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The Norris Group Real Estate News Roundup 9/1/10

Wednesday, September 1st, 2010

Today’s News Synopsis:

The MBA’s weekly survey shows mortgage applications increased 2.7% this week. SB1275, the foreclosure/modification bill, was rejected by congress in a 36-30 vote. Fannie Mae’s new rule regarding appraisal cutting takes effect today. Construction spending decreased 1 percent in July, according to the Commerce Department.

In The News:

Mortgage Bankers Association – “Mortgage Applications Increase as Rates Hit New Low in MBA Weekly Survey” (9-1-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending August 27, 2010.  The Market Composite Index, a measure of mortgage loan application volume, increased 2.7 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 2.3 percent compared with the previous week.”

Reuters - “Loan picture improves but troubles remain: FDIC” (9-1-10)

“The Federal Deposit Insurance Corp revealed some encouraging figures about the bank industry, saying the sector earned $21.6 billion during the quarter largely due to banks putting away less money to cover expected loan losses. During the first quarter, the industry earned $17.8 billion.”

San Francisco Chronicle – “Assembly rejects foreclosure/modification bill” (9-1-10)

“SB1275, which was rejected 36-30 late Monday, would have required lenders to provide homeowners with a fully considered loan modification decision prior to foreclosing. Unlike federal initiatives, it would have given homeowners the right to sue the lender if that process did not occur.”

Housing Wire – “Fannie’s appraisal cutting ban takes effect” (9-1-10)

“Fannie Mae’s new policy to reduce appraisal cutting takes effect today. If a lender is trying to sell the GSE a loan, they are now prohibited from changing the market value of a home on the request form. Fannie Mae said Tuesday if a loan servicer does not properly handle a troubled mortgage loan in a timely manner, it will demand compensation from the servicer for the mortgage.”

Housing Wire – “Fed buys $900 million of Treasury debt” (9-1-10)

“Dealers offered to sell the Fed $25.79 billion in debt. The three slices of debt purchased by the Fed include $131 million maturing Nov. 15, 2012; $345 million maturing Dec. 15, 2012; and $424 million maturing Jan. 31, 2013. At its meeting from earlier this month, the Federal Open Markets Committee directed the New York Fed to maintain the total face value of domestic securities held in the system open market account at about $2 trillion.”

Housing Wire – “DebtX July CRE loan value up to 79.4%” (9-1-10)

“The value of commercial loans priced by The Debt Exchange in July that collateralize commercial mortgage-backed securities rose to 79.4% of the original balance. DebtX said the value is up from 77.4% in June, marking the fourth-straight month of increases, and is higher than the 71.1% for the year-ago July. The values are based on loans priced by DebtX. In July, the company priced 57,801 CRE loans with an aggregate principle balance of $679.5 billion that collateralize 623 CMBS trusts.”

Bloomberg - “Construction Spending in U.S. Declined Twice as Much as Forecast in July” (9-1-10)

“The 1 percent drop brought spending to $805.2 billion, the lowest level in a decade, after a revised 0.8 percent drop in June that wiped out a previously estimated gain, Commerce Department figures showed today in Washington. Spending on federal government projects fell by the most in a year.”

Bloomberg - “Real Estate Premium Near Record to U.S. Bonds Signals Time to Buy Property” (9-1-10)

“Capitalization rates, a measure of real estate yields, averaged 7.22 percent in the second quarter, based on an index calculated by the National Council of Real Estate Investment Fiduciaries. That was 429 basis points, or 4.29 percentage points, higher than the yield on 10-year government bonds as of June 30, according to data compiled by Bloomberg. It’s about 475 basis points higher than Treasury yields as of yesterday.”

Looking Back:

One year ago, the NAR reported that pending home sales increased 3.2 percent in one month. The average price of homes bought with mortgages funded by Freddie Mac increased 1.7% during the 2nd quarter of 2009. A wildfire north of Los Angeles threatened more than 12,000 homes and forced the evacuation of more than 4,300 people.

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The Norris Group Real Estate News Roundup 8/26/10

Thursday, August 26th, 2010

 

 

Today’s News Synopsis:

The MBA’s second quarter survey shows the delinquency rate for mortgage loans on residential properties dropped to 9.85 percent. Freddie Mac reports that interest rates have dropped AGAIN to 4.36%. According to CoreLogic, 23 percent of residential homes with mortgages were in negative equity at the end of the 2nd quarter. Barclays Capital claims existing home sales decreased 30% last month.

In The News:

NAR - “Commercial Real Estate Remains Soft but Favors Business Expansion” (8-26-10)

“The SIOR index, measuring 10 variables, rose 2.8 percentage points to 41.0 in the second quarter, but remains well below a level of 100 that represents a balanced marketplace.  This is the third consecutive quarterly improvement after nearly three years of decline; the last time the commercial market was in equilibrium at the 100 level was in the third quarter of 2007.”

MBA - “Delinquencies and Foreclosure Starts Decrease in Latest MBA National Delinquency Survey” (8-26-10)

“The delinquency rate for mortgage loans on one-to-four-unit residential properties dropped to a seasonally adjusted rate of 9.85 percent of all loans outstanding as of the end of the second quarter of 2010, a decrease of 21 basis points from the first quarter of 2010, and an increase of 61 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate increased two basis points to 9.40 percent this quarter from 9.38 percent last quarter.”

Los Angeles Times – “Home loan rates drop yet again to record low” (8-26-10)

“Freddie Mac said rates for both 30-year and 15-year fixed mortgages dropped for the ninth time in the past 10 weeks. The mortgage giant’s weekly survey said the average rate that lenders were offering on the 30-year loan was 4.36% during the week that ended Thursday, down from 4.42% a week earlier and 5.14% a year ago. Borrowers would have paid 0.7% of the loan amount in upfront lender fees.”

Housing Wire – “Ranks of Underwater Borrowers Decline, Thanks to Foreclosure” (8-26-10)

“The number of Americans that owe more on their mortgages than their homes are worth declined during the second quarter of 2010, but not because home prices have improved. Instead, according to a new report, increased foreclosures have helped flush underwater borrowers out of the nation’s housing markets. According to a report from information services provider CoreLogic (CLGX: 17.77 +0.28%) released Thursday morning, 11 million — or 23% — of all residential properties with mortgages were in a negative equity position at the end of the second quarter.”

