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

Tuesday, December 8th, 2009

Today’s News Synopsis:

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

In The News:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Looking Back:

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

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The Norris Group Real Estate News Roundup 11/30/09

Monday, November 30th, 2009

Today’s News Synopsis:

Edward Pinto expects 20 percent of FHA’s mortgage loans to default. The Federal Reserve bought $16 billion worth of mortgage-backed securities last week. According to Michael Barr, Over 650,000 mortgage modifications are currently being processed, and over 375,000 borrowers will receive permanent modifications by the end of this year. A survey from Barclay’s shows that as a U.S. citizen’s net worth increases so does the proportion of their wealth invested in real estate.

In The News:

CNBC - “Fannie Mae to Tighten Lending Standards” (11-26-09)

“Fannie Mae plans to raise minimum credit score requirements next month and limit the amount of overall debt that borrowers can carry relative to their incomes”

The Daily Reckoning – “Federal Housing Administration Encourages More Bad Mortgage Loans” (11-26-09)

“An astounding 20 percent of the Federal Housing Administration’s $725 billion portfolio of mortgage loans will go into default as the result of the agency’s recent campaign to subsidize first-time homebuyers with little cash and weak credit. That prediction comes from an industry insider who has seen it all happen before: former chief credit officer of Fannie Mae, Edward Pinto, who recently testified before a House committee on the gathering storm of FHA mortgage defaults.”

Orange County Register – “Banks forced to buy back more loans” (11-26-09)

“Banks had to buy back $7.1 billion in defaulted single-family loans in the third quarter to reimburse mortgage investors, up from $1.9 billion in the previous quarter. Federal Deposit Insurance Corp. Call Report information shows that most of the buyback demands fell on JPMorgan Chase and Bank of America. Chase repurchased $2.7 billion in defaulted loans and BoA repurchased $2.3 billion to satisfy investor demands.”

Finance My Money – “FDIC too broke to Takeover Banks? No Bank Failure Friday on Black Friday. Can 5,300 Employees Deal with $5.3 Trillion in Deposits?” (11-30-09)

“The Federal Deposit Insurance Corporation (FDIC) was hammered this week when a third quarter report demonstrated that the FDIC was running in the red to the sum of $8.2 billion. This is troubling since the FDIC protects deposits in member banks up to $250,000 and funds covered by the deposit insurance fund (DIF) are over $5.3 trillion, this amount is over one-third of our nationwide GDP. The FDIC as of Q1 of 2009 has 5,381 employees.”

San Francisco Chronicle – “Gov’t increases pressure on mortgage industry” (11-30-09)

“The Treasury Department said Monday it will withhold payments from mortgage companies that aren’t doing enough to make the changes permanent. Officials will monitor the largest of the 71 participating mortgage companies via daily progress reports. The goal is to increase the rate at which troubled home loans are converted into new loans with lower monthly payments. At the end of October, more than 650,000 borrowers, or 20 percent of those eligible, had signed up for trials lasting up to five months.”

Inman – “Non-investors get Fannie REOs first” (11-27-09)

“Fannie Mae has launched a new program that’s intended to give public entities and buyers looking for a home to live in, rather a property to flip, a first crack at homes Fannie has foreclosed on. Under Fannie Mae’s ‘First Look’ initiative, only offers from buyers who intend to be owner occupants and buyers using public funds will be considered during the first 15 days a property is on the market. Offers from investors will be considered only after the first 15 days have passed.”

Housing Wire – “Fed Continues Slower Agency MBS Purchases” (11-30-09)

“The Federal Reserve continued its slower mortgage bond purchases, buying up $16bn of mortgage-backed securities (MBS) from government-sponsored entities in the week ending November 25. The Fed’s purchases shifted more toward Freddie Mac (FRE: 1.03 -6.36%), with $6.5bn of Freddie MBS purchased this week, from $5.9bn last week. The Fed bought $6bn from Fannie Mae (FNM: 0.88 -6.38%), compared with $4.55bn last week. The Fed also bought $3.5bn from Ginnie Mae this week, according to details released by the New York Fed.”

Housing Wire – “FHA Proposes Lenders Maintain $2.5m Net Worth” (11-30-09)

“Federal Housing Administration (FHA)-approved lenders could be required to hold increased net worth, meet stronger approval criteria and be held responsible for the actions of the mortgage brokers they do business with, if a recently proposed FHA rule is enacted. The rule is designed to reduce risks to the single-family insurance fund, which finances the FHA guarantees of mortgages in case of default. The FHA reported to Congress recently the insurance fund dipped below the Congressional-mandated 2% capital reserve threshold.”

