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The Norris Group Real Estate News Roundup 5/12/10

Wednesday, May 12th, 2010

Today’s News Synopsis:

The NAHB reports that builder confidence increased from Q1 2009, but is still low. The MBA’s weekly survey shows that mortgage application volume increased by 3.4 percent. According to Freddie Mac, of all borrowers who had 30-year FRMs, 75% refinanced into a new 30-year FRM. Barclays estimates that foreclosure shadow inventory should peak during the summer of 2010.

In The News:

NAHB - “Active Adult Home Builder Activity, Confidence Remain Low” (5-12-10)

“The 55+ single-family HMI measures builder sentiments based on current sales, prospective buyer traffic and anticipated six-month sales for the 55+ single-family market.  A number greater than 50 indicates that more builders view conditions as good than poor. Although the index recorded a slight rise in the first quarter of 2010 – moving up two points to 19 from its 2009 Q1 level of 17 – the level of confidence remains low.”

Mortgage Bankers Association – “Refinance Applications Surge, Purchase Applications Drop in Latest MBA Weekly Survey” (5-12-10)

“The Refinance Index increased 14.8 percent from the previous week and the seasonally adjusted Purchase Index decreased 9.5 percent from one week earlier.  The unadjusted Purchase Index decreased 8.9 percent compared with the previous week and was 0.6 percent lower than the same week one year ago. The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending May 7, 2010.  The Market Composite Index, a measure of mortgage loan application volume, increased 3.9 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 3.4 percent compared with the previous week.”

Inman - “More U.S. residents on the move” (5-12-10)

“The percentage of U.S. residents who moved between 2008 and 2009 jumped to 12.5 percent (37.1 million people), according to a report by the U.S. Census Bureau. That increase comes after a record-low move rate between 2007 and 2008: 11.9 percent, or 35.2 million people. The bureau’s data comes from the 2009 Current Population Survey conducted between February and April every year at about 100,000 U.S. addresses. It includes residents who are at least 1 year old.”

Housing Wire – “Freddie Mortgage Refinancing Dominated by Fixed-Rate Products” (5-12-10)

“Of borrowers who had 30-year FRMs, 75% refinanced into a new 30-year FRM, while 15% opted for a 15-year FRM and the remaining 10% chose a 20-year FRM. Freddie said the combined 25% of 30-year borrowers that refinanced into a shorter-term loan is the most since Q304, when 30% of 30-year borrowers refinanced into a balloon mortgage or shorter-term FRM.”

Housing Wire – “Shadow Inventory To Peak in Summer of 2010: Barclays” (5-12-10)

“The shadow inventory of foreclosures should peak in the summer of 2010 before falling gradually in the later months, according to a new report from Barclays Capital. Barclays defines the shadow inventory of foreclosures as loans in 90-plus day delinquency or already in the foreclosure process. According to the report, there are currently 2.4m loans in 90-plus day delinquency and another 2.1m in foreclosure, totaling 4.5m in the shadow inventory.”

Housing Wire – “End in Sight for General Growth Bankruptcy” (5-12-10)

“The end is in sight, as a plan is in place for General Growth Properties (GGP: 14.96 +0.20%) to emerge from bankruptcy as early as this summer. The judge overseeing the case approved bidding procedures and the issuance of warrants to a group of investors led by Brookfield Asset Management (BAM: 25.49 +1.03%).”

Bloomberg - “‘Perfect Quarter’ at Four U.S. Banks Shows Fed-Fueled Revival” (5-12-10)

“Bank of America Corp., JPMorgan Chase & Co. and Goldman Sachs Group Inc., the first, second and fifth-biggest U.S. banks by assets, all said in regulatory filings that they had zero days of trading losses in the first quarter. Citigroup Inc., the third-largest, doesn’t break out its daily trading revenue by quarter. It recorded a profit on each trading day, two people with knowledge of the results said.”

Bloomberg - “Morgan Stanley’s Gorman Denies Bank Misled CDO Buyers” (5-12-10)

“Morgan Stanley Chief Executive Officer James Gorman denied allegations the U.S. bank misled investors about mortgage derivatives it sold them. The firm is being probed by U.S. prosecutors over whether the bank misled clients when it sold them collateralized debt obligations as its own traders bet that the value of the securities would drop, the Wall Street Journal reported today. The New York-based firm hasn’t been contacted by the Justice Department, Gorman told reporters in Tokyo today.”

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The Norris Group Real Estate News Roundup 4/13/10

Tuesday, April 13th, 2010

Today’s News Synopsis:

MDA DataQuick reports 20,476 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. Schwarzenegger signed a bill allowing taxpayers to be exempt from paying for forgiven mortgage debt. In 2008 and 2009, the income needed to buy a median-priced home decreased in 93 percent of U.S. markets. According to IAS, national house prices fell 0.6% in February.

In The News:

DQNews - “More Incremental Gains for Southland Real Estate Market” (4-13-10)

“A total of 20,476 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 33.3 percent from 15,359 in February, and up 5.0 percent from 19,506 in March 2009, according to MDA DataQuick of San Diego.”

Sacramento Bee – “California won’t tax forgiven home debt” (4-13-10)

“Gov. Arnold Schwarzenegger signed legislation Monday to spare thousands of Californians big tax bills on mortgage debt forgiven in 2009. The bill, signed days before Thursday’s tax filing deadline, will eliminate state taxes on forgiven mortgage debt from 2009 through the end of 2012. The U.S. government has already done the same.”

