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The Norris Group Real Estate News Roundup 3/5/10

Friday, March 5th, 2010

Today’s News Synopsis:

According to Callahan & Associates, the credit union industry originated $95bn from residential mortgages in 2009. The Labor Department reports that 36,000 jobs were lost in February. Chris Kotowski predicts that Fannie Mae and Freddie Mac may force other lenders to to buy back $21 billion of home loans this year. $4.1 billion in lending was sought from the Federal Reserve throughout the last six months.

In The News:

Business Journal – “Tiny supply builds hope for housing industry” (3-5-10)

“Existing homes listed for sale are in shorter supply here on a per-capita basis than in 18 major metro areas, including Chicago, Dallas and Atlanta. And unlike areas where condo towers proliferate, such as Las Vegas, the Southern California coast and south Florida markets, Sacramento has among the fewest finished-but-vacant new homes in the country.”

Wall Street Journal – “Study Sees FHA Taking More Risk” (3-5-10)

“economists warn that the Federal Housing Administration—which has jumped to fill the void left by the collapse of the private mortgage market—is overlooking factors that signal higher losses, according to a working paper released Thursday. The agency has traditionally turned a profit for the U.S. government. But the economists warn that by underestimating the risks it faces, the FHA has increased the likelihood that it will have to ask Congress for money for the first time in its 75-year history.”

Housing Wire – “Credit Unions Originate $95bn in Residential Mortgages in 2009″ (3-5-10)

“The credit union industry originated $95bn in residential mortgages in 2009, taking a 4.5% share of the nation’s total mortgage market. Including the mortgages written last year, the nation’s 7,710 credit unions originated more than $271.9bn in new loans, a 7.1% increase over 2008, according to data released by Callahan & Associates, a Washington, DC-based financial consulting firm that specializes in the credit union industry.”

Housing Wire – “Unemployment Holds at 9.7% in February” (3-5-10)

“The economy lost 36,000 jobs in February and the unemployment rate held at 9.7%, according to the Labor Department’s Bureau of Labor Statistics monthly report. The 9.7% unemployment rate is steady from January, but up from February 2009’s rate of 8.2%. The U-6 unemployment rate, which includes not only those without jobs, but also the underemployed, was 16.8% in February, up from 16.5% in January, but down from December’s 17.3%. A year ago, the U-6 unemployment rate was 15%.”

Housing Wire - “Bair: Too Soon to Know How Successful HAMP Will Be” (3-5-10)

“It is true that the numbers of trial and permanent modifications have lagged behind program projections. But at the same time, we saw a slowdown in the pace of new foreclosures in the second half of last year.”

Bloomberg - “Fannie, Freddie Ask Banks to Eat Soured Mortgages” (3-5-10)

“Fannie Mae and Freddie Mac may force lenders including Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co. and Citigroup Inc. to buy back $21 billion of home loans this year as part of a crackdown on faulty mortgages. That’s the estimate of Oppenheimer & Co. analyst Chris Kotowski, who says U.S. banks could suffer losses of $7 billion this year when those loans are returned and get marked down to their true value. Fannie Mae and Freddie Mac, both controlled by the U.S. government, stuck the four biggest U.S. banks with losses of about $5 billion on buybacks in 2009, according to company filings made in the past two weeks.”

Bloomberg - “Fed’s TALF Winds Down With Most Loan Requests in Six Months” (3-5-10)

“The Federal Reserve received the most loan requests in six months from investors for the final round of its program that unlocked the market for asset-backed securities. About $4.1 billion in lending was sought, including $1.8 billion for financing of student-loan securities, the New York Fed said yesterday on its Web site. In total, about $7.1 billion of sales this week were of securities that included eligible classes, according to data compiled by Bloomberg.”

Bloomberg - “Fed Presidents Say Rates Need to Be Low Early in U.S. Recovery” (3-5-10)

“Two regional Federal Reserve Bank presidents, speaking before today’s release of a February report on U.S. jobs, said they believe the central bank should keep rates low until the recovery picks up.”

