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The Norris Group Real Estate News Roundup 5/24/10

Monday, May 24th, 2010

Today’s News Synopsis:

According to the NAR, Existing home sales increased 7.6 percent to a seasonally adjusted annual rate of 5.77 million units in April. The CIRB reports permits were pulled for 3,314 total housing units in April. Statistics from CAR show California home sales decreased 8.1 percent in April. The Federal Reserve doesn’t intend to sell any of its assets until after it begins raising interest rates.

In The News:

NAR - “Existing-Home Sales Continue to Improve in April” (5-24-10)

“Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 7.6 percent to a seasonally adjusted annual rate of 5.77 million units in April from an upwardly revised 5.36 million in March, and are 22.8 percent higher than the 4.70 million-unit pace in April 2009. Monthly sales rose 7.0 percent in March.”

CBIA - “California Housing Starts Dip in April, CBIA Announces” (5-24-10)

“According to statistics compiled by the Construction Industry Research Board (CIRB), permits were pulled for 3,314 total housing units in April, down 6 percent from the same month a year ago and down 9 percent from March. Permits for single-family homes totaled 2,252, down 6 percent from April 2009 and down 5 percent from the previous month, while multifamily permits totaled 1,062, down 7 percent from a year ago and down 16 percent from March.”

CAR - “April 2010 sales and price report” (5-24-10)

“Home sales decreased 8.1 percent in April in California compared with the same period a year ago, while the median price of an existing home rose 21 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.”

Wall Street Journal – “Mortgage Rates Decline” (5-24-10)

“The housing industry had been bracing for months for a period of rising mortgage rates, triggered by the end of the Federal Reserve’s $1.25 trillion mortgage-securities purchase program. Conventional wisdom held that mortgage rates would rise as the Fed pulled back from propping up the market. Instead, many in the industry now say rates could drift as low as 4.5% this summer from 4.86% now, instead of rising to 6% as some economists projected, making for significantly lower payments for Americans buying homes or refinancing their mortgages.”

Bloomberg - “Fed Won’t Sell Mortgage-Backed Assets Until it Raises Rates” (5-24-10)

“The Federal Reserve doesn’t intend to sell any of its assets, including more than $1.1 trillion in mortgage-backed securities, until after it begins raising interest rates, the central bank said in a report to Congress.”

Housing Wire – “FDIC Sells $233m of Commercial Mortgage-Backed Notes” (5-24-10)

“The Federal Deposit Insurance Corp. (FDIC) sold $233m in notes backed by performing and non-performing commercial real estate loans from 22 financial institutions under receivership. The underlying mortgages bear an aggregate unpaid principal balance of $1bn.”

Bloomberg - “FHA Home-Financing Volume Sign of ‘Very Sick System’” (5-24-10)

“The FHA, which backs loans with down payments as low as 3.5 percent, insured $52.5 billion of home-purchase mortgages in the first quarter, compared with $46 billion of purchases of the debt by Fannie Mae and Freddie Mac, according to data compiled by Washington-based Potomac Partners. The FHA and Fannie Mae and Freddie Mac, which regulators seized in 2008, have been financing more than 90 percent of U.S. home lending after a retreat by banks and the collapse of the market for mortgage bonds without government-backed guarantees.”

Bloomberg - “Defaults on Apartment-Building Loans Set Record for U.S. Banks” (5-24-10)

“Defaults on apartment-building mortgages held by U.S. banks climbed to a record 4.6 percent in the first quarter, almost twice the year-earlier level, as more borrowers failed to repay debt approved near the market peak, said Real Capital Analytics Inc. in a report. Defaults on so-called multifamily mortgages rose from 4.4 percent in the fourth quarter and from 2.4 percent during the same period in 2009, the New York-based real estate research firm said today. Commercial-mortgage defaults also rose in the first quarter for loans against office, retail, hotel and industrial properties, Real Capital said.”

Bloomberg - “U.S. Subprime Hunt Targets Goldman, May Skip Cassano: Timeline” (5-24-10)

“Federal prosecutors don’t plan to bring charges against former American International Group Inc. executive Joseph Cassano after a two-year probe of the insurer’s collapse, according to a person familiar with the investigation. Justice Department investigators found there is insufficient evidence to charge Cassano, the former head of AIG’s Financial Products division, the person said.”

Inman - “3 fatal flaws of real estate negotiation” (5-24-10)

“Agents have a wealth of places both online and offline to find strategies that work. Agent blogging sites are rich with great suggestions, many of which are from the best agents in the business. Nevertheless, many of these strategies still use manipulation or one-upmanship. The result is that these old approaches often undermine the agent’s success.”

My Desert – “Short sales on the rise” (5-23-10)

“Real estate experts say they’re seeing spurts of multiple bids and cash buys on homes priced below $250,000 by investors with deep pockets, buyers from other states or residents with equity in their home, a move-up mentality or frazzled nerves from a volatile stock market.”

Washington Post – “Anger at the root of mortgage default problem, study finds” (5-22-10)

“Now White has published a paper based on the personal accounts of 356 strategic defaulters and homeowners on the verge of doing the same. His finding: People who intentionally default on their loans are not as economically rational or calculating in their decision-making as widely thought. In fact, he said, their decisions to pull the plug ‘may not turn out to be economically rational.’ But they walk anyway, in large part because they are at the end of their emotional rope. They have transitioned from feelings of anxiety and hopelessness to outright anger at their lenders, the government and a financial system they consider unfair.”