Los Angeles Times – “Washington Mutual created ‘mortgage time bomb,’ Senate panel says” (4-13-10)

“Before Washington Mutual collapsed in the largest bank failure in U.S. history, its executives knowingly created a ‘mortgage time bomb’ by making subprime loans they knew were likely to go bad and then packaging them into risky securities, a congressional investigation has found. In some cases, the bank took loans in which it had discovered fraudulent activity — such as misstated income by borrowers — and rolled them into mortgage securities sold to investors without disclosing the fraud, according to the report released Monday by the Senate’s Permanent Subcommittee on Investigations.”

Inman - “The workers homeownership left behind” (4-13-10)

“Between 2008 and 2009, the income needed to purchase a median-priced home fell in 93 percent of the markets studied, while the income needed fell a median of 9.1 percent, the study said.”

Housing Wire – “Top Four Banks Ready to Write-Down Second Liens” (4-13-10)

“In a hearing today before the House Financial Services Committee, representatives from Bank of America (BAC: 18.67 +0.05%), Citi (C: 4.62 -0.43%), JP Morgan Chase (JPM: 45.87 -0.59%) and Wells Fargo (WFC: 32.15 -0.83%) report that they do not feel efforts to satisfy second lien obligations represent a conflict of interest between the desires of investors and the needs of distressed borrowers. As a result, they are willing to write-down second liens if first lien lenders are doing the same. All four lenders are participants in the Second Lien Modification Program, known as 2MP, which is struggling to gain traction.”

Housing Wire – “Seven Months of House Price Declines Keep IAS Index Near 2004 Levels” (4-13-10)

“National house prices fell 0.6% in February, the seventh consecutive month of decline, keeping prices ‘only fractionally higher’ than levels seen in 2004, according to collateral valuation firm Integrated Asset Services (IAS). Although February’s decline is smaller than recent months — like 0.7% in December — the IAS house price index is now down 25% from its peak in July 2007.”

Housing Wire – “New Inspection Report Helps REO Holders Market Homes to FHA Borrowers” (4-13-10)

“Altisource Portfolio Solutions (ASPS: 25.61 -0.70%), a real estate portfolio services provider, introduced a new inspection report with increased data and repair information on subject properties. According to the company, while a traditional property inspection report outlines the general condition of a property, the new report includes information on the existence and condition of appliances, carpets or other flooring, and whether electrical systems are functioning.”

Bloomberg - “Mortgage-Bond Yields That Guide Loan Rates Fall to 3-Week Low” (4-13-10)

“Fannie Mae’s current-coupon 30-year fixed-rate mortgage bonds fell about 0.01 percentage point to 4.44 percent as of 3:02 p.m. in New York, according to data compiled by Bloomberg. That’s down from an eight-month high of 4.67 percent on April 5.”

Looking Back:

One year ago, distressed properties represented 25 percent of U.S. home sales. Jeff Greene confessed to his 2006 investment estimation that money could be quickly made by buying credit default swaps on mortgage backed securities. Experts warned that FHA loans would be the next biggest risk in the U.S. housing market.

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The Norris Group Real Estate News Roundup 4/12/10

Monday, April 12th, 2010

Today’s News Synopsis:

According to First American CoreLogic, distressed home sales in Orange County are selling 34 percent under the typical market place. Altos Research reports a 0.5 percent in the national median home price. A modification becomes permanent through HAMP after the borrower makes all three monthly payments during the trial period. Fiserv estimates that home prices will not return to the past peak levels until 2025.

In The News:

My Desert – “Valley’s Housing Market Warming” (4-12-10)

“The median sales price of new and single-family homes rose 11 percent to about $200,000, about $20,000 higher than in February 2009. Home sales also rose 9.4 percent compared to the same period last year. Real estate sales have been outpacing sales from the previous year every month since October. Sales volume rose 31 percent in November, 29 percent in December, and 22.2 percent in January.”

Orange County Register – “Distressed home discounts at 6-month high” (4-12-10)

“Orange County homebuyers got a 34% price discount when they chose a distressed property vs. overall market prices in January, according to First American CoreLogic. That’s the biggest discount in six months.”

Wall Street Journal – “Second Mortgages Vex Borrowers” (4-12-10)

“Banks are coming under increasing political pressure to write off or at least write down second-lien and other junior mortgages as a way to help borrowers keep their homes or extract themselves from heavy debt. As the Wells Fargo suit shows, however, banks often are reluctant to give up on loans when they see a chance of recovering all or part of their money. This issue will be the focus of a hearing Tuesday by the House Financial Services Committee in Washington. Panel members are due to quiz executives from Wells Fargo, Bank of America Corp., Citigroup Inc. and J.P. Morgan Chase & Co. about their junior-lien mortgage policies.”

Bloomberg - “Bank Profits Dimmed by Prospect of Home-Equity Losses” (4-12-10)

“Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. may have to set aside an additional $30 billion to cover possible losses on home-equity loans, an amount almost equal to analysts’ estimates of profit at the three banks this year. The cost of these reserves was calculated by CreditSights Inc., a New York-based research firm whose prediction almost four years ago proved prescient after banks reported unprecedented mortgage-related writedowns. Recognizing the home- equity loan losses is unfinished business from the housing bubble, CreditSights said in a March 29 report.”

Housing Wire – “So, Where Will Housing Double Dip?” (4-12-10)

“Put in more plain terms, a state with a 1% foreclosure rate and an 11% delinquency rate should be expected to feel the impact of distressed properties moving through the pipeline far more than a state with a 5% foreclosure rate and a 5% delinquency rate, for example. The reasoning is simple: distressed property sales (short sales or REOs) are a drag on retail home prices. In markets that have seen comparatively less foreclosures relative to the volume of delinquencies stuck in the pipeline, the impact of those delinquencies will be felt proportionately more strongly as they are finally dealt with.”