Inman - “Hitwise: Zillow reclaims No. 2 spot” (3-5-10)

“Zillow eked out a tiny edge over Yahoo Real Estate in February to reclaim its title as the second-most visited real estate site on the Web, according to rankings compiled by Web metrics firm Hitwise. Zillow, which was bumped into third place by Yahoo Real Estate in December, captured 3.43 percent of traffic in the real estate category during February, Hitwise said, compared to 3.4 percent for Yahoo Real Estate. Realtor.com retained its top spot on the Hitwise top 10 list, with 6.67 percent of traffic in the category.”

Looking Back:

One year ago, the Mortgage Bankers Association asked to have the 105 percent LTV limit raised. The MBA observed an increase in delinquencies on mortgage loans. The NAA reported that gross receipts for real estate auctions grew about 1.1.

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The Norris Group Real Estate News Roundup 2/26/10

Friday, February 26th, 2010

Today’s News Synopsis:

According to the NAR, existing home sales decreased by 7.2 percent in January. The rise in GDP exceeded the median forecast of economists surveyed by Bloomberg. Freddie Mac reports the 30-year FRM increased to a rate of 5.05 percent. A recently proposed plan from the Obama administration would give homeowners an extra 30 days after receiving the HAMP non-approval notice before the foreclosure sale can proceed.

In The News:

NAR - “Existing-Home Sales Down in January but Higher than a Year Ago; Prices Steady” (2-26-10)

“Existing-home sales – including single-family, townhomes, condominiums and co-ops – dropped 7.2 percent to a seasonally adjusted annual rate1 of 5.05 million units in January from a revised 5.44 million in December, but remain 11.5 percent above the 4.53 million-unit level in January 2009.”

CNBC - “Housing Recovery Is Looking A Lot Shakier Than Expected” (2-26-10)

“Even the optimists never expected a traditional housing recovery with unemployment stubbornly high, the consumer balance sheet still in repair mode and credit conditions stingy, but right now there’s palpable worry about momentum—especially given a string of solid months in mid- to late-2009.”

Bloomberg - “U.S. Economy Grew at 5.9% Annual Pace Last Quarter” (2-26-10)

“The U.S. economy expanded at a 5.9 percent annual rate in the fourth quarter, more than the government reported last month, reflecting stronger business investment and a greater contribution from inventories. The rise in gross domestic product, which exceeded the median forecast of economists surveyed by Bloomberg News, marked the best performance in more than six years, the Commerce Department said today in Washington. Inventories added 3.88 percentage points to GDP, more than previously reported, and investment in software and equipment grew at the fastest pace in almost a decade.”

Inman - “30-year fixed punches through 5 percent” (2-26-10)

“Rates on 30-year fixed-rate mortgages broke through the 5 percent mark this week for the first time in three weeks, Freddie Mac said in releasing the results of its weekly Primary Mortgage Market Survey. The 30-year fixed-rate mortgage averaged 5.05 percent with an average 0.7 point for the week ending Feb. 25, up from 4.93 percent last week but down from 5.07 percent a year ago.”

Housing Wire – “As Commercial Real Estate Weakens, Moody’s Considers Action on Related CDOs” (2-26-10)

“The credit rating agency Moody’s Investors Service put a total of $6.2bn of commercial real estate linked CDOs up for possible downgrade today, citing growing concerns over the ability of the underlying assets to continually perform.”

Housing Wire – “BB&T Originations Nearly Doubled in 2009″ (2-26-10)

“BB&T Corp. (BBT: 28.53 +1.06%) said it originated 72,500 mortgages through its retail operation, including 53,500 refinance loans and 19,000 purchase mortgages, a 97% increase from 2008’s origination level. In addition, BB&T said it closed 6,600 loans worth nearly $1.3bn Homeowners Affordability and Stability Plan, as known as the Making Home Affordable program, to help stave foreclosure for distressed borrowers.”

Housing Wire – “Homeowner Estimates as Good as Zillow? Appraisal Academics Think So” (2-26-10)

“When it comes to using the Zillow.com automated valuation model (AVM) to get a free listing price on a house, users may be getting what they paid for, according to a report published by the Appraisal Institute that finds the Web site overestimates the values on homes almost as often as the actual homeowners.”

