The Commerce Department reports new home sales increased 11% in March. A study shows that short sales and foreclosures equally damage FICO scores. A survey from Pew shows 81% of adults believe purchasing a home is the best long-term investment a person can make. Morgan Stanley believes home prices will fall 6-11% this year.

In The News:

Mortgage Bankers Association – “Study Examines the Impact of Homebuyer Education and Counseling on Mortgage Performance” (4-26-11)

“Potential homeowners who participate in prepurchase education and counseling programs may be more likely to pay their mortgages on time, although the evidence on this point is not consistent and compelling, according to a study released today by the Mortgage Bankers Association (MBA). The study also finds that those who participate in default counseling are more likely to have their loans modified.”

MSNBC - “Housing reality trumps dogma for some in GOP” (4-26-11)

“leading proponents of doing away with Fannie and Freddie aren’t predicting victory. As a precaution, they’re advancing eight bills taking bite-sized swipes at the issue. In the Democratic-led Senate, a sister measure by 2008 presidential candidate Sen. John McCain, R-Ariz., faces long odds, and the Banking Committee’s top Democrat and Republican are wary of quickly reshaping the market for financing home purchases.”

CNN - “Home prices in ‘double dip’” (4-26-11)

“Home prices in February sank 3.3% to just above the post-crisis lows reached in April 2009. It was the seventh straight month of declines. Home values are down 32% from their peak set in May of 2006, according to the S&P/Case-Shiller index of home prices in 20 cities.”

Housing Wire – “Harvard finds dwindling housing supply abolishes affordable rentals” (4-26-11)

“The Harvard University Joint Center for Housing Studies released a report Tuesday, analyzing conditions in the housing market from 1999 to 2010. The study found the price to rent a home is trending inversely to renters’ annual income, just one of many factors hindering growth in the rental space.”

Housing Wire – “FHFA: 30-year fixed-rate mortgage passes 5%” (4-26-11)

“The average interest rate on a 30-year, fixed-rate mortgage reached 5.06% in March, an increase of 9 basis points from the previous month, according the Federal Housing Finance Agency.”

Housing Wire – “Study finds recent housing counseling cuts made in the dark” (4-26-11)

“Republicans and Democrats struck a late-hour deal in April on how to continue funding the U.S. government. But among the cuts, was $88 million used to fund nonprofit counseling groups approved by the Department of Housing and Urban Development.”

Housing Wire – “Freddie Mac mortgage purchases plummet 31%” (4-26-11)

“The amount of monthly mortgages purchased for securitization by Freddie Mac fell nearly 31% in March to $26.9 billion. The government-sponsored enterprise reported its total mortgage portfolio decreased at an annualized rate of 4.7% during the month to $2.14 trillion.”

Los Angeles Times - “New home sales rose in March after weak winter” (4-25-11)

“New-home sales rose 11 percent last month from February to a seasonally adjusted rate of 300,000 homes, the Commerce Department said Monday. That follows three straight monthly declines. Still, the pace remains far below the 700,000 homes a year that economists view as healthy.”

New York Times – “Stimulus by Fed Is Disappointing, Economists Say” (4-24-11)

“Mr. Bernanke and his supporters say that the purchases have improved economic conditions, all but erasing fears of deflation, a pattern of falling prices that can delay purchases and stall growth. Inflation, which is beneficial in moderation, has climbed closer to healthy levels since the Fed started buying bonds.”

Housing Wire – “Short sales and foreclosures equally degrade FICO scores” (4-25-11)

“homeowners that entered short-sales found themselves with FICO scores in the 575-to-595 range — the same range reported for parties with foreclosures on their records.”

Housing Wire – “Homeownership still considered best long-term investment: Pew” (4-25-11)

“The housing crash seems to have had little impact on consumer confidence, as 81% of adults believe buying a home is the best long-term investment a person can make”

Housing Wire – “Distressed property index rises in March: Campbell/Inside Mortgage Finance”
(4-25-11)

“A distressed property index rose to 48.6% in March – the second highest level in the past 12 months while owner-occupant home purchases slowed during the same time period according to another index.”

Housing Wire – “Wells economist: Foreclosure supply points to ‘long, arduous’ recovery” (4-25-11)

“Despite better-than-expected new home sales in March, a Wells Fargo (WFC: 28.56 +0.07%) economist said builders will continue to struggle until the foreclosure wave begins to recede.”

Bloomberg - “U.S. Home Prices May Decrease 6% to 11% This Year, Morgan Stanley Says” (4-25-11)

“U.S. home prices will fall 6 percent to 11 percent this year, more than previously forecast, as mortgages become harder to obtain and distressed sales drive down values, according to Morgan Stanley. ”

Bloomberg - “Fed Officials Count on Untested Tool to Hold Off Inflation” (4-25-11)

“Raising the rate, currently at 0.25 percent, is intended to entice banks to keep their money on deposit at the Fed instead of loaning it out and stoking inflation.”

Bloomberg - “Sales of New U.S. Homes Probably Rose From Record Low as Market Struggled” (4-25-11)

“New-home sales, tabulated when contracts are signed, climbed 12 percent to a 280,000 annual pace last month, according to the median estimate in a Bloomberg News survey of 64 economists. Purchases slumped 17 percent in February to a 250,000 rate, the weakest in data going back to 1963.”

Looking Back:

One year ago, the CIRB reported that permits were pulled for 3,714 total California housing units in March. Commercial mortgage delinquencies fell to 0.63% in Q1 of 2010. The MARI saw a 50 percent increase in appraisal fraud in 2009. Homeownership rates in Q1 of 2010 decreased to the lowest levels since 2000.

