Sean O’Toole

President of ForeclosureRadar

(Full Bio)

On October 14th, 2011, The Norris Group returns with its award-winning event I Survived Real Estate. An expert lineup of industry specialists join Bruce Norris to discuss current industry regulation, head-scratching legislation, and the opportunities emerging for savvy real estate professionals. 100% of the proceeds support the Orange County Affiliate of Susan G. Komen for the Cure. This event would not be possible without the generous help of the following platinum partners: Foreclosure Radar and Sean O’ Toole, Housing Wire, The San Diego Creative Real Estate Investors Association and President Bill Tan, Investors Workshops and President Shawn Watkins and Angel Bronsgeest, Invest Club for Women and Iris Veneracion and Bobbie Alexander, San Jose Real Estate Investors Association and Geraldine Berry, Real Wealth Networks, Frye Wiles Web and Branding, MVT Productions, and White House Catering, who will provide the 3-course meal for this black tie event. Visit iSurvived2011.com for more details.

Bruce is joined this week by Sean O’Toole. Sean is the founder and CEO of ForeclosureRadar.com. Prior to launching ForeclosureRadar, Sean successfully purchased and flipped more than 150 residential and commercial foreclosures. Leveraging 15 years in the software industry, Sean used technology as a key competitive advantage to build his successful real estate investment track record. Prior to that, he was involved in software startup companies.

Back in the late 80s and early 90s, Sean ran a homes and land real estate magazine in the Hawaiian Islands. He spent time taking a break from his software career to run this magazine and to buy and sell his own houses, which played a part in his real estate business career prior to buying at trustee sales. He became attracted to trustee sales after the .com bubble when he was trying to figure out what to do with his life. They were trying to take public company he had started and raised money for about the time that the bubble imploded, bringing it to an end. He was trying to figure out what he was going to do next when he was thinking of starting another software company since this was really all he had ever done. He was introduced to a friend who was buying foreclosures, and he said he should give it a try and if Sean helped him write some software to run his business, then his friend would teach him the rest of the business. At first Sean did not think this was very interesting; but then his friend showed him the kind of money he was making, and he became a lot more interested. Sean started buying at the trustee sales in 2002, which was an interesting time to be involved in something like this. During the era from 2002-2006, Sean was often surprised on the high side. He bought a property, and if it was a hassle to fix and get people out, he was bonused money along the way for the time delays.

One of Sean’s most profitable deals was where he had a gentleman fight him on the eviction for a year through multiple bankruptcy declarations to the point where the judge said he could never file bankruptcy again for the rest of his life. It seemed like a real headache until he went to sell the property, and it had gone up nearly 50%. It’s a very different world today. You would not want to have delays; if you can get to the finish line, then you would want to get there.

When Sean first started in the trust deeds business, it was tough to access information about properties and liens. There was a decent little service up in Northern California that later changed their business model and didn’t have as good of information as Sean had first used from them. After they changed their business model and stopped collecting the data directly, he had to find out how to collect the data himself. He was pulling data from the assessor’s office and the recorder’s office. The biggest thing was you would show up at the sales from everything that had been in the paper, and you would have a list of about 20 properties. They would then call 100 properties because the other 80 had been postponing for some period of time. Unless you went back years and went through all the notices, you had no idea what was still coming up for sale or not. You would have to play catch-up, which would be an awful lot of homework. People don’t realize unless they are in the business that each property entails a full-blown title search, an appraisal, and you have to determine if the pursuit is worth your time. Fortunately, from 2002-2006, there was natural equity most of the time. You wouldn’t have been following a lot of trustee sales that did not have equity; whereas now it is completely different. Back then, term “drop-bid” was unheard of at the time. It was very rare that the banks discounted the bid from the amount owed on the property and was unnecessary. The nice part about having inflation was that their loan was probably below what it was worth and therefore attractive to trustee sale buyers even though the number of trustee sales was way down compared to now. The amount of properties that had equity had to be very high in percentage.

Since Sean’s father is a logic professor, to him he needs things to make sense for him to understand them. So one of the hardest times he had with trustee sales was none of the deals sold on the courthouse steps made any sense. They had equity, and the person could have sold the house. It should not have gone to sale; they should have taken care of their problems, paid their mortgage, or refinanced. This was when he had learned that there were some basic reasons for foreclosure which had happened even in the best of times which were called the 5 D’s: drugs, divorce, death, denial, and disease. These things were not fun to talk about and made the business not feel very great on that side, but back in that period of time these were the reasons properties were foreclosed on. We still have foreclosures for those reasons, but the vast majority of foreclosures happening today are due to negative equity. We have an additional category that is really raining a lot of properties into the system. Back then when you were checking up on sales, you were on the phone and trying to get information to see if it was going to be worth going to the sale.

Sean’s website has really changed the process for someone wanting to be a trustee sale buyer and made it simpler. The person who taught him the business would take a Polaroid of each house and then write down the postponement dates. He had a shoebox organized by date of all the properties that could come up for sale, and literally each time a property came up for sale he had to put a new date on it and put it in a new spot in the shoebox. Other people would keep spreadsheets, and you really had to have somebody down at the sales every day to track everything. One of the big goals for ForeclosureRadar was to get people out of the really tedious sale tracking business. This is one of the areas where they have been very successful. Sean’s website is much more accessible and understandable, and it has made the competition greater. There are definitely new people that can go from novice to acceptable much quicker these days. Sean and his team was definitely in the right place at the right time, but he thinks the transition still would have happened if they were there or if somebody else was there. They launched in May of 2007, and it was towards the end of 2008 that banks began dropping bids and people began making a lot of money. At the same time, they had a lot of contractors and commercial real estate folks who suddenly saw their business go away and needed to find something else. Trustee sales were the right thin at the right time for a lot of people, and Sean and his team benefited from being the best tool at that time. However, he still thinks the transition and the competition would have heated regardless of whether they had been there or not.