Housing Wire – “Altos Sees House Price Decline Decelerate in March” (4-12-10)

“The median house listing price declined 0.5% in the Altos Research 10-city composite in March, improved from February’s 1.3% decline in an indication the pace of decline may be decelerating. March, the eighth consecutive month of decline, brings the Q110 price decline to 1.8%. But weekly price changes have shown a modest upward trend in the past seven weeks, which means a uptick in house prices could arrive in the coming months, Altos said.”

Housing Wire – “BofA Completes 33,000 Permanent HAMP Mods” (4-12-10)

“Bank of America (BAC: 18.66 +0.38%) completed almost 32,900 permanent mortgage modifications through the Home Affordable Modification Program (HAMP) through March, up from 20,666 in February. The Treasury Department launched HAMP in March 2009 to provide incentives to servicers for the modification of loans on the verge of foreclosure. When Treasury first reported permanent modifications in November 2009, BofA reported 98 permanent modifications. A modification becomes permanent through HAMP after the borrower makes all three monthly payments during the trial period.”

Housing Wire – “Despite HAMP, Mortgage Delinquency Grows 21% over 2009: LPS” (4-12-10)

“The number of mortgages delinquent at the end of February 2010 is 21.3% higher than the same time last year despite government-led modification efforts, according to the latest monthly report from Lender Processing Services (LPS: 37.61 +0.94%).”

Housing Wire – “Peak House Prices Will Return to Sand States after 2025: Fiserv” (4-12-10)

“Housing markets that experienced the greatest inflation in house prices — including certain metro areas in sand states California, Florida, Arizona and Nevada — will not see a return of peak-level home prices before 2025, according to financial services technology provider Fiserv.”

Wall Street Journal – “AIG, Goldman Unwind Soured Trades” (4-12-10)

” The derivatives unit of American International Group Inc. has unwound most of its soured mortgage trades with Goldman Sachs Group Inc. still left after the insurer was bailed out by the U.S. government in 2008, according to people familiar with the matter. The move by AIG Financial Products to terminate credit-default swaps insuring about $3 billion of mortgage-asset pools arranged by Goldman caused AIG to realize a $1.5 billion to $2 billion loss last year, the people said.”

Bloomberg - “Pimco Says Investors to Hold Down U.S. Mortgage Rates” (4-12-10)

“Investor demand for mortgage-backed securities will keep U.S. home-loan rates down after the Federal Reserve ended its purchases of the debt, said Pacific Investment Management Co., manager of the world’s biggest bond fund. The Fed’s unprecedented program to buy $1.25 trillion of the securities that guide home-loan costs stopped U.S. housing prices from falling, Scott Simon, who is in charge of investing in the notes at Pimco, wrote on the company’s Web site.”

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The Norris Group Real Estate News Roundup 3/25/10

Thursday, March 25th, 2010

Today’s News Synopsis:

New rules for the HAMP program may require servicers to screen borrowers for modification after only 31 days of delinquency. ForeclosureListings.com shows that California experienced an 11.9% increase in foreclosures. Freddie Mac reports the 30-year FRM rate is currently at 4.99 percent. According to the Comptroller of the Currency,  the re-default rate for modified loans is over 50 percent.

In The News:

Los Angeles Times – “Bank of America to reduce mortgage principal for some borrowers” (3-25-10)

“Amid increasing government pressure to stem foreclosures, Bank of America Corp. said Wednesday that it would offer to erase as much as $3 billion in principal owed by thousands of severely delinquent borrowers who owe more than their homes are worth.”

Mercury News – “Citigroup agrees to modify some second mortgages” (3-25-10)

“Citigroup on Thursday became the latest lender to commit to the government’s program to modify second mortgages as a recovery in the housing market appears to be in jeopardy. With Citi on board, now four big owners of home mortgages in the U.S. have joined the program — part of the Obama administration’s $75 billion loan modification plan aimed at reducing monthly payments to help customers stay in their homes. Bank of America, Wells Fargo and JPMorgan Chase already participate.”

Inman - “Home values rise in Boston, San Diego” (3-25-10)

“Radar Logic’s monthly RPX report, based on 28 days of price-per-square-foot data, found that the price per square foot rose most in Boston (up 15.5 percent, to $187.84 per square foot) year-over-year in January, and dropped most in Las Vegas (down 21.4 percent, to $76.18 per square foot) during that period.”

Housing Wire - “Treasury to Require HAMP Servicers to Step Up Outreach Efforts” (3-25-10)

“Allison announced that servicers must pursue early intervention, pre-screening every borrower that misses two or more payments to determine eligibility for HAMP and soliciting those qualifying borrowers for HAMP participation. This change encourages servicers to reach out to the borrower as early as 31 days of delinquency when the chance for homeownership retention is best, according to a supplemental directive on the changes provided to HousingWire.”

Housing Wire – “ForeclosureListings: Texas Leads Nation in Foreclosure Gains” (3-25-10)

“The 35% increase of Texas foreclosures in February was the highest monthly gain of any state in the country, according to data from ForeclosureListings.com, an online foreclosure marketplace. Michigan had the second highest increase at 17.5%, followed by California at 11.9% and Florida at 4.7%.”

Housing Wire – “Mortgage Rates Increase as Fed MBS Purchase Program Nears End” (3-25-10)

“Freddie Mac (FRE: 1.29 +0.78%) said the average rate for a 30-year fixed-rate mortgage (FRM) was 4.99% with an average 0.6 origination point for the week ending March 25, up from last week’s average of 4.96%. A year ago, the rate average was 4.85%. The Bankrate.com survey of large banks and thrifts put the average rate for a 30-year FRM at 5.11% with an average 0.41 origination point, up from last week’s average of 5.07%, but down from last year’s average of 5.19%.”

