started willing to sell quantities of properties in small packages and then eventually packaged them in larger quantities. Eventually they only wanted to sell properties and debt in packages.

RTC properties were marketed in different ways ranging from auction to mailers to the bigger players who could purchase in bulk. It changed drastically every year. The arrangements got more and more complex.

Bruce asks Michael if the similar groups will be set up to handle this. Michael says past people who were involved are being solicited for jobs who can handle this again. Many are retired.

Michael says the better investor deals happened early in the cycle. Bruce asks Michael where the deals will be. Michael thinks this will take years and that the S&L Crisis was tiny compared to what’s coming. Opportunities are already here. He’s hoping there’s no great depression. Investors are a big part of the solution.

Michael and Bruce talk about the potential for true bulk deals coming our way. Stay tuned for more with Michael next week.

Michael Pines is currently principle of REventures that provides brokerage, investment, and property management services.

Michael has handled all types of civil, commercial, and business lawsuits, including cases involving real estate, insurance insolvency, insurance liability, and professional malpractice, breach of contract, lender liability, and white collar crime.

He has been involved in numerous complex cases including pursing actions against and defending major corporations.

Michael has tried cases in many state and federal courts throughout the Unites States. He represented clients before all levels of the Courts Of Appeal in California including presenting cases before the Supreme Court of California some of which resulted in a law changes for the state.

Michael represented parties and sued the RTC during the S&L crisis and hired an attorney from the law firm that represented the RTC. He is experienced in handling many complex large-scale workouts in and outside of bankruptcy and complex litigation within the insolvency proceedings.

Michael formed and runs the Michaelisa Foundation which engages in various types of charity work. It’s latest project is a “prisoner-canine” or “cell-dog” program. Under this program (dedicated to Michael’s recently deceased “best friend” for about 18 years, dogs will be taken from shelters to prisons. Prisoners will be taught how to train dogs. Then the dogs will be adopted out to good homes.

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89-TNG Radio – I Survived Real Estate 10-4-08

Friday, October 3rd, 2008

isurvived2008

I Survived Real Estate 2008

Part Seven

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Part seven of “I Survived Real Estate 2008” picks up with the panel interview from the last session where Bruce talks about how Wall Street keeps calling to find out when bottom is so they can profit even though they are part of the reason we’re in this current situation.

Rick talks about large pools of money purchasing these loans at deep discounts and then fixing the principles of the people in the homes.

Bruce then responds by talking about HR3221 about how HUD can buy first trust deeds at a discount and how the new structure would allow them to alter the loan of the person in the property. Bruce worries about the ramifications of this program. It is limited in who can apply since it applies to adjustable mortgages only. The people who really get burned are those next door who qualified for a fixed loan and are making the payments. They did everything correctly but they don’t apply for the principle reduction. With California being a non recourse state, Bruce worries the dominos that might fall. Bruce then asks Philip Tirone if bailing from mortgages is becoming more acceptable.

Philip says clients don’t care about the moral issue of walking away; they are more concerned about the credit ramification. Philip talks about the raised loan limits and how everyone thought it would make a difference. They think things are going to help but when you get into the legislation, it doesn’t.

Bruce agrees with Christopher in that the median price has to become more reasonable. Christopher thinks another 6 months and everyone will qualify.

Tommy Williams brings up the very important point of moral hazard in letting something like a bailouts occur. Not holding consumers accountable sets up a larger problem for the future.

Bruce asks Christopher about Merrill Lynch taking .22 cents on the dollar for a $30 billion package of CDOs . He says they actually got 5% in cash and carried back a note and guaranteed the pile. Bruce asks whose money was actually lost. Christopher says it was the consumer investing in their company. Christopher says this buyout is another instrument and accounting mechanism. The financial system, Christopher says, is an absolute mess. All banks are having a difficult time. We’re having an issue with cash because of it.

Bruce asks Christopher about how FDIC can handle writing these sort of checks and if the government will just keep writing checks. Christopher says that they’ll have to be bailed out as well. Bruce asks if stagflation will be a problem. Christopher says he doesn’t think it will be an issue.

Bruce asks Rick Sharga about the difference between a bank owning a loan and the individual owner. Rick explains how the process works. Banks can accept the losses but the private investors can’t as easily take the hit. These loans are not as flexible as the securitized loans. Bruce talks about HR3221 and how the second must be wiped out first.