Sean’s customer base is dominated by investors and realtors. Just in Sean’s little hometown of Discovery Bay, there is about 85 properties listed for sale; but there is 200-300 in some stage of foreclosure at any give time. If you want to call yourself a market expert, it is pretty hard to do if you don’t have a clue about the all the properties in some stage of foreclosure. If you’re listing a property, and two days later a bank-owned listing pops up next door, there is no excuse for not having known about it ahead of time. At ForeclosureRadar, they can give you months of advanced notice that is potentially coming, so you can work with your customers to be ready for it. The volume of dollars in sales as far as trustee sales in California is in the billions. Typically, the third-party investors are buying 20%, about half a billion dollars worth of property, a month. ForeclosureRadar’s peak month was around $8 billion at original loan value, not at current market value. The $8 billion encompassed the properties that would go to third party and to REO, anything for when someone has lost their house to foreclosure. The two categories combined, REOs and third-party bidders, is a resolution.

In California, there are currently 95,000 properties scheduled for sale, which is down quite a bit. A year ago, there were 120,000 properties scheduled for sale. Out of that, between homes sold back to the bank and sold to third parties, about 14-15,000 sell in a month. Last month, about 24,000 were added. If you take the 95,000 with 24,000 new added, you have 15,000 taken away. This means about 15% or more of the properties are bought by people that are investors to fix and resell. This is one of the reasons they don’t use trustee sales when talking about market sales. When NAR or CAR talks about the number of homes sold per year, they’re not including what happens at the trustee sales. The vast majority of things purchased at trustee sales are resold. Almost all the investors at trustee sales flip the property, and then the banks largely relist the properties as REOs.

Investors are the ones who tend to get rid of properties quicker. Right now in California, it takes banks on average 237 days and 131 days for third-party investors. Investors are a lot better at disposing of properties than banks. Investors are pretty motivated in terms of the fact that it is their money on the line and not a shareholder or tax payer. They also know the local markets better, and they invest in and fix up homes. The people who are fixing up properties put in new paint and carpet, and they are getting them ready for a first-time buyer or a landlord to turn them into a rental. Therefore, they usually try to make them really nice. The banks, usually because of the servicing agreements, try to do a little more than clean out the properties. You will have a lot of properties that are trashed that end up going as REO sales that first-time buyers simply can’t afford to buy, fix, and clean up. You also have some that are so trashed that you cannot get loans on them. The banks not fixing the properties is a big part of it.

When they first started talking about shadow inventory at ForeclosureRadar, it was prior to September 2008 because at that point the banks were taking on huge inventories of REOs that were not listed. Shadow inventory is described as bank-owned homes that were not listed for sale. After September 2008 when they really slowed down the foreclosure sales, at the time when the government made some changes that really slowed down the foreclosure sales, the bank-owned inventory came down to the levels where it really should be. Several folks that had been talking about shadow inventory changed the definition to now include the folks that were now in foreclosure and not-yet-bank-owned. Later, it was changed again to also include delinquent properties and not yet in foreclosure. Depending on who gives the term these days, Sean has even seen some people expand it to those who have so much negative equity they will eventually be delinquent, lose their home, and pay inventory. Sean even had someone the recently tell him that you also have to include all the people who like to sell their home, but not at the current prices. Pretty much most of the country is shadow inventory. Nationally, there are about 4.2 million properties that are between the stages of 90 days late and the bank already owns them. Of the folks that are in foreclosure, you have 134 that are at the default stage plus 94 scheduled for sale. You also have another 100 that are currently bank-owned. NODs are usually filed at the 13-month mark, although this has gone up a lot. Traditionally it was at the 90-day mark, and now it is at 13 months, which is roughly 398 days. The other 300 days, between 90 and 398 days, included defaults and delinquencies. Delinquencies in California are usually around 9%, so that is 30 or more days late. If you take 9% of homeowners with a mortgage, that is another 650,000. All combined, you have close to 1 million.

There are some problems that are going to have to be resolved one way or the other, which will be discussed with the group on the panel at I Survived Real Estate on October 14. They will be discussing possible resolutions since there seem to be conflicting goals. One document says it wants the country to save between $2 and $4 trillion so we can pay our bills, and we have an industry that almost needs more support. It will be interesting to see how the discussion comes about.

The percentage of owners that are over encumbered in California is unknown right now, but a lot of the larger properties are more over encumbered. They have not yet seen the declines in the upper end. There have certainly been declines in the Bay Area and in Newport Beach, but they have not been as traumatic as the declines in San Bernardino, Riverside, Central Valley, and Sacramento. This would most likely be attributed to the bulk of the inventory that is for sale being a foreclosure property. The other reason could be it was a different loan type that did not have the biggest problem as early as its subprime. Also, wealth plays a part. Higher end neighborhoods tend to have more wealth. In addition, data shows that the banks are taking a lot longer to foreclose on higher end homes where the losses are bigger, so part of the reason we have seen less in that area is because the banks are trying to delay losses and remain solvent.