Housing Wire – “Obama Aims to Prohibit Foreclosure to Give HAMP a Chance” (2-26-10)

“The Obama Administration is drafting a proposal that would prohibit foreclosure on delinquent mortgages until servicers get a chance to evaluate a borrower for the Home Affordable Modification Program (HAMP). According to the presentation to lenders obtained by HousingWire, the Administration would also give borrowers an extra 30 days after receiving the HAMP non-approval notice before the foreclosure sale can proceed.”

Housing Wire – “Republicans Say Government-Led Mortgage Modifications are a Failure” (2-26-10)

“The US Treasury Department launched HAMP in March 2009 to allocate capped incentives to servicers for the modification of loans on the verge of foreclosure. The $75bn program aims to modify 3-to-4m mortgages by the time it expires in 2012. Through January, participating servicers provided 116,000 permanent modifications, an increase from 66,000 in December. In November 2009, the Treasury initially estimated 375,000 permanent modifications by the end of the year.”

Realty Times – “Top Affordable U.S. Housing Markets” (2-26-10)

“The HOI [Housing Opportunity Index] showed that 70.8 percent of all new and existing homes sold in the final quarter of 2009 were affordable to families earning the national median income of $64,000, slightly higher than the previous quarter and near the record-high 72.5 percent set during the first quarter of 2009, according to a press statement from the National Association of Home Builders.”

Realty Times – “Commercial Real Estate Losses Could Reach $1 Trillion” (2-26-10)

“We estimate that between $800 billion and $1 trillion of losses to commercial real estate equity and debt will be realized over the next few years. The annual volume of commercial mortgage maturities is expected to increase each year through 2013, according to Ken Rosen, during the Commission’s first hearing on January 15, 2010.”

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The Norris Group Real Estate News Roundup 2/23/10

Tuesday, February 23rd, 2010

Today’s News Synopsis:

The NAR predicts that the commercial real estate market will not recover until after 2011. In California, single family home sales decreased by 3 percent during January. The Standard & Poor’s index shows that national home prices increased slightly during December. 702 banks made the ‘Problem List’ for the FDIC in 2009.

In The News:

NAR - “No Meaningful Recovery in Commercial Real Estate Before 2011″ (2-23-10)

“Lawrence Yun, NAR chief economist, said commercial real estate almost always lags the economy. ‘Because of the lingering impact from the deep recession over the past two years, vacancy rates will trend higher and many commercial property owners will need to make rent concessions,’ he said.”

CAR - “January sales and price report” (2-23-10)

“Existing, single-family home sales decreased 3 percent in January to a seasonally adjusted rate of 539,040 units on an annualized basis compared with December 2009. The statewide median price of an existing single-family home decreased 6.3 percent in January to $287,440, compared with December 2009. C.A.R.’s Unsold Inventory Index fell to 5.8 months in January, compared with 7.3 months in January 2009.

Los Angeles Times – “Home prices show small gain in December” (2-23-10)

“The Standard & Poor’s/Case-Shiller index of home prices in 20 metropolitan areas increased 0.3% from November on a seasonally adjusted basis, with 14 cities posting gains. Compared with a year earlier, the index was down 3.1% in December, but the year-to-year rate of decline moderated in all 20 cities.”

Housing Wire – “FDIC ‘Problem’ Banks Increased 27% in Q409″ (2-23-10)

“By the end of 2009, 702 banks made the ‘Problem List’ for the Federal Deposit Insurance Corp. (FDIC), a marked increase of 27% from 552 at the end of Q309. Additionally, the total amount of assets of insured institutions increased $137.2bn to $13.7trn in Q409. Bank investments in mortgage-backed securities (MBS) also increased by $44.8bn, overall, to $1.4trn.”