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

The NAR said vacation home sales accounted for 10% of all transactions in 2010. A new proposal may force lenders to allow short sales for delinquent homeowners. The House voted 252 to 170 end funding for HAMP. CoreLogic estimates there are 1.8 million homes in the shadow inventory.

In The News:

NAR - “Vacation- and Investment-Home Shares Hold Even in 2010″ (3-30-11)

“vacation-home sales accounted for 10 percent of transactions last year while the portion of investment sales was 17 percent, both unchanged from 2009.”

Mortgage Bankers Association – “Mortgage Applications Decrease in Latest MBA Weekly Survey” (3-30-11)

“Mortgage applications decreased 7.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending March 25, 2011.”

Los Angeles Times – “Proposed settlement would force banks to allow short sales for delinquent homeowners” (3-30-11)

“Major banks may be forced to let severely delinquent homeowners sell their houses for less than the loan amounts owed as part of a broad settlement of federal and state investigations into botched foreclosure paperwork, according to government officials involved in the negotiations.”

CNN - “House votes to kill Obama mortgage plan” (3-30-11)

“The House voted 252 to 170 to stop any new funding for the Home Affordable Modification Program (HAMP). Eleven Democrats joined Republicans to defund the program.”

Housing Wire – “Job gains barely beat estimates on the long road back to pre-recession levels” (3-30-11)

“While the economy gained 201,000 private sector jobs last month, those additions are not enough to set the pace for a rapid economic or housing recovery, analysts say.”

Bloomberg - “Lenders Could Get Exemptions Under New Risk-Retention Rule” (3-30-11)

“U.S. regulators proposed exempting banks and bond issuers who meet high underwriting standards from rules requiring them to keep a stake in loans they securitize, according to a draft proposal.”

Bloomberg - “U.S. Home ‘Shadow Inventory’ Totals Nine Months of Supply, CoreLogic Says” (3-30-11)

“About 1.8 million homes that are delinquent or in foreclosure loom as additional supply for the struggling U.S. housing market, according to CoreLogic Inc.”

Housing Wire – “CBO drops estimate of TARP cost to $19 billion” (3-30-11)

“The Troubled Asset Relief Program will end up costing taxpayers $19 billion, according to the latest estimate Wednesday from the Congressional Budget Office.”

Housing Wire – “‘Too big to fail’ legacy lives on: Rosner” (3-30-11)

“government intervention in 2008 forced bank mergers and acquisitions, leaving the financial market in the control of the nation’s largest financial firms.”

Looking Back:

One year ago, national home prices decreased by 0.7 percent from the previous year. Fannie Mae and Freddie Mac estimated that mortgage rates would rise less than a quarter of a percentage point in the next three months. Interest rates on conventional 30-year FRMs increased to 5.13% in February 2010. The US Treasury Department announced it would allocate $600 million to HFA for foreclosure prevention programs in California, Florida, Arizona, Michigan and Nevada.

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

Results from an NAHB survey show builders expect homes to average 2,152 square feet by 2015. Lockhart, from the Atlanta Fed, expects the economy to grow up to 4% over the next 2 years. FNC Inc said over 25% of foreclosed properties liquidated in 2008 and 2009 sold at more than a 40% discount. Bank regulators are attempted to push new rules that would require lenders to offer borrowers more principal write-downs.

In The News:

NAHB - “NAHB Study: New Homes in 2015 will be Smaller, Greener and More Casual” (3-7-11)

“Builders surveyed expect homes to average 2,152 square feet in 2015, 10 percent smaller than the average size of single-family homes started in the first three quarters of 2010. To save on square footage, the living room is high on the endangered list – 52 percent of builders expect it to be merged with other spaces in the home by 2015 and 30 percent said it will vanish entirely.”

Inman - “Bank regulators push for principal write-downs” (3-7-11)

“If accepted by lenders, the formulas would force them to offer more borrowers principal write-downs, the Journal said, which are considered to be more effective in preventing foreclosure than lowering a borrower’s interest rate or extending the loan term.”

Wall Street Journal – “FHA Powers What’s Left of the Home Market” (3-7-11)

“About 56% of mortgages for a home purchase were FHA-insured in 2009, up from 6% in 2007, according to a report from the George Washington University School of Business. Many FHA borrowers are first-time buyers drawn by a down-payment requirement of just 3.5% of a home’s purchase price. The FHA currently can insure loans of up to $729,750 in high-cost markets, but the Obama administration recently recommended that those higher limits, which vary by market, expire in October. That would push the top limit down to $625,500, shrinking the pool of eligible properties. And those limits may be reduced even further.”

Housing Wire – “Housing remains economy’s weak spot, Atlanta Fed CEO says” (3-7-11)

“As for the overall economy, Lockhart believes it’s ‘demonstrating moderate strength’ and expects growth in the range of 3% to 4%, with gradual employment increases over the course of the next one to two years.”

Housing Wire – “Higher down payments will stifle mortgage market, CRL says” (3-7-11)

“Policy proposals suggesting a 10% to 20% hike in mortgage down payments could derail the housing recovery, the Center for Responsible Lending said in a new report.”

Housing Wire – “Monday Morning Cup of Coffee” (3-7-11)

“More than one quarter of foreclosed properties liquidated in 2008 and 2009 sold at more than a 40% discount, according to one mortgage technology firm. FNC Inc. said the bottom quarter of foreclosed properties sold at deep discounts again in 2010, while the remaining 75% experienced signs of modest improvement.”

Contra Costa Times – “Pleasanton real estate investor pleads guilty to rigging foreclosure auctions” (3-6-11)

“Yama Marifat, 38, along with other participants agreed not to bid against each other at public real estate auctions in San Joaquin County, the U.S. attorney’s office said. After one of them would secure the property at a rock bottom price, the group would meet privately and rebid the property among themselves. The conspirator with the highest bid got the property and the difference between the auction price and the final sale price was split among those involved, prosecutors said.”