Bloomberg - “Half of U.S. Home Loan Modifications Default Again” (3-25-10)

“More than half of U.S. borrowers who received loan modifications on delinquent mortgages defaulted again after nine months, according to a federal report. The re-default rate of loans modified in the first quarter of 2009 was 51.5 percent by the end of the year, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said in a joint report today. The figure, which measures payments at least 30 days late, climbed to 57.9 percent for changes made in the prior 12 months.”

Bloomberg - “Prepare to Pay 15% Less for New U.S. Homes: Chart of the Day” (3-25-10)

“New-home prices may have to tumble 15 percent in the U.S. before sales start to rebound, according to Michael Panzner, an author and financial blogger. ”

Looking Back:

One year ago, The MBA reported a 32 percent increase in mortgage applications from the previous season. One in five homeowners owed more on their mortgage than their house was worth. The Federal Reserve began purchasing long-term treasuries. New home sales in the U.S. increased by 4.7 percent within a month.

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The Norris Group Real Estate News Roundup 3/12/10

Friday, March 12th, 2010

Today’s News Synopsis:

The FDIC sold $1.8bn of residential mortgage-backed securities. The Federal Reserve bought a total of $10bn worth of mbs. More than 25 percent of the home owners who received trial modifications have been removed from Obama’s program. Approximately 462,000 new unemployment claims were made last week.

In The News:

Housing Wire – “FDIC Details $1.8bn Structured Financing Transaction” (3-12-10)

“The Federal Deposit Insurance Corp. (FDIC) today closed on a sale of notes backed by residential mortgage-backed securities (RMBS) from seven failed bank receiverships. The news of the closing, summarized in an FDIC press release today, marks the first official release of information on $1.8bn of structured notes that roadshowed and priced in recent weeks.”

Housing Wire – “BofA Makes 21,000 HAMP Modifications Permanent” (3-12-10)

“Bank of America (BAC: 16.985 -0.79%) reported 21,000 permanent modifications under the Home Affordable Modification Program (HAMP) through February. The US Treasury Department launched HAMP in March 2009 to provide incentives to servicers for the modification of loans on the verge of foreclosure. BofA faced industry criticism for reporting 98 permanent modifications through November 2009.”

Housing Wire – “Fed MBS Purchases 98% Complete with Another $10bn” (3-12-10)

“The New York Federal Reserve Bank bought another $10bn of agency mortgage-backed securities (MBS) in the week ending March 10 as the $1.25trn program, now 98% complete, winds down to a close. The Fed bought $29.4bn gross of MBS — $4.4bn Freddie Mac (FRE: 1.2801 -1.53%) MBS, $25bn Fannie Mae (FNM: 1.0701 -2.72%) MBS, and no Ginnie Mae MBS. After reporting $19.4bn of MBS sales through the same week, the Fed’s net purchases came to $10bn, level with last week’s agency MBS buys.”

Bloomberg - “More Than 250,000 Borrowers Dropped From U.S. Modification Plan” (3-12-10)

“More than 250,000 of the 1 million borrowers who have received trial loan modifications through the Obama administration’s chief foreclosure prevention plan have either dropped out or been removed from the program through February, the Treasury Department said.”

Inman - “Credit Starvation Fallout” (3-12-10)

“Overall retail sales have risen 6 percent since the pit one year ago, but are still 6.5 percent below 2008. New unemployment claims are still elevated, running 462,000 last week.”

Inman - “NAR: Don’t rein in FHA” (3-12-10)

“FHA insured nearly 30 percent of purchase loans in 2009, including more than half of mortgages taken out by first-time homeowners, and NAR also wants lawmakers to make temporary increases in FHA loan limits in costly housing markets permanent. But rising claims have eroded FHA’s capital reserves below statutory limits, forcing the program’s administrators to tighten underwriting requirements and raise upfront mortgage insurance premiums.”

Orange County Register – “85,000 O.C. real estate jobs gone” (3-12-10)

“In January, Orange County real estate and finance bosses employed 199,200 workers, 24,600 below 2009 levels and 85,100 less than the recent cycle’s peak, by the state Employment Development Dept.’s freshly revised math.”

Looking Back:

One year ago, the MBA reported that commercial and residential mortgage delinquencies increased during the 4th quarter of 2008. Riverside and San Bernardino County were ranked as the 6th highest foreclosure market. U.S. foreclosures increased by 30 percent in one month. Freddie Mac’s statistics showed that 30-year mortgage rates decreased to 5.03 percent.

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The Norris Group Real Estate News Roundup 3/5/10

Friday, March 5th, 2010

Today’s News Synopsis:

According to Callahan & Associates, the credit union industry originated $95bn from residential mortgages in 2009. The Labor Department reports that 36,000 jobs were lost in February. Chris Kotowski predicts that Fannie Mae and Freddie Mac may force other lenders to to buy back $21 billion of home loans this year. $4.1 billion in lending was sought from the Federal Reserve throughout the last six months.

In The News:

Business Journal – “Tiny supply builds hope for housing industry” (3-5-10)

“Existing homes listed for sale are in shorter supply here on a per-capita basis than in 18 major metro areas, including Chicago, Dallas and Atlanta. And unlike areas where condo towers proliferate, such as Las Vegas, the Southern California coast and south Florida markets, Sacramento has among the fewest finished-but-vacant new homes in the country.”