Housing Wire – “Lowe’s Profits Top $200m for Q409″ (2-23-10)

“Lowe’s Companies (LOW: 22.81 -1.13%), the world’s second largest home improvement retailer, reported profits of $205m, or $0.14 per share, for its fiscal fourth quarter ending January 29. The Q409 results are up 26.5% from one year ago, when Q408 net earnings were $162m, or $0.11 per share. For the fiscal year ending January 29, 2010, net earnings were $1.78bn, or $1.21 per share, down 18.8% from one year ago, when North Carolina-based Lowe’s earned $2.195bn. In Q309, Lowe’s reported net earnings of $344m.”

Housing Wire – “11.3m Homeowners Now Underwater: First American” (2-23-10)

“11.3m homeowners now owe more on their mortgages than the value of their home at the end of Q409, with the Sand States taking four of the top five negative equity, or underwater, markets according to research released by First American CoreLogic.”

MGIC - “MGIC to Lower Mortgage Insurance Rates for Good Credit Borrowers” (2-23-10)

“The new rates will be lower for borrowers with a credit score of 720 or greater and higher for borrowers with credit scores between 620 and 679. No change is expected for those with a score between 680 and 719, according to a form 8-K filed today with the Securities Exchange Commission.”

Housing Wire – “Home Depot Posts $342m Q4 Profit” (2-23-10)

“Home improvement retailer Home Depot (HD: 30.75 +1.42%) reported a profit of $342m, or $0.20 per share, for its fiscal year fourth quarter ending January 31. That’s an improvement from last year’s fiscal fourth quarter, when Home Depot lost $54m, or $0.03 per share. But it’s lower than Home Depot’s Q309 net earnings of $689m, or $0.41 per share. Home Depot said its sales performance was driven by gains in kitchen and bath, paint, flooring and plumbing as well as its international businesses.”

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The Norris Group Real Estate News Roundup 2/8/10

Monday, February 8th, 2010

Today’s News Synopsis:

The U.S. Treasury Department reported 66,465 permanent loan modifications over 8 months. Delinquencies on prime jumbo loans increased to 10 percent in January. According to Altera Real Estate, distressed property sales increased in Dana Point and Laguna Beach. Unemployment in the U.S. construction industry increased to 24.7 percent in January.

In The News:

California Builder – “2010 Economic Forecast: The Bear Turns Bullish” (2-8-10)

“In April of 2009, we reversed our tune and called for a ‘W,’ which would be an improvement in the market until the tax credit expired. However, with the federal tax credit extended through June for all buyers, and affordability far better than we imagined at the time, the risk of a second leg down has been significantly reduced.”

Housing Wire – “House Committee Investigates HAMP ‘Effectiveness’” (2-8-10)

“The US Treasury Department launched HAMP in March 2009 to allocate capped incentives to borrowers for the modification of loans on the verge of foreclosure. After eight months in the program, the Treasury reported 66,465 permanent loan modifications in December, up from 31,382 permanent modifications in November.”

Housing Wire – “Fitch Says Prime Jumbo RMBS Near 10% Delinquent” (2-8-10)

“The performance of US prime jumbo loan performance within residential mortgage-backed securities (RMBS) slipped again in January as serious delinquencies (60+ days past due) rose for the 32nd consecutive month and edged closer to 10%, according to the latest market commentary from Fitch Ratings.”

Housing Wire – “Monday Morning Cup of Coffee” (2-8-10)

“The editorial argues the $111bn in mortgage losses covered by the Treasury Department was justifiable as an emergency measure to keep the housing market from collapsing entirely. But with continued losses projected in 2011 and 2012, covering the GSEs in perpetuity would cost more than $1.6trn, on top of the national debt of $12.3trn.”

Housing Wire – “BofA Lends $758bn in 2009″ (2-8-10)

“Bank of America (BAC: 14.48 -3.47%) said it extended more than $758bn in credit in 2009, including nearly $180bn in Q409. BofA originated $87bn in first mortgages to fund purchase or refinance loans for more than 400,000 borrowers in Q409. That total includes $23bn in mortgages made to 151,000 low- and moderate-income borrowers. For the year, BofA originated $378bn in first mortgages for more than 1.7m customers, including $87bn in mortgages to more than 561,000 low- and moderate-income borrowers. In Q409, BofA originated $3bn in home equity and reverse mortgage loans, bringing the total for 2009 to $13bn.”