Sean O’Toole will be on the panel for I Survived Real Estate 2011, taking place on October 14th. The Norris Group would like to thank their gold sponsors for the event: Adrenaline Athletics, Coldwell Banker Pioneer Real Estate, Conaway and Conaway, Delmae Properties, Elite Auctions, Inland Empire Investors Forum, Keller Williams of Corona, Keystone CPA, Kucan & Clark Partners, LLC, Las Brisas Escrow, Leivas Associates, Mike Cantu, Northern California Real Estate Investors Association, Northern San Diego Real Estate Investors Association, Pacific Sunrise Mortgage, Personal Real Estate Magazine, Realty 411 Magazine, Rick and LeaAnne Rossiter, Southwest Riverside County Board of Realtors, Starz Photography, uDirect IRA, Wilson Investment Properties, Tony Alvarez, Tri-Emerald Financial Group, and Westin South Coast Plaza. Visit isurvived2011.com for more details.

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.

Mortgage rates went up a little today to 4.22% after being at their lowest in 50 years.  Government Sponsored Enterprises, specifically Fannie Mae and Freddie Mac, are expected to receive less money from the government, almost $35 billion less according to DS News.  The market is not looking good for both commercial real estate and homebuilders as both the sale of new homes are expected to be at their lowest since the 60′s and commercial real estate is being effected by a weak economy.

In The News:

Bloomberg - “Mortgage Rates for 30-Year U.S. Loans Rise From Half-Century Low to 4.22%” (8-25-11)

“Mortgage rates in the U.S. rose for the first time in four weeks, pushing borrowing costs up from the lowest in more than half a century as a faltering economy holds back home purchases.“

Housing Wire - “Freddie delinquencies tick up for first time in 10 months” (8-25-11)

“The Freddie Mac delinquency rate increased 1 basis point in July to 3.51%, the first increase since November.”

DS News - “Government to Spend Significantly Less on GSEs This Year” (8-25-11)

“In its August 2011 Budget and Economic Outlook update, the Congressional Budget Office (CBO) predicts the government will spend $35 billion less on Fannie Mae and Freddie Mac in 2011 than in 2010.”

Rismedia - “Mortgage Applications Decrease; Purchase Index Lowest in 15 Years” (8-25-11)

“Mortgage applications decreased 2.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending August 19, 2011.”

O.C. Register - “Analyst: Homebuilders face growing challenges” (8-25-11)

“Recent statistics point to weakening marketing conditions for the homebuilding industry.  This week’s new home sales report by the US Census Bureau showed that new home sales ran at a seasonally adjusted rate of 298,000 in July — down 0.7% from June yet up 6.8% from a year ago. Still, the industry is on pace for slowest annual sales since 1963.”

Inman - “REO, preforclosure properties selling at a larger discount” (8-25-11)

“The share of bank-owned homes and homes in some stage  of foreclosure dropped 5 percent from the first quarter to the second  quarter, falling from 36 percent to 31 percent, but was up from 24 percent in second-quarter 2010, according to a report released today by foreclosure data  provider RealtyTrac.”

Housing Wire – “Wells Fargo tops MBA’s commercial/multifamily servicer list” (8-25-11)

“Wells Fargo (WFC: 24.76 +1.35%) ranks first among master and primary servicers for its handling of $442.9 billion in commercial/multifamily loans tied to commercial mortgage-backed securities, collateralized debt obligations and other
asset-backed securities, the Mortgage Bankers Association said Thursday.”

Los Angeles Times - “Gov. Jerry Brown proposes job creation plan for California” (8-25-11)

“Gov. Jerry Brown wants to expand a hiring tax credit and provide tax relief to businesses that buy manufacturing equipment, while getting rid of a loophole that voters supported in elections in 2010.”

Realtor Magazine - “Foreclosures Sell for Up to 40% Less” (8-25-11)

“Foreclosures made up about one-third of all home sales during the spring quarter (April to June), and sales were about six times the percentage of foreclosures in a healthy housing market, RealtyTrac Inc. reports.”

Housing Wire – “Commercial real estate outlook turns grim” (8-25-11)

“Just as the commercial real estate sector showed signs of recovery, analysts now forecast a renewed struggle as the economy slumps.”

Looking Back:

One year ago, the MBA’s weekly survey showed that mortgage loan application volume increased by 4.9%. The Commerce Department reported new homes sales decreased 12.4% in July 2010. According to Zillow, most Western states experienced a decrease in 20-year mortgage rates the prior week. California’s 30-year rate decreased to 4.30%.

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

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

In The News:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Looking Back:

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

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

The Office of Thrift Supervision reports serious delinquencies decreases in the 4th quarter of 2010. Riverside was pronounced to be the most likely city to experience further economic trouble. Commercial and multifamily mortgage originations increased 88% in the last few months of 2010. Fannie Mae’s mortgage portfolio decreased by 15% in February.

In The News:

CNN - “JPMorgan’s Dimon: No mortgage writedowns” (3-31-11)

“The head of JPMorgan Chase said Wednesday that banks would not consider writing down mortgages for homeowners who can make payments, an idea at the center of talks aimed at fixing the mortgage mess.”

Housing Wire - “Chief risk officer Bob Ryan to head up FHA” (3-31-11)

“The Department of Housing and Urban Development tapped Bob Ryan, formerly the chief risk officer at the Federal Housing Administration as its acting commissioner, replacing David Stevens. Stevens departs the FHA Thursday and will run the Mortgage Bankers Association.”

Housing Wire – “Fannie Mae’s gross mortgage portfolio drops 15.2%” (3-31-11)

“Fannie Mae said its gross mortgage portfolio fell at a compound annualized rate of 15.2% in February, while the government-sponsored enterprise’s entire book of business fell 0.7%.”

Housing Wire - “Jobless claims drop slightly for a third consecutive week” (3-31-11)

“The number of initial jobless claims filed by unemployed Americans fell to 388,000 in the week ending March 26, down from last week’s upwardly revised figure of 394,000, the Labor Department said Thursday.”