Wall Street Journal – “Study Sees FHA Taking More Risk” (3-5-10)

“economists warn that the Federal Housing Administration—which has jumped to fill the void left by the collapse of the private mortgage market—is overlooking factors that signal higher losses, according to a working paper released Thursday. The agency has traditionally turned a profit for the U.S. government. But the economists warn that by underestimating the risks it faces, the FHA has increased the likelihood that it will have to ask Congress for money for the first time in its 75-year history.”

Housing Wire – “Credit Unions Originate $95bn in Residential Mortgages in 2009″ (3-5-10)

“The credit union industry originated $95bn in residential mortgages in 2009, taking a 4.5% share of the nation’s total mortgage market. Including the mortgages written last year, the nation’s 7,710 credit unions originated more than $271.9bn in new loans, a 7.1% increase over 2008, according to data released by Callahan & Associates, a Washington, DC-based financial consulting firm that specializes in the credit union industry.”

Housing Wire – “Unemployment Holds at 9.7% in February” (3-5-10)

“The economy lost 36,000 jobs in February and the unemployment rate held at 9.7%, according to the Labor Department’s Bureau of Labor Statistics monthly report. The 9.7% unemployment rate is steady from January, but up from February 2009’s rate of 8.2%. The U-6 unemployment rate, which includes not only those without jobs, but also the underemployed, was 16.8% in February, up from 16.5% in January, but down from December’s 17.3%. A year ago, the U-6 unemployment rate was 15%.”

Housing Wire - “Bair: Too Soon to Know How Successful HAMP Will Be” (3-5-10)

“It is true that the numbers of trial and permanent modifications have lagged behind program projections. But at the same time, we saw a slowdown in the pace of new foreclosures in the second half of last year.”

Bloomberg - “Fannie, Freddie Ask Banks to Eat Soured Mortgages” (3-5-10)

“Fannie Mae and Freddie Mac may force lenders including Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co. and Citigroup Inc. to buy back $21 billion of home loans this year as part of a crackdown on faulty mortgages. That’s the estimate of Oppenheimer & Co. analyst Chris Kotowski, who says U.S. banks could suffer losses of $7 billion this year when those loans are returned and get marked down to their true value. Fannie Mae and Freddie Mac, both controlled by the U.S. government, stuck the four biggest U.S. banks with losses of about $5 billion on buybacks in 2009, according to company filings made in the past two weeks.”

Bloomberg - “Fed’s TALF Winds Down With Most Loan Requests in Six Months” (3-5-10)

“The Federal Reserve received the most loan requests in six months from investors for the final round of its program that unlocked the market for asset-backed securities. About $4.1 billion in lending was sought, including $1.8 billion for financing of student-loan securities, the New York Fed said yesterday on its Web site. In total, about $7.1 billion of sales this week were of securities that included eligible classes, according to data compiled by Bloomberg.”

Bloomberg - “Fed Presidents Say Rates Need to Be Low Early in U.S. Recovery” (3-5-10)

“Two regional Federal Reserve Bank presidents, speaking before today’s release of a February report on U.S. jobs, said they believe the central bank should keep rates low until the recovery picks up.”

Inman - “Hitwise: Zillow reclaims No. 2 spot” (3-5-10)

“Zillow eked out a tiny edge over Yahoo Real Estate in February to reclaim its title as the second-most visited real estate site on the Web, according to rankings compiled by Web metrics firm Hitwise. Zillow, which was bumped into third place by Yahoo Real Estate in December, captured 3.43 percent of traffic in the real estate category during February, Hitwise said, compared to 3.4 percent for Yahoo Real Estate. Realtor.com retained its top spot on the Hitwise top 10 list, with 6.67 percent of traffic in the category.”

Looking Back:

One year ago, the Mortgage Bankers Association asked to have the 105 percent LTV limit raised. The MBA observed an increase in delinquencies on mortgage loans. The NAA reported that gross receipts for real estate auctions grew about 1.1.

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The Norris Group Real Estate News Roundup 2/16/10

Tuesday, February 16th, 2010

Today’s News Synopsis:

According to MDA Dataquick, the median home price in Southern California decreased by 6 percent from December. CBIA reports that home sales in new communities decreased by 15 percent from last month. John Burns estimates that 5 million houses and condominiums with delinquent mortgages will end up in foreclosure over the next few years. TransUnion reports that mortages over 60 days delinquent increased to 6.89% in quarter four of 2009.

In The News:

NAR - “NAR’s HouseLogic: The Logical Source for Today’s Homeowners” (2-16-10)

“Today the National Association of Realtors® launched HouseLogic, a new, comprehensive consumer Web site about all aspects of homeownership. HouseLogic helps homeowners make smart decisions and take responsible actions to maintain, protect and increase the value of their homes. The free Web site helps homeowners plan and organize their home projects and provides timely articles and news; home improvement advice and how-to’s; and information about taxes, home finances and insurance.”

DQNews - “Southland home sales, median price edge above year-ago level” (2-16-10)

“Southern California home sales eked out a modest gain in January compared with a year earlier but fell sharply – as they normally do – from December. The median price paid rose above the year-ago level for the second consecutive month, but fell 6 percent from December as foreclosures and lower-cost inland markets claimed a higher share of sales, a real estate information service reported. A total of 15,361 new and resale homes closed escrow last month in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was down 31.2 percent from December’s 22,328, but up 0.9 percent from 15,227 in January 2009, according to MDA DataQuick of San Diego.”

CBIA - “California New-Home Market Ends 2009 in Lackluster Condition, CBIA Announces” (2-16-10)

“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 15 percent below December 2008. While the decline was disappointing, it remains an improvement from most months in 2009 in which year-over-year declines were substantially larger. During December, 1,372 new homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 1,607 in December 2008. Sales of single-family homes were down by 25 percent, while sales of townhomes and ‘plexes’ – duplexes, triplexes, etc. – were off by 5 percent and sales of condominiums were 18 percent higher than a year ago.”