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

Resources:
California Housing Production Continues Decline in October, CBIA Announces
Existing-Home Sales Decline in October Following Two Monthly Gains
California home sales decline from previous month, year
Bank earnings skyrocket in 3Q as FDIC problem list nears 17-year high
Foreclosures of U.S. Homes Fell 36% After Freeze, Lender Processing Says
Shadow Inventory of Homes Rising

Today’s News Synopsis:

The FDIC’s problematic bank list grew by 31 in the 3rd quarter. New home sales decreased 8.1% in September, according to the Commerce Department. Statistics from the FHA show home prices fell 3.2% year over year. LPS reports foreclosures fell 4.4% in October.

In The News:

San Francisco Chronicle – “Mortgage rates rise to 4.40 pct. as Treasurys rise” (11-24-10)

“Freddie Mac said Wednesday that the average rate for 30-year fixed loans rose to 4.40 percent this week from 4.39 percent last week. Two weeks ago, the rate hit 4.17 percent, the lowest level on records dating back to 1971.”

Los Angeles Times – “Bank ‘problem list’ swells but industry’s condition improving, FDIC says” (11-24-10)

“The agency’s so-called problem list consisted of 860 financial institutions at the end of the quarter, two years after the financial crisis hit the nation. That’s up from 829 at the end of June, the agency said Tuesday. The latest figure amounts to about one out of eight FDIC-insured banks.”

CNN - “New home sales: Down 80% from the boom” (11-24-10)

“New home sales dropped to an annual pace of just 283,000, according to the Commerce Department. That was down 8.1% from a slow September and 28.5% from 12 months ago when the annualized sales rate was at 430,000.”

Orange County Register – “Forecast: Calif. home prices to drop 9.9%” (11-24-10)

“Real estate trackers from FiServ and Moody’s Economy.com forecast that California home prices will fall 9.9% in the year ending in June 2011 — fourth biggest drop across the nation.”

Housing Wire – “Delinquent borrowers would rather rent: Fannie Mae survey” (11-24-10)

“Half of homeowners who are delinquent on their mortgages would rather rent than buy a home, according to Fannie Mae’s third quarter national housing survey. This is the first time the rental preference has exceeded the percentage of people who would rather buy.”

Housing Wire – “LPS: Mortgages entering foreclosure fell 4.4% in October” (11-24-10)

“The company said another 263,000 loans entered the foreclosure process last month, which is down 4.4% from September. LPS said the total inventory of foreclosures includes 2.1 million loans with another 2.2 million loans more than 90-days delinquent but not yet in the process.”

Housing Wire – “Mortgage interest rates increase in two nonagency surveys” (11-24-10)

“Mortgage rates fell in two weekly surveys. The Bankrate national mortgage survey reported the interest rate for a 30-year fixed-rate mortgage at 4.58%, down from 4.62% a week prior, while a survey from LendingTree.com reported the rate at 4.55%.”

Housing Wire – “Jobless claims down 7.7% to lowest level in two years” (11-24-10)

“Initial jobless claims fell 7.7% last week to 407,000, which is the lowest level in two years and well below most analyst estimates. The Labor Department said the seasonally adjusted figure of actual initial claims for the week ended Nov. 20 fell by 34,000 from the previous week’s figure of 441,000, which was revised upward a few thousand.”

Housing Wire – “Nation has 8.6-month glut of new homes on market, Census Bureau says” (11-24-10)

“New home sales dropped to an annualized rate of 283,000 in October, leaving 202,000 new homes (8.6 months worth) on the market, according to a report released Wednesday by the Census Bureau and the Department of Housing and Urban Development. New home sales are down 8.1% from September and 28.5% from October 2009.”

Bloomberg - “U.S. Home Prices Fell 3.2% in Third Quarter, FHFA Says” (11-24-10)

“U.S. home prices fell 3.2 percent in the third quarter from a year earlier as demand weakened without federal tax credits, the Federal Housing Finance Agency said.”

Looking Back:

One year ago, the CIRB reported that homebuilders pulled 6 percent fewer permits in October. American banks decreased lending by 2.8 percent in the third quarter 09. The FOMC suspected that the economy would take 5 years to return to an acceptable rate of growth.  According to First American CoreLogic, 23 percent of all US homes were less valuable than the mortgages owed on them.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor event calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 200 podcasts in our free investor radio archive.

Think Big Work Small Video on MERS

American Land Title view on title issue

See if your property is on the MERS system

Information on MERS

Statement by R.K. Arnold, President and CEO of MERSCORP, Inc.

Washington Post - “U.S. presses mortgage lenders to fix documents, but foreclosures can continue”

Lawyer puts former foreclosed family back into property

Today’s News Synopsis:

Some evicted homeowners are breaking into their previously owned homes, and claiming that they were wrongfully foreclosed on. Bernanke is giving signs that the Federal Reserve will continue its strategy of quantitative easing. As a percentage of gross domestic product, the national deficit decreased 1.1% in 2010.

In The News:

Orange County Register – “Newport Beach man says foreclosure was illegal” (10-15-10)

“A Newport Beach man was arrested Wednesday after an attempt to regain possession of the home he claims his family was wrongfully evicted from 16 months ago.”

New York Times – “Bernanke Signals Intent to Further Spur Economy” (10-15-10)

“The impact of the Fed’s most likely course — resuming vast purchases of government debt to lower long-term interest rates — would ripple far beyond American shores. The new actions could contribute to the weakening of the dollar and complicate a festering currency dispute that threatens to disrupt global trade relations.”