Office of Thrift Supervision – “Mortgage Performance Slightly Better in Fourth Quarter of 2010; Serious Delinquencies Drop for the Fourth Consecutive Quarter” (3-31-11)

“The quarterly report by the Office of the Comptroller of the Currency and the Office of Thrift Supervision showed that 87.6 percent of the 32.9 million loans in the portfolio were current and performing at the end of the fourth quarter of 2010.”

Mortgage Orb – “Legislation Dismantles GSEs Piecemeal-Style” (3-30-11)

“Republicans on the House Financial Services Committee have introduced eight targeted bills that, taken together, aim to reduce the government’s involvement in housing and spark a resurgence among private capital.”

Yahoo - “Cities Where Things are Getting Worse” (3-29-11)

“Six California cities claim spots on our list of Cities Where The Economy May Get Worse. Riverside took the number one spot, thanks to a high unemployment rate (13.9%) coupled with weak job growth, a hefty number of mortgage loans 90 days or more delinquent (8.21% of all loans) and a projected migration pattern that finds 4,000 residents expected to leave the area this year.”

Housing Wire – “Commercial and multifamily mortgage originations up 88%” (3-31-11)

“Commercial and multifamily mortgage originations grew 88% in the fourth quarter of 2010 when compared to 4Q 2009, the Mortgage Bankers Association said in its Fourth Quarter Commercial Real Estate-Multifamily Finance Quarterly Report.”

Housing Wire – “Barney Frank says mortgage interest tax deduction is safe” (3-31-11)

“Rep. Barney Frank (D-Mass.) said at a House subcommittee hearing Thursday that the mortgage interest tax deduction would be safe. Currently, interest on a mortgage taken out to buy or improve a home can be fully deducted if the amount of the loan is less than $1 million for married couples and $500,000 for singles. Home equity loans taken out for anything else is limited to $100,000 for couples and $50,000 for singles.”

Housing Wire – “Freddie Mac mortgage interest rates inch up this week” (3-31-11)

“The government-sponsored enterprise said its primary mortgage market survey showed the average rate for a 30-year, fixed mortgage rose to 4.86% for the week ending Thursday from 4.81% a week earlier. The average rate for a 15-year, fixed mortgage increased to 4.09% from 4.04 the prior week, according to the Freddie Mac survey.”

Housing Wire – “Judge dismisses securities fraud case against Freddie” (3-31-11)

“A federal district court judge in New York dismissed a lawsuit filed by Southeast and Southwest Areas Pension Fund and National Elevator Industry Pension Plan — two Freddie investors, who allege Freddie mislead a class of investors after experiencing a $2 billion loss for the third quarter of 2007 by ‘materially misrepresenting Freddie’s exposure to risky mortgage products.’”

Looking Back:

One year ago, Mortgage loan application volume increased by 1.3 percent from the previous week. Vacation home sales increased by 7.9 percent in 2009.  Fannie Mae reported the percentage of seriously delinquent loans increased to 5.52% in January. FHA allowed mortgages to borrowers who sold their residence under short-sale provisions and then purchase a new home without the standard 3 year wait.

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

The CBIA reports home production has dropped 41% from last year. MacroMarkets believes a double dip in housing prices may soon occur. Fannie Mae said mortgage applications decreased by 7.9% in January. U.S. home prices fell 3.9% year over year, according to FHFA.

In The News:

Housing Wire – “Cleveland Fed president says housing remains weak link in recovery” (3-22-11)

“Sandra Pianalto, president of the Federal Reserve Bank of Cleveland, says the housing sector remains one of the most ‘unforgiving aspects’ of the recession.”

Housing Wire – “Elizabeth Warren aims to cut regulatory costs for community banks” (3-22-11)

“Elizabeth Warren, the special adviser to the Treasury Department, told an audience of community bankers Tuesday that the Consumer Financial Protection Bureau she is working to construct will look to cut regulatory costs for smaller financial institutions.”

CBIA - “California Housing Production Continues Decline in February, CBIA Announces” (3-22-11)

“According to statistics compiled by the Construction Industry Research Board (CIRB), permits were pulled for 2,088 total housing units in February, down 41 percent from the same month a year ago and down 26 percent from January. Permits for single-family homes totaled 1,204, down 34 percent from February 2010 and down 26 percent from the previous month, while multifamily permits totaled 884, down 48 percent from a year ago and down 24 percent from January.”

Housing Wire – “Housing double dip could be coming: MacroMarkets” (3-22-11)

“A double-dip in housing could arrive this year with national home prices only 1% away from a new ‘post-crash low,’ MacroMarkets said in its March 2011 Home Price Expectation Survey.”

Housing Wire – “Fannie Mae expects home sales to remain soft through spring season” (3-22-11)

“Home sales are expected to remain soft in the near term after mortgage applications fell 7.9% in January and another 3.3% in February, Fannie Mae said in its March Economic Outlook report.”

Bloomberg - “U.S. Commercial Property Prices Fell for Second Straight Month in January” (3-22-11)

“The Moody’s/REAL Commercial Property Price Index slumped 1.2 percent from the previous month and 4.3 percent from a year earlier. It’s up 4.2 percent from an eight-year low in August, Moody’s said in a statement today.”

Bloomberg - “Home Prices in U.S. Declined 3.9% in January From Year Earlier, FHFA Says” (3-22-11)

“U.S. home prices fell 3.9 percent in January from a year earlier as the housing market struggled to recover from the worst crash in seven decades, according to the Federal Housing Finance Agency.”