San Francisco Chronicle – “Resale prices steady for San Francisco condos” (2-16-10)

“San Francisco’s median resale condominium prices from November through January stayed steady from the same period a year ago, leading some analysts and real estate agents to conclude that values have settled into a range where they are likely to remain for some time. According to city data analyzed by the Polaris Group, a San Francisco real estate firm that crunches housing numbers, the median price for a resale condo in the city – as opposed to a newly built unit – was $638,000 in the threemonth period ending Jan. 31.”

Wall Street Journal – “Foreclosures Seen Still Hitting Prices” (2-16-10)

“The John Burns study estimates that five million houses and condominiums on which mortgages are now delinquent will go through foreclosure or related procedures that put them on the market over the next few years. That would represent the bulk of the estimated 7.7 million households behind on their mortgage payments.”

Housing Wire – “BofA Makes 12,700 HAMP Modifications Permanent” (2-16-10)

“Bank of America (BAC: 15.16 +4.91%) reported 12,700 permanent modifications under the Home Affordable Modification Program (HAMP) through January, an increase from 3,200 a month earlier. The US Treasury Department launched HAMP in March 2009 to provide capped incentives to servicers for the modification of loans on the verge of foreclosure. Through December, servicers provided 66,000 HAMP permanent modifications.”

Housing Wire – “Mortgage Delinquencies Rise for 12th Straight Quarter: TransUnion” (2-16-10)

“Mortgage delinquencies of 60 or more days rose for the 12th straight quarter, hitting a record high 6.89% in Q409, according to market research by credit bureau TransUnion. The rate of deceleration seen in previous quarters in the rise in delinquencies appears ’short lived,’ the credit bureau said. Year-over-year, the delinquency rate is up about 50% from 4.58% delinquent in Q408.”

Housing Wire – “Borrowers Overwhelmingly Pick Fixed-Rate Refinancings in Q4″ (2-16-10)

“Freddie Mac (FRE: 1.23 +0.82%) reported Monday that 95%of refinance loans during the last quarter of last year were of the fixed-rate variety. And while traditional 30-year fixed-rate mortgages are still the most preferred product among refinancings, 15-year fixed-rate mortgages gained favor among borrowers who previously held 30-year fixed-rate mortgages, balloon mortgages and adjustable-rate mortgages (ARMs), the GSE said in a statement.”

Bloomberg - “U.S. Homebuilder Confidence Rises More Than Forecast” (2-16-10)

“The National Association of Home Builders/Wells Fargo index of builder confidence increased to 17, higher than anticipated, from 15 the prior month, the Washington-based group said today. Readings below 50 mean most respondents view conditions as poor. ”

Looking Back:

One year ago, Congress considered making improvements to the $7,500 tax credit under the $789 billion economic stimulus package. A prediction was made that the 5 biggest banks would soon loose over $524 million.

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

Wednesday, February 10th, 2010

Today’s News Synopsis:

The MBA reports that mortgage application volume decreased by 1.2 percent from last week. According to the NAHB, there were approximately 234,000 homes for sale at the end of 2009. Statistics from Zillow show that the national median price was $186,200 in Q409 of 2009. The total number of FHA-insured single-family mortgages in default reached 531,671 in Q409 of 2009.

In The News:

Mortgage Bankers Association – “Purchase Applications Decline in Latest MBA Weekly Survey” (2-10-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending February 5, 2010. The Market Composite Index, a measure of mortgage loan application volume, decreased 1.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 0.6 percent compared with the previous week.”

Wall Street Journal – “Spec Houses Rise as Builders Bet on Buyers Before Tax Credit Ends” (2-10-10)

“Houses typically take between four and six months to build, so the window to start construction is closing quickly. And current inventory is low. At the end of 2009, there were 234,000 homes for sale, the lowest level since April 1971, according to the National Association of Home Builders. It’s difficult to measure the total number of spec homes nationwide. But according to a survey conducted by John Burns Real Estate Consulting, based in Irvine, Calif., home builders have about three finished homes with no buyer per community. That’s up slightly from 2.8 finished homes in November but much lower than the peak of six finished homes in July 2008.”

Mercury News – “Bay Area home prices may drop, real estate firm warns” (2-10-10)

“The median estimated value of all Santa Clara County homes at the end of the fourth quarter was $568,401, up a fraction from $564,360 in the third quarter, Zillow reported. In San Mateo County, prices have already begun to fall. The median estimated value of all homes was $635,264 in the fourth quarter, down 0.68 percent from $639,600 in the third quarter. Home values fell in San Mateo County from September through December, Zillow said, after four months of increases from May through August.”

Housing Wire – “Zillow Warns on Double Dip in House Prices” (2-10-10)

“The Zillow Home Value Index put the national median price at $186,200 in Q409, a 5% decrease from Q408. Compared to Q309, prices declined 0.5% during the last quarter of 2009. The index is a measure of median home values of all single-family residences, condominiums and cooperatives, both on the market and not for sale. Q409 marked the 12th consecutive quarter of year-over-year declines, Zillow said.”

Housing Wire – “Defaults on FHA Mortgages Pass 9 Percent” (2-10-10)

“The default rate in the single-family FHA portfolio reached 9.12% in Q409, climbing from 6.82% in Q408, according to the Federal Housing Administration December monthly report. The total number of FHA-insured single-family mortgages in default reached 531,671 in Q409, a 66% increase from 319,741 in Q408. In that same period, modifications on FHA-backed loans increased 54% to 23,973 in Q409.”

