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231-TNG Radio – Mike Shedlock 6-25-11

Friday, June 24th, 2011

Mike Shedlock

Registered Investment Adviser Representative, Sitka Pacific Capital Management


(Full Bio)

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This week Bruce is joined once again by Mike Shedlock.  Mike is a registered investment advisor representative for Sitka Pacific Capital Management. 

Mike’s blog, Mish’s Global Economic Trend Analysis, was started back in 2005.  Before, he had worked in the banking industry for over 20 years as an assistant vice-president for Harris.  He then became a consultant in 1999, but the consulting  jobs dried up after Y2K and 9/11.  For this reason he was out of work for almost 3 years.  He started his blog with the intent of being discovered, which originally he thought the odds were 0, but he proved himself wrong.  He now gets a million and a half to 2 million page hits a month on his blog.  He initially started writing about the things that he was going through at the time that a lot of people are going through right now.  I could see the bubble in housing building, and people were telling him “Cash is miss, cash is trash,” but when you are out of work cash is not trash.  Now, most of the people who told him this have actually lost money on their houses.  He wonders how many of them would like to have their cash back in their pockets now that they’re unemployed.  However, very few people listened.  Bernanke tried to claim the housing bubble didn’t exist, but it was very easy for Mike to see it did indeed exist.  He called the exact top of the housing market on his blog in real time in the summer of 2005.  Some people tried to say that Case-Shiller showed the peek was in 2006, but Case-Shiller only looks at re-sales and not at new home sales.  What started happening in the summer of 2005 that didn’t reflect itself in prices was huge incentives, whether it was free garages, free trips to Europe, free cars, free swimming pools, free landscape upgrades, free granite counter tops.  It actually started with the free granite counter tops, and then it went as big as free pools.  Case-Shiller never picked up any of this.  Housing peeked in 2005, and it took another year for things to start heading down in earnings.  The same type of thing happened back in 2006 when there was an 18% commission to sell a house in Phoenix. 

One of the things that was very difficult about picking a top accurately back in 05-06 was you would have really had to understand the way real estate was being financed, and very few people understood what a mortgage-backed security or a CDO or a fault-swap until around 2007.  Part of the problem was possibly a disconnection between the ways things were really being financed and how little the lender cared if anybody really could pay.  However, it’s really hard to say what was going on in Bernanke’s mind, but he certainly did miss the housing bubble.  He didn’t think there would be a recession and said, “The housing prices were supported by fundamentals” and mentioned there possibly being some “local froth.”  Neither he nor Greenspan saw the role of the Fed’s interested rate.  It’s interesting to ask how much of what Bernanke said he really believes or if he is simply trying to absolve the Feds’ guilt.  Last week he did a very self-serving speech where he praised the Feds for doing things that caused the recovery, but ignored all the things that the Fed did that caused the bubble in the first place.  Greenspan was a veritable cheerleader for housing, preaching variable interest loans, adjustable rate mortgages.  He was praising derivatives and all the things we would look back on as silly.  One did not need to understand credit derivatives or anything like that to know housing was in a bubble.  All one needed to see was how fast home prices were rising vs. how fast wages were rising.  Home prices were 3-4 standard deviations above rental prices and 3-4 standard deviations above wage growth.  It’s simply not sustainable.  That is how out of line home prices were.  We’re closer now to being back at the trim line, but we’re still a little bit above it. 

The tendency, however, is to overshoot to the downside.  Should that happen, there is a chance for some significant declines in places like California.  Home prices look a lot cheaper in Las Vegas because the bigger the bubble the bigger the decline.  Some of the biggest bubble areas were Las Vegas, Florida, Phoenix, and a lot of places in California.  California still has not corrected to where it needs to go to where one would say the valuations are reasonable.  California also has Proposition 13, which is putting a floor on home prices.  Some cities, such as Chicago, New York, and San Diego, are always going to have a premium because these cities are where there are a lot of jobs.  However, there is a difference between premium and 300-400% and 3 standard deviations like we were above norm.  A deviation is a mathematical function of a normalized curve that shows just how insane things are.  Three times normal is an extremely low probability event, and when you get into that condition, you know that you’re in a bubble.  Australia, Vancouver, Canada, and China are in this same situation right now. You can look at all these places and see that home prices are going up faster than rents and faster than wage growth.  It’s not sustainable.  The bubble in Australia has now popped, but all the mentioned countries were in a bubble longer than expected.  When Canada’s and China’s burst, we are most likely going to see some 50% declines just like here in the United States. 