Orange County Register – “South coast: short sales, foreclosures up” (2-8-10)

“Most of our south coast cities went against the grain and reflected the opposite of the countywide trend by seeing an increase in distressed properties for sale. Two weeks ago, Dana Point’s percentage of short sales and foreclosures was 24.7%, which has risen just slightly to 24.8%, according to a biweekly report by Steven Thomas of Altera Real Estate. Laguna Beach also saw a slight increase in distressed properties. The percentage of short sales and foreclosures rose from 9% two weeks ago to 9.3%.”

Orange County Register – “1-in-4 U.S. construction workers jobless” (2-8-10)

“The U.S. construction industry’s unemployment rate hit 24.7% in January as another 75,000 American construction workers lost their jobs.”

Realty Times – “Developing Referral Relationships” (2-8-10)

“The primary objective of your first contact, like the objective of any other first sales call to a new prospect, is to book an appointment. The first appointment might take the form of an exploratory session aimed at determining the wants, needs, and desires of the lead, or it might be an appointment to conduct a buyer consultation or listing presentation. The secondary objective of your first contact is to open the door, establish trust and respect, demonstrate your knowledge, and establish your position as a reliable resource.”

Looking Back:

One year ago, the MBA ranked Wachovia as the leading national commercial and multifamily loan servicer. Geithner promised that lenders receiving financial rescue would be required to offer mortgage modifications. A total of 70 banks were shut down within the first month of 2009.

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The Norris Group Real Estate News Roundup 1/19/10

Tuesday, January 19th, 2010

Today’s News Synopsis:

MDA Dataquick’s monthly report shows that 22,328 homes were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange County last month. AFIRE conducted a survey in which 51 percent of foreign investors claimed the US provides the best opportunity for capital appreciation. According to the NAHB, builder confidence decreased from last month. Fitch Ratings sees many positive signals for housing and other related industries which may soon lead to a strong recovery.

In The News:

DQNews - “Southland home sales, median price up over last year” (1-19-10)

“A total of 22,328 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 16.4 percent from November’s 19,181, and up 12.1 percent from 19,926 in December 2008, according to MDA DataQuick of San Diego.”

Housing Wire – “New Home Builds Strengthen Though Sector Remains Weak: Fitch” (1-19-10)

“There are more positive signals and developments for housing and related industries than at any time in the past three years, Fitch Ratings analysts wrote in a quarterly outlook report, but despite having fewer competitors, public builders will continue to be challenged and need to maintain tight controls over costs and expenses in 2010.”

Housing Wire – “Washington Federal Earnings Drop 61% in Q409, Driven by Large REO Expenses” (1-19-10)

“Washington Federal, the parent company of Washington Federal Savings, reported $7.9m in earnings for Q409 or $0.07 per share. Earnings dropped 61% from $20.1m or $0.23 per share in Q408, due to higher credit costs including the provision for loan losses and real estate owned (REO) expenses. Those expenses reached $82.5m in Q409, a 128% jump from $46.2m in Q408.”

Housing Wire – “Foreign Investors Revive Optimism in US Real Estate” (1-19-10)

“AFIRE conducted the survey in Q409 among its nearly 200 members. Respondents own more than $842bn of global real estate, including $304bn in the US. In the survey, 51% of respondents said the US provides the best opportunity for capital appreciation, an increase from 37% in 2008, 26% in 2007 and 23% in 2006. It’s the highest positive perception for US real estate since the same number in 2003.”

Housing Wire – “Citi Posts $7.6bn Q4 Loss After TARP Repayment” (1-19-10)

“Citigroup repaid $6.2bn of Troubled Asset Relief Program (TARP) funds during Q409, exiting its loss-sharing agreement with the federal government. Excluding the TARP payment, Citigroup would have lost $1.4bn, or $0.06 per share, in Q409.”