Housing Wire – “Feds Outline Mortgage Securities Exit Strategy” (2-10-10)

“And according to Federal Reserve chairman Ben Bernanke, a series of policy wind-down methods are being tested. The Fed may first drain excess reserves built up over many months through extraordinary asset-purchase programs, and then begin to raise interest rates. Or the Fed could pursue both options simultaneous to facilitate a quicker exit. Ultimately, economic developments will determine the exit process.”

Housing Wire – “Freddie Mac Will Buy Out 120-Day Delinquent Mortgages” (2-10-10)

“Government-sponsored mortgage securitizer Freddie Mac (FRE: 1.24 +3.33%) said today it will buy ’substantially all’ mortgages delinquent by at least 120 days from the company’s related fixed-rate and adjustable-rate mortgage (FRM and ARM) Participation Certificate (PC) securities. Freddie said the loan purchases will show up in the PC factor report published after March 4, 2010. The corresponding principal payments on affected PCs will pass through to FRM and ARM PC holders on March 15 and April 15, respectively.”

Housing Wire – “Option ARMs Don’t Measure Up in HAMP: BofA” (2-10-10)

“Of all mortgage collateral sectors, pay-option adjustable-rate mortgages (ARMs) are the least modifiable under a federally-subsidized modification program, according to research Monday by Bank of America Merrill Lynch (BofAML). Researchers found that, in general, collateral with higher delinquencies see higher modification rates. But despite the wave of option ARMs set to recast monthly payments over the next several years, these types of loan fall in ‘the least modifiable sector’ under the Home Affordable Modification Program (HAMP) because of their failure to measure up to eligibility requirements and net present value (NPV) test requirements.”

Orange County Register – “Expect more price cuts on high end homes” (2-10-10)

“Data from 2009 MLS sales for Laguna Beach show that last year started out extremely slow. February 2009 recorded a record low of only 6 residential properties sold for the entire month. By contrast, buying activity picked up enough by year end that December was the highest single month of sales since May 2006.”

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The Norris Group Real Estate News Roundup 1/27/10

Wednesday, January 27th, 2010

Today’s News Synopsis:

According to MDA DataQuick, 84,568 Notices of Default were recorded in California during the 4th quarter of 2009. The MBA’s weekly survey shows that mortgage application volume decreased 10.9 percent from last week. The Commerce Department reports that new home sales decreased by 7.6 percent last month. The Federal Reserve claims it will stick to its plan to end the $1.25 trillion program of mortgage-debt purchases in March.

In The News:

CBIA – “Protect Your Model Homes” (1-27-10)

“Neighbors are the first and strongest line of defense in neighborhood security. If they can put a face to your model home, they will be much more likely to help protect you. Bring them gift baskets, shake hands and be respectful. Let them know that you’d appreciate if they’d call the police if they notice anyone at the model home after dark.”

DQNews – “Another Drop in California Mortgage Defaults” (1-27-10)

“A total of 84,568 Notices of Default (”NODs”) were recorded at county recorder offices during the October-to-December period. That was down 24.3 percent from 111,689 for the prior quarter, and up 12.4 percent from 75,230 in fourth-quarter 2008, according to San Diego-based MDA DataQuick.”

Mortgage Bankers Association – “Mortgage Applications Decrease in Latest MBA Weekly Survey” (1-27-09)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 22, 2010.  The Market Composite Index, a measure of mortgage loan application volume, decreased 10.9 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 10.1 percent compared with the previous week and decreased 19.8 percent compared with the same week one year earlier.”

Housing Wire – “BofA First to Join HAMP Program for Second Liens” (1-27-10)

“Bank of America (BAC: 14.975 +1.39%) signed the first agreement to participate in the second-lien mortgage modification initiative under the Home Affordable Modification Program (HAMP), the bank confirmed Tuesday afternoon.”

Bloomberg – “U.S. May Retool Loan Program for Underwater Borrowers” (1-27-10)

“The changes would be at least the third lease on life for the program, which began in October 2008 during the Bush administration and has so far helped just 96 of the 400,000 homeowners originally targeted.”

Bloomberg – “U.S. Economy: Sales of New Homes Fall, Capping Worst Year Ever” (1-27-10)

“Sales of new homes in the U.S. unexpectedly dropped in December, capping the worst year on record and signaling the government’s tax-credit extension has yet to shore up demand. Purchases declined 7.6 percent to an annual pace of 342,000, marking the fourth decrease in the past five months, the Commerce Department said today in Washington. For all of 2009, sales declined 23 percent to 374,000, the lowest level since records began in 1963.”

Bloomberg – “S&P, Moody’s Win Dismissal of Claims Over Mortgage Securities” (1-27-10)

“Standard & Poor’s and Moody’s Corp. won dismissal of a lawsuit seeking to hold them responsible for defrauding investors who bought about $100 billion of mortgage- backed securities.”

Bloomberg – “Fed May Take Risk MBS Program End Won’t Hurt Housing” (1-27-10)

“The Federal Reserve may take a chance the housing market can stage a comeback without its support by announcing today it will stick to the plan to end a $1.25 trillion program of mortgage-debt purchases in March.”

Looking Back:

One year ago, MDA DataQuick reported that 75,230 default notices had been sent to California homeowners during the 4th quarter of 2008. The S&P Index showed that home prices fell 18.2 percent within two months. C.A.R. reported that Orange County home sales increased by 13.5 percent in one month.