There are a lot of smart people who disagree with the direction the market is going and believe we need to protect against strong inflation.  However, before you can hear their arguments and debate you have to know what the terms mean.  Mike defines inflation as an increase in money supply and market to market credit.  A common definition people use for inflation is prices going up, and they look at consumer prices.  Unfortunately, they ignore asset prices, which is one of the mistakes Bernanke and Greenspan made.  They absolutely ignored asset prices and did not consider home prices as part of inflation.  Had you taken home prices and put them in the CPI, then interest rates in the initial stages of the bubble popping were 5-6% too low.  You put housing in the CPI; the CPI would have been about 8 or 9%.  Instead, interest rates were 4 1/2%, so there should be no wonder that speculation in homes was running rampant when interest rates are that low.  On the contrary, people today say inflation is going through the roof, but you have to ask if it really is.  If you put home prices in the CPI, we now see something different.  The CPI would be barely flat here now.  This is what happens when you ignore asset bubbles and don’t put them in the CPI.  This is what happens when you only look at prices.  It’s not even really possible to measure prices.  If you take a look at the CPI, this is a basket of goods and services, and there is not one representative basket.  Take for example someone who is on fixed income and retired.  They are going to care the most about gasoline prices, their heating bill, property taxes, rent prices, the prices of food, and medicine if they are not fully covered by Medicare.  If also, for example, you take the basket of someone with kids in high school heading for college, you see the cost of college education has doubled in the last ten years or less.  Someone can easily rack up $50,000 a year in expenses going to college.  Kids are racking up $100,000 in debt.  These are two different kinds of baskets, not one representative basket.  Therefore, the whole idea of thinking you can measure the CPI is flawed. 

Mike has a letter on his website from a lady named Stephanie who is retired.  To Stephanie, inflation meant her fixed income bought less.  She said she gets $938 from Social Security, which is what she lives on every month.  She has a cd that has $16,000 in it, which she was getting $75 a month on the cd at one time.  Short-term interest rates are now down to nothing, so she is getting nothing on $16,000.  She wrote Mike asking him for advice, and he responded saying that she was being clobbered by the policies of the Fed.  Not only did the taxpayers bail out the banks at their expense, but the Fed continues to do so.  When Bernanke holds the interest rates so low, he is hurting everyone on fixed income that has savings in cds or receives a social security check every month that buys less and less.  These are the people that Bernanke is hurting.  Norio Rabini just came out with a statement that he thought there could be quite a shaking up of bonds and yields in the next couple years.  Mike mentioned this possibility too, although it is uncertain.  He received an email recently asking this very question, and they got upset when he didn’t know.  However, the real answer is anyone who thinks they know is probably lying.  No one really knows.  We can put together our guesses and make a case why we think something is going to happen, but when someone says they know, they really don’t.  We don’t know what the Fed is going to do, or what the ECB is going to do, or what China is going to do.  Everything is intertwined.  China is having a government change in 2012, something of which not many people are aware.  It is going to be a very significant one.  The current leadership in China is focused on maintaining growth at any price.  It is highly rumored that the next regime coming into China is extremely concerned about the property bubbles.  If they slow the Chinese economy, slow the prices of commodities, drop oil, drop the CPI, and if Congress sticks to its policies of being fiscally conservative, we may still be running huge deficits, but we’re no longer adding to it.  This is a change in the direction of downward pressure on the dollar.  Last year the ECB thought Jean-Claude Trichet was going to hike prices last month, and he didn’t.  If the ECB doesn’t hike, this is going to put upward pressure on the dollar and downward pressure on the Euro.  All of these claims are being put out there, but most of the claims are lies; the people don’t really know.  However, Mike is very supportive of what Rabini said about there being a legitimate chance of a bond market revolt.  On Yahoo Finance Mike talked about this very thing.  He was on the air with Aaron Task and Henry Blodget and had mentioned it two weeks before Rabini had even mentioned it.  He said if they get another round of QE out of the Fed, there is a real risk of a bond market revolt.  However, if he doesn’t and delays off on it, if there is a stock market plunge, if Europe delays hiking, if Australia does rate cuts, China slows, and commodities come down, then we can see a flight to treasuries.  As of which one of these things will happen depends on where all the variables fit.  It depends on what China does, what the ECB does, and what the Fed does.  Only then can we have a more definitive answer. 

The Fed will attempt to inflate, but it would be better for us to bite the bullet and balance the budget.  Otherwise, there is a very big risk of what happened in Greece happening in the United States if the U.S. does not address its budget deficit.  Interest rates do shoot up, and this is a very real risk.  If we want to get back to growth policies, we need to balance the budget.  We’re already spending $750 billion on defense, and we could probably spend $100 billion and have enough defense.  We could also allow drug imports to come in from Canada, get rid of student loans, or kill the entire department of energy.  There are a lot of things we could do that would get this country back on fiscal track.  We can’t balance the budget in one year, but it is possible that someone can do it in 5 years.  There is not really a choice here.  If we continue on the current path of not tackling the deficit, then what’s going to eventually happen is something similar to what happened in Greece.  The path we’re on is unsustainable.  The sooner the Congress addresses this, the better.  The sooner they address it, the sooner housing, commercial real estate prices, and the stock market will be negatively impacted.  No one wants to see this happen; no one wants to see the short-term pain.  However, the long-term pain gets greater and greater just like what happened in Greece if we don’t address the problem. 

The U.S. has been following the path of Japan, which has had a 20-year run with their housing market.  It seems we are still on this path, and even if the Fed does manage to obtain a little bit more inflation, home prices will probably not go anywhere for a decade due to the deleveraging of consumers.  All the people out there who are thinking housing is at a bottom and better buy now should forget it.  We are not going to have hyperinflation, and home prices are going to be stagnant for a long time.  