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 5/13/10

Thursday, May 13th, 2010

Today’s News Synopsis:

According to RealtyTrac, the total number of national foreclosures decreased by 9 percent in March. Economists Lawrence Yun and Mark Zandi predict that mortgage rates will remain historically low over the next few years. CAR reports the minimum household income needed to purchase an entry-level home at $246,270 in California in the first quarter of 2010 was $41,540. Statistics from Freddie Mac show the average rate on a 30-year fixed rate mortgage dipped to 4.93 percent.

In The News:

The Atlantic – “Foreclosures Declined 9% in April” (5-13-10)

“Fewer Americans lost their homes in April, though the numbers are still alarmingly high at 333,837 foreclosed properties nationwide, according to foreclosure data specialist RealtyTrac. This number was 9% lower than the record high hit in March. So April’s decline, while relatively good news, doesn’t quite get foreclosures back down to pre-March levels.”

NAR - “Two Economists Project Improving Housing Market but Timing Uncertain” (5-13-10)

“Both Lawrence Yun, NAR chief economist, and Mark Zandi, chief economist and co-founder of Moody’s Economy.com, agreed that job creation is key to an economic and housing recovery, with job creation expected as the year progresses, but they differed somewhat on the impact that foreclosures will have on home price stabilization. Both project that mortgage interest rates will remain historically low, the availability of jumbo loans will improve and home sales will rise over the next few years.”

CBIA - “California New-Home Sales Rise From February, CBIA Announces” (5-13-10)

“The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New-Home Sales and Pricing Report showed that sales in new-home communities of 10 units or more were 13 percent above February, but fell 31 percent below March 2009. During March, 2,189 new homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 1,938 in February and 3,192 in March 2009. Sales of single-family homes were up by 5 percent from the previous month, but down 36 percent from the same month a year ago. Sales of townhomes and ‘plexes’ – duplexes, triplexes, etc. – rose 24 percent from February but were off by 32 percent from March 2009, while sales of condominiums were up 37 percent from the previous month, but were 16 percent lower than a year ago.”

CAR - “Entry-level housing affordability stood at 66 percent in Q1 2010″ (5-13-10)

“The minimum household income needed to purchase an entry-level home at $246,270 in California in the first quarter of 2010 was $41,540, based on an adjustable effective interest rate of 4.33 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $1,380 for the fourth quarter of 2010. At $41,540, the minimum qualifying income was $3,910 greater than a year earlier when households needed $37,630 to qualify for a loan on an entry-level home.”

Sign On San Diego – “Mortgage rates drop to lowest level this year” (5-13-10)

“Mortgage rates fell this week to the lowest level of the year, as rates fell on U.S. government securities. Fixed mortgage rates closely track interest rates paid on long-term Treasury bonds. The average rate on a 30-year fixed rate mortgage dipped to 4.93 percent this week from 5 percent a week earlier, Freddie Mac said Thursday. It was the lowest level since mid-December, when rates averaged 4.81 percent.”

Housing Wire – “RealtyTrac’s Daren Blomquist Calls for Shadow Inventory Clearance” (5-13-10)

“I think the year-over-year decrease in national foreclosure activity in April is a definite sign that there is an end in sight, but on the other hand the record REO numbers show that we’ve got a lot of backlogged inventory stopped up in the foreclosure process that needs to be cleared before we can return to a balanced, healthy market.”

Housing Wire – “Dodd Bill Amendment Will Assign Credit-Rating Agencies to Deals” (5-13-10)

“The US Senate today approved in a 64-35 vote an amendment by Sen. Al Franken (D-MN) on credit ratings to be added to S 3217, the Restoring American Financial Stability Act sponsored by Sen. Chris Dodd (D-CT). The amendment would instruct the Securities and Exchange Commission (SEC) to establish a self-regulatory organization to assign credit-rating agencies (CRAs) to provide initial credit ratings on financial products. It essentially creates a board to assign CRAs to securities, to prevent firms from ‘shopping around’ for the highest ratings.”

Orange County Register – “O.C. construction recovery 6 years away” (5-13-10)

“Orange County won’t get back to pre-recession levels of employment in the construction business until 2016, according the Cal State Long Beach’s 2010 forecast released today. Construction employment hit 107,175 at the peak in 2006. The forecast projects employment in the sector will drop to 66,691 this year before bottoming at 65,312 in 2011.”

Looking Back:

One year ago, the national share of home sales above $750,000 fell from 4.4 percent in 2007 to approximately 2.3 percent in 2009. The number of U.S. households faced with losing their homes to foreclosure jumped 32 percent in April 2009. General Growth Properties received approval for a $400 billion dollar loan to aid their recovery from bankruptcy. Fitch Ratings predicted that home prices would by 36 percent within 18 months of May 2009.

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The Norris Group Real Estate News Roundup 2/16/10

Tuesday, February 16th, 2010

Today’s News Synopsis:

According to MDA Dataquick, the median home price in Southern California decreased by 6 percent from December. CBIA reports that home sales in new communities decreased by 15 percent from last month. John Burns estimates that 5 million houses and condominiums with delinquent mortgages will end up in foreclosure over the next few years. TransUnion reports that mortages over 60 days delinquent increased to 6.89% in quarter four of 2009.