Housing Wire – “Federal Reserve’s balance sheet grows on MBS, Treasury securities” (3-22-11)

“At Dec. 31, the Fed reported total assets of $2.43 trillion, up $193 billion from 2009, the Federal Reserve said in its consolidated 2010 financial report released Tuesday. The expanded balance sheet includes an $86 billion increase in mortgage-backed securities acquired from government-sponsored enterprises and federal agencies.”

Housing Wire – “HUD updates Chinese drywall remediation guidance” (3-22-11)

“The Department of Housing and Urban Development and the Consumer Product Safety Commission recently released an updated version of their guidance on Chinese drywall remediation. The change comes after a study by Sandia National Laboratories found there were no correlating hazardous effects.”

Looking Back:

The total number of failed banks so far in 2010 has now reached 37. Geithner suggests that government officials listen more to harmed families and businesses than to large financial institutions while considering a financial overhaul bill. Lennar is investing over $3 billion into distressed real estate assets. California will offer about $3.1 billion in taxable debt sales this 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.

Sources:
Bay Area Housing Market Stuck In Neutral; Investors, Cash Buyers Active
California February Home Sales
Southland February Home Sales At 3-year Low; Investor Interest High
Foreclosure activity slows in February: ForeclosureRadar
California Foreclosure Losses in Billions, Lawmaker Wants Banks to Pay
Congressional Panel Report Says Foreclosure Mitigation “Largely Failed”
Internet whistle-blower e-mails show loose link to Bank of America
GSEs inflated subprime balloon before it popped: Cato Institute
A Red Flag on Reverse Mortgages
Young Home Buyers Will Lead Housing Market Recovery, Says NAHB

Today’s News Synopsis:

The SEC may charge top executives of Fannie and Freddie with violations related to the financial crisis. RCA claims commercial real estate defaults dropped to 4.28% in the 4th quarter. The Bureau of Labor Statistics reports Southern California rents rose by 1.3% in February. According to Freddie Mac, 30 year mortgage rates fell to 4.76% this week.

In The News:

Washington Post – “SEC moves to charge Fannie, Freddie execs” (3-18-11)

“The Securities and Exchange Commission is moving toward charging former and current Fannie Mae and Freddie Mac executives with violations related to the financial crisis, setting up a clash with the housing regulator that oversees the companies, according to sources familiar with the matter.”

Housing Wire – “Bill would provide HUD grants for foreclosure mediation” (3-18-11)

“Under the bill, HUD would create a competitive grants program for state and local governments to provide mediation programs to assist homeowners facing foreclosure. It would refer homeowners to a pro-bono attorney or a HUD-certified counselor. It would also require mediation between the homeowner and the lender as soon as practicable after a foreclosure proceeding is filed. If the homeowner doesn’t show up for the mediation, the requirement for a mediation conference is deemed to be fulfilled, according to the bill.”

Housing Wire – “CRE defaults fell for first time in four years in 4Q: RCA” (3-18-11)

“Commercial real estate defaults fell to 4.28% in the fourth quarter, down from 4.36%, according to RCA. The New York-based analytics firm also reported that defaulted loan balances fell to $45.8 billion after 17 consecutive quarterly increases.”

San Francisco Chronicle – “Field Poll: Quality of life plunges in California” (3-18-11)

“The Golden State’s residents rated their quality of life at its lowest mark in almost 20 years, citing the economic downturn and stagnant personal finances, according to a joint UC Berkeley and Field Poll.”

Housing Wire – “House Republicans introduce bill to reform Fannie, Freddie” (3-18-11)

“Rep. Jeb Hensarling (R-Texas) re-introduced legislation late Thursday that would end the bailouts of Fannie Mae and Freddie Mac and end their conservatorship in two years.”

Housing Wire – “Republican senators join fight to end HAMP” (3-18-11)

“Three Republicans submitted a bill in the U.S. Senate that would end the Home Affordable Modification Program, a companion to a bill that is scheduled for a vote in the GOP-controlled House of Representatives next week.”

Orange County Register – “SoCal rents rise for 6th straight month” (3-18-11)

“Rents in Southern California — at least, as measured by the local version of the Consumer Price Index — were rising in February at a 1.3% annual rate, according to the Bureau of Labor Statistics. That rise compares to an increase at a 1.1% annual rate in the previous month. It was the sixth consecutive month of year-over-year increases and the biggest jump since July 2009 when rents were rising at a 1.7% annual rate.”

Realty Times – “30-Year Fixed-Rate Mortgage Drops Amid Japan Crisis” (3-18-11)

“Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey (PMMS), which shows the 30-year fixed-rate dropping to 4.76 percent while the 15-year fixed-rate hit its lowest rate at 3.97 percent since December 2010.”

Looking Back:

One year ago, statistics from MDA Dataquick showed that 4,987 homes and condos closed escrow within a month. Fannie Mae predicted the housing market would bounce back by the end of the year. Freddie Mac’s weekly survey showed that interest rates were at 4.96 percent, which was just .02 percent lower from the previous year. The MBA reported that commercial/multifamily mortgage debt decreased by 1.7 percent in the 4th quarter of 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 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.

Statistics from the MBA show outstanding commercial/multifamily mortgage debt  fell by 0.5% in the 4th quarter of 2010. FHA mortgage delinquencies decreased about 7% year over year. According to MDA DataQuick, 4,991 new and resale houses and condos sold in the Bay Area during February. Also, 27,320 new and resale houses and condos were sold statewide last month.

In The News:

MBA - “Commercial/Multifamily Mortgage Debt Outstanding Fell by $67 billion, 2.7 Percent in 2010, Driven by CMBS Declines” (3-17-11)

“The level of commercial/multifamily mortgage debt outstanding decreased by 0.5 percent in the fourth quarter of 2010, to $2.4 trillion, according to the Mortgage Bankers Association (MBA) analysis of the Federal Reserve Board Flow of Funds data. On a year-over-year basis, the amount of mortgage debt outstanding at the end of 2010 was $67 billion lower than at the end of 2009, a decline of 2.7 percent.”