To learn more, you can view Mike’s website at globaleconomicanalysis.blogspot.com, or type Mish in a Google search.  He talks about housing, interest rates, Europe, gold, silver, and the global economy every day of the week. 

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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The Norris Group Real Estate News Roundup 4/26/11

Tuesday, April 26th, 2011

Today’s News Synopsis:

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.

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The Norris Group Real Estate News Roundup 2/9/11

Wednesday, February 9th, 2011

Today’s News Synopsis:

The MBA reports mortgage applications decreased 5.5% last week. Zillow claims national home prices dropped 2.6% during the 4th quarter of 2010. Bernanke and Geithner said the economy is still having trouble, but have strong hope for stable growth.

In The News:

Market Watch – “10 reasons to be bullish on housing” (2-9-11)

“housing follows jobs. Consumer confidence is close to reaching last spring’s high point, the most optimistic the U.S. has felt since 2008. And while hiring hasn’t restarted in earnest, firing has slowed to a drip.”

Mortgage Bankers Association – “Mortgage Applications Decrease as Rates Jump in Latest MBA Weekly Survey” (2-9-11)

“The Market Composite Index, a measure of mortgage loan application volume, decreased 5.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3.9 percent compared with the previous week.”

NAR - “GSE Structures Must Protect Taxpayers and Ensure Mortgage Availability, Says NAR” (2-9-11)

“The House Financial Services Subcommittee will convene today for the first hearing in a series to debate the future of the government-sponsored enterprises, Fannie Mae and Freddie Mac. NAR’s recommended plan is to restructure the entities as government-chartered, non-shareholder owned authorities that protect taxpayers and ensure continued access to affordable mortgages for consumers who are willing and able to assume the responsibilities of the American Dream of home ownership.”

CNN - “30% of mortgages are underwater” (2-9-11)

“Home prices dropped 2.6% nationwide during the last three months of 2010, pushing more borrowers underwater, according to a quarterly real estate market survey from Zillow.com.”

Housing Wire – “Bernanke: Lagging real estate drags down investments” (2-9-11)

“During his testimony, the Chairman said while unemployment remains high, evidence of a ‘self-sustaining recovery’ driven by consumer and business spending has surfaced in economic data. He added that real consumer spending grew at an annual rate of 4% in the fourth quarter.”

Housing Wire – “Academics challenge Fed to create real jobs this time around” (2-9-11)

“According to the Labor Department’s Bureau of Labor Statistics, unemployment fell to 9% in January, though many critics point out that number does not include the amount of workers who have had pay scaled back or even those who have given up looking.”

Housing Wire – “Geithner: Weak housing, unemployment stifle economic recovery” (2-9-11)

“U.S. Treasury Secretary Timothy Geithner says the nation’s economic recovery is still plagued by high unemployment and a weak housing market, but he’s confident policy makers will address the nation’s current needs by raising the debt ceiling.”

Looking Back:

One year ago, Altera Real Estate foresaw significant improvement in the Orange County real estate market. National home prices returned to 2004 levels. Forecasters from iEmergent expected approximately $580 billion in mortgage refinancing during 2010.

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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The Norris Group Real Estate News Roundup 1/7/11

Friday, January 7th, 2011

Today’s News Synopsis:

ZipRealty reports housing inventory increased 11.2% in 26 major markets from last year. Bernanke told congress he expects a moderate recovery this year. The Massachussets Supreme Court ruled against Wells Fargo in a major foreclosure case. Radar Logic claims home prices remained nearly unchanged from last year.

In The News:

Inman - “For-sale real estate inventory rises 11.2% in December” (1-7-11)

“More homeowners listed their homes for sale in December compared to the same month the year before, according to a report from national real estate brokerage ZipRealty. The number of multiple listing service listings for single-family homes and condominiums in 26 major markets rose 11.2 percent year-over-year in December, to 595,922 total.”

New York Times – “Bernanke Expects a ‘Moderately Stronger’ Recovery” (1-7-11)

“The Federal Reserve chairman, Ben S. Bernanke, told senators on Friday that he expected the recovery to be ‘moderately stronger’ this year. He also defended the central bank’s $600 billion program to stimulate the economy by buying government bonds, and urged Congress to put a credible plan in place to reduce the federal deficit.”

Housing Wire – “Mass. Supreme Court rules against US Bancorp, Wells Fargo in foreclosure case” (1-7-11)

“In a case that could cause many others to be reviewed, a Massachusetts Supreme Judge ruled against U.S. Bancorp (USB: 26.12 -0.65%) and Wells Fargo (WFC: 31.62 -1.65%) Friday saying the banks were not the mortgage holders when they foreclosed on two separate homes.”

Housing Wire – “Senator claims HUD help for unemployed has not reached homeowners” (1-7-11)

“Sen. Bob Casey (D-Pa.) sent a letter to Department of Housing and Urban Development Secretary Shaun Donovan, urging him and the agency to disburse funds allocated to help unemployed homeowners avoid foreclosure. As it stands, Casey claims $100 million in promised funding is now more than three months overdue.”