Housing Wire – “375,000 HAMP Trials to Go Permanent, Treasury Says” (11-30-09)

“Under HAMP, the Treasury allocates capped incentives to participating servicers for the modification of loans on the verge of foreclosure. According to the latest report, more than 650,000 trials modifications are underway. Saxon Mortgage Services leads all servicers by providing trials to 44% of its eligible portfolio, according to the report. More than 375,000 borrowers are on track for a permanent modification by the end of the year, according to Michael Barr, assistant secretary for financial institutions at the Treasury.”

Bloomberg – “Wealthy Investors Plan to Buy More Real Estate, Barclays Says” (11-30-09)

“Twice as many people plan to raise their investment in commercial and residential property as intend to reduce it, the Barclays Wealth unit said in an e-mailed statement today. The richer the individual, the greater the proportion of wealth is placed in real estate, the survey found.”

Orange County Register – “Irvine home listings drop along with temps” (11-30-09)

“As of last Wednesday, there were 461 active homes for sale in Irvine, with an expected market time of 2.06 months, according to a biweekly report done by Steven Thomas of Altera Real Estate. That’s a benchmark tracking how many months it theoretically takes to sell all the inventory in the local MLS for-sale listings at the current pace of pending deals being made.”

Looking Back:

One year ago, the CIRB reported that the value of non-residential building in 2008 had reached a total of $1.3 billion. Evan Gentry of G8 Capital predicted that Orange County would need another five years before real estate began to appreciate again. New home sales decreased by 18 percent in the West during October of 2008.

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The Norris Group Real Estate News Roundup 10/22/09

Thursday, October 22nd, 2009

Today’s News Synopsis:

WSJ reports that home inventories across the nation have decreased.According to FHA, home prices fell .3 percent from July to August. A survey from Point2 Technologies reveals that real estate agents and brokers are less confident in the market than they were in August.

In The News:

DSNews - “TARP Inspector Wants to Subpoena Treasury” (10-22-09)

“Special Inspector General Neil Barofsky lashed out at the U.S. Treasury Department for failing to implement clear recommendations from his office that would improve the program and refusing to come forth with critical details of fund usage. Barofsky even went so far as to threaten to subpoena documents from the Treasury and White House.”

Bank Investment Consultant – “Fannie Mae Offers Hand to Investors” (10-22-09)

“Fannie Mae is replacing a forbearance program for troubled borrowers with one that will make the breaks available to property investors and owners of second homes. In a forbearance, the government-sponsored enterprise reduces the monthly payment on a mortgage for up to six months. The current program only provides this relief for loans on owner-occupied properties.”

Wall Street Journal – “Waiting for the Next McMansion to Drop” (10-22-09)

“The Wall Street Journal’s quarterly survey of housing-market data in 28 major metro areas shows sharp drops in the number of homes listed for sale across the country. But the potential supply of homes is far larger because banks are likely to acquire significant numbers of foreclosed homes in some areas, notably Las Vegas, Atlanta, Detroit, Phoenix, Miami and other parts of Florida, and Sacramento, Calif., over the next few years.”

Sacramento Bee – “Home price index falls 0.3 percent in August” (10-22-09)

“The Federal Housing Finance Agency says prices fell 0.3 percent in August from July. The agency’s index, based on loans owned or guaranteed by Fannie Mae and Freddie Mac, is 3.6 percent below last year’s levels and 10.7 percent off its peak in April 2007.”

Inman - “Agent, broker confidence slips” (10-22-09)

“Real estate agents and brokers surveyed in September by Point2 Technologies were slightly less confident about the future than they were in August, but remained more optimistic than pessimistic overall. On a scale of one to 10, Point2′s Real Estate Confidence Index recorded a 5.83 reading at the national level in September, down from 5.88 in August. It was the first decline in the index since it was launched in June, the company said.”

Housing Wire – “Looming Refinance Needs Will Pressure CRE Market: RBS” (10-22-09)

“The commercial real estate (CRE) market will not likely post signs of recovery until mid-2010 and faces key challenges ahead, according to RBS Securities.”

Housing Wire – “PNC’s Mortgage Banking Profits Hold Steady at $91m” (10-22-09)

“PNC Financial Services Group (PNC: 50.65 +12.66%) earned net income of $559m, $1 per share, for Q309, compared with net income of $207m, $0.14 per share, in Q209. Mortgage banking revenue stayed even from the previous quarter, but originations plummeted from the year-ago period.”

Housing Wire – “HOPE NOW Pushes HAMP for Unemployed Homeowners” (10-22-09)

“The HOPE NOW Unemployment Committee collaborated with the Obama Administration to develop a new tool to help identify the eligibility of unemployed homeowners to for the Home Affordable Modification Program (HAMP). The US Treasury Department allocates capped incentives to servicers participating in HAMP to modify loans on the verge of foreclosure. Servicers lower the debt-to-income ratio of a qualified borrower to 31% with a HAMP modification.”