Housing Wire – “Amherst Sees HARP Failing Over Fees” (8-26-10)

“The Home Affordable Refinance Program, which started early last year, was supposed to ’solve the key inhibitor to many borrowers refinancing in our current housing market – negative equity,’ the research firm’s MBS strategy group said in its most-recent mortgage insight report. However, high levels of due diligence and onerous fees for borrowers mean that those who should get the refi, likely won’t.”

Housing Wire – “Fed Buys $1.41bn of Treasuries” (8-26-10)

“The Federal Reserve purchased $1.41 billion of Treasury debt Thursday, including $1.14 billion of notes maturing in November 2021.”

Housing Wire – “Freddie Mac Mortgage Purchases and Issuances Fall in July, 2010 Total Pushes $207bn” (8-26-10)

“Mortgage purchases and issuance at government-sponsored enterprise (GSE) Freddie Mac fell to nearly $28.4bn, from $30.9bn in June — bringing the year-to-date totally to $207.4bn so far in 2010. Refinance-loan purchase and guarantee volume at Freddie fell to $18.1bn in July, from $19.1bn in June, according to the firm’s monthly volume summary (download here). The aggregate unpaid principal balance of the GSE’s mortgage-related investments decreased by $13.6bn.”

Housing Wire – “Barclays Capital Expects Home Prices to Dip Another 7%” (8-26-10)

“Existing home sales plummeted 30% in July after the homebuyer tax credit brought forward 300,000 to 600,000 of housing demand, assuming 4 million homes sell annually, according to research today from Barclays Capital.”

Housing Wire – “Weekly Initial Jobless Claims Down 6.1% to 473,000″ (8-26-10)

“The Labor Department said Thursday that seasonally-adjusted initial claims slid to 473,000 last week, down from an upwardly revised 504,000 for the previous week. Briefing.com consensus had expected claims to drop to 485,000.”

Looking Back:

One year ago, the NAR reported nearly one-third of all existing homes sales were either short sales or foreclosures. Home sales in July 2009 increased by 30 percent from January 2009. Office space availability increased in the second quarter of 2009 in Orange County.

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 8/24/10

Tuesday, August 24th, 2010

Today’s News Synopsis:

Existing home sales experienced a dramatic decrease of 27.2 percent in July, according to the NAR. Housing production decreased by 10 percent in June. The CAR reports California home sales decreased 20.8 percent in July. Statistics from the California Employment Development Department show that 7,100 jobs were lost from July 2009.

In The News:

NAR - “July Existing-Home Sales Fall as Expected but Prices Rise” (8-24-10)

“Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million in June, and are 25.5 percent below the 5.14 million-unit level in July 2009.”

CBIA - “California Housing Production Increases in July, CBIA Announces” (8-24-10)

“According to statistics compiled by the Construction Industry Research Board (CIRB), permits were pulled for 4,165 total housing units in July, up 35 percent from the same month a year ago but down 10 percent from June. Permits for single-family homes totaled 1,951, down 9 percent from July 2009 and down 31 percent from the previous month, while multifamily permits totaled 2,214, up 134 percent from a year ago and up 25 percent from May.”

Mortgage Bankers Association – “Wells Fargo Tops U.S. Commercial/Multifamily Servicers in MBA Mid-Year Rankings Report” (8-24-10)

“The Mortgage Bankers Association (MBA) today released its mid-year ranking of commercial and multifamily mortgage servicers as of the end of June 30, 2010. Topping the list of firms is Wells Fargo with $462.8 billion in U.S. master and primary servicing, followed by PNC Real Estate/Midland Loan Services with $307.9 billion, Berkadia Commercial Mortgage with $202.6 billion, Bank of America Merrill Lynch with $133.4 billion and KeyBank Real Estate Capital with $124.7 billion.”

CAR - “July sales and price report” (8-24-10)

“California home sales decreased 20.8 percent in July compared with the same period a year ago, while the median price of an existing home rose 10.4 percent from July 2009, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.”

Housing Wire – “Disappointing Homes Sales Unlikely to Reverse Course” (8-24-10)

“Predictions that home prices may drop into double digits continue to drag down sales. Bill Gross, managing director of the world’s biggest bond fund, PIMCO remarked that the idea of a rebound anytime soon is ‘ludicrous.’ In a meeting at the US Treasury last week, Gross called for combining the government-sponsored entities into one entity that insures the majority of current and future originations.”

Housing Wire – “60% of Delinquent Mortgages Not in Loss Mitigation” (8-24-10)

“According to a study from the State Foreclosure Prevention Working Group (SFPWG), 60% of borrowers with mortgages delinquent by 60 days or more are not being forwarded to the servicer’s loss mitigation department.”

Bloomberg - “Purchases of Existing Homes in U.S. Probably Slumped in July” (8-24-10)

“Sales of U.S. previously owned homes probably plunged in July to the lowest level since March 2009, evidence the market is restrained by foreclosures and limited job growth, economists said before a report today. Purchases dropped 13.4 percent from June to a 4.65 million annual rate, according to the median of 73 forecasts in a Bloomberg News survey. A decline would be the third in a row.”

Orange County Register – “Corona del Mar is O.C.’s ‘coldest’ market” (8-24-10)

“The pricier the town, the harder it is to sell a home there right now, the latest O.C. home inventory report from Steve Thomas at Altera Real Estate shows. Corona del Mar, for example, was Orange County’s ‘coldest’ market in the past 30 days. In theory, it would take 11 1/2 months to sell all the homes on the market there at the current sales pace, the highest ‘market time’ for any O.C. community in the 30 days ending on Aug. 19. Other ‘cold’ markets likewise tend to be home to some of O.C.’s most expensive housing.”

Orange County Register – “Real estate, building jobs down 5% in July” (8-24-10)

“Indeed, construction suffered the largest year-over-year decline among every employment category, the state Employment Development Department reported. Construction jobs fell by 7,100 positions from July 2009, down nearly 10%. Construction jobs totaled 65,700 in July, state figures show.”