Housing Wire - “Unemployment falls to 9.4%” (1-7-11)

“Nonfarm payroll employment rose last month although lower than most analysts expected, and the unemployment level decreased to 9.4%, the lowest since May 2009. The Labor Department’s Bureau of Labor Statistics said the economy added 103,000 jobs in December”

Housing Wire – “Radar Logic: Stable home prices in October not market trend” (1-7-11)

“Home prices remained virtually unchanged in October of last year, increasing just 0.1% from the month prior on the RPX Composite price index released by Radar Logic Thursday. However, the firm said the monthly data does not signify a substantial stabilization across the market.”

Bloomberg - “Geithner Urged by Senators to Tackle Home-Foreclosure Process `Forcefully’” (1-7-11)

“Treasury Secretary Timothy F. Geithner and federal regulators need to fix the mortgage foreclosure process so that it doesn’t derail the economic recovery, Senator Jack Reed and 16 other senators wrote in a letter yesterday.”

Los Angeles Times – “Jerry Brown takes a hard look at Prop. 13″ (1-7-11)

“In an interview Tuesday, Brown said he did not support an increase in property taxes. But he said that much of the fallout from the measure should be undone and that he planned to propose a ‘complex reordering’ of government that would address some of the problems the measure created.”

For m ore 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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The Norris Group Real Estate News Roundup 11/17/10

Wednesday, November 17th, 2010

Today’s News Synopsis:

The MBA reports mortgage application volume decreased 14.4% this week.  According to CoreLogic, home prices have fallen 2.8% since September 2009.  Mortgage fraud has increased 20% from early 2009. Mortgage lenders are raising their minimum credit score requirements on FHA-insured loans.

In The News:

MBA - “Mortgage Applications Decline as Mortgage Rates Jump in Latest MBA Weekly Survey” (11-17-10)

“The Market Composite Index, a measure of mortgage loan application volume, decreased 14.4 percent on a seasonally adjusted basis from one week earlier. The results do not include an adjustment for Veterans Day. On an unadjusted basis, the Index decreased 15.0 percent compared with the previous week.”

Washington Post – “States, mortgage lenders in talks over fund for borrowers in foreclosure mess” (11-17-10)

“State attorneys general and the country’s biggest lenders are negotiating to create a nationwide fund to compensate borrowers who can prove they lost their home in an improper foreclosure, state and industry officials said.”

Housing Wire - “Fed proposal gives banks 2 years to comply with Volcker Rule” (11-17-10)

“The Federal Reserve issued a proposal Wednesday giving banks two years to bring investment activities in compliance with the Volcker Rule.”

Housing Wire – “CoreLogic HPI for September down 2.8%” (11-17-10)

“The data analytics company said its HPI fell 2.8% in September from a year earlier, following a revised drop of 1.1% in August. Excluding sales of distressed properties, home prices decreased 0.73% from the year-ago September.”

Housing Wire – “CoreLogic: Mortgage fraud up 20% from 2009″ (11-17-10)

“When CoreLogic (CLGX: 18.32 +1.05%) analyzed 7 million loan files in its database, it found the rate of mortgage fraud increased by more than 20% from early 2009 with specific processes and products being targeted.”

Housing Wire – “U.S. housing starts unexpectedly plunge in October” (11-17-10)

“The U.S. housing market continues to show signs that it isn’t well, with housing starts falling 11.7 percent in October to an 18-month low, the Commerce Department reported Wednesday. The annualized rate of new housing starts for last month came in at 519,000, well off consensus estimates of 600,000.”

Housing Wire – “Foreclosure fund for robo-sign victims under consideration: Iowa AG” (11-17-10)

“A fund to compensate homeowners caught in the foreclosure robo-signing scandal is being considered but is not a done deal, according to Iowa Attorney General Tom Miller’s office.”

Bloomberg - “Home Ownership Gets Tougher on Restricted FHA Mortgages” (11-17-10)

“Mortgage lenders including Wells Fargo & Co. and Bank of America Corp., the two largest, have raised the minimum credit score on FHA-insured loans that they will buy to 640 from 620. About 6.3 million people fall within that range, according to FICO, which created the formula for the ratings.”

Bloomberg - “Bernanke’s `Cheap Money’ Stimulus Spurs Corporate Investment Outside U.S.” (11-17-10)

“Such spending sounds like just what the Federal Reserve had in mind in 2008 when it cut interest rates to near zero and started buying $1.7 trillion in securities to spur job growth. Yet Southern Copper, which raised $1.5 billion in an April debt offering, will use that money at its mines in Mexico and Peru, not the U.S., said Juan Rebolledo, spokesman for parent Grupo Mexico SAB de CV of Mexico City.”

Looking Back:

One year ago, home sales increased by 2.8 percent from September to October in Southern California. The MBA reported that 6.7 million households with mortgages were behind on their payments, or were in the foreclosure process. TransUnion conducted a study of 27 million credit files and found that 6.25 percent were delinquent.

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.

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

Monday, October 25th, 2010

Today’s News Synopsis:

California government agencies got rid of 37,300 jobs in September. NAR reports existing home sales increased 10% last month. 47.5% of sales performed by agents last month were from distressed homes. U.S. home prices decreased 1.5% from a year ago, according to CoreLogic.

In The News:

Los Angeles Times – “Government job cuts ravage California” (10-23-10)

“Weighed down by a struggling economy, government agencies in California shed 37,300 workers last month — more jobs than were lost in the private sector — as cities and counties made their biggest payroll cutbacks since at least 1990.”