In The News:

NAR - “NAR’s HouseLogic: The Logical Source for Today’s Homeowners” (2-16-10)

“Today the National Association of Realtors® launched HouseLogic, a new, comprehensive consumer Web site about all aspects of homeownership. HouseLogic helps homeowners make smart decisions and take responsible actions to maintain, protect and increase the value of their homes. The free Web site helps homeowners plan and organize their home projects and provides timely articles and news; home improvement advice and how-to’s; and information about taxes, home finances and insurance.”

DQNews - “Southland home sales, median price edge above year-ago level” (2-16-10)

“Southern California home sales eked out a modest gain in January compared with a year earlier but fell sharply – as they normally do – from December. The median price paid rose above the year-ago level for the second consecutive month, but fell 6 percent from December as foreclosures and lower-cost inland markets claimed a higher share of sales, a real estate information service reported. A total of 15,361 new and resale homes closed escrow last month in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was down 31.2 percent from December’s 22,328, but up 0.9 percent from 15,227 in January 2009, according to MDA DataQuick of San Diego.”

CBIA - “California New-Home Market Ends 2009 in Lackluster Condition, CBIA Announces” (2-16-10)

“The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New-Home Sales and Pricing Report showed that sales in new-home communities of 10 units or more were 15 percent below December 2008. While the decline was disappointing, it remains an improvement from most months in 2009 in which year-over-year declines were substantially larger. During December, 1,372 new homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 1,607 in December 2008. Sales of single-family homes were down by 25 percent, while sales of townhomes and ‘plexes’ – duplexes, triplexes, etc. – were off by 5 percent and sales of condominiums were 18 percent higher than a year ago.”

San Francisco Chronicle – “Resale prices steady for San Francisco condos” (2-16-10)

“San Francisco’s median resale condominium prices from November through January stayed steady from the same period a year ago, leading some analysts and real estate agents to conclude that values have settled into a range where they are likely to remain for some time. According to city data analyzed by the Polaris Group, a San Francisco real estate firm that crunches housing numbers, the median price for a resale condo in the city – as opposed to a newly built unit – was $638,000 in the threemonth period ending Jan. 31.”

Wall Street Journal – “Foreclosures Seen Still Hitting Prices” (2-16-10)

“The John Burns study estimates that five million houses and condominiums on which mortgages are now delinquent will go through foreclosure or related procedures that put them on the market over the next few years. That would represent the bulk of the estimated 7.7 million households behind on their mortgage payments.”

Housing Wire – “BofA Makes 12,700 HAMP Modifications Permanent” (2-16-10)

“Bank of America (BAC: 15.16 +4.91%) reported 12,700 permanent modifications under the Home Affordable Modification Program (HAMP) through January, an increase from 3,200 a month earlier. The US Treasury Department launched HAMP in March 2009 to provide capped incentives to servicers for the modification of loans on the verge of foreclosure. Through December, servicers provided 66,000 HAMP permanent modifications.”

Housing Wire – “Mortgage Delinquencies Rise for 12th Straight Quarter: TransUnion” (2-16-10)

“Mortgage delinquencies of 60 or more days rose for the 12th straight quarter, hitting a record high 6.89% in Q409, according to market research by credit bureau TransUnion. The rate of deceleration seen in previous quarters in the rise in delinquencies appears ‘short lived,’ the credit bureau said. Year-over-year, the delinquency rate is up about 50% from 4.58% delinquent in Q408.”

Housing Wire – “Borrowers Overwhelmingly Pick Fixed-Rate Refinancings in Q4″ (2-16-10)

“Freddie Mac (FRE: 1.23 +0.82%) reported Monday that 95%of refinance loans during the last quarter of last year were of the fixed-rate variety. And while traditional 30-year fixed-rate mortgages are still the most preferred product among refinancings, 15-year fixed-rate mortgages gained favor among borrowers who previously held 30-year fixed-rate mortgages, balloon mortgages and adjustable-rate mortgages (ARMs), the GSE said in a statement.”

Bloomberg - “U.S. Homebuilder Confidence Rises More Than Forecast” (2-16-10)

“The National Association of Home Builders/Wells Fargo index of builder confidence increased to 17, higher than anticipated, from 15 the prior month, the Washington-based group said today. Readings below 50 mean most respondents view conditions as poor. ”

Looking Back:

One year ago, Congress considered making improvements to the $7,500 tax credit under the $789 billion economic stimulus package. A prediction was made that the 5 biggest banks would soon loose over $524 million.

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

Wednesday, February 10th, 2010

Today’s News Synopsis:

The MBA reports that mortgage application volume decreased by 1.2 percent from last week. According to the NAHB, there were approximately 234,000 homes for sale at the end of 2009. Statistics from Zillow show that the national median price was $186,200 in Q409 of 2009. The total number of FHA-insured single-family mortgages in default reached 531,671 in Q409 of 2009.

In The News:

Mortgage Bankers Association – “Purchase Applications Decline in Latest MBA Weekly Survey” (2-10-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending February 5, 2010. The Market Composite Index, a measure of mortgage loan application volume, decreased 1.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 0.6 percent compared with the previous week.”