Housing Wire – “BofA hiring 1,000 small business lenders as analyst warns on bank’s repurchases” (10-15-10)

“Bank of America (BAC: 11.99 -4.84%) will hire more than 1,000 small business bankers by early 2012, president and CEO of the bank Brian Moynihan announced Thursday. During his speech at the Chief Executive Club of Boston. Moynihan said the hiring is part of BofA’s effort to expand its small business presence in the marketplace.”

Housing Wire – “JPM: Robo-signing now borrower strategy to avoid foreclosure” (10-15-10)

“One of the largest investment banks at the center of the robo-signing scandal is claiming that distressed borrowers are using the allegations as a stall tactic to prevent losing their homes. Further, the secondary industry is rejecting claims that the current transfer of mortgage titles into the bond market is faulty.”

Housing Wire – “Government outlays to Fannie, Freddie 24% below estimates” (10-15-10)

“Obama administration officials said Friday that lower-than-expected outlays to the Troubled Asset Relief Program and government-sponsored entities resulted in a reduction in the deficit. As a percentage of gross domestic product, the national deficit fell to 8.9% for fiscal 2010, down from 10% a year earlier.”

Bloomberg - “`Ninja Nightmare’ for U.S. Homes May Lead to Double-Dip, BNP Paribas Says” (10-15-10)

“U.S. banks embroiled in an investigation into faulty home foreclosures may be forced to scale back lending, pushing the economy back into recession, according to BNP Paribas SA.”

Orange County Register – “Countrywide icon settles fraud claim for $67M” (10-15-10)

“Former Countrywide Financial Corp. Chief Executive Angelo Mozilo agreed to pay $67.5 million in financial penalties to settle the Securities and Exchange Commission’s high-profile civil fraud suit against him. The two other defendants in the case, former Countrywide President David Sambol and former Chief Financial Officer Eric Sieracki, also reached settlements with the SEC. Mr. Sambol agreed to pay just over $5.5 million in penalties while Mr. Sieracki agreed to pay $130,000. All three defendants, who reached the settlements without admitting or denying wrongdoing, also agreed to injunctions against future violations of securities law.”

Looking Back:

One year ago, Comptroller of the Currency John C. Dugan said that although credit quality was worsening, most banks had the strength to absorb oncoming damage. Fitch Ratings saw positive signs for home sales, but warned that the recovery will involve ups and downs. RealtyTrac reported that 1 in every 136 U.S. homes received a foreclosure notice during Q3 of 2009. According to MDA DataQuick, San Francisco home and condo sales increased by 4.8 percent in September 2009.

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

Mortgage application volume increased 14.6% this week. All 50 state attorney generals are now involved in an investigation into lenders that filed faulty foreclosure affidavits. The FHFA is urging GSEs to accelerate the foreclosure process once the AG reviews are over. Foreign investors are planning to purchase large amounts of commercial property.

In The News:

Mortgage Bankers Association – “Mortgage Refinance Applications Jump as Rates Continue to Fall in Latest MBA Weekly Survey” (10-13-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending October 8, 2010. The Market Composite Index, a measure of mortgage loan application volume, increased 14.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 14.8 percent compared with the previous week.”

NAR - “NAR Says Families Will Suffer if Foreclosure Freeze Continues” (10-13-10)

“Thousands of first-time and move-up buyers who hoped to make a foreclosed property their new home now face uncertainty, anxiety and possibly remorse as they worry that closing on their desired property could be in jeopardy. For many, the dream of homeownership could turn into agony if their home purchase is indefinitely delayed by a moratorium on foreclosures declared by some banks, the National Association of Realtors® said today.”

Los Angeles Times – “California to join multistate inquiry of foreclosures by banks” (10-13-10)

“California will join a multistate investigation into whether banks violated laws by cutting corners while foreclosing on homes as the Obama administration made clear Tuesday that it would not support a nationwide moratorium.”

Housing Wire – “Jaime Dimon: ‘Almost no chance we made a mistake’ with foreclosures” (10-13-10)

“JPMorgan Chase said new processes are being put in place to ensure it fulfills all procedural requirements going forward. ‘There’s almost no chance we made a mistake,’ Jaime Dimon, CEO of JPMorgan Chase, said during the conference call.”

Housing Wire – “It’s official: All 50 state AGs to review foreclosures” (10-13-10)

“Alabama Attorney General Troy King announced Wednesday he is joining the other 49 AG offices in a nationwide investigation into lenders that filed faulty foreclosure affidavits.”

Housing Wire – “St. Louis Fed economist questions wisdom of more quantitative easing” (10-13-10)

“An economist at the Federal Reserve Bank of St. Louis wonders if additional large-scale securities purchases by the Fed will produce the desired effects of driving down interest rates, boosting employment, and preventing deflation.”

Housing Wire – “FHFA urges GSE servicers to accelerate foreclosure process after reviews” (10-13-10)

“On Oct. 1, DeMarco said Fannie Mae and Freddie Mac are working with their third-party servicers to identify any loans that may be have been foreclosed improperly. On Wednesday, FHFA urged servicers to proceed on foreclosures as quickly as possible after all foreclosure alternatives have been exhausted.”

Bloomberg - “Investors Target U.S. Commercial Properties After Drop in Values, DTZ Says” (10-13-10)

“Commercial-property investors are preparing to spend more in the U.S. next year after more than two years of declining values, DTZ Group Plc said. Funds and investment companies increased the capital available for deals in the Americas by 54 percent since December to $97 billion, the London-based real-estate broker said in a report today. Most of this will be used for U.S. transactions.”