CBIA - “California Housing Starts Post Decline in September, CBIA Announces” (10-25-10)

“According to statistics compiled by the Construction Industry Research Board (CIRB), permits were pulled for 2,562 total housing units in September, down 16 percent from the same month a year ago and down 31 percent from August. Permits for single-family homes totaled 1,604, down 30 percent from September 2009 and down 14 percent from the previous month, while multifamily permits totaled 958, up 27 percent from a year ago but down 48 percent from August.”

NAR - “September Existing-Home Sales Show Another Strong Gain” (10-25-10)

“Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, jumped 10.0 percent to a seasonally adjusted annual rate of 4.53 million in September from a downwardly revised 4.12 million in August, but remain 19.1 percent below the 5.60 million-unit pace in September 2009 when first-time buyers were ramping up in advance of the initial deadline for the tax credit last November.”

New York Times – “Foreclosures Had Errors, Bank Finds” (10-25-10)

“Even as Bank of America begins to restart foreclosure proceedings in 23 states on Monday, the bank confirmed that it had discovered errors, including incorrect data and misspelled names, in the paperwork it has reviewed.”

Housing Wire – “Monday Morning Cup of Coffee” (10-25-10)

“In his weekly address, President Obama said the coming financial reform will defend the interests of the middle class, as the Consumer Financial Protection Bureau will guard against unfair practices in mortgages and foreclosures.”

Housing Wire – “Bernanke: Federal banking agencies reviewing mortgage servicing operations” (10-25-10)

“Federal banking agencies are conducting an in-depth review of practices at the nation’s largest mortgage servicing operations as a result of reported irregularities in foreclosure practices, Federal Reserve Chairman Ben Bernanke said Monday. Preliminary results are expected next month.”

Housing Wire – “Real estate agents surveyed say distressed home sales nearly half of market” (10-25-10)

“Distressed home sales took up 47.5% of the total home purchases in September, up from 45.7% in August and 44.8% a year ago, according to a survey of more than 3,000 real estate agents. Campbell Surveys and Inside Mortgage Finance tapped a network of agents across the country to determine home sales and mortgage patterns.”

Housing Wire – “Fitch Ratings assigned triple-A to $735.9M Wells Fargo issue” (10-25-10)

“Fitch Ratings assigned its triple-A rating to most classes in a coming $735.9 million issue of commercial mortgage-backed securities by Wells Fargo.”

Housing Wire – “S&P: Defaults on CMBS loans to peak beyond 2011″ (10-25-10)

“S&P studied commercial real estate loans in CMBS it rates through June 2010. Roughly 1,200 CMBS loans defaulted in the first half of 2010 and should pass the 2,138 that occurred throughout 2009. Between January 2009 and June 2010, more than 3,300 defaulted for a cumulative default rate of 9.4% of those loans studied.”

Housing Wire – “CoreLogic home price index drops for first time in 2010″ (10-25-10)

“Home prices in the U.S. dropped 1.5% in August from a year ago, the first annual drop in prices measured in the CoreLogic (CLGX: 17.99 0.00%) Home Price Index in 2010.”

Housing Wire – “Obama housing scorecard: Market fragile with signs of stabilization” (10-25-10)

“The U.S. housing market remains fragile but is showing some signs of stabilization, according to the Obama administration’s 2010 October housing scorecard. Rates for 30-year, fixed-rate mortgages remain at all-time lows, helping 7.1 million homeowners refinance since April 2009 and resulting in $12.7 billion in homeowner savings, the scorecard noted.”

Bloomberg - “Bair Says Regulators Will Uncover More Flaws in Foreclosures” (10-25-10)

“Regulators are likely to discover more problems related to loan servicing by some of the biggest banks as they probe claims that documents were mishandled, Federal Deposit Insurance Corp. Chairman Sheila Bair said.”

Bloomberg - “Mortgage Lenders Say `Enough Is Enough’ as Buybacks Curb Loans” (10-25-10)

“Home lenders are making it tougher to get loans as investors step up demands for refunds on defective mortgages, damaging the housing market, executives said today at an industry conference.”

Bloomberg - “U.S. Mortgage Modifications Slow as Fewer Borrowers Qualify, Treasury Says” (10-25-10)

“An additional 27,840 delinquent borrowers qualified for permanent loan modifications through the Treasury’s Home Affordable Modification Program, bringing the total to 495,898. The 5.9 percent increase from August was the smallest gain since at least September 2009.”

Bloomberg - “Refinancing Surge Lifts Banks Amid Foreclosure Scrutiny” (10-25-10)

“Wells Fargo & Co., the biggest U.S. mortgage lender, received $194 billion of loan applications in the third quarter, the second-most in its history, Chief Financial Officer Howard Atkins said last week. About 80 percent were to refinance. Bank of America Corp. CFO Charles Noski said lending margins are up and demand should remain robust through yearend.”

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.

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The Norris Group Real Estate News Roundup 10/15/10

Friday, October 15th, 2010

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.