Wall Street Journal – “Spec Houses Rise as Builders Bet on Buyers Before Tax Credit Ends” (2-10-10)

“Houses typically take between four and six months to build, so the window to start construction is closing quickly. And current inventory is low. At the end of 2009, there were 234,000 homes for sale, the lowest level since April 1971, according to the National Association of Home Builders. It’s difficult to measure the total number of spec homes nationwide. But according to a survey conducted by John Burns Real Estate Consulting, based in Irvine, Calif., home builders have about three finished homes with no buyer per community. That’s up slightly from 2.8 finished homes in November but much lower than the peak of six finished homes in July 2008.”

Mercury News – “Bay Area home prices may drop, real estate firm warns” (2-10-10)

“The median estimated value of all Santa Clara County homes at the end of the fourth quarter was $568,401, up a fraction from $564,360 in the third quarter, Zillow reported. In San Mateo County, prices have already begun to fall. The median estimated value of all homes was $635,264 in the fourth quarter, down 0.68 percent from $639,600 in the third quarter. Home values fell in San Mateo County from September through December, Zillow said, after four months of increases from May through August.”

Housing Wire – “Zillow Warns on Double Dip in House Prices” (2-10-10)

“The Zillow Home Value Index put the national median price at $186,200 in Q409, a 5% decrease from Q408. Compared to Q309, prices declined 0.5% during the last quarter of 2009. The index is a measure of median home values of all single-family residences, condominiums and cooperatives, both on the market and not for sale. Q409 marked the 12th consecutive quarter of year-over-year declines, Zillow said.”

Housing Wire – “Defaults on FHA Mortgages Pass 9 Percent” (2-10-10)

“The default rate in the single-family FHA portfolio reached 9.12% in Q409, climbing from 6.82% in Q408, according to the Federal Housing Administration December monthly report. The total number of FHA-insured single-family mortgages in default reached 531,671 in Q409, a 66% increase from 319,741 in Q408. In that same period, modifications on FHA-backed loans increased 54% to 23,973 in Q409.”

Housing Wire – “Feds Outline Mortgage Securities Exit Strategy” (2-10-10)

“And according to Federal Reserve chairman Ben Bernanke, a series of policy wind-down methods are being tested. The Fed may first drain excess reserves built up over many months through extraordinary asset-purchase programs, and then begin to raise interest rates. Or the Fed could pursue both options simultaneous to facilitate a quicker exit. Ultimately, economic developments will determine the exit process.”

Housing Wire – “Freddie Mac Will Buy Out 120-Day Delinquent Mortgages” (2-10-10)

“Government-sponsored mortgage securitizer Freddie Mac (FRE: 1.24 +3.33%) said today it will buy ‘substantially all’ mortgages delinquent by at least 120 days from the company’s related fixed-rate and adjustable-rate mortgage (FRM and ARM) Participation Certificate (PC) securities. Freddie said the loan purchases will show up in the PC factor report published after March 4, 2010. The corresponding principal payments on affected PCs will pass through to FRM and ARM PC holders on March 15 and April 15, respectively.”

Housing Wire – “Option ARMs Don’t Measure Up in HAMP: BofA” (2-10-10)

“Of all mortgage collateral sectors, pay-option adjustable-rate mortgages (ARMs) are the least modifiable under a federally-subsidized modification program, according to research Monday by Bank of America Merrill Lynch (BofAML). Researchers found that, in general, collateral with higher delinquencies see higher modification rates. But despite the wave of option ARMs set to recast monthly payments over the next several years, these types of loan fall in ‘the least modifiable sector’ under the Home Affordable Modification Program (HAMP) because of their failure to measure up to eligibility requirements and net present value (NPV) test requirements.”

Orange County Register – “Expect more price cuts on high end homes” (2-10-10)

“Data from 2009 MLS sales for Laguna Beach show that last year started out extremely slow. February 2009 recorded a record low of only 6 residential properties sold for the entire month. By contrast, buying activity picked up enough by year end that December was the highest single month of sales since May 2006.”

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The Norris Group Real Estate News Roundup 1/13/10

Wednesday, January 13th, 2010

Today’s News Synopsis:

According to the CBIA, condominium sales were 39 percent higher from last year. The MBA’s weekly survey shows that mortgage loan application volume increased by 14.3 percent from last week. Jumbo residential mortgage-backed securities increased to 9.2 percent from December 2008 to December 2009. All but two of the Federal Reserve districts reported increased activity or improved conditions.

In The News:

CBIA - “California New-Home Market Dips Slightly in November, CBIA Announces” (1-13-10)

“The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New-Home Sales and Pricing Report showed that sales in new-home communities of 10 units or more were 4 percent below November 2008, representing a less impressive result than last month’s year-over-year increase, but was nevertheless an improvement from most months in 2009. During November, 1,860 new homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 1,934 in November 2008. Sales of single-family homes were down by 18 percent, while sales of townhomes and “plexes” – duplexes, triplexes, etc. – were up 8 percent and sales of condominiums were 39 percent higher than a year ago thanks to strong sales at projects in the Los Angeles and San Diego areas.”

Mortgage Bankers Association – “Mortgage Refinance Applications Increase While Purchase Applications Remain Flat in Latest MBA Weekly Survey” (1-13-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 8, 2010.  The Market Composite Index, a measure of mortgage loan application volume, increased 14.3 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 66.0 percent compared with the previous week, which was a shortened week due to the New Year’s holiday.”