Orange County Register – “Broker: No tsunami of repo’d homes to hit market” (8-24-10)

“This shadow inventory has to be worked through, but is not going to occur as a tsunami of distressed properties to hit the market all at once. Instead, we are going to witness slow increases and drops over the next few years. This slow absorption will not pull down values like it did at the beginning of this downturn and it will keep a lid on any substantial appreciation. Once employment improves, the pathway to an eventual healthy and stable recovery will occur.”

Looking Back:

One year ago, 45,079 new and resale houses and condos were sold statewide in one month. Home sales in the Bay Area hit a 4 year high. The Federal Reserve accepted $2.3 billion in investor requests for financing to purchase legacy commercial mortgage-backed securities.

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 8/13/10

Friday, August 13th, 2010

 

 

Video Blog Sources:

ABC News – “Housing Summit May Yield Fannie and Freddie Clues” (8-12-10) To air on  Treasury website Tuesday.

Sacramento Bee –  “Californias’ Income Falls For First Time Since WWII” (8-11-10)

Los Angeles Times – “Fed to resume buying Treasury bonds” (8-11-10)

Foreclosure Radar Report – www.foreclosureradar.com

Inman – “FHA premium changes pushed to Oct. 4″ (8-12-10) 

Today’s News Synopsis:

Equity from the boom has now disappeared and many homeowners are deciding not to pay what they owe. Builders are shrinking the size of new projects as fewer consumers want McMansions. Moody’s sees increasing weakness in the commercial market and the U.S. government appears not to be sure how to move forward to avoid the much talked about double dip recession.

In The News:

New York Times - “Debts Rise, and Go Unpaid, as Bust Erodes Home Equity” (8-11-10)

“During the great housing boom, homeowners nationwide borrowed a trillion dollars from banks, using the soaring value of their houses as security. Now the money has been spent and struggling borrowers are unable or unwilling to pay it back.”

RisMedia - “Builders Shrink Homes to Fit Buyers’ Newly Modest Tastes” (8-13-10)

“I do believe the younger generation isn’t looking to build mansions anymore,” Palazzolo said. “They are looking at simpler lives. They aren’t looking for the same houses that the baby boomers were.”

AP - “Homes lost to foreclosure up 6 pct from last year” (8-12-10)

“The number of U.S. homes lost to foreclosure surged in July, another sign lenders are moving quicker to take back properties from homeowners behind in payments. Lenders repossessed 92,858 properties last month, up 9 percent from June and an increase of 6 percent from July 2009, foreclosure listing firm RealtyTrac Inc. said Thursday.”

Market Watch - “Monetary policy in a time of deleveraging” (8-11-10)

“The U.S. economy is on the edge of the cliff, threatening to plunge back into ruinous recession, but the worst part is that Washington won’t do anything to stop it. ”

Bloomberg - “Related News:Opinion · Insurance · Retail .U.S. Is Bankrupt and We Don’t Even Know It: Laurence Kotlikoff” (8-10-10)

“Let’s get real. The U.S. is bankrupt. Neither spending more nor taxing less will help the country pay its bills.”

Housing Wire – “Fifth Third Converts 70% of HAMP Trials to Permanent Status” (8-13-10)

“Fifth Third Mortgage Co., the mortgage unit of Fifth Third Bancorp, so far converted 70% of its trial Home Affordable Modification Program (HAMP) plans into permanent modifications.”

Housing Wire – “Moody’s Sees CMBS Delinquency Poised to Rise 9%-11% in 12 Months” (8-13-10)

“Moody’s Investors Service expects the share of commercial mortgage-backed securities loans that are delinquent or in special servicing to continue to rise over the next year. Analysts expect delinquencies to increase by 9% to 11% during the next 12 months with loans in special servicing climbing to about 20%, which would be up from the current 11.3% and 5% a year ago.”

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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187-TNG Radio – Sean O’Toole 8-14-10

Friday, August 13th, 2010

Sean O'Toole from Foreclosure Radar

 

Sean O’Toole

Founder and CEO of ForeclosureRadar


 

 

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

This week Bruce is joined by Sean O’Toole. Sean is the Founder and CEO of ForeclosureRadar.com. ForeclosureRadar is the only company that tracks every foreclosure in California, Arizona, Nevada, Washington and Oregon. It makes updates daily on all foreclosure auctions. Prior to ForeclosureRadar, Sean spent 15 years building and launching software companies. In 2002, Sean entered the foreclosure business, and bought and sold over 150 properties.

Bruce thinks everyone who is a trustee sale buyer should be a member of ForeclosureRadar. When Sean started Foreclosure Radar, there were only about 40 trustee sale buyers who bought the majority of the deals within the state, but now there are thousands. The invention of the lower bid has created activity. We wish they would drop their opening bids even lower.

5 to 10 billion dollars worth in properties go to the courthouse steps every month. 80 percent of those properties go back to the bank as REOs. The number of REOs have decreased 50 percent from July 2008. However, there are still a huge number of properties being taken back by banks. From a historical perspective, we still have an outrageously high number of REOs.

People tend to have this mentality that nothing bad can happen from here on out, because they don’t think the lenders will unload a bunch of inventory into the market. However, in 2007 and 2008, that is exactly what they did. Up until the end of 2008, regulations required you to file a notice of default after 60 to 90 days of delinquency. In September of 2008, Paulson changed the rules, and since then, they have changed the rules to mark to market. Lenders now have this mentality that discourages them from foreclosing so long as there is some hope of receiving payment at some point in the future.

People are wondering when all the shadow inventory is going to show up and ruin everyone’s day. Shadow inventory has a few different holding tanks. The banks are holding it and not releasing it. In 2008, there was growing evidence that banks had inventory that were not being listed. In 2009, banks started selling more foreclosures than they were taking back. In the mean time, we had delinquencies that were over 90 days delinquent and were not going into foreclosure. Some properties are as much as 180 days delinquent. We have 1 million homeowners in California that are not making payment, but only 200,000 in foreclosure, and only 15,000 to 20,000 being foreclosed on per month.