Housing Wire – “Senate committee delays foreclosure mediation bill again” (3-17-11)

“The Senate Judiciary Committee delayed voting on a bill that would authorize bankruptcy courts to establish a mediation program in foreclosure cases nationwide. It is the second delay in as many months.”

Housing Wire – “FHA delinquencies drop due to higher quality mortgage origination” (3-17-11)

“The serious delinquency rate for mortgages in the Federal Housing Administration portfolio declined about 7% in the first quarter of 2011 from one year ago. The 8.29% rate dropped from 8.9% a year earlier, according to a quarterly update from the FHA. In the fourth quarter of 2010, the delinquency rate was 8.84%.”

MDA DataQuick – “Bay Area Housing Market Stuck In Neutral; Investors, Cash Buyers Active” (3-17-11)

“A total of 4,991 new and resale houses and condos sold in the nine-county Bay Area last month. That was up 0.5 percent from 4,966 in January but down 0.9 percent from 5,035 in February 2010, according to San Diego-based DataQuick Information Systems.”

MDA DataQuick – “California February Home Sales” (3-17-11)

“An estimated 27,320 new and resale houses and condos were sold statewide last month. That was down 1.4 percent from 27,706 in January, and down 2.8 percent from 28,111 for February 2010. California sales for the month of February have varied from a low of 20,153 in 2008 to a high of 48,409 in 2004, while the average is 32,117. DataQuick’s statistics go back to 1988.”

Housing Wire – “Jobless claims drop 4%” (3-17-11)

“The number of initial jobless claims filed by unemployed Americans fell 4% last week to 385,000 initial claims filed on an seasonally adjusted basis, according to the most recent Labor Department survey.”

Housing Wire – “Small investors play big role in healing housing market” (3-17-11)

“Small, local investors who earn less than $100,000 a year are playing a major role in the housing recovery by acquiring distressed REO properties, fixing them up and renting them out to future buyers.”

NAHB - “Young Home Buyers Will Lead Housing Market Recovery, Says NAHB” (3-17-11)

“Generation X –young families and adults ages 31 to 45 – are likely to lead the home buying recovery as it gets underway, according to real estate experts who spoke at an educational webinar produced by the National Association of Home Builders”

Housing Wire – “RE/MAX: February home sales down 3%” (3-17-11)

“February home sales dropped 3% from one year ago, but increased from January, according to the RE/MAX national housing report.”

Looking Backing:

One year ago, the CBIA reported that new home sales decreased by 12 percent from January of 2009. Mortgage loan applications decreased by 1.9 percent from the previous week. HOPE NOW made over 99,000 modifications in January 2010, and HAMP made over 50,000.

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.

Sean O’Toole President of ForeclosureRadar (Full Bio)

This week Bruce is joined by Sean O’Toole. Sean is president and founder of ForeclosureRadar. He has successfully purchased and flipped over 150 commercial and residential properties in foreclosure. He has leveraged the software industry for 15 years to make a successful trustee sale business.

Sean does not believe we will see a growth in REOs in 2011. He believes we should see a growth in REOS, but we won’t. Since September 2008, when the financial world drastically changed, foreclosures have just been trickling out. He thinks this fact is due to bank and financial institution solvency.

Sean tracks the amount of time a property remains in the foreclosure process. In California, that time period is now up to 285 days, but it should only take 120 days. The average delinquency period for homes before reaching the foreclosure process is 334 days. If you add 334 days on top of the 285 days for the foreclosure process, it is a long period of time.

Some bills are being suggested right now to end the HAMP program and the Neighborhood Stabilization program. Sean believes those programs have been largely irrelevant from the beginning. In California, the total amount of money given to neighborhood stabilization was equivalent to one week of foreclosures. The billions of dollars spent on these programs seems like a lot of money, but when you look at the big picture, it really is not.

Sean’s company created a short sale tool because he wanted to give realtors and homeowners a way to see if certain lenders are approving short sales or not. Sean believes this is a very important resource, and he will be promoting it a lot this year. Wachovia was very good at approving short sales last year, and realtors that focused on Wachovia deals were able to perform more deals than other realtors.

ForeclosureRadar has also added multiple title related services. These services are primarily for auction investors who are interested in the state of a property. ForeclosureRadar offers links to county indexes, and webinars to train investors on how to look up title issues and figure out whether or not you are buying a first or second. Knowing the position of your loan is critical, because if you buy a second then you still have to pay for the first.

The average opening bid at the end of January 2011 was $254,000, and at the beginning it was $261,000. At the end of January average, about 80% go back to the bank, so that price range is still too high for most buyers. The average debt of a foreclosure by the end of January 2011 was $397,000, and at the beginning of the year it was $385,000. We have not seen a big change in the kind of inventory being foreclosed on.

The average opening bid for a foreclosure property is 15% above market value. Properties purchased by third parties are typically 25% below market value. If a lender successfully sells at a trustee sale, they typically take a 43% hit. Sean still sees properties going for sale at 50% of what they are worth. This is why programs like HAMP have been so ineffective in high equity states like California and Florida, because the problem is not payment affordability, the problem is the fact that they are 50% under water. When their payment adjusts back to a full rate, they will still not have the income level necessary to pay off their house. Also, unemployment and job transfers can occur which severely dampens a family’s ability to pay.

Lenders have not discovered whether or not drop bids, short sales, or REO sales make the maximum profit, and Sean does not think they are too concerned about that. Many things are controlled by servicers who do not suffer a loss from the losses they help cause.