San Francisco Chronicle – “State adopts greenest building codes in U.S.” (1-13-10)

“The new code, dubbed Calgreen, will take effect next January and requires builders to install plumbing that cuts indoor water use, divert 50 percent of construction waste from landfills to recycling, use low-pollutant paints, carpets and floorings and, in nonresidential buildings, install separate water meters for different uses. It mandates the inspection of energy systems by local officials to ensure that heaters, air conditioners and other mechanical equipment in nonresidential buildings are working efficiently. And it will allow local jurisdictions, such as San Francisco, to retain their stricter existing green building standards, or adopt more stringent versions of the state code if they choose.”

Housing Wire – “Prime Jumbo RMBS Delinquencies Swell to 9.2%: Fitch” (1-13-10)

“Delinquency of more than 60 days among prime jumbo residential mortgage-backed securities (RMBS) nearly tripled to 9.2% in December 2009, from 3.2% at the end of 2008, according to Fitch Ratings.”

Housing Wire – “GSEs Could Lose $448bn of MBS Guarantee Business, Says Amherst” (1-13-10)

“Losses on the combined credit-guarantee books of government-sponsored enterprises (GSEs) Freddie Mac (FRE: 1.41 +2.17%) and Fannie Mae (FNM: 1.14 +1.79%) could reach 9.6% – or $448bn – according to market analysis by Amherst Securities Group.”

Housing Wire – “Housing Sales Up, Prices Remain Steady: Beige Book” (1-13-10)

“All but two Fed districts reported increased activity or improved conditions, with Philadelphia and Richmond seeing mixed results. In the December 2 edition of the Summary of Commentary on Current Economic Conditions, commonly called the Beige Book, eight districts reported an uptick in their perspectives economy. The book is published eight times a year and is a nationwide economic indicator compiled from the 12 Fed districts.”

Housing Wire – “Government to Earn Billions on Bailouts” (1-13-10)

“The US Treasury Department expects profits of at least $19bn from bank investment programs under the Troubled Asset Relief Program (TARP), according to market commentary Wednesday by the American Bankers Association (ABA). Originally projected to cost $76bn according to the ABA, the outlook for TARP bank programs was updated in December in anticipation of actual profits.”

Housing Wire – “FinestExperts Ranks Top 2010 Real Estate Investment Markets” (1-13-10)

“FinestExpert.com named Dallas-Fort Worth as the hottest real estate investment market for 2010. After analyzing more than 10,000 real estate markets to identify stable, growth-oriented for investors, San Francisco-based FinestExpert.com formed its first top-20 hottest real estate investment market list for 2010.”

Housing Wire – “Cancelled Foreclosures Outnumber Sales in California: ForeclosureRadar” (1-13-10)

“The amount of California foreclosure cancellations increased 26.5% in December to 13,243, primarily due to loan modifications. And for the first time this number overtook foreclosures reaching real-estate owned (REO) status, according to ForeclosureRadar, which tracks foreclosure activity in the state. In December, the amount of foreclosures heading back to the banks, REO, dropped 11.9% from the previous month to 12,437. Significant declines in foreclosure discounts by lenders drove the decrease in sales to third parties, according to the report.”

Bloomberg - “Obama to Announce Fee on 20 Banks to Recoup TARP” (1-13-10)

“President Barack Obama will announce tomorrow his intention to impose a fee on roughly 20 of the country’s largest banks and financial institutions to help recoup taxpayer bailout money and trim the federal budget deficit. Obama will outline his proposal to raise as much as $120 billion at 11:45 a.m. local time at the White House, Obama’s press secretary, Robert Gibbs, told reporters. Gibbs said the president’s economic team has worked on a structure to prevent the levy from being passed onto consumers.”

Bloomberg - “Real Estate Bull Laub Sees Unprecedented Workout From Bad Debt” (1-13-10)

“Kenneth Laub has been through three commercial real estate boom and bust cycles during almost five decades as a broker and consultant to corporations such as Hess Corp. and International Paper Co. He says the current downturn will overshadow all of the others, Bloomberg Markets reports in its February 2010 issue.”

Looking Back:

One year ago, the NAHB encouraged congress to use a portion of the $700 billion bailout to increase credit for home purchases, and to stem foreclosures. California lost a total of 144,000 people from 2008 to 2009. Ben Bernanke warned that a fiscal stimulus would not cause an economic recovery. In November of 2008, 4 percent of homes were bought with adjustable rate mortgages.

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The Norris Group Real Estate News Roundup 12/28/09

Monday, December 28th, 2009

Today’s News Synopsis:

Statistics show that more people are leaving California than are entering. Approximately 31,000 homeowners have received permanent mortgage modifications of the 4 million that applied for them. Pacific Marketing Associates estimates that condominiums in the Bay Area will soon see a price increase. The Federal Reserve bought $15 billion in mortgage-backed securities from Fannie Mae, Ginnie Mae and Freddie Mac.

In The News:

CNN - “Biggest losers: Where Americans aren’t moving” (12-27-09)

“For years more people have fled the Golden State than have arrived. In the year ended July 1, California was the country’s biggest loser, with nearly 100,000 more residents leaving than moving in. Still, that was an improvement over earlier losses: In 2006 the net decline was 313,081.”