There is a report claiming that “once a person is behind, the odds of them making that payment current again without a loan modification is 1%”. Sean thinks that may be true historically, but right now, the situation is worse than that. In the past, people went delinquent because of job problems, but this time, they are going late because we had a massive credit bubble that doubled home prices fictitiously. We have now corrected those prices, but we have 4 trillion dollars in excess mortgage debt. People are realizing that they are never going to get that money back, and paying the interest doesn’t help them.

ForeclosureRadar noticed an increase in investor activity in 2009. Subscriptions increased slightly around that time. Right now, people are concerned that the economy and housing might double-dip. Bruce thinks that a double-dip will probably occur.

A lot of ForeclosureRadar’s growth has come from builders and commercial real estate brokers. The court house steps have become much more competitive because of these two groups. They can’t just stop working because their niche isn’t doing well.

From 2002 to 2006, good investors could get a 50 to 75 percent return on capital. In 2007, the market went away because the banks weren’t dropping the bids. In 2008 and 2009, Sean heard plenty of stories about investors getting an 80 percent return on capital. It got really good for a little while, but over the past six months, the market got a lot more competitive. There are plenty of risks with buying at auctions. Bruce believes that someone makes a mistake every day at the courthouse that alters their financial life for a while.

The government has decided that it is better to avoid taking a property back to the lender. ForeclosureRadar is tracking the lenders who are willing to work problems out. Investor short sales concern Sean, especially if the deal is being bought to be flipped. Some people are claiming you can make a lot of money by doing a short sale through a double escrow. Sean thinks people who do that are going to get themselves into trouble. Bruce interviewed the FBI on this subject, and the FBI described the people who do double escrows as perpetrators. There are short sale opportunities out there, but there is a lot of risk involved. It can be difficult to convince lenders that you have added a significant amount of value to a recent short sale.

Lenders understand that auctioned properties are being sold at a discount. On a short sale, lenders believe that a market sale is being made, and they will not like the idea of selling a short sale at $100,000 below market.

Deutsche Bank recently made a report on mortgage servicers and how long it takes to do a short sale. With prime mortgages, GMAC took six months on average, CitiGroup took 7.5 months, Wells Fargo took 8 months, and Countrywide took 13 months. There is a buyer attached to the end of these deals, and no one is going to wait 13 months.

People involved with HAFA brag about their ability to sell within six months, and Bruce thinks that is ridiculous. The problem is that people are not coming to terms with the losses they are going to take. The government also has a few policies that are affecting speed. If Bruce was attached to that business, he would be very frustrated.

Mortgage insurance companies know they will have a better income and have less of a loss with a short sale, but if they have that loss right now, then they’ve got a payout to make. If they do not approve a short sale, and force a property into foreclosure, they may not have to payout for 8 or 9 months.

Sean believes that companies are moving away from principal reductions. Freddie claimed that they are not going to do principal reductions, because they have been tasked with protecting tax payer funds and they cannot just give out principal. If GSEs, who hold a lot of the mortgage debt, start giving out principal reductions, then that comes directly at the cost of the taxpayers. Freddie has a deed-in-lieu lease back program with a lease option. If someone does a deed-in-lieu under this program, they have a two year waiting period before they get to buy a property, and Bruce has the feeling that the property they will buy is that same property they were previously in. That would cause less volatility in the market, because it would discourage buyers from moving around.

Sean recently did some research for American Banker Magazine on jumbo loans. Loans under $417,000 are the fastest to be foreclosed on. Mini jumbos, which range from $417,000 to $729,000, take 30 days longer to foreclose on, and it takes even longer to foreclose on big jumbos. If lenders are struggling to deal with reality anywhere, it is at the high end of the market. Lenders sometimes try to aggressively foreclose with the hope of scaring the borrower into paying, but when they don’t get scared, the borrowers will simply vacate and move, and then the foreclosure gets cancelled. When lenders do not foreclose because they do not want the house, they are usually cancelling foreclosure by the masses. These lenders are often working to get people into the HAFA program, so that they can get a short sale or deed-in-lieu. Sean thinks the HAFA program is just like HAMP last year. It is not meant to conclude a bunch of short sales, it is meant to put people through another six months of delay only to tell them that they do not qualify.

Sean O’Toole’s website is www.foreclosureradar.com

Sean will be on the I Survived Real Estate 2010 panel in September.

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.

Thank you for being a Gold Sponsor for I Survived Real Estate 2010: Delmae Properties, Elite Auctions, Entrust California, Inland Empire Investors Forum, Keystone CPA, Las Brisas Escrow, Leivas Financial Services, Mike Cantu, North San Diego Real Estate Investors Association, Northern California Real Estate Investors Association, Personal Real Estate Investor Magazine, Realty 411 Magazine, San Jose Real Estate Investor Association, Tony Alvarez, and Westin South Coast Plaza.

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

Tuesday, August 10th, 2010

Today’s News Synopsis:

The new FHA short refinancing program will provide additional refinancing options to underwater homeowners starting Sept. 7. According to Integrated Asset Services, nationwide home prices increased 1.1% in the second quarter. Zillow reports California’s current rate on 30-year mortgages is 4.34%. CoreLogic estimates that short sales in Arizona, California, Florida and Texas will cost lenders $310m in unnecessary losses in 2010.

In The News:

Sign on San Diego - “Q&A: Pulte Homes exec on the San Diego housing market” (8-10-10)

“Q:Why is your company looking to build in the San Diego market? A: We are trying to be very strategic in our land acquisitions because there is a limited availability of finished lots. We see the economy starting to recover here with companies beginning to invest, especially in the high-tech and biotech markets. Engineers are relocating here. It tells us the demand is there.”

Housing Wire – “FDIC Launches Unit to Liquidate Banks under Dodd-Frank” (8-10-10)

“The CFI will review bank holding companies (BHCs) with more than $100bn of assets as well as non-bank financial companies designated as systemically important by the new Financial Stability Oversight Council. The CFI unit will also carry out the FDIC’s new authority to implement orderly liquidations of failed BHCs and non-bank financial firms.”