FHA is developing a program for short refis. Obama is supportive of these programs to keep people in their homes, but on the other hand, Fannie Mae and Freddie Mac are concerned with maintaining equity.

A 30 page document just came out which discussed the future of financing. The goal of the document was to tell people that Fannie Mae and Freddie Mac will not exist. Sean believes this would be a good thing. He does not like our current 0% interest rate policy. We have baby boomers close to retirement, and they cannot make a decent living on fixed income in a zero interest rate environment. You could have saved a million dollars, but if you put it into something with nearly zero risk, such as a T Bill, you would be living off of $30,000 per year.

The U.S. has $14 trillion in debt right now. We have 115 million households, but only half of those households pay taxes. Of those tax payers, the top 20% pay about 80% of all taxes.

Currently, banks are being incentivized to push commercial foreclosures into the future, rather than deal with them now. The FDIC would be insolvent if they had to get rid of foreclosures in a timely matter. We have changed the accounting rules from mark-to-market to mark-to-model. The mark-to-model philosophy is driven by the idea that certain assets will increase in the future, which encourages businesses to set aside less for loan loss reserves.

As a nation, we went from a 45% debt to equity ratio, so we had 4.5 trillion dollars worth of residential mortgage debt on 10 trillion dollars of real estate. At the peak, we went to 10.5 trillion dollars worth of mortgage debt on a false market value of 20 trillion dollars. That market value was fictitious, and our market value is down to 13$ trillion, but we still have about $10 trillion in debt. We created about $4 trillion in excess debt, which we fundamentally do not have the proper level of household income to afford. In California, we have 2.8 million homeowners who either have negative equity or don’t have enough equity to sell their house and pay commissions. In Nevada, the loan to value ratio is 123%. They owe 23% more in their mortgages than what their real estate is worth.

The next big pile of REOs will probably come from HUD. FHA has a program to perform short sale refis. It required the lender to take at least a 10% hit, and a loan to value rate of at least 115%. FHA would provide government insurance on a loan up to 115% of the house’s value for the purpose of refinancing, so long as the lender would take a 10% principal loss. They have had difficulty getting this program off the ground, and now they are talking about ending the program.

Sean believes real estate prices will decline this year. However, Sean is a believer in holding real estate. He also believes the only way out of our debt problem is inflation, and real estate is a good investment during inflationary times.

Sean’s website is www.ForeclosureRadar.com

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.

Sean O’Toole President of ForeclosureRadar (Full Bio)

This week Bruce is joined by Sean O’Toole. Sean is president and founder of ForeclosureRadar. He has successfully purchased and flipped over 150 commercial and residential properties in foreclosure. He has leveraged the software industry for 15 years to make a trustee sale business.

The Mission of ForeclosureRadar is “to bring transparency, efficiency and honesty to the foreclosure market place.” Trustee sales have a notorious reputation. Sean believes they are generally honest, but there are always a few bad apples. The Norris Group bids on trustee sales every day, and there are some people accused of bid rigging. However, it would be difficult to rig a bid in Riverside because there are often 50 people bidding at a time.

The foreclosure process has not changed since the Great Depression. Most market places for goods and services have gone online. Online bidding is much more efficient than requiring investors to stand outside the court steps for property sales.

Sean is uncertain of whether or not a national foreclosure law may be implemented in the future. Because we are a republic, each state has its own rights, and many of those rights involved property. Sean believes a national foreclosure law may not be helpful.

Sean was recently elected one of the top 100 most influential real estate leaders, and Bruce feels his election was well deserved.

Sean bought most of his trustee properties from 2002 to 2005. He bought a few properties in 2006, but he eventually sold everything that same year because he thought the bubble was about to burst. When Sean sold his properties, he noticed the affordability levels were unsustainable, many buyers were unfit for purchasing property, and builders were discounting. People would pay $370,000 for a house, with no money down, and poor credit. Later that house would be selling for $350,000 with a swimming pool. Its not likely that the buyer, who thought property values would continue to increase, is going to keep making his payments.

Sean has met multiple investors who have told him that Bruce Norris’ predictions helped them leave the market before the bubble burst. Sean wishes he had known Bruce Norris during the bubble, because it was tough for him to leave the market while his partners were disagreeing with him.

Sean bought his first house when he was 18. Later, Sean’s father persuaded Sean to run a business for him in Hawaii. The business was a homes and land magazine. Later, Hawaii’s real estate market fell severely, and it became hard to sell real estate magazines during that time. Also, Sean’s house in his home town lost a lot of value, and he had to perform a short sale.

An event in another country can have an impact on our shores. The debt bubble in Japan had a strong impact on Hawaii’s market.

Sean once found a house that looked really nice on the outside and it had been boarded up. This lead Sean to believe that the inside was probably also well kept, so he bought the house. Unfortunately, Sean discovered the neighbors had been keeping the house clean, but they had also been using the inside of the house as a trash dump to avoid paying their trash bills. The house had 8 feet of trash and 30 dead animals. When Sean attempted to hire people to take the trash out, they came out of the house throwing up and quit.

Bruce does not believe you can have the kind of website that helps people in the business unless you have experienced the business for yourself. Sean has experienced the problems that come with being in this business, which is why he has been able to build such a helpful website. Sean believes that if half the people in Silicon Valley were willing to experience the problems they are trying to fix, then we would be building much better solutions for many problems.