New Observations – “Housing Inventory Still Dramatically Oversupplied — Before You Add In The Foreclosures” (12-27-09)

“supply exceeds long-term inventory averages by 32% — a significant hurdle despite a count of months-of-supply inventory which is just 12% above average and is practically normal (see below). The disconnect in the measure of excess between units for sale and months of supply suggests a logical problem with the data.”

Yahoo - “Credit crunch: Home equity lending evaporates” (12-25-09)

“At the peak of the housing boom in 2006, banks made $430 billion in home equity loans and lines of credit, according to the trade publication Inside Mortgage Finance. From 2002 to 2006, such lending was equal to 2.8 percent of the nation’s economic activity, according to a study by finance professors Atif Mian and Amir Sufi of the University of Chicago.”

Yahoo - “No consequences for lying borrowers” (12-25-09)

“The federally funded Home Affordable Modification Program was aimed at getting banks to rework mortgages for homeowners in order to slow the pace of foreclosures. The government set a goal of modifying up to 4 million mortgages over the next three years. The program isn’t working like it’s supposed to. Since March, just 31,000 homeowners have won permanent relief. One big reason why is that lenders are doing what they should have been doing all along — requiring things like proof of income.”

McClatchy – “How Goldman secretly bet on the U.S. housing crash” (12-28-09)

“In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting. Goldman’s sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation’s premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies. Only later did investors discover that what Goldman had promoted as triple-A rated investments were closer to junk. ”

Housing Wire – “FHA Loans Could Spark Condo Sales in Bay Area” (12-28-09)

“Pacific Marketing Associates, which provides sales and marketing services for real estate developers in California, anticipates increased demand and limited supply will boost prices in the condominium market.”

Housing Wire – “Fed’s Agency MBS Purchases Slow Ahead of 2010″ (12-28-09)

“The Federal Reserve Bank of New York bought $15bn of mortgage-backed securities (MBS) from mortgage giants Fannie Mae (FNM: 1.27 +20.95%), Freddie Mac (FRE: 1.61 +27.78%) and Ginnie Mae in the week ending December 23.”

Orange County Register – “Dramatic 2011 housing rebound eyed” (12-28-09)

“At current levels of undervaluation, distressed inventory is being absorbed faster than it is being introduced, and this trend will continue in Orange County and throughout California. 2010 won’t feel like a dramatic improvement in either price or sales volume, but small, incremental economic and market improvements will continue through next year, with more dramatic improvements forecast for 2011.”

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The Norris Group Real Estate News Roundup 12/22/09

Tuesday, December 22nd, 2009

Today’s News Synopsis:

Research from the Office of Thrift Supervision and the Office of the Comptroller of the Currency show that the number of U.S. homes in foreclosure have passed the 1-million mark. The NAR reports that existing homes sales increased by 7.4 percent in November. According to IHS Global Insight, U.S. home prices increased by 0.2 percent during the 3rd quarter of 2009. Barclay’s predicts that the unemployment rate will reduce to 9.1 percent by the end of 2010.

In The News:

Los Angeles Times – “More prime mortgages default in 3rd quarter” (12-22-09)

“For the first quarter ever, the number of homes in foreclosure with mortgages serviced by U.S. national banks and savings and loans topped the 1-million mark, according to figures released Monday by the Office of Thrift Supervision and the Office of the Comptroller of the Currency. The percentage of prime borrowers whose loans were 60 or more days past due doubled from the July-to-September period a year earlier. And more than half of all homeowners whose payments had been lowered through modification plans defaulted again.”

NAR - “Another Big Gain in Existing-Home Sales as Buyers Respond to Tax Credit” (12-22-09)

“Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 7.4 percent to a seasonally adjusted annual rate1 of 6.54 million units in November from 6.09 million in October, and are 44.1 percent higher than the 4.54 million-unit pace in November 2008. Current sales remain at the highest level since February 2007 when they hit 6.55 million.”

Housing Wire – “Treasury Spends $4.1bn on Affordable Housing Programs” (12-22-09)

“The amount of American Recovery and Reinvestment Act funds distributed to state agencies to promote affordable housing is running at nearly $4.1bn after the latest round of payouts, the Treasury Department said.”

Press Enterprise – “Local, national retail hiring still sluggish” (12-22-09)

“According to an analysis of Labor Department data by the Chicago-based outplacement firm Challenger, Gray & Christmas, the U.S. retail sector grew by a net 321,300 jobs in November, for an increase of 37 percent from November 2008. In the Inland region, the California Employment Development Department reported last week, the net gain of 550 retail jobs in November marked a 3.6 percent bump from the prior month, but the total retail workforce of 157,800 was actually down 5.5 percent from a year ago.”

Housing Wire – “Housing Prices End Two-Year Skid, says IHS Global Insight” (12-22-09)

“The two-year slide in US housing prices ended in Q309 and increased 0.2% over the previous quarter, according to a quarterly report form IHS Global Insight, a provider of economic and financial analysis. Although prices increased on a national average, 161 of the top 330 metropolitan areas had declines in prices, but it’s still an improvement from Q408 when prices dropped in 317 metro areas.”