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The Norris Group Real Estate News Roundup 1/20/10

Wednesday, January 20th, 2010

Today’s News Synopsis:

The MBA’s Market Composite Index shows that loan application volume increased by 9.1 percent. Policy changes for FHA will consequently cause borrowers to pay more on their FHA-insured mortgages. HUD reports that housing starts declined 4% in December. Regional housing inflation rose 0.2% in Southern California.

In The News:

Mortgage Bankers Association – “Refinance Applications Increase as Mortgage Rates Fall in Latest MBA Weekly Survey” (1-20-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 15, 2010. The Market Composite Index, a measure of mortgage loan application volume, increased 9.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 10.4 percent compared with the previous week and decreased 52.3 percent compared with the same week one year earlier.”

Mortgage Bankers Association – “MBA Comments on Changes to FHA Credit Policy” (1-20-10)

“Borrowers may have to pay a little more for their FHA-insured mortgages or certain borrowers will have to put more money down for their home, but these changes are necessary given the stress that the housing downturn has put on the FHA program.”

Housing Wire – “Commercial Real Estate Investor Demand to Grow in 2010″ (1-20-10)

“The start of 2010 is showing signs of growing investor demand in US commercial real estate, and potentially in related secondary markets, despite the lagging performance of underlying collateral. The pick-up is also predicted to be mirrored in similar markets in Europe and Asia; areas expected to see comparatively better performance. In a report from the rating agency Moody’s, analysts project some pick-up in commercial real estate (CRE) demand after Q409, which would help markets after little movement for much of the year.”

Housing Wire – “Housing Starts Drop, Permits Up in December” (1-20-10)

“After jumping up 8.9% one month earlier, housing starts declined 4% to a seasonally adjusted annual rate of 557,000 in December, according to the Department of Housing and Urban Development (HUD) and the Commerce Department’s Census Bureau.”

Housing Wire - “BofA Posts $5.2bn Loss in Q409 After TARP Repayment” (1-20-10)

“In the same quarter of 2008, BofA posted a net less of $2.4bn, or $0.48 per diluted share. Excluding the $4bn TARP repayment, BofA had a net loss of $194m in Q409, which narrowed from the $1.8bn loss from a year earlier. For all of 2009, BofA reported a net income of $6.3bn, an improvement from $4bn in 2008.”

Housing Wire – “Morgan Stanley Posts $413m Q409 Profit as Real Estate Gains” (1-20-10)

“Firm-wide results for the full year reflected $1.9bn of net losses on real estate investments ‘amidst the ongoing industry-wide decline in this market,’ Morgan Stanley said in the earnings statement.”

Housing Wire – “Wells Fargo Posts Record $12.3bn Annual Net Income” (1-20-10)

“Wells Fargo said mortgage originations and servicing revenue was $3.4bn in the quarter, and its total mortgage banking noninterest income accounted for 15% of the company’s consolidated Q409 revenue. The bank had $1.2bn in income from mortgage origination and sales activities on $94bn of residential mortgage originations and $144bn of applications.”

Bloomberg - “‘Tranche Warfare’ Erupts as Property Owners Slide Into Default” (1-20-10)

“Infighting among lenders with different classes of debt, called tranches, is on the rise in the hotel industry and throughout the $3.5 trillion market for commercial real estate loans after property prices fell more than 40 percent from their peak in 2007. Commercial mortgage defaults more than doubled to 3.4 percent in last year’s third quarter from a year earlier.”

Bloomberg - “Property Bonds Beat Corporates as Simon Sells: Credit Markets” (1-20-10)

“Real estate borrowers are leading the rally in U.S. corporate bonds as investors add to bets property companies will weather an increase in commercial mortgage defaults. Bonds sold by real-estate investment trusts, shopping-mall owners and office landlords have gained 3.27 percent this month, exceeding 3.18 percent for all of the fourth quarter, and BBB rated commercial mortgage bonds returned 3.59 percent, according to Bank of America Merrill Lynch indexes. The gains are the biggest among investment-grade issuers, which returned 1.65 percent so far in 2010, the indexes show.”

Orange County Register – “SoCal housing inflation lowest in 32+ years” (1-20-10)

“Overall regional housing inflation rose 0.2% for the year, lowest since they started this data series in 1977. Household energy costs fell 8.8% last year, biggest drop in the series that dates to 1977.”

Orange County Register – “408 south coast homes in default on loans” (1-20-10)

“There are hundreds of homes in Dana Point, Laguna Beach and San Clemente that are in default on their mortgages and in danger of being foreclosed. According to Trulia.com, a total of 408 homes in these south coastal communities have received a notice of default from their bank, which typically follows one or often a series of missed mortgage payments and a late notice.”

Inman - “Zillow, Trulia slip in Hitwise ratings” (1-20-10)

“Realtor.com remained the dominant Web site in the real estate category, with 6.79 percent market share. Rounding out the top 10 Web sites were Yahoo! Real Estate (3.8 percent), Zillow (3.5 percent), ZipRealty (2.91 percent), eBay’s Rent.com (2.57 percent), Service Magic (2.27 percent), Trulia.com (2.16 percent), Homes.com (1.99 percent), MSN Real Estate (1.78 percent) and Apartments.com (1.32 percent).”

Inman - “Google, RPR and the future” (1-20-10)

“Marty Frame, president of NAR’s Realtors Property Resource, which seeks to create a national database of property information and a new property-valuation system for Realtors to access, discusses RPR plans with Dale Ross, RPR CEO.”

Looking Back:

One year ago, congress voted to use the second half of the $700 billion TARP bailout. FHA was offering 3.5%-down mortgages to qualified buyers. Nouriel Roubini predicted that the U.S. financial crisis may reach $3.6 trillion. Dataquick reported that foreclosures made up just 6 percent of resales in August 2007.

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