Housing Wire – “Home Prices Nationwide Increase 1.1%: IAS360″ (8-10-10)

“Integrated Asset Services, LLC (IAS), a Denver-based collateral valuation and default management service firm, released its latest IAS360 House Price Index (HPI) Tuesday reporting that collectively, nationwide home prices increased 1.1% from the first quarter of 2010 to the second. This is down 0.9% from the same period last year and down 16.7% from the survey’s all-time HPI high in Q407.”

Housing Wire – “FHA Short Refinancing Program Likely to Have Low Impact on Housing: KBW” (8-10-10)

“As HousingWire reported last week, the new program will provide additional refinancing options to underwater homeowners starting Sept. 7. To be eligible for the new loan, the homeowner must be underwater but still current on the mortgage. A credit score of 500 or better is required, and once refinanced and insured by the FHA. The new refinanced loan must have a loan-to-value ratio of no more than 97.75%. The borrower’s existing first-lien holder must agree to write at least 10% of the unpaid principal balance, and it must bring the borrower’s combined loan-to-value ratio (LTV) on that first mortgage to no more than 115%. The existing refinanced loan cannot be an FHA-insured one.”

Housing Wire – “Zillow: Weekly Rate on 30-Year Fixed Rate Mortgage Averages 4.3%” (8-10-10)

“The 30-year fixed-mortgage rate (FRM) slightly increased week-to-week nationally to an average of 4.3%, according to the Zillow Mortgage Marketplace weekly update. This is up 0.02% from the record low set last week. Regionally 30-year rates are varying, but the majority of states saw an escalation. California’s current rate is 4.34%, up from 4.33% last week, as is New Jersey’s at 4.28%, up from 4.27%.”

Housing Wire – “DebtX June CRE Loan Value Up to 77.4%” (8-10-10)

“The value of commercial real estate (CRE) loans that collateralize commercial mortgage-backed securities (CMBS) priced by DebtX rose to 77.4% at the end of June from 76.6% in May, the loan-sale adviser said in a press release Tuesday.”

Housing Wire – “Short Sales Cost Lenders $310m More Than Necessary, CoreLogic Study Finds” (8-10-10)

“The study projects that more than half of short sales happen in Arizona, California, Florida and Texas and will cost lenders an estimated $310m in unnecessary losses during all of 2010. These losses average $41,500 per short sale. Potential fraud, such as flipping or offer misrepresentation, likely happens in one in every 53 short sale transactions. CoreLogic examined a representative data sample of single family residence (SFR) short sale transactions from the past two years, representing 98% of real estate transactions and 85% of mortgage financing details, the firm said.”

Housing Wire – “Risk of House Price Decline Slightly Shrinks in PMI Index” (8-10-10)

“The Q310 market risk index, which uses Q110 data, dropped to 51.9 from 53.8. The score indicates the probability (from zero to 100) that the price of homes will on average be lower after two years. And while the risk of declines is less, economic analysts say house prices will likely continue to drop.”

Bloomberg - “`Buy and Bail’ Homeowners Get Past Loan Restrictions” (8-10-10)

“Real estate professionals call it ‘buy and bail,’ acquiring a new house before the buyer’s credit rating is ruined by walking away from the old one because it’s ‘underwater,’ or worth less than the mortgage. It’s an attempt to escape payments on a home whose value may never recover while securing a new property, often at a lower price with a more affordable loan. The practice, which constitutes fraud if borrowers lie on loan applications, is continuing even after Fannie Mae and Freddie Mac, the biggest U.S. mortgage-finance companies, beefed up standards to prevent it, according to brokers such as Collier and Meg Burns, senior associate director for congressional affairs and communications at the Federal Housing Finance Agency.”

Bloomberg - “Investors Doubt Mortgage-Bond Revival Until 2012, Moody’s Analysts Say” (8-10-10)

“Investors doubt the market for home- loan securities without government backing will revive until 2012, according to Moody’s Investors Service. About 74 percent of attendees surveyed for a June conference by the New York-based rating company responded that issuance, which essentially halted in 2007, will make a substantial ‘comeback’ no sooner than 2012, Moody’s analysts Navneet Agarwal and Brian Harris wrote in an Aug. 6 report.”

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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186-TNG Radio – Daniel Phelan 8-7-10

Friday, August 6th, 2010

daniel-phelan

Daniel Phelan

CEO of Pacific Southwest Realty Services


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

This week Bruce is joined by Daniel Phelan. Daniel is the CEO of Pacific Southwest Realty Services. He is responsible for this company’s mortgage operations. Pacific Southwest Realty Services is an investment firm focused on commercial real estate. It represents and advises both real estate clients and institutional investors in debt. It is involved in equity placement, strategic planning, property sales and loan administration.

In 2006, Daniel’s company was heavily involved in the financing of commercial real estate. His company financed $1.5 billion of commercial real estate per year for every year of the boom.

Daniel does not think that investors perceived a high level of risk in the prices they were paying for real estate during the boom. Prices had been steadily increasing since July 1993. Commercial real estate had a continuous growth pattern all the way to 2007. If you had only been in the business for 15 years and had only seen positive growth, then you probably wouldn’t feel at risk.

The lending side was probably looking at the boom similarly. There was a lot of competition, because Wall Street entered the market. There was a tremendous amount of debt capital in the market, and it was extremely competitively priced. These prices made real estate investments that much more enticing. People saw the need to get their capital invested in some form, and commercial real estate was perceived to be a safe investment.

In 2006 to 2007, down payments were reduced because of the confidence of the market. Borrowers were getting into commercial properties with only 20 percent. Historically, you could probably get most properties financed with 25 to 30 percent down. However, 75 percent is considered to be a more appropriate and safe number.

There are two tiers of debt. Most banks is recourse, but most non-bank debt is nonrecourse. 99.9 percent of the debt for life insurance companies and pension funds is nonrecourse. Because Daniel’s company works with these kinds of firms, they could only look to the real estate for satisfaction of a debt following a default. From 2005 to 2007, many banks backed off their recourse loans and went nonrecourse.

The source of capital during the boom came from portfolio lenders, such as life insurance companies and banks, and nonportfolio lenders, such as securitized lenders and Wall Street lenders. If you were trying to accomplish high loan to value with lower rates, then you probably got involved in the commercial mortgage backed securities market. You would expect a rate of 110-120 over treasuries. Those loans would be pooled into $2 billion pools, and then sold on Wall Street.