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The Norris Group Real Estate News Roundup 9/2/10

Thursday, September 2nd, 2010

Today’s News Synopsis:

Servicers made over 120,000 proprietary loan modifications in July, and 36,695 HAMP modifications. Pending home sales increased 5.2 percent in July, according to the NAR. MBA reports 30+ day commercial delinquencies increased to 8.22 percent in the second quarter. Freddie Mac’s weekly survey shows mortgage rates dropped again to a rate of 4.32%.

In The News:

The Press Enterprise – “New ways of viewing the housing meltdown” (9-1-10)

“At a meeting last night of the Inland Empire Investors, Norris said the federal government’s apparent agreement to allow banks to delay foreclosing on homes where the owners have ceased paying their mortgages for months on end is probably helping to hold up the economy. After all, the money that isn’t paying mortgages is going into the homeowners’ pockets and being spent on goods and services. Ironic, huhn?”

Mortgage Orb – “Proprietary Mods More Than Triple HAMP Mods” (8-31-10)

“Servicers completed more than 120,000 proprietary loan modifications in July – more than three times the number of mods completed through the federal Home Affordable Modification Program (HAMP), HOPE NOW reports. As reported by U.S. Treasury Department, servicers executed 36,695 HAMP modifications in July.”

Mortgage News Daily – “HUD Secretary Tiptoes Around Another Tax Credit, Pushes Balanced Housing Policy” (8-30-10)

“Donovan said that the dip in house sales in July was not unexpected because it would mark the end of the homebuyers’ tax credit that had been successful in spurring those sales. But, he said, the numbers were clearly worse than expected. The Secretary said, in response the Administration would be launching two additional critical tools in the next few weeks. The first will be an FHA refinancing effort to help borrowers who are underwater in their homes, the second is an emergency homeowners’ loan program to help unemployed borrowers to in their homes.”

NAR - “Pending Home Sales Rise” (9-2-10)

“The Pending Home Sales Index,* a forward-looking indicator, rose 5.2 percent to 79.4 based on contracts signed in July from a downwardly revised 75.5 in June, but remains 19.1 percent below July 2009 when it was 98.1. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.”

Mortgage Bankers Association – “MBA: Commercial Delinquencies Up for CMBS, Flat for Banks in Second Quarter” (9-2-10)

“Between the first quarter and second quarter 2010, the 30+ day delinquency rate on loans held in CMBS rose 1.39 percentage points to 8.22 percent. The 60+ day delinquency rate on loans held in life company portfolios decreased 0.02 percentage points to 0.29 percent. The 60+ day delinquency rate on multifamily loans held or insured by Fannie Mae rose 0.01 percentage points to 0.80 percent. The 60+ day delinquency rate on multifamily loans held or insured by Freddie Mac increased 0.03 percentage points to 0.28 percent. The 90+ day delinquency rate on loans held by FDIC-insured banks and thrifts remained unchanged at 4.26 percent. ”

Inman - “Communities get ‘First Look’ at many REOs” (9-2-10)

“Federal housing officials have reached an agreement with mortgage lenders that will give nonprofit organizations and state and local governments right of first refusal to purchase foreclosed homes in certain targeted neighborhoods. Lenders participating in the ‘National First Look Program’ represent about 75 percent of the real estate owned (REO) marketplace, the Department of Housing and Urban Development announced Wednesday.”

Housing Wire – “Weekly jobless claims down 1.25% to 472,000″ (9-2-10)

“The Department of Labor said Thursday seasonally-adjusted initial claims fell to 472,000 for the week ended Aug. 28, down from an upwardly revised 478,000 for the previous week. The consensus estimate of analysts surveyed by Briefing.com expected claims to drop to 475,000 last week.”

Housing Wire – “Freddie 30-year FRMs set record low at 4.32%” (9-2-10)

“The Freddie Mac Primary Mortgage Market Survey reported the average rate for a 30-year fixed-rate mortgage (FRM) at 4.32% with an average 0.7 origination point for the week ending Sept. 2, down from last week’s average of 4.36% and a year ago, when the average was 5.08%. This is the lowest rate the survey has recorded since its inception in 1971.”

Housing Wire – “Bernanke says stopping housing bubble was not an option” (9-2-10)

“Speaking before the Financial Crisis Inquiry Commission this morning in Washington, Federal Reserve chairman Ben Bernanke said if steps could have been taken three years ago to stop the bubble in the economy, which eventually lead to today’s recession, it would not have been a prudent decision to do so.”

Housing Wire – “OCC: lending standards loosen somewhat from year earlier” (9-2-10)

“The 2010 survey of credit underwriting practices by the Office of the Comptroller of the Currency showed 65% of banks tightened standards for commercial products and 74% tightened up retail lending. The survey measures the most-common types of credit offered by 51 of the largest national banks for the 12 months ended March 31. The value of the loans surveyed was $4 trillion, or more than 93% of all outstanding loans in the national banking system, according to the OCC.”

Housing Wire – “Serious HFA delinquencies decline in Q110: S&P” (9-2-10)

“Overall delinquency rates for HFA loans remained high, increasing 1.67% between Q409 and Q110 to 6.05%; however, seriously delinquent HFA loans decreased to 6.05% from 6.57%.”

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.