When Sean first began investing in trustee sales, he had to watch the notice of trustee sales coming through the county records and the newspaper. The records would only tell you what is scheduled for the first time. You would go to the trustee sales and hear the auctioneer mentioning many other properties that were not in the records, because they were being postponed. It took months to compile a complete database of when certain sales were scheduled. This gave Sean a significant disadvantage over other buyers who had been in the business longer. There were some properties that you could get information on through calling, but for most of the properties you had to stand at the court steps.

Sean’s website has leveled the playing field, and it has hastened the time it takes to go from being a novice to being fully functional. Sean believes ForeclosureRadar has significantly helped the data aspect of foreclosure sales. However, there are still other inefficiencies, such as being required to show up with cash, and not having title insurance. As the market becomes more efficient, the discounts will become smaller, and that will decrease profitability.

“Get Rich Quick” gurus and disreputable list peddlers have thrived on the industry’s darkness, and Bruce believes ForeclosureRadar has brought transparency and understandability to the business. If you are looking to get rich quick, you should probably seek another venue, but you can still make a great living in the foreclosure business. Sean does not believe in “get rich quick” ideas.

2007 was an awful year to be in the foreclosure business, because the banks were not discounting anything. During that time, he started focusing more on his software business.

Sean is always anxious after wining a foreclosure bid, because he worries that his competitors may know something he doesn’t. Bruce feels most anxious when he is the only bidder on a property. In Southern California, no one will come to your rescue if you are making a mistake. Sean once stopped a man from purchasing a second which would have resulted in a minimum $150,000 loss. After stopping the man, the other investors were furious with Sean, because they were hoping the man would destroy his ability to compete against them. Bruce understands the desire to beat out the competition, but he is glad that he was able to help someone else in a similar situation. Bruce once attempted to test the kindness of his competition by purposely qualifying for a bad sale. Once he had qualified, 4 other investors decided to qualify with him, but no one made a bid. After the foreclosure sales ended, one of the competing investors asked Bruce, “Why did you do that?” Bruce responded, “I wanted to see if you would tell me it was a second.” What the 4 investors did was worse than just letting Bruce bid on the property. The reason why they qualified for the property along side him was because they wanted to make him feel comfortable about making a bad choice. Sean has even seen an investor bid an inexperienced investor up on a bad deal in an attempt to increase the inexperienced investor’s losses.

In Sean’s hometown, he has 4 times as many properties in foreclosure as he has listed for sale. If you want to claim to be a market expert, you have to be able to understand the foreclosures in your area.

Sean’s website is www.foreclosureradar.com

We will be doing a second interview with Sean next 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.

The CBIA reports housing production decreased 56% from December, and the Commerce Department reports construction spending dropped 0.7%. A survey from Equity-Trax shows that short sales currently take around 4 to 9 months to complete. Lender Processing Services claims foreclosure starts fell 11.4% in January.

In The News:

CBIA - “California Housing Production Dips in January, CBIA Announces” (3-1-11)

“According to statistics compiled by the Construction Industry Research Board (CIRB), permits were pulled for 2,920 total housing units in January, down 5 percent from the same month a year ago and down 56 percent from December. Permits for single-family homes totaled 1,506, down 24 percent from January 2010 and down 55 percent from the previous month, while multifamily permits totaled 1,414, up 28 percent from a year ago but down 57 percent from December.”

Bloomberg - “U.S. Construction Spending Falls on Slump in Commercial Works” (3-1-11)

“The 0.7 percent drop brought the value of all projects down to a $791.8 billion annual rate, the lowest since August, Commerce Department figures showed today in Washington. Outlays on private non-residential works dropped 6.9 percent, the most since January 1994, which may in part reflect the influence of winter storms.”

Housing Wire – “Geithner wants Congress to act on Fannie, Freddie in next two years” (3-1-11)

“Treasury Secretary Timothy Geithner asked lawmakers Tuesday to pass legislation on Fannie Mae and Freddie Mac reform within the next two years.”

Housing Wire – “Short sales still take too long on average, report says” (3-1-11)

“Seventy-one percent of agents surveyed in a new study conducted by data analytics firm Equi-Trax Asset Solutions said it takes four to nine months on average to finish a short sale. About 10% of the transactions take more than 10 months, and 18.3% are finalized within the preferred three-month time frame, the report concluded after surveying 600 real estate agents.”

Housing Wire – “Freddie Mac mortgage purchases down 23% in January” (3-1-11)

“Mortgage purchases and issuances at Freddie Mac fell to $38.8 billion in January, down from $49.7 billion in December, according to Freddie’s latest monthly loan volume summary.”

Housing Wire – “Commercial real estate brought down failed banks in February” (3-1-11)

“Of the nonperforming loans on the balance sheets of the 12 banks that failed in February, 72% were for commercial real estate, according to analytics firm Trepp.”

Housing Wire – “Mortgage lenders move more foreclosures back into delinquent bucket: LPS” (3-1-11)

“The number of foreclosure starts fell about 11.4% in January from a month earlier, but delinquency rates rose slightly because many lenders are moving loans out of foreclosure and back into the seriously delinquent category, according to Lender Processing Services”

Bloomberg - “Commercial-Property Deals May Double in U.S. as Blackstone Bets on Rebound” (3-1-11)

“Blackstone Group LP’s planned $9.4 billion purchase of U.S. shopping centers and Ventas Inc.’s proposed $5.7 billion buyout of a health-care real estate investment trust, one of two multi- billion dollar health care REIT deals announced yesterday, may mean a wave of commercial real estate acquisitions is coming as buyers regain confidence in the market.”

Looking Back:

One year ago, California officials considered implementing new builder fees. Home sales had generated $934 million from the previous year. Fannie mae lost 15.9 billion dollars during quarter 4 of 2009. Warren Buffet predicted the residential real estate market would begin to recover in 2011.

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.