The Norris Group Blog

Today’s News Synopsis:

According to the CBIA, sales in new-home communities of 10 units or more were 32 percent below April 2009. MDA DataQuick reports 8,264 homes closed escrows in the nine-county Bay Area last month.  Statistics from Freddie Mac show the average 30-year frm rate increased to 4.75 percent this week. The number of suspected mortgage fraud activities reported to law enforcement grew 5% during fiscal year 2009.

In The News:

CBIA - “California New-Home Market Down in April, CBIA Announces” (6-17-10)

“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 32 percent below April 2009. During April, 2,203 new homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 3,218 a year earlier. Sales of single-family homes were down by 34 percent, while sales of townhomes and ‘plexes’ – duplexes, triplexes, etc. – were off by 33 percent and sales of condominiums were 22 percent lower than a year ago.”

DQNews - “Bay Area $500K-Plus Home Sales Jump; Median Price Tops $400K” (6-17-10)

“Sales rose across the Bay Area last month in many mid- to high-end neighborhoods, helping to push the median sale price over $400,000 for the first time in 21 months. But as tax credits, low mortgage rates and an ample supply of homes for sale fueled the $500,000-plus market, sales fell in many affordable inland areas where investors and first-time buyers faced a dwindling inventory of low-cost foreclosures, a real estate information service reported. Last month a total of 8,264 homes closed escrows in the nine-county Bay Area, up 18.0 percent from 7,003 in April and up 11.0 percent from 7,447 in May 2009, according to MDA DataQuick of San Diego.”

Wall Street Journal – “Shadow Problem: Home Price Declines May Land in Cities That Largely Avoided Them” (6-17-10)

“A new report shows that the ‘shadow inventory’ of homes, with delinquent mortgages that have yet to go through the foreclosure process, is growing fastest in areas that have so far avoided the biggest home-price declines, according to a report by ratings agency Standard & Poor’s. Mortgage companies could be forced to reduce their prices on these foreclosued homes as they work through that supply, and as more of those homes sell, that could continue to put pressure on prices. At the top of the list: the New York City area, where at the current rate it would take 103 months to clear the shadow inventory of loans that are more than 90 days delinquent or in foreclosure. That’s nearly 3.5 times the national average.”

San Francisco Chronicle - “Freddie Mac: Mortgage rates up from yearly low” (6-17-10)

“Rates on 30-year fixed mortgages backed off from yearly lows this week, but still remain historically cheap. Mortgage finance company Freddie Mac says the average rate rose to 4.75 percent, up from 4.72 percent last week. The rate hit 4.71 percent in December, the lowest since Freddie Mac began keeping records in 1971.”

Housing Wire – “Suspected Mortgage Fraud Reports to FBI Grew 5% in 2009″ (6-17-10)

“The number of suspected mortgage fraud activities reported to law enforcement grew 5% during fiscal year 2009 to 67,190, according to the latest yearly mortgage fraud report from the Federal Bureau of Investigation (FBI). FBI mortgage fraud pending investigations rose 71% from fiscal year 2008, while Department of Housing and Urban Development – Office of Inspector General (HUD-OIG) pending investigations rose 31% in the same time. Of all pending FBI mortgage fraud investigations during FY 2009, 66% involved dollar losses totaling more than $1m.”

Housing Wire - “55-75% of HAMP Mods Could Re-Default under Fitch Projections” (6-17-10)

“As of May 2010, Fitch noted that roughly 15% of non-agency RMBS loans by balance — including nearly 35% of RMBS subprime loans — received at least one modification. This is up from 10% and 25% respectively in September 2009. Fitch currently expects anywhere from 55% to 75% of modified loans within RMBS to re-default after 12 months.”

Bloomberg - “Mortgage-Fraud Crackdown in U.S. Brings 485 Arrests” (6-17-10)

“Authorities arrested 485 people since March in the largest nationwide mortgage-fraud crackdown of its kind, the U.S. Justice Department said. During the enforcement effort, 1,215 criminal defendants responsible for $2.3 billion in losses faced some type of legal action, the department said. The crackdown, dubbed Operation Stolen Dreams, also included 191 civil cases resulting in the recovery of more than $147 million.”

Inman - “5 real estate opportunities” (6-17-10)

“In 2001, 42 percent of homebuyers were first-timers. That number dropped to 36 percent at the peak of the seller’s market in 2006. Today, first-time buyers represent 47 percent of all buyers, the highest percentage in this century. Opportunity: To take advantage of this trend, actively prospect for listings in first-time-buyer areas. To determine which areas are the best to prospect, watch the sales board in your office or the sales report from your local multiple listing service.”

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.