Housing Wire – “Google Teams with Tech Firms for Online Mortgage Search Tool” (1-19-10)

“Search giant Google (GOOG: 587.62 +1.31%) is partnering with mortgage technology companies for the launch of a new feature that allows consumers to search for mortgage products and rates through its site.”

Bloomberg - “Treasury Delay on Home-Equity Debt Imperils Housing” (1-19-10)

“The U.S. Treasury Department has failed to win agreements to get struggling borrowers’ home- equity debt reworked, among the biggest roadblocks to reducing foreclosures that may reach a record 3 million this year. None of the lenders holding a combined $1.05 trillion of the debt has signed contracts requiring participation in the second-mortgage modification plan announced eight months ago. The largest banks remain ‘committed’ to joining, Meg Reilly, a department spokeswoman, said in an e-mail.”

Bloomberg - “Homebuilder Confidence in U.S. Unexpectedly Decreases” (1-19-10)

“The National Association of Home Builders/Wells Fargo index of builder confidence decreased to 15 from 16 the prior month, the Washington-based group said today. Readings below 50 mean most respondents view conditions as poor. The report showed traffic slowed to a 10-month low, indicating the government’s extension and expansion of its first-time buyer program has, so far, not drawn in new demand after propelling total sales to an almost three-year high in November. A projected record 3 million foreclosures this year may also pressure prices, making it more difficult for homebuilders to turn a profit.”

Looking Back:

One year ago, MDA Dataquick reported that statewide home sales from 2008 to 2009 increased by 25.7 percent. Home sales in Southern California increased by 50.5 percent from 2007 to 2009. The Commerce Department reported that home starts had decreased to an annual rate of 605,000.

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The Norris Group Real Estate News Roundup 1/8/10

Friday, January 8th, 2010

Today’s News Synopsis:

Economists are criticizing Gov. Schwarzenegger’s $10,000 homebuyer tax credt and claiming it to be a waste of money. According to Amherst Securities Group, default and prepayment rates on mortgage-backed-securities remained consistent from October through November. Colony Capital Acquisitions bought 1,200 commercial mortgages from the FDIC. Multiple appraisal institutions filed complaints to the Department of the Interior regarding the absence of a qualified Chief Appraiser.

In The News:

Sacramento Bee – “Home Front: Some economists not buying proposed homebuyer tax credit” (1-8-10)

“Gov. Arnold Schwarzenegger’s proposed new $10,000 homebuyer tax credit is thrilling the real estate universe, but don’t think it’s a done deal. Opponents, who include economists and advocacy groups, are weighing in. Their point: it’s a poor use of money in a state that’s whacking community college budgets and health programs for poor kids”

Washington Post – “FDIC considers plan to penalize banks whose pay practices encourage risky moves” (1-8-10)

“The Federal Deposit Insurance Corp. is considering financial penalties for banks whose pay practices encourage reckless behavior, potentially opening a new front in the federal government’s effort to reshape the way bankers are paid, according to people familiar with the matter. Officials at the FDIC and other federal agencies are concerned that some banks reward executives for increasing revenues and profits in the short term even if those executives also are increasing the company’s risk of losses in the long term.”

Housing Wire – “Settling the Chinese Drywall Fight” (1-8-10)

“Homeowners and builders are facing difficulties seeking recourse from manufacturers of a toxic drywall that’s been alleged to emit sulfur fumes, causing damage to heating, ventilation and air conditioning (HVAC) components and health problems ranging from watery eyes to respiratory issues. The problem? It’s difficult for plaintiffs to serve foreign manufacturers in US courts. In this case, the problem with the manufacturers of Chinese drywall is exactly what you’d expect: the manufacturers are in China.”

Housing Wire – “Redefault Rates ‘Tragic’, Says Amherst” (1-8-10)

“According to Amherst Securities Group, default and prepayment rates on non-agency, private-label mortgage-backed securities (MBS) were constant in November. However, re-performance rates, where payments return to less than two months delinquent, were down and re-default rates ‘tragic’ in November, according to market commentary provided by the firm.”