Mortgages made near 2006 are not doing well right now. Underwriting standards were very loose at that time. The default rates for those issuances are above 5 percent, and sometimes above 10 percent.

Mezzanine financing can be compared to second trust deed. It is a debt placed behind a first trust deed. It is used for taking cash out of a property, cover tenant improvements, or buy out existing partners to recapitalize the partnership.

During the boom, mezzanine debt could be taken at a 7 to 8 percent rate on the low end. The mezzanine debt today is going for above 10 percent. It is not available for the same loan to value rate. In 2006, you could get 90 percent loan to value. Today, you would be lucky if you got mezzanine debt for 65 percent loan to value. You may not be able to get it at all.

If you intend to occupy a commercial building, you could get 90 percent financing from a bank loan. This is only available to owner occupants, and it is only available in a purchase situation, not a refinance situation. If you were buying a multi-tenant investment property, you probably would get financing from life insurance companies. Banks are beginning to come back to the commercial investment market. With these deals, banks are looking for a full relationship with bank accounts and operating accounts. During the second quarter, the commercial mortgage backed securities market starting coming back. However, this market is not coming back quickly. Daniel’s company funded its first two cmbs loans since 2007.

Daniel’s company always looks at the operating history and income of a property, and then he makes a reasonable expectation of how well that property will operate over time. The projection for those properties is typically not very good. In 2006-07 we had not been hit by unemployment. Most tenants were performing well, and occupancy rates were above 90 percent.

Many commercial loans are coming due in 2012. These loans were underwritten in 2002. These loans are going to cause a big problem. In 2002, underwriting standards were not that “out of wack”. Prices have come down a lot, but they are still greater than what they were in 2002. Daniel think there is plenty of capital to refinance the debt on those properties, and in many cases, lenders are willing to roll over those loans. The bigger problem comes in during 2014 to 2017. During these years, you will have loans on properties with significantly diminished values. At that time, you may start having tenant default issues.

Construction on commercial real estate is not going to perform well. Daniel does not know of any bank that did a commercial construction loan in 2008-09. However, there are some banks now that are willing to loan on a multifamily property now.

Residential real estate is beginning to experience a large number of strategic defaults. Commercial loans are also beginning to default, but not as badly. Commercial property owners can make their payments so long as 70 percent of the tenants are making their payments. Commercial loans are made based on the ability of a property to make income. The commercial property owners that will experience difficulty are the ones that have let go of workers. They may have a large amount of space, but are only using a small portion of it. When their leases come due, these owners will probably move out to a smaller space. This will hurt larger commercial properties.

Most cap rates during the peak were around 6 to 7 percent. For multifamily properties and apartments, cap rates were around 5 percent. As of last year, most cap rates have moved up to 8 to 9 percent. The reason why we have not experienced a dramatic change in cap rates is because of Fannie and Freddy’s involvement.

Daniel believes we are going to see more problems in 2010 rather than improvement. Sales are going to start again, but they are going to have to pay 35 percent down rather than 25 percent.

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.

Thank you for being a Gold Sponsor for I Survived Real Estate 2010: Delmae Properties, Elite Auctions, Entrust California, Inland Empire Investors Forum, Keystone CPA, Las Brisas Escrow, Leivas Financial Services, Mike Cantu, North San Diego Real Estate Investors Association, Northern California Real Estate Investors Association, Personal Real Estate Investor Magazine, Realty 411 Magazine, San Jose Real Estate Investor Association, Tony Alvarez, and Westin South Coast Plaza.

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The Norris Group Real Estate News Roundup 7/30/10

Friday, July 30th, 2010

Sources:
http://www.govtrack.us/congress/bill.xpd?bill=h111-600
http://maplight.org/us-congress/bill/111-hr-600/357605/total-contributions.table
http://blogs.wsj.com/developments/2010/07/29/popular-zero-down-mortgage-program-makes-comeback/?blog_id=36&post_id=14060
http://www.rurdev.usda.gov/rhs/sfh/brief_rhguar.htm
http://www.rurdev.usda.gov/SupportDocuments/CA%20GRH.pdf
http://money.cnn.com/2010/07/26/real_estate/new_home_sales/?postversion=2010072612
http://www.housingwire.com/2010/07/26/multifamily-rental-demand-catching-up-to-supply-barcap
http://www.bloomberg.com/news/2010-07-27/apartment-rentals-surge-in-u-s-as-foreclosures-rise-job-growth-resumes.html
http://www.housingwire.com/2010/07/27/homeownership-vacancy-rate-level-in-q210
http://www.bloomberg.com/news/2010-07-27/job-cuts-of-500-000-next-year-predicted-for-cities-counties-over-budget.html
http://money.cnn.com/2010/07/29/real_estate/new_face_of_foreclosure

Today’s News Synopsis:

The Commerce Department reports the economy grew by 2.4%. Altos Research predicts home prices will continue to decrease through the rest of the year. According to FinCen, suspicious activity reports for mortgage fraud in 2009 increased by 4% from 2008. Legislation for the Section 502 single-family rural housing program is headed to the President to be signed back into law. The program allows 30-year originations to purchase households or renovate currently owned ones with zero down payment at the time of application.

In The News:

Los Angeles Times – “Economy slows sharply in second quarter” (7-30-10)

“The nation’s economy grew at a modest 2.4% annual rate in the April-to-June period, the Commerce Department said in its first estimate of gross domestic product for the second quarter. That compares with a GDP growth of 3.7% in the first quarter – a figure adjusted up from 2.7% reported earlier. But Commerce officials revised down the growth in the fourth quarter of last year, to 5% from 5.6%, as it did for prior quarters, painting an overall picture of a deeper recession than previous data suggest.”

Housing Wire – “Fannie Mortgage Portfolio Grows 6% on $19bn of Repurchases” (7-30-10)

“Fannie’s book of business include about $19bn of loans purchased from mortgage-backed security (MBS) trusts in June that won’t be reflected as liquidated from MBS until July. Excluding these repurchases, the total book of business would have grown at a compound annualized rate of 0.3% in June. Within the company’s mortgage portfolio, Fannie added $27.6bn in purchases and recorded $6.2bn in sales and $17.2bn in liquidations. Due largely to the $19bn of buybacks, Fannie’s mortgage portfolio grew at a compound rate of 6.3% in June.”