Housing Wire – “IRS Wrongly Gave Homebuyer Tax Credit to Resident Aliens, Minors: Watchdog” (10-22-09)

“The Treasury Inspector General for Tax Administration (TIGTA) believes the Internal Revenue Service (IRS) may have paid out millions of dollars in first-time homebuyer tax credits to individuals not eligible to receive the $8,000 credit. Nearly $4m of incorrectly paid credits were due to both alleged fraud and filing errors on claims by 580 taxpayers less than 18 years old.”

Bloomberg - “Wells Fargo, JPMorgan Benefit From Servicing Hedging” (10-22-09)

“Wells Fargo & Co. earned almost a third of its pretax quarterly profit by hedging mortgage- servicing rights, producing gains similar to those that have helped some of the biggest U.S. banks offset weaker consumer- lending businesses. Wells Fargo’s hedges outperformed writedowns it took on the so-called MSRs by $1.5 billion and JPMorgan Chase & Co. came out ahead by $435 million. The two banks, as well as Bank of America Corp. and Citigroup Inc., wrote down MSRs by at least $5 billion in the third quarter as mortgage rates fell by about 0.26 percentage point. ”

Bloomberg - “U.S. Housing to Bottom in March 2010 After 37% Drop” (10-22-09)

“The U.S. housing market will hit bottom by March 2010 as lower-priced properties recover more quickly than expensive homes, First American CoreLogic said”

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

Wednesday, October 14th, 2009

Today’s News Synopsis:

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

In The News:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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The Norris Group Real Estate News Roundup 10/13/09

Tuesday, October 13th, 2009

Today’s News Synopsis:

Fitch reports that 60 percent of borrowers from 06 to 07 have negative equity and owe more than their homes are worth. Interthinx’s Mortgage Fraud Index estimates 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 show that Southern California home sales increased by 5 percent from October of 2008.

In The News:

Housing Wire – “Fitch Sees 60% of Current RMBS Borrowers Underwater” (10-13-09)

“The majority — 60% — of remaining performing borrowers within ‘06- and ‘07-vintage residential mortgage-backed securities (RMBS) bear negative home equity, meaning they are underwater on their mortgages and owe more than their houses are worth”

Housing Wire – “Treasury to Announce New Program to Avoid Foreclosure” (10-13-09)

“HAFA already holds the support of Fannie, according to a VP at the agency, Eric Schuppenhauer, who believes the new program allows borrowers in imminent default to ‘make a graceful exit’ from their home. HAFA will keep the stigma associated with foreclosure away from the borrowers, he added, and help keep communities intact.”

Housing Wire – “Interthinx Fraud Report Links Mortgage Fraud, Foreclosure: DBRS” (10-13-09)

“Interthinx’s Mortgage Fraud Index calculates fraud risk based on the frequency of mortgage fraud activity detected in applications processed by Interthinx’s FraudGUARD system. The Q209 Fraud Index dropped 4% from Q109 but jumped 7% from the year before, according to the report.”

Housing Wire – “House Prices Decline 0.2% in August: IAS” (10-13-09)

“House prices declined 0.2% from July to August, the second month of declines after a fourth-month-long rally that brought a 2.8% increase earlier this year, reported Integrated Asset Services (IAS). The last time national home prices were at the August 2009 level was in February 2005, and prices in August this year were 8% lower than the prices in August 2008, the default management and residential collateral valuation service provider said.”

DQNews – “Southern California home sales inch up; median price steady” (10-13-09)

“Last month 21,539 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was up 0.2 percent from 21,502 in August and up 5.1 percent from 20,497 a year earlier, according to MDA DataQuick of San Diego.”

Bloomberg – “JPMorgan Pitches Interest-Only Mortgages to Boost Obama Plan” (10-13-09)

“Banks will push the Obama administration to expand its mortgage-modification program to allow interest-only periods on reworked loans, seeking to bring more homeowners into the initiative while recognizing concern that it may only postpone defaults, according to JPMorgan Chase & Co.”

Reuters – “BofA, Chase executives say US housing still fragile” (10-13-09)

“Executives from two of the United States’ biggest home mortgage lenders said the nation’s housing market is still in a tenuous state despite signs of stability over the summer months.”

Inman – “First American offers free market reports” (10-13-09)

“First American CoreLogic has launched a new service, ePropertyWatch, that provides homeowners with e-mail updates on their property value, recent sales, price trends and foreclosure activity in their neighborhood.”

Inman – “Economists mixed on California’s outlook” (10-13-09)

“Drastic cutbacks in new-home construction have helped reduce inventories of homes for sale in California faster than expected, and falling home prices and low interest rates are making owning look like a better deal than renting for many, according to Richard Green, director of the Lusk Center for Real Estate at the University of Southern California.”

Inman – “Fewer sellers slash asking price” (10-13-09)

“Fewer sellers were willing to reduce their home’s asking price in September than they were a year ago, but 44 percent of listings in 28 markets tracked by ZipRealty had seen at least one price reduction, the company said in releasing the results of a monthly survey on price reductions.”

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