About 10% of the foreclosures list in Riverside being non-owner occupied but 70% out of the 90% that are owner occupied have simultaneous first and second at the time of purchase. Almost 100% of these properties are 100% financed.

Joel Singer brings up refinancing. The number of first payment defaults is huge because of bad credit and no skin in the game. The good news, he says, 2 out of 3 will stay in their home most likely. However, he is much more concerned about price drops then the mortgage resets. He thinks more people will walk if the prices get too low.

Bruce also brings up unemployment and how it will continue to go up. He says out migration will then probably force more to leave.

Bruce asks Annemaria if loan tightening happens during every cycle. Annemaria talk about how there’s a cycle and she thinks that this will never happen on this scale again. Lenders are in sheer panic because of what’s gone on and all the legislation now being presented. It’s a little late to implement since everyone has already got in. Bruce feels once we get into a safe market, the next person will dream up the next special mortgage.

Christopher says financial investors are always slipping in risk and hiding it. Incentives from Wall Street are bazaar and we need to not trust them so this doesn’t happen.

Bruce sees the foreclosures coming as being a huge problem and much worse then the 90s. In the 90s we had two times as many sales as we had foreclosures. This year, we’ll have two times as many foreclosures to sales.

Joel Singer says the 90s downturn was caused by unemployment. There were 7 years where prices were flat. Joel is curious to see if the market will clear faster because of the steep price drop. He thinks we have to make the market clear and he feels that it really already has. Joel is stunned at how many sales are currently being made and he doesn’t think it’s investor purchases. It’s cheaper to buy then rent in some places. Builders are having a hard time competing because homes are being bought below replacement costs.

Bruce talks about his Grand Junction, Colorado experience buying all of HUD’s condos. Bruce set all the costs at $8,000 a condo but no one would buy because the market was too scary. Emotions definitely play a role.

Rick says he talked to a man who handled the REO assets at a credit union and the man was wondering if RealtyTrac could supply him a list of who owned the first. Rick was surprised since he thought that would have been information that was gathered. The man said they did not have the information as little information was gathered on the first mortgage and little was taken on the homebuyer. More next week or see YouTube or Google video for the entire program. Next week is the final week of the audio.

The following partners and sponsors without whom the event would not have been possible:

Platinum Sponsors:

The San Diego Creative Investors Association (SDCIA): sdcia.com

Investors Workshops: investorsworkshops.com

Frye Wiles: fryewiles.com

Proxibid: proxibid.com

White House Catering: whcatering.com

MVT Productions: mvtpro.com

Pechanga Resort and Casino: pechanga.com

The Denver Nuggets: nba.com nuggets

The Chicago Bulls: nba.com bulls

The Cleveland Cavaliers: nba.com cavaliers

Gold Sponsors:

7 Steps to a 720 Credit Score and Philip X. Tirone – 7stepsto720.com

Chicago Title – ctic.com

Elite Auctions – sellwithauction.com

Foreclosure Trackers – foreclosuretrackers.com

Investors Resource Center of America LA and Steve and Robyn Love – irca-losangeles.com

Las Brisas Escrow – lasbrisasescrow.com

National Club of Real Estate Investors and Sam Saddat – ncrei.com

Northern California Real Estate Investors Association (Norcalreia) and David Granzella – norcalreia.com

North San Diego Real Estate Investors and Linda Wessels – nsdrei.org

RealtyTrac – realtytrac.com

RE Ventures and Michael Pines – reventuresrealty.com

Real Estate Investors Club of Los Angeles and Phyllis Rockower – realestateclubla.com

Real Wealth Investor and Scott Whaley – realwealthinvestor.com

Saddleback Valley Communities – svc4.com

Silverstar Finance and Janet French – silverstarfinance.com

Sunset Hills Memorial Park and Mortuary – sunsethills.cc

The Mission Inn – missioninn.com

The Mortgage Equity Group – http: themeg.net

The Naked Real Estate Investor Club – Rosie Nieto – nakedrealestateinvestorsclub.com

The Short Sale Processor and Nick Manfredi – theshortsaleprocessor.com

Virtual Real Estate Tour and Layla Tusko – 1wealthcreation.com

Wholesale Capital Corporation – wccmtg.com

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