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The Norris Group Real Estate News Roundup 8/23/10

Monday, August 23rd, 2010

Today’s News Synopsis:

The CBIA reports 2,454 new homes and condominiums were closed statewide in June, compared to 3,848 a year earlier. A survey from Trulia shows that 68% of renters believe they will have to wait at least two years before even considering buying a home. According to HUD, 616,839 HAMP modifications have been canceled and 434,716 modifications have been made permanent since the program began. The Congressional Budget Office expects the Troubled Asset Relief Program to cost a total of $66bn.

In The News:

Daily Bulletin - “Uncertain times” (8-19-10)

“Norris said a larger number of expensive homes thrown into the mix of homes sold this year may be skewing the median price up, rather than an overall price increase in homes. Norris also said home affordability is ‘off the charts’ but it does not necessarily translate to a greater demand to buy homes. Because of the real estate crash, more people are afraid to go to the finish line with home purchases, he said.”

CBIA - “California New-Home Market Continues Struggle in June, CBIA Announces” (8-23-10)

“The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New-Home Sales and Pricing Report showed that statewide new-home closings in June were off 36 percent from a year ago. During the month, 2,454 new homes and condominiums were closed across the state, compared to 3,848 a year earlier. Closings of single-family homes were down by 17 percent, while sales of townhomes were off by 57 percent and sales of condominiums were 67 percent lower than a year ago.”

Orange County Register – “Landlords pray for jobs” (8-21-10)

“I’m still concerned about future job growth and global market conditions that we don’t have control over. Unfortunately, our improvement is a condition of the housing and credit markets and reduced multifamily inventory, not significant job growth. Would-be home buyers who are no longer able to qualify to purchase a home, former home owners who lost their homes and new wage earners are sustaining our improved fundamentals. We will need consistent and sustainable job growth going forward.”

Orange County Register – “A good time to be a landlord?” (8-22-10)

“A new survey by Trulia.com shows that 1 in 4 renters say they’ll never purchase a home, and of those who will, 68% say it’ll take more than a couple of years to happen.”

Housing Wire – “Housing’s Second Leg Down” (8-23-10)

“Home prices have fallen 34% from their peak in the middle of 2006, according to Standard & Poor’s HPI data — but is that enough? Or is there further to go? How much further could we fall?”

Housing Wire – “HAMP Trial Cancelations Catching up to Permanent Modifications” (8-23-10)

“The Making Home Affordable Program (HAMP) initiated 1.3m trials as of July 2010, but is having difficulty retaining program participants through the process of making their modifications permanent. According to the July Servicer Performance Report released by the US Department of Housing and Urban Development (HUD), 616,839 modifications have been canceled while 434,716 modifications have been made permanent throughout the program’s lifetime.”

Housing Wire – “TARP Losses Recalculated to $66bn as GSE Outlook Improves” (8-23-10)

“The Congressional Budget Office (CBO) projected Friday the total cost of Troubled Asset Relief Program (TARP) over its lifetime would be $66bn. This is down from the $109bn lifetime cost projected in March. Outlays for Fannie Mae and Freddie Mac will fall from $96bn in 2009 to $41bn this year, the CBO estimates, mostly because the two entities are expected to recognize fewer losses on their mortgage investments and guarantees.”

Housing Wire – “Econoday Reports Swings in Housing Starts Due To Multifamily Volatility” (8-23-10)

“July housing starts rose 1.7% to 546,000 from June’s revised figure of 537,000, which is the lowest level since October. The June revision and volatility in the multifamily component led to the monthly gain, according to Mark Rogers, senior economist at the Calif.-based research firm.”

Housing Wire – “Monday Morning Cup of Coffee” (8-23-10)

“The Office of the Comptroller of the Currency (OCC) released Friday a list of Community Reinvestment Act (CRA) performance evaluations for 39 national banks and insured federal branches of foreign banks. Of the banks, nine received an outstanding rating, 30 received a satisfactory rating and none needed to improve. None were of substantial noncompliance.”

Housing Wire – “Strengthening CRE Market Pushes Defeasance Levels Up: Moody’s” (8-23-10)

“Moody’s said loans originally secured by multi-family properties saw the highest level of defeasance during the first six months, accounting for 46% of total defeasance. Retail properties represented 22% of all defeasance for the period with lodging properties at 17%. And 61% of all defeased loans during the period had two years or less remaining on the loan. Defeasance activity is when a borrower in a commercial real estate securitization substitutes some type of capital-generating collateral – often Treasury securities – in lieu of a hard payment.”

Bloomberg - “Bernanke Must Raise Benchmark Rate 2 Points, Rajan Says” (8-23-10)

“Raghuram Rajan accurately warned central bankers in 2005 of a potential financial crisis if banks lost confidence in each other. Now the International Monetary Fund’s former chief economist says the Federal Reserve should consider raising rates, even as almost 10 percent of the U.S. workforce remains unemployed.”

Bloomberg - “Housing Slide in U.S. Threatens to Drag Economy Into Recession” (8-23-10)

“‘If foreclosures continue to mount and depress home prices, that could send the economy back into a recession,’ said Celia Chen, an economist who tracks the industry for Moody’s Analytics Inc.”