Housing Wire – “Carlton Selling $307M Distressed Asset Portfolio” (1-8-10)

“Carlton Advisory Services is selling a portfolio of non-performing loans and real estate owned (REO) assets worth a combined $307m. The portfolio includes office, industrial, retail, multi-family, assisted-living facility, and self-storage assets located across 24 states. The New York-based firm said its services were retained by the commercial mortgage-backed securitization (CMBS) trusts that currently hold the assets.”

Housing Wire – “FDIC Sells Equity Stake in $1bn Portfolio of Distressed CRE Loans” (1-8-10)

“Colony Capital Acquisitions won the bidding process on a sale of equity interest in 1,200 commercial mortgages the Federal Deposit Insurance Corp. (FDIC) seized from depository institutions that failed within the past 18 months. FDIC created a limited liability company, called a multibank structured transaction, to hold commercial real estate assets from 22 failed bank receiverships. As winner of the bidding process, Los Angeles-based Colony Capital purchases a 40% ownership interest in the company.”

Housing Wire – “Call for Chief Appraiser Gains Momentum” (1-8-10)

“A handful of appraiser organizations joined together Thursday to send a letter to the US Department of the Interior, urging the hire of a chief appraiser. The groups – the Appraisal Institute, the American Society of Appraisers, the American Society of Farm Managers and Rural Appraisers and the National Association of Independent Fee Appraisers – noted a December report (download here) from the Interior Department’s Inspector General directs the filling of such a position, which has not been filled by qualified executive in almost three years.”

Housing Wire – “Fed’s MBS Purchases Slow and Spreads Hold, For Now” (1-8-10)

“The Federal Reserve Bank of New York bought $12bn of mortgage-backed securities (MBS) from mortgage giants Freddie Mac (FRE: 1.45 -3.33%), Fannie Mae (FNM: 1.15 -2.54%) and Ginnie Mae in the week ending January 8.”

Bloomberg - “Fed Won’t Raise Until After Jobless Rate Peaks, Crescenzi Says” (1-8-10)

“The Federal Reserve won’t raise its target rate for overnight loans between banks until many months after unemployment peaks, according to Pacific Investment Management Co.’s Tony Crescenzi.”

Bloomberg - “U.S. Office Vacancies Climb to 15-Year High on Employment Cuts” (1-8-10)

“Office vacancies in the U.S. surged to a 15-year high in the fourth quarter and rents fell the most on record as the deepest recession in more than half a century slashed demand for commercial space, according to Reis Inc. The vacancy rate climbed to 17 percent from 14.5 percent a year earlier, the New York-based research company said. Effective rents, the amount tenants actually pay landlords, dropped 8.9 percent, the biggest year-over-year decline since Reis began tracking the data in 1980.”

Inman - “Economy: Bad is the new good” (1-8-10)

“A renewed, two-group consensus drove the jump: The economy is in a solid recovery, or even if it isn’t, immense Treasury borrowing will force rates higher. Both groups agree that the Fed should stop its assistance, either because the economy no longer needs it, or because even if the economy does need help, to continue assistance would produce inflation. I think this consensus is mistaken. There is no meaningful recovery under way, and the Fed has already pulled up short. More data like today’s will add to policymaking tension, force the administration’s hand, and soon have the Fed back to buying mortgages, Treasurys or both.”

Inman - “Confidence slips among agents, brokers” (1-8-10)

“Confidence among real estate agents and brokers dipped in December after a heady rise in November, according to a monthly survey conducted by real estate tech company Point2 Technologies.”

Looking Back:

One year ago, Fannie Mae and Freddie Mac decided to halt all foreclosure sales and evictions until January 9, 2009.  A panel of economists predicted that home sales would not increase, despite the Federal Reserve’s attempts to lower interest rates.  Consumer borrower dropped by $7.8 billion last November.

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The Norris Group Real Estate News Roundup 1/6/10

Wednesday, January 6th, 2010

Today’s News Synopsis:

California Governor Schwarzenegger announced a new home buyer tax credit. The Mortgage Bankers Association reports that mortgage applications have increased by .4 percent since Christmas. The FOMC confirmed plans to buy $1.25 trillion in mortgage-backed-securities from Freddie Mac, Fannie Mae and Ginnie Mae. Eugene Ludwig believes that commercial real estate losses will break historical records in 2010.