Housing Wire – “FHFA Home Price Index Up 0.6% in October” (12-22-09)

“US housing prices increased 0.6% on a seasonally adjusted basis from September to October, according to the Federal Housing Finance Agency’s (FHFA) monthly house price index. The increase comes after the FHFA adjusted the index’s August to September reading from no change to a 0.4% decline. For the 12 months ending in October, prices fell 1.9%. The index is 10.8% below its April 2007 peak.”

Housing Wire – “BarCap: Commercial Real Estate Demand to Start Back This Summer” (12-22-09)

“according to Barclay’s report on the 2010 outlook for commercial mortgage-backed securities (CMBS), the labor market is showing encouraging signs in recent months, which is the best indication of growing demand in commercial space. Barclay’s analysts forecast “sustained positive job growth” beginning in Q110 and an addition of 2.3m jobs by the end of the year. This translates to a 9.1% unemployment rate at the end of 2010, which is not yet healthy but a sign of recovery.”

Housing Wire – “Securitization Systematic Risk to Lessen in 2010, Barclays Says” (12-22-09)

“Due to the ‘herculean’ and ‘unprecedented’ efforts of myriad Fed bailouts, Barclays Capital is reporting that, going into the New Year, the systemic risk posed by the securitized markets will be much lower, although the agency mortgage-backed securities (MBS) market remains a concern.”

Bloomberg - “Mortgage-Bond Yields Jump to 4-Month High, Boosting Loan Rates” (12-22-09)

“Yields on Fannie Mae and Freddie Mac mortgage securities climbed to the highest in four months, signaling interest rates on new home loans may extend a rebound from record lows this month and blunt a housing recovery.”

Looking Back:

One year ago, policy makers were considering the abolition of Fannie Mae and Freddie Mac. Foresight Analytics estimated that $530 billion in commercial mortgages were due for refinancing over the next three years. CIRB reported that the number of construction permits being pulled increased by 8 percent from the previous month. The pace of existing home sales decreased by 10.6 percent from 2007 to 2008.

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The Norris Group Real Estate News Roundup 12/10/09

Thursday, December 10th, 2009

Today’s News Synopsis:

According to RealtyTrac, foreclosure activity decreased  by 8 percent in November. Hanley Wood Market Intelligence reports that Orange County builders had their first positive month in October, after 13 months of contract declines. A survey from HomeGain shows that 48 percent of agents and brokers believe that home prices will stay the same, and 24 percent believe that prices will increase.  Data from the U.S. Treasury Department shows that 31,382 of the 1 million three-month modifications have become permanent.

In The News:

DSNews - “Foreclosure Activity Recedes for Fourth Straight Month: RealtyTrac” (12-10-09)

“The foreclosure tide appears to be subsiding, according to the latest numbers from RealtyTrac. The company said Thursday that foreclosure activity fell 8 percent in November, compared to October – it’s the fourth consecutive month that RealtyTrac’s data has shown a decrease in foreclosure filings.”

CBIA - “California New-Home Market Breaks into Positive Territory, CBIA Announces” (12-10-09)

“The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New-Home Sales and Pricing Report showed that sales in new-home communities of 10 units or more were 25 percent above October 2008, a strong improvement from the lingering year-over-year decline last month and represents the first notable increase since the start of the housing downturn. During October, 2,294 new homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 1,838 in October 2008. Sales of single-family homes were up by 4 percent, while sales of townhomes and ‘plexes’ – duplexes, triplexes, etc. – were up 36 percent and sales of condominiums were 94 percent higher than a year ago thanks to strong sales at projects in the Los Angeles and San Francisco areas.”

Orange County Register – “Losing streak ends for O.C. builders” (12-10-09)

“Hanley Wood Market Intelligence says after 13 straight months of annual declines in new home sales contracts, Orange County builders recorded their first up month in October. According to the Costa Mesa research firm, homebuyers signed 90 contracts to buy a new Orange County home that month, up 13.9% from October 2008.”

Inman - “Survey: Hopeful on home prices” (12-10-09)

“Forty-eight percent of agents and brokers surveyed think home prices will stay the same and 24 percent think prices will go up, the company reported. That’s a slight increase from the third-quarter survey, when those numbers were 46 percent and 23 percent, respectively. This marks a major change from HomeGain’s first-quarter survey when 36 percent thought prices would remain flat and 11 percent thought prices would increase. The survey had 928 respondents.”

Housing Wire – “30,000 Trial HAMP Mods Go Permanent” (12-10-09)

“Of the 1m homeowners who have been offered three-month trial modification under the Home Affordable Modification Program (HAMP), 31,382 have received a permanent modification, according to from the US Treasury Department.”

Housing Wire – “Mortgage Volume to Decline in 2010, Says Dorado” (12-10-09)

“Mortgage origination volume will decline next year compared to 2009 levels, but the use of software-as-a-service (SAAS) applications will rise, San Mateo, Calif.-based SAAS developer Dorado Corporation said in its projections for next year. Dorado projects more than 30% of mortgages created next year will be originated with SAAS applications, which generally work as Web-based tools a developer hosts on its own servers and distributes access through subscription licenses.”

Housing Wire – “Treasury Used $364bn of TARP funds in 2009″ (12-10-09)

“The Treasury Office of Financial Stability (OFS) used $364bn of the $700bn available funds, mostly in investments according to the report, and $73bn of the TARP funds have already been repaid. Bank of America last week committed to repaying the $45bn it received through the program.”