Bloomberg - “Banks to Shift From `Extend and Pretend’ in Real Estate Loans, Survey Says” (10-13-10)

“Lenders will shift toward amending commercial mortgages next year instead of extending maturities, leading to increased sales of distressed real estate, according to a survey of almost 900 property professionals. More than 63 percent of those surveyed said they expect maturing loans to be modified, while 7.1 percent said loans will continue without changes to defer losses, a practice known as ‘extend and pretend.’ About 16 percent of respondents said real estate with maturing loans will be foreclosed on and put on the market, and almost 14 percent said properties will be sold by borrowers, PricewaterhouseCoopers LLP said in a report today.”\

Looking Back:

One year ago, Fitch reported that 60 percent of borrowers from 06 to 07 had negative equity and owed more than their homes are worth. Interthinx’s Mortgage Fraud Index estimated that fraud decreased by 4 percent from Q1 to Q2 of 2009, but increased by 7 percent from Q2 of 2008. Statistics from MDA DataQuick showed that Southern California home sales increased by 5 percent from October of 2008.

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

Ivan Choi President of REOMac (Full Bio)

September 17^th, 2010, The Norris Group returns with its award winning event I Survived Real Estate 2010. The Norris Group has assembled an incredible line up of industry experts to discuss the state of REO from the inside. Topics will include regulatory intervention and aftermath, bulk buying, myths and facts, and opportunities emerging for real estate professionals. 100 percent of the proceeds support the Orange County affiliate of Susan G. Komen for the Cure. This event would not be possible without generous help from the following platinum partners: Foreclosure Radar and Sean O’Toole, the San Diego Creative Real Estate Investors Association and Bill Tan, Investors Workshops and Shawn Watkins and Angel Bronsgeest, Invest Club for Women and Iris Veneracion and Bobby Alexander, Claudia Buys Houses, The Business Press, Frye Wiles, MVT Productions, and White House Catering.

This week Bruce is joined by Ivan Choi. He is a fifteen year veteran in mortgage banking with a background in finance, technology, retail loan origination, and servicing. He just started his own company called Savia Home Loans. Also, he is president of REOMac; a national non-profit trade organization.

Ivan currently lives in Corona, and previously lived in Irvine. For the last 15 years he has been working in retail mortgage banking. For 14 of those years, he worked with Countrywide Home Loan, which was acquired by Bank of America. He worked with Bank of America for another year, and then decided to start his own mortgage banking company. He has a second job with a national REO outsourcing company.

Mortgage banking is different than mortgage brokering. A mortgage broker originates loans, and puts them through to a major bank for funding. The broker attempts to find the best possible fit, and best possible pricing, for the homebuyer. The mortgage banker is fulfilling loans directly out of their own funding capacity. The money that a mortgage banker uses is essentially his or her own.

Presently, it is very difficult to start a mortgage banking company, because of the meltdown. Another prominent mortgage executive, who worked with one of the big banks until 2008, decided to start his own mortgage banking company. The biggest warehouse line he was able to get was worth about $700,000. That is not worth a week’s worth of loans.

Once your loan money is entirely lent out, you can try to keep that loan in your books, or you can try to sell it to an investor. That investor will provide you with liquidity to buy and sell another loan. You can either sell the underlying note and service the loan yourself, or you can sell both the note and the servicing rights. This is not understood by all people, but servicing rights to the loan has a certain monetary value as well.

In 2006, mortgage bankers were amazed by how generous loan guidelines were. On the flip side, when the mortgage market melted down, Ivan could not believe how difficult it was to obtain credit. We swung the pendulum from allowing too many people to obtain credit, to now allowing too few to obtain it. What is traditionally observed as a “makes sense” loan is now very difficult to obtain.

The present model of mortgage banking is that an originator makes a lot of loans for home buyers, they then package those loans into securities and sell them on the secondary market. Unfortunately, the demand for those securities in the secondary market has dried up, so we no longer have the liquidity that mortgage originators relied on to make loans in the first place. That is why many of those “makes sense” loans can no longer be made today. Currently, Fannie, Freddie, and FHA make up over 70% of the business for mortgage originators and lenders.

New Vista Asset Management Company is a San Diego-based company established 4 years ago by two veterans of the mortgage banking business. The two partners, Jim Park and Jerry Acosta, have a lot of connections both in the mortgage industry and the political world. New Vista serves as an REO asset management company. Any bank that cannot handle REO inventory can hire a company like New Vista to offload those REOs. New Vista is special because it is a multicultural company. Normally, Ivan does not pay attention to the cultural differences between companies, however, this is currently a significant difference because the government is more willing to work with culturally diverse businesses.

Inventory levels have changed pretty dramatically over the last couple years. Foreclosure inventory has been building up for the past couple years. This is because the foreclosure process has slowed down. Ivan believes it will take another 6 to 12 months before we can feel that we are in a foreclosure market. This will be a big relief for real estate agents, because many of them were hurt in 2007 and 2008.

Ivan defines “shadow inventory” as the backlog of foreclosures that have not yet finished the foreclosure process. When people use the term shadow inventory, they often use it to imply there was some evil conspiracy by big banks and the government to artificially hold in properties from the market to do 1 of 2 things: 1) to hold properties back and parcel them out, on a limited basis, to preserve valuations and earn a better return than what they would have received. 2) Mortgage bankers are holding inventory from the market to play magic accounting on the backside, which enables them to put out good quarterly earnings reports, so that their stocks won’t drop. As a former worker for Countrywide and Bank of America, Ivan believes these theories to be untrue.

Fannie and Freddie have double the REOs from last year, but the REO agents do not. Fannie expects approximately 1 million properties to finish the foreclosure process between the 4^th quarter of 2010 and the 1^st quarter of 2011. Asset management companies and banks can only process so many of those properties. Ivan believes that California cities are probably not capable of getting rid of that many properties with their current level of staff.