Housing Wire - “Shadow Inventory to Push 2011 Home Prices Lower than ‘09: Altos Research” (7-30-10)

“House prices will continue to drop through the rest of the year and will begin 2011 lower than they were in 2009, according to a webinar hosted by Scott Sambucci, vice president of data analytics for Altos Research.”

Housing Wire - “Alleged Mortgage Fraud up 4% in 2009 with LA, Miami in Top Spots” (7-30-10)

“FinCEN notes that suspicious activity reports (SARs) for mortgage fraud in 2009 rose 4% from 2008, and really started speeding up towards the end of the year. Q409 is up 6% from the same quarter one year ago. Further, mortgage loan fraud made up 9% of all SARs filed in 2009, spiking at 11% in Q409.”

Housing Wire – “CMBS Defaults on Track to Break 11% by Year-End: Fitch” (7-30-10)

“Defaults on fixed-rate conduit US commercial mortgage-backed security (CMBS) loans continued at record speeds, on track to reach a cumulative default rate of 11% by year-end 2010, according to credit-rating agency Fitch Ratings. Cumulative defaults rose to 9.48% through June — a 133bp-climb from Q110. This increase is in line with Fitch’s expectation of an 11% cumulative default rate by year-end.”

Housing Wire – “Fed Hikes Mortgage Fee Disclosure Trigger 2% in 2011″ (7-30-10)

“The Federal Reserve Board of Governors today raised the dollar amount of mortgage fees that triggers mortgage disclosure requirements under the Truth in Lending Act and the Home Ownership and Equity Protection Act of 1994 (HOEPA). The Fed raised the trigger 2% to $592, from the current $579, beginning in January 2011. The trigger amount is now 48% higher than the $400 originally set by HOPEA in 1994.”

Housing Wire – “Section 502 May Return with Zero Down Payment Mortgages, 3.5% Guarantee Fee” (7-30-10)

“The National Association of Realtors (NAR) announced Wednesday that legislation for the Section 502 single-family rural housing program under the Department of Agriculture is headed to President Obama’s desk to be signed back into law. The program allows 30-year originations primarily for low-income families to purchase households or renovate the ones they already own with no down payment at the time of application. Loans are guaranteed by the federal government.”

Realty Times - “California gets $700,000 slice of special $1.5 billion homeowner bailout pie” (7-30-10)

“California struck gold, receiving the biggest chunk of a special $1.5 billion federal fund pie for programs that target struggling homeowners in states hardest hit by the housing crash. Earlier this year President Obama announced the $1.5 billion infusion for state housing agencies in Arizona, California, Florida, Michigan and Nevada, where home values have fallen more than 20 percent from peak 2006 and 2007 markets.”

Looking Back:

One year ago, the Labor Department reported the unemployment rate rose to 9.5. The average 30-year mortgage rate increased to 5.25 percent. Inventory levels in Orange County reached the lowest levels in 4 years.

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 7/9/10

Friday, July 9th, 2010

Sources:
http://www.nytimes.com/2010/07/09/business/economy/09rich.html?_r=2
http://blogs.wsj.com/wealth/2010/06/29/mansion-foreclosures-surge/?source=patrick.net
http://latimesblogs.latimes.com/money_co/2010/07/30year-mortgage-rate-edges-down-to-new-record-low.html
http://www.boston.com/business/articles/2010/07/09/banks_fight_changes_to_accounting_rules/
http://www.aba.com/Industry+Issues/FASB_advocacy.htm
http://www.dsnews.com/articles/fannie-mae-adopts-new-rules-for-pre-mod-income-verification-2010-06-28
http://www.lpsvcs.com/NewsRoom/IndustryData/Documents/06-2010%20Mortgage%20Monitor/LPS_Mortgage_Monitor_May_2010_Final.pdf

Today’s News Synopsis:

According to Greg Paquin, Sacramento new home sales decreased by 21.3 percent in the second quarter. Foreign home buyers purchased $66 billion of US residential property during the year ending May 2010. The VP of the Federal Reserve Bank of Cleveland believes that the high foreclosure rate is likely to continue for some time. Multiple economic statistics show that the tax credits may have simply hid an ongoing recession in real estate.

In The News:

Sacramento Bee – “New-home sales plunge in Sacramento area” (7-9-10)

“Second-quarter new-home sales in the Sacramento area fell 21.3 percent from the first quarter and by 50.1 percent from the already dismal second quarter of 2009, said Greg Paquin, a Folsom consultant who issued the sales report.”

Housing Wire – “REITs Raised $22bn for Real Estate Investments in 2010: NAREIT” (7-9-10)

“The US Real Estate Investment Trusts (REITs) raised $22bn in initial, debt and equity capital offerings in 2010, and as a whole the industry owns $500bn of commercial real estate assets, approximately 10% to 15% of total institutionally owned commercial real estate, according to a mid-year report by the National Association of REITs, NAREIT.”

Housing Wire – “International Investment in US Housing Market Rises: NAR” (7-9-10)

“Foreign home buyers — those with residency outside the US as well as recent immigrants and temporary visa holders — purchased $66bn of US residential property, or 7.27% of the market, in the year ending March 2010, according to the National Association of Realtors (NAR). Based on NAR’s existing home sales information, $907bn of residential sales occurred in the 12 months ending March 2010.”

Housing Wire – “DebtX Sees Commercial Mortgage Values Recover Slightly in May” (7-9-10)

“The aggregate value of commercial real estate (CRE) loans that collateralize commercial mortgage-backed securities (CMBS) rose to 76.6% of the original balance in May, from 76.4% in April, according to loan sale advisor DebtX. Values are up from 75.9% in March and 76.5% in February. CRE loan values are down from 77.6% in May 2009, according to DebtX.”

Housing Wire - “High Foreclosure Rate Likely to Persist, Cleveland Fed VP Says” (7-9-10)

“If past recessions are a guide, the nation’s high foreclosure rate is likely to persist, according to authors at the Federal Reserve Bank of Cleveland.”