In The News:

CBIA - “Homebuilders Applaud Governor Schwarzenegger for Prioritizing Jobs, Economic Recovery and Housing in State of the State Address” (1-6-10)

“Enacting a new homebuyer tax credit and streamlining the building process would definitely help continue that positive momentum and help our economy recover more quickly.”

Mortgage Bankers Association - “Mortgage Applications Drop the Week of Christmas and Remain Flat the Week After in Latest MBA Weekly Surveys” (1-6-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the weeks ending December 25, 2009 and January 1, 2010. For the week ending December 25, 2009, the Market Composite Index, a measure of mortgage loan application volume, decreased 22.8 percent on a seasonally adjusted basis from the prior week. For the week ending January 1, 2010, this index  increased 0.5 percent on a seasonally adjusted basis.  Both weeks’ results include an adjustment to account for the Christmas and New Year’s Day holidays. On an unadjusted basis, the Index decreased 46.9 percent the week before Christmas and increased 0.4 percent the week after.”

Housing Wire - “FOMC Eyes Extending Scope of MBS Purchases” (1-6-10)

“The Federal Open Market Committee, in its mid-December meeting, considered extending and expanding its initiatives to buy assets from mortgage agencies Fannie Mae (FNM: 1.10 -4.35%), Freddie Mac (FRE: 1.38 -3.50%) and Ginnie Mae. The FOMC also confirmed plans to buy $1.25trn of agency mortgage-backed securities (MBS) and $175bn of agency debt by the end of Q110, according to minutes released Wednesday.”

Housing Wire – “FHA Proposal Will Stifle Competition, Claims NAMB” (1-6-10)

“The National Association of Mortgage Brokers (NAMB) criticized a Department of Housing and Urban Development (HUD) proposal that would change how brokers and lenders operate in the Federal Housing Administration (FHA) loan program. The association contends HUD’s actions will adversely affect competition in the FHA loan market and have far-reaching economic impacts on lenders and correspondents both.”

Housing Wire – “Dodd to Leave Senate, Banking Committee Chair” (1-6-10)

“Senate Banking Committee chairman Christopher Dodd (D-Conn) on Wednesday said he will leave his post in Congress when his term expires and not seek reelection.”

Bloomberg - “Commercial Property Is Biggest Risk, U.S. Bank Examiners Find” (1-6-10)

“‘Losses from commercial real estate will be quite high by historic standards,’ said Eugene Ludwig, former Comptroller of the Currency who is now chairman of Promontory Financial Group, a Washington-based consulting firm to financial institutions.”

Bloomberg - “Regional Mall Vacancies in U.S. Rise to Record on Unemployment” (1-6-10)

“Vacancies at the largest U.S. shopping centers reached a record 8.8 percent in the fourth quarter as unemployment rose and consumers spent less, Reis Inc. said. Vacancies at smaller neighborhood and community centers increased to 10.6 percent, the highest level since 1991, from 8.9 percent a year earlier, New York-based Reis, a real estate research company, said today in a statement.”

Bloomberg - “U.S. Office, Shopping Center Construction Spending May Fall 13%” (1-6-10)

“Construction spending on hotels, office buildings and retail centers may fall 13 percent this year, the second straight annual decline amid a drop in property prices, the American Institute of Architects said. ”

Bloomberg - “Mortgage-Bond Spreads Narrow to Lowest in More Than 17 Years” (1-6-10)

“Yields on Fannie Mae and Freddie Mac mortgage securities fell to the lowest relative to Treasuries in more than 17 years, narrowing further on news Federal Reserve officials last month reiterated they may favor expanding their program to purchase $1.25 trillion of home-loan debt. ”

Looking Back:

One year ago, the NAR reported that the pending home sales index decreased by 4 percent from October to November. President Obama promised a tax break for business that would cover 5 years of expenses. Gary Watts forecasted that home prices below $