In 2008, Mike Novak-Smith had 900 REO listings. Today, he has 105, yet Fannie has double their amount of REOs. There does seem to be a disconnect between their ability to get properties onto the market. Perhaps the players have shifted, and the GSEs are understaffed.

On another topic, delinquencies are very high. In California, delinquency numbers have gone from 5% to 12% in the last 18 months, yet foreclosure numbers have gone down. Bruce believes that lenders do not actually own all these properties. Bruce believes that banks are refusing to foreclose on properties.

The government is involved in the foreclosure process now. There is a huge motivation for the federal government to modify loans or do short sales. The major servicers are now paranoid about going through the normal foreclosure process now, because if they do not fully document everything without offering ever possible solution to the borrower, the government will attack them. If the government believes the lender could have offered a loan modification but chose not to, then the lender gets dragged through the mud. There is a lot of pressure on the lenders to find other solutions.

REOMAC is having an educational event in October in Hollywood, Florida. The title of the event is “New Challenges, New Approaches”. The industry is preparing for a very different new year. Banks and servicers must satisfy their homeowners and their loan investors. At the same time, the government is beating up the banks. The end result is that we have a lot of government initiative and legal changes. The servicer must still find a way to make everyone happy, including the loan investor who has ultimate responsibility for the underlying note. Ivan believes many of the changes in 2011 will be legal related. Ivan does not believe there will be much of a change in public perception, because now everyone has had their shot at beating up people involved in the real estate industry.

The REO business is a very low margin business, and you must have a big team to run a lot of volume. REO inventory has decreased so dramatically that many professional REO broker shops have had to lay off people in the midst of the impending surge in inventory. All the good REO brokers are trying to figure out ways to scale up rapidly, because they don’t want to get caught with their pants down. It’s a Catch 22, because you can’t staff up too far in advance, but you still want to be ready when the opportunity hits.

HAFA guidelines were released on April 1^st. Those guidelines were a game changer, because it caused the government to be heavily involved in mortgage servicing and foreclosure processing. Ivan does not believe that short sales will pick up to the high degree that we need them to pick up. Short sale numbers are increasing right now, but when you compare the overall number of short sales to the number of foreclosures, you can see that short sale numbers are still very small. REO is where all the business is going to go.

The event for REOMAC is taking place on October 20^th thru the 23^rd in Hollywood, Florida. It is the 25^th anniversary of a very worthwhile organization.

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

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According to Capital Economics, business investment rose 17% during the second quarter. Multiple forecasters suspect the housing market and the economy are in a double dip. Zillow reports that 18.2% of all O.C. homes sold for a loss. The Case-Shiller 20-city home price index shows prices increased 1% from May to June.

In The News:

Housing Wire – “Dallas Fed says fiscal stimulus is a quick fix, not a permanent solution” (8-30-10)

“The fiscal stimulus plan, formally known as the American Recovery and Reinvestment Act, signed into law by President Obama in February 2009 has succeeded in everything it planned to do, in theory. It designated the majority of funding toward the people who need it the most and at the most crucial time they need it. But Jason Saving, senior economist at the Federal Reserve Bank of Dallas, doubts the plan is showing the anticipated results in practice.”

Housing Wire – “Restricted credit for small businesses driving delinquencies up” (8-30-10)

“According to Capital Economics’ U.S. Quarterly Outlook, business investment in Q210 rose 17%. However, Moody’s Analytics reported last week that commercial mortgage-backed security delinquencies spiked since after Sept. 2008, passing 23% by March 2010.”

Housing Wire – “Home values drop 0.2% from a year ago: Freddie Mac” (8-30-10)

“Home values in the U.S. fell 0.2% in the second quarter of 2010 from the same quarter last year, according to the Freddie Mac Conventional Mortgage Home Price Index (CMHPI).”

Orange County Register – “1-in-5 O.C. homes selling at a loss” (8-30-10)

“While 18.2% of all homes sold for a loss, that’s down about 2.5% from the same period a year earlier. Zillow spokeswoman Jill Simmons said that losing deals in O.C. peaked at 25% in February 2009, the month after median home prices hit bottom.”

Orange County Register – “Apartment occupancy up in first half of year” (8-30-10)

“A survey of large apartment managers indicated that U.S. apartment occupancy has recovered steadily throughout the first half of 2010, following more than two years of decreasing occupancy.”

Orange County Register – “Realtors report increase in house supply” (8-30-10)

“Steve Thomas of Altera Real Estate reported that the supply of unsold homes on the Orange County market increased to 11,650, up from 7,300 in January. Still, at 7.2 months, O.C.’s July inventory is below a countywide average of eight months dating back to the early 1990s.”

Associated Press - “Home prices rise in 17 cities in June” (8-31-10)

“The Standard & Poor’s/Case-Shiller 20-city home price index released Tuesday posted a 1 percent increase in June from May and was up 4.2 percent from a year ago. Home prices nationally were up 4.8 percent in the second quarter compared with the first quarter. That was largely because buyers could take advantage of government tax credits of up to $8,000.”

Inman - “Appraisers publish homebuying guide” (8-31-10)

“A new homebuying guide offers consumers advice on timing their purchase, selecting a real estate agent, and choosing the best home on the market from the ‘uniquely unbiased perspective’ of a real estate appraiser, according to its publisher, the Appraisal Institute. Because appraisers are not paid by sales commissions, ‘they have the unbiased perspective needed to help homebuyers weigh their options carefully, make logical decisions and effectively navigate the sales negotiation and mortgage application processes,’ the Appraisal Institute said in announcing the publication of the 190-page book.”