Housing Wire – “Bank Bailout May Turn a Profit for Treasury, KB&W Report Finds” (7-9-10)

“The Capital Purchase Program, $205bn in financial firm relief funds from the Treasury’s $700bn stimulus package, the Troubled Asset Relief Program (TARP), is nearly repaid in full and likely to turn a profit, according to a report from broker/dealer investment bank Keefe, Bruyette and Woods.”

Housing Wire – “Ginnie Guarantees $33.4bn of MBS in June” (7-9-10)

“The Government National Mortgage Association — or Ginnie Mae — guaranteed more than $33.4bn of mortgage backed securities (MBS) in June.”

Inman - “Tax credits hid ongoing real estate slide?” (7-9-10)

“The economic data that did arrive confirmed a slipping recovery, but not a double-dip. The Institute for Supply Management service-sector report for June followed last week’s pattern: softer than prior month, and well below forecast (May 55.4, forecast 55, actual 53.8). New claims for unemployment insurance came down 21,000 last week to 454,000, but have been stuck in that range all year long. Mortgage refi applications have begun to rise, but purchase ones fell again, by 2 percent last week, now 42 percent below the end of April.”

Looking Back:

One year ago, the government-insured (FHA and VA loans) share of mortgage applications was 35.9 percent. The average 30-year rate dropped to 5.2 percent. UCLA economists predicted that commercial real estate demand would not return to 2006 levels until 2014. The Financial Crimes Enforcement Network reported that suspicious mortgage activities were increasing significantly.

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 7/7/10

Wednesday, July 7th, 2010

Today’s News Synopsis:

The MBA reports mortgage loan application volume increased 6.7 percent from last week. Delinquencies on home equity loans decreased to 4.12% in the first quarter. 89 percent of mortgage lenders intend to, or already, offer Web-based mortgage application services. The average price discount on foreclosed properties nationwide is 26 percent.

In The News:

Mortgage Bankers Association – “Mortgage Refinance Applications Increase in Latest MBA Weekly Survey” (7-7-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending July 2, 2010.  The Market Composite Index, a measure of mortgage loan application volume, increased 6.7 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 6.5 percent compared with the previous week.”

CNet - “Freddie, Fannie reject energy retrofit loans” (7-7-10)

“The FHFA said it does not object to all energy retrofit loans, but specifically to those PACE or PACE-like energy loans that are essentially structured as property taxes and, therefore, have first lien. In the event of a foreclosure on the property, those loans are legally required to be paid off first before any money goes to the mortgage lender.”

Los Angeles Times – “Home equity loan delinquencies fall for first time in two years” (7-7-10)

“The percentage of home equity loans on which consumers were at least one payment late declined to 4.12% in the first quarter from 4.32% the previous quarter. Not since the first quarter of 2008, when the rate fell to 2.34% from 2.39%, had there been a decline. Missed payments on consumer loans overall improved for the third straight quarter, the ABA said in its quarterly Consumer Credit Delinquency Bulletin. Bank card delinquencies fell from 4.39% to 3.88% of all accounts — the first time since 2002 that card delinquencies were below 4%.”

Housing Wire – “When it Comes to Servicing Ginnie Mortgages, BofA Scores Again” (7-7-10)

“BofA-serviced Ginnie loans ranked among the lowest in terms of 60-day delinquencies (less than 1% in May), followed closely by Wells Fargo (WFC: 26.67 +6.04%) (just over 1%). Countrywide loans had the highest 60-day delinquency rate of around 3%”

Housing Wire – “Tech Developer’s Survey Finds Lenders Expect Surge in Online Mortgage Volume” (7-7-10)

“18% of mortgage lenders offer so-called ’smart’ Web-based mortgage application services. The survey defines ’smart’ software products as those that are interactive mortgage-application systems that are a fully transactional, Web-based solution that intelligently guides borrowers through the application, adjusting the questions for applicants according to responses. Of the remaining companies that current do not offer the service, 71% said they will adopt online mortgage application technology sometime in the future, while 14% said they would not. The remaining 15% responded they were unsure.”

Bloomberg - “U.S. Commercial Property Sales Trail Six-Year Average” (7-7-10)

“U.S. commercial real estate sales in the first half totaled about a quarter of the average of the previous six years as owners kept properties off the market, impeding investors with record funds for purchases. Buyers and sellers completed $34.2 billion of deals through June, or 26 percent of the average first-half dollar volume since 2004, according to preliminary figures from Real Capital Analytics. The total was about 12 percent of the 2007 peak, when $277.7 billion of properties changed hands in the same period, data from the New York-based real estate research firm show.”

Realty Times – “Short Sale Tactics May Bring on Legal Liabilities For Agents” (7-7-10)

“Real estate agents know that short sales are likely to be time-consuming and frustrating. What many don’t know is that short sales carry high risks of legal liability for agents. One area of short sales that is fraught with liability is in the use of negotiators. In California, short sale negotiators must possess a real estate license and are subject to a variety of regulations. Moreover, a negotiator’s agency relation to the principals is frequently unclear and undisclosed. Undisclosed dual agency is a particular problem.”

Orange County Register – “O.C. builders hit by tax break’s demise” (7-7-10)

“The total number of O.C. sales contracts — the start of escrow for new home purchases — tumbled to 191, down from 218 in April, according to Costa Mesa-based Hanley Wood Market Intelligence, which tracks new home sales. May’s total was up a mere 3.8% from year-ago levels. By comparison, O.C. contracts had been up 39.7% in April. April 30 was the deadline to open escrow on a home purchase to qualify for the federal tax credit.”

Orange County Register – “Calif. has 4th largest foreclosure discount” (7-7-10)

“The company ranked of 44 states and Washington D.C. (other states don’t have enough data for valid analysis, according to Realtytrac) for the gap between pricing for homes sold somewhere in the foreclosure process vs. those that were not anywhere in foreclosure. As for fat foreclosure discounts, Ohio led the nation at 39.5%, followed by Kentucky at 35.2% and Illinois at 35.1%. The average sales price of properties nationwide that sold while in some stage of foreclosure in the first quarter was 26 percent below the average sales price of properties not in the foreclosure process.”

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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