Orange County Register – “‘How to torpedo your short sale’” (8-23-10)

“Many of the lenders won’t pay past due HOA dues, and the short sale can’t be closed without bringing the HOA dues current. If you can, keep your HOA dues current or plan to bring money to close to pay for them.  Sometimes the lender will pay them, sometimes the buyer will, and sometimes we need can succesfully negotiate the amount, but late HOA dues can torpedo a short sale on your Orange County home.”

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.

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The Norris Group Real Estate News Roundup 8/9/10

Monday, August 9th, 2010

Today’s News Synopsis:

The percentage of American single-family homes with mortgages in negative equity decreased by 1.8% from the first to second quarter.  Freddie Mac is requesting $1.8 billion in federal aid after a $6 billion loss in the second quarter. Freddie Mac’s single-family inventory rose by 84.2% and its multifamily inventory doubled from last year. PIMCO fears the U.S. may be entering a period of deflation, and JPMorgan Chase expressed concerns that our financial system may crash in 2015.

In The News:

MSNBC - “Fewer U.S. homeowners have ‘underwater mortgages’” (8-9-10)

“The percentage of American single-family homes with mortgages in negative equity fell to 21.5 percent in the second quarter from 23.3 percent in the first quarter and 23 percent a year ago, according to the Zillow Real Estate Market Reports.”

Los Angeles Times – “Freddie Mac requests $1.8 billion in aid after loss” (8-9-10)

“Government-controlled mortgage buyer Freddie Mac is asking for $1.8 billion in additional federal aid after posting a larger loss in the second quarter. Freddie Mac said Monday it lost $6 billion, or $1.85 per share, in the April-to-June period. That takes into account $1.3 billion in dividends paid to the Treasury Department. It compares with a loss of $840 million, or 26 cents a share, in the second quarter a year ago.”

Housing Wire – “Flooded with Housing Inventory, Freddie REO Sales Surge Despite Foreclosure Alternatives” (8-9-10)

“Year-over-year, Freddie’s single-family portfolio increased 84.2% and the multifamily portfolio doubled. Monday morning’s quarterly results reveal a 655% increase in forbearance agreements, where distressed homeowners simply get more time to begin paying back the mortgage. These forbearance agreements numbered 21,673 at the end of the first half of 2010, up from 2,869 at the end of the first half of 2009.”

Housing Wire - “The Scope: JP Morgan Estimates Nearly 9m Mortgages Eligible for New FHA Refinancing” (8-9-10)

“There is $870bn worth of underwater mortgages that could be eligible for the new Federal Housing Administration (FHA) short refinance program announced last week, according to JPMorgan. Additionally, there could be as many as 8.9m loans eligible for the program, worth an aggregate balance of $2.3trn, which includes underwater borrowers and mortgages eligible for the Home Affordable Modification Program (HAMP).”

Housing Wire – “Zillow Sees 3.6% Dip in US Home Prices as More Underwater Mortgages Come up for Air” (8-9-10)

“For the 14th consecutive quarter, national US home values declined 3.2% year-over-year during Q210, according to a quarterly market report produced by real estate listing website Zillow. The average sales price for residential properties was $182,500 during the quarter, down 0.6% from the Q110 price of $183,700. In Q210, 21.5% of mortgage properties were in negative equity positions, compared with 23.3% in Q110.”

Housing Wire – “PIMCO: US On Verge of Turning Japanese?” (8-9-10)

“The US may be nearing a long period of limited growth with the risk of deflation that would bring the nation’s economy very close to that of Japan during the 1990s, according to investment-management firm PIMCO.”

Housing Wire – “Monday Morning Cup of Coffee” (8-9-10)

“Federal Reserve chairman Ben Bernanke said there are options to re-shape US housing finance that don’t involve government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. ‘There are a variety of organizational forms that might replace Fannie Mae and Freddie Mac that could likely provide mortgage credit without the systemic risks associated with these institutions in the past,’ Bernanke said in a July 23 letter to Ohio Democrat Rep. Marcy Kaptur, according to reports by multiple media reports.”

Bloomberg - “Crash of 2015 Won’t Wait for Regulators to Rein in Wall Street” (8-9-10)

“The financial system experiences a crisis ‘every five to seven years,’ JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon told the Financial Crisis Inquiry Commission in January. By that measure, the next crash could come by 2015 — years before new banking reforms are in place. Many of the measures ordered by Congress and global regulators, aimed at cushioning the financial system in future crises, are years away from being implemented. The Basel Committee on Banking Supervision plans to give the world’s banks until 2018 to comply with limits on how much they can borrow.”

Orange County Register – “Real estate loss hammers Calif. pensions” (8-9-10)

“The $200 billion California Public Employees’ Retirement System (CalPERS) earned 11.4 percent return in the year ended June 30 — despite losing 37.1% on its real estate bets through March 31. The $130 billion California State Teachers’ Retirement System (CalSTRS) was up 12.3 percent in the same year after losing 12.4% on its property holdings.”

Orange County Register – “Unsold homes up 57% this year” (8-9-10)

“The number of homes for sale on the Orange County housing market has mushroomed to 11,414 in the 30 days ending last Thursday. That’s up 57% since ‘inventory’ began a steady rise at the start of the year, according to the latest report by Altera’s Steven Thomas.”

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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