Housing Wire – “FDIC bank ‘problem list’ hits highest point since 1993″ (8-31-10)

“The number of banks on the Federal Deposit Insurance Corporation’s (FDIC) ‘Problem List’ rose to 829, the highest level since March 1993, according to second-quarter earnings released today. The 829 figure is up from 775 problem banks in Q110 and accompanies a total of 45 failed FDIC insured banks for the second quarter.”

Housing Wire – “More borrowers refinance to shorter FRMs with higher monthly payments: CoreLogic” (8-31-10)

“An increasing number people are choosing to pay off their mortgage loans in a shorter time period, according to data provided by CoreLogic. The data shows at 26% of all loans, or 252,600 loans, were refinanced to a 15-year fixed-rate mortgage (FRM), up from 18.5% in 2009 and 16.3% in 2008. In 2007, only 9.4% of loans were refinanced to a 15-year FRM.”

Housing Wire – “Consumer confidence rises in August, but conditions weaken” (8-31-10)

“An improved short-term outlook boosted consumer confidence for the first time in two months in August but the average American’s take on current economic conditions continued to weaken during the month, according to the private research firm The Conference Board. The board’s consumer confidence index for August was 53.5, topping the consensus analysts’ estimate of 50.5, according to Thomson Reuters, and up from a revised July figure of 51.”

Bloomberg – “Home Prices Probably Cooled, U.S. Consumer Sentiment Languished” (8-31-10)

“‘The housing market is in the midst of a double dip, with sales declining and prices likely to,’ said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia.”

Realty Times – “Real Estate Outlook: Mixed Figures” (8-31-10)

“Affordability is another key area where things have been slowly improving with little attention. The Wells Fargo-National Association of Home Builders ‘housing opportunity index’ — which looks at home prices, mortgage rates and what median-income families can afford to buy — is at a near record high point. Thanks to 30-year mortgage rates in the mid-four percent range, 72 .3 percent of median-income American families can now afford to buy the median-priced house. Historically that number has stayed in the low 60 percent range, and sometimes slipped below 50 percent.”

Realty Times – “American Savings” (8-31-10)

“Nowadays, the average American has 3.5 open credit cards, with an average household carrying credit card debt equaling $15,788 (Federal Reserve). And on that they pay an average of nearly 15 percent interest!”

Realty Times – “When Should an HOA Be Able to Restrict an Owner’s Right to Rent Out His Unit” (8-31-10)

“Is it fair for an HOA (Homeowner Association) to prohibit or restrict a unit owner from renting out his property? Should there be a law about this? In California, these issues are currently being argued in both the legislature and the courts. In some other states the issues may already be settled; in others the debate is no doubt going on.”

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

The MBA’s weekly survey shows that mortgage loan application volume increased by 4.9%. The Commerce Department reported new homes sales decreased 12.4% in July. According to Zillow, most Western states experienced a decrease in 20-year mortgage rates last week. California’s 30-year rate decreased to 4.30%.

In The News:

Mortgage Bankers Association - “Mortgage Refinance Applications Continue to Increase as Rates Decrease in Latest MBA Weekly Survey” (8-25-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending August 20, 2010.  The Market Composite Index, a measure of mortgage loan application volume, increased 4.9 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 4.5 percent compared with the previous week”

Washington Post – “New home sales hit lowest level” (8-25-10)

“The Commerce Department reported Wednesday that new homes sold in July at an annual rate of 276,000, down 12.4 percent from June and down 32.4 percent compared with the same time last year”

Housing Wire – “Dow Closes Down Nearly 134 Points Following Bad Housing Data” (8-25-10)

“The American stock markets closed lower today following the news of homes sales dropping a staggering 27%. Stocks of big banks that have large mortgage-finance operations such as Citigroup (C: 3.68 -0.81%), Bank of America (BAC: 12.63 -0.08%), Wells Fargo (WFC: 23.4907 -0.63%) and JPMorgan (JPM: 36.179 -0.09%) closed lower despite doing large amounts of trading volume, according to the New York Stock Exchange”

Housing Wire – “Zillow: Rate on 30-Year Mortgage Remains Flat on Average” (8-25-10)

“Most western states saw a decline in rates: California’s current rate of 4.3% is down from 4.33% last week; Colorado’s at 4.17% is down from 4.19%; Washington’s at 4.29% is down from 4.33%; Illinois’ at 4.24% is down from 4.3%, and Florida’s at 4.2% is down from 4.21%.”

Housing Wire – “Deutsche Bank Summarizes Future of GSEs, Government Guarantee” (8-25-10)

“Key elements included re-launching of the MBS guarantee business backed by catastrophe insurance from the US government. This guarantee would implicitly serve as a backstop to the TBA pass-through market. In a panel with investors in the space, both of these aspects were considered key to maintaining adequate liquidity at the GSEs.”

Housing Wire – “House Prices Begin to Climb, Up 0.9% in Q2 in FHFA Index” (8-25-10)

“The agency said its second quarter HPI – calculated using information from mortgages acquired by Fannie Mae and Freddie Mac – rose 0.9% on a seasonally adjusted basis from the prior quarter, yet fell 1.6% from the year ago. Still, prices of other goods and services in the second quarter were 3% higher than the year earlier. This puts the second quarter inflation-adjusted home price about 4.4% higher than last year, according to the FHFA.”

Housing Wire - “Americans Continue to Deleverage with Credit Card Debt Below $5k per Person” (8-25-10)

“The average national credit card borrower debt slid downward for the fifth consecutive quarter by 4.1% to $4,951, marking the first time the average has been below $5,000 since 2002, according to a report released today by TransUnion. This, coupled with the fact the national credit card delinquency rate for borrowers 90-plus days delinquent plummeted to 0.92% in Q210 (down 17.1% from the first quarter and 21.3% from last year) suggests that borrowers are saving more and spending more responsibly.”