Housing Wire - “Mortgage Rates Rise off Record Lows” (12-10-09)

“Freddie Mac’s (FRE: 1.12 +0.90%) survey put the 30-year fixed-rate mortgage (FRM) at 4.81% with an average 0.7 point for the week ending Dec. 10, up from the previous week when it was a record low average of 4.71%. A year ago, Freddie Mac put the 30-year FRM at 5.47%.”

Bloomberg – “Wells Fargo Cuts as Much as 30 Percent in Principal” (12-10-09)

“Wells Fargo & Co., the bank that gained a portfolio of option adjustable-rate mortgages when it bought Wachovia Corp. last year, cut the principal for delinquent borrowers in some loans by as much as 30 percent. Wells Fargo has forgiven an average of $46,000 in principal, or 15 percent, for the 43,500 option-ARM loans it has modified this year through September, said Franklin Codel, chief financial officer at the bank’s home-lending unit.”

Looking Back:

One year ago, Orange County tax collectors reported that property tax collections decreased by $145 million. One hundred twenty-seven financial companies received preliminary approval for $60.4 billion from TARP.

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

Wednesday, November 11th, 2009

Today’s News Synopsis:

The CBIA report shows that September sales for new-home communities have decreased by 11 percent from 2008. Foreclosure activity increased by 5 percent from August to September. According to Trulia, nearly 26 percent of homes were decreased in price from the previous month, and the total value of those price reductions is $28.1 billion.

In The News:

CBIA - “California New-Home Sales Down Again in September, CBIA Announces” (11-11-09)

“The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New-Home Sales and Pricing Report showed that sales in new-home communities of 10 units or more were 11 percent below September 2008, an improvement from the 13 percent year-over-year decline last month and the much higher declines in previous months. During September, 2,310 new homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 2,580 in September 2008. Sales of single-family homes were down by 17 percent, while sales of townhomes and ‘plexes’ – duplexes, triplexes, etc. – were down 11 percent and sales of condominiums were 12 percent higher than a year ago.”

Orange County Register – “Foreclosure notices hit record 8,800″ (11-11-09)

“September’s total was up 5% from August and 90% from a year ago. The chart (click for larger image) shows outstanding auction notices going back to January 2007. Auction notices, also known as notices of trustee’s sale, are a warning that a property will be offered for sale, usually at a local courthouse.”

Los Angeles Times – “Existing-home prices slide in most metropolitan areas” (11-11-09)

“The U.S. median sale price for an existing single-family home was $177,900, an 11.2% drop from the same period a year earlier, according to the National Assn. of Realtors in Washington. Distressed sales continued to weigh on prices despite a popular tax credit fueling the volume of deals. Still, the median was higher than in the second quarter of this year, when it was $174,200.”

Housing Wire – “CMBS TALF May Bring New Issue in November: Sources” (11-11-09)

“Industry reports indicate a number of firms are gearing up to sell the first round of debt under the Fed’s CMBS TALF program for new issuance. The firms include Developers Diversified Realty Corp. (DDR: 9.02 +5.99%), which in October said it obtained new first mortgage financing of $400m from Goldman Sachs Commercial Mortgage Capital, an affiliate of Goldman Sachs & Co.”

Housing Wire – “Loss Severity May Reverse Recent Stability: Amherst” (11-11-09)

“the firm sees ‘temporary’ stabilization of house prices, as 7.5m units or 13.5% of US homeowners are in non-payment status. Amherst previously explained its reasoning for calculating 7m of those are ‘destined’ to liquidate, which hangs a shadow of distressed inventory over the positive signs seen in the US housing market.”

Housing Wire – “Refinancing Interest Boosts MBA’s Weekly Mortgage Apps” (11-11-09)

“MBA’s refinance index increased 14.5% from the previous week. The association’s purchase index decreased 1.8%. Refinance applications took a 66.1% share of all applications, up from 62.3% in the previous week. The adjustable-rate mortgage (ARM) share of all applications decreased to 6.1% from 6.9%.”

Bloomberg - “U.S. Home Sellers Slash Prices by $28.1 Billion, Trulia Says” (11-11-09)

“The average discount was 10 percent, little changed from a month earlier, the San Francisco-based real estate data provider said today. Almost 26 percent of homes for sale were reduced at least once. Luxury properties — those costing $2 million or more — accounted for 25 percent of the dollar value of reductions and less than 2 percent of listings, Trulia said. ”

Inman - “Realogy in the black for Q3″ (11-11-09)

“Real estate franchisor and brokerage Realogy Corp. said it turned a $58 million profit in the third quarter, thanks in part to a debt restructuring that allowed the company to claim a $75 million gain and stay in compliance with agreements governing nearly $3 billion in loans.”

Inman - “GMAC Real Estate unites with Real Living” (11-11-09)

“A major real estate brokerage company merger gives GMAC Real Estate a new name while expanding the Real Living real estate brand and growing the U.S. operations of Canada-based Brookfield Residential Property Services. The merger of GMAC Real Estate and Real Living, which will operate under the Real Living name and under parent company Brookfield, represents the second sizable U.S. expansion of Brookfield operations in the past two years.”

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