Orange County Register – “Thinking of a refi? Tips for borrowers” (8-25-10)

“This summer’s bout of falling mortgage rates has sparked yet another frenzy of homeowners looking to refinance their loans. Now could be a good time to do it, too, with interest rates at their lowest in decades — lower than in 2001, lower than in 2003 and even lower than in 2004, when we last told you rates were at record lows. They’re lower now.”

Orange County Register – “O.C. housing risk 9th highest in U.S.” (8-25-10)

“Orange County home prices have 99.7% chance of price loss in two years, or by the winter of 2012. PMI Group doesn’t say how big of a price drop that would be, so the declines could be small or large. Nationwide, the average risk for price drops was 51.9% — down from 53.8% the previous quarter.”

Looking Back:

One year ago, the CAR reported Home sales increased 12 percent in July in California. Nationally home prices fell 6.1 percent in the second quarter from 2008, claimed the FHFA.

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

According to the NAHB, builder confidence fell for the 3rd straight month. The California Homebuilding Foundation reports the housing industry’s economic output has decreased by nearly 80% since 2005. New rules were released which restrict an originator from receiving compensation based on the interest rate or other loan terms of the mortgage. Michael Carliner of Harvard University believes that the decrease in mortgage rates will not offset the effect of decreasing home values on home buyer pessimism.

In The News:

The Hill – “Banks to benefit most from White House program to help fight foreclosures” (8-15-10)

“‘Giving money to the banks isn’t what the government should be doing right now,’ said Dean Baker, co-founder of the Center for Economic and Policy Research.”

Mish’s Global Economic Trend Analysis – “Former Bank Regulator William Black: U.S. Using ‘Really Stupid Strategy’ to Hide Bank Losses – Will Produce Japanese Style Lost Decade” (8-15-10)

“we should be upset there are not more bank failures. The industry has used its political muscle to get Congress to extort the financial accounting standards board to gimmick the accounting rules so that banks do not have to recognize their losses.”

USA Money – “Thoughts of real estate double dip deter investors” (8-14-10)

“‘Housing is entering a double dip in prices,’ says Paul Dales, chief economist at the research group, Capital Economics. ‘They are headed down even more over the next 18 months by as much as 5%. Anyone looking for a short term gain by selling a property is heading for trouble.’”

John Burns – “U.S. Housing Market Statistics” (7-31-10)

This article contains a list of economic statistics which influence the housing market.

NAHB - “Builder Confidence Declines In August” (8-16-10)

“Builder confidence in the market for newly built, single-family homes edged down for a third consecutive month in August, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The HMI declined one point to 13, its lowest level since March of 2009.”

CBIA - “Study Shows Housing Industry’s Economic Output Down 80 Percent Since 2005″ (8-16-10)

“An updated version of The Economic Benefits of Housing report released today by the California Homebuilding Foundation (CHF) in conjunction with the Center for Strategic Economic Research (CSER), confirms that the housing industry’s economic output has fallen approximately 80 percent since 2005, representing a loss of tens of billions of dollars and hundreds of thousands of jobs to the state’s economy.”

Wall Street Journal – “Redfin: Less Than Half of All Home-Sale Attempts Successful in ‘09″ (8-16-10)

“A survey of seven major housing markets found that less than half of all attempts to sell a home in 2009 had, as of last Wednesday, resulted in a sale. The survey looked at how the 500,000 homes that were listed for sale last year in seven of the nation’s biggest counties had fared. Around 47% of those listings had sold by last week, while just 4% of those listings were still active.”

CNBC - “US Banks Get Securities Buy-Back Window” (8-16-10)

“The Dodd-Frank financial reform bill has opened a 90-day window for banks to buy back $118 billion in high-cost securities, a move that would enable them to replace the instruments with cheaper capital but is likely to cause tensions with regulators and investors.”

Housing Wire - “House Price Appreciation Slows in June: CoreLogic” (8-16-10)

“National prices, including distressed sales, rose by 1.4% in June from a year earlier. The yearly appreciation slowed from the 3.7% increase in May from one year earlier. The May increase was revised up from the initial 2.9% estimate.”

Housing Wire – “Fed Publishes Wave of Rules for Mortgage Origination Transparency” (8-16-10)

“The Fed released final rules restricting an originator from receiving compensation based on the interest rate or other loan terms of the mortgage. The new rules apply to mortgage brokers and the companies that employ them, as well as loan officers employed by depository institutions and other lenders.”

Bloomberg - “Your House Might Be Underwater for Years: Michael Carliner” (8-16-10)

“Now we’re seeing the opposite mindset. If a potential buyer believes that housing prices may fall more, then mortgage rates of 4.5 percent won’t attract home buyers. Rates could even drop to zero and it might not outweigh consumers’ negative perceptions. Household expectations of future U.S. home price appreciation aren’t directly measured, and are probably based on recent experience. If expectations reflect changes in home prices over the last three years, for example, consumers seem to anticipate annual house price declines of 3.7 percent to 10.4 percent, depending on which of the various house price indexes is used.”

Orange County Register – “Home closing costs are on the rise” (8-16-10)

“A new survey by Bankrate.com shows closing costs are climbing around the country. The average Good Faith Estimate on a $200,000 mortgage this year is $3,741, up from $2,732 in 2009.”

Orange County Register – “5 O.C. hot spots for home price cuts” (8-16-10)

“According to online home tracker Trulia.com, 32.5% of homes on the O.C. market have seen at least one price reduction as of Aug. 1. That compares to 30% in July. Nationwide, 25% of listings had at least one price trim, with the average reduction 10% off the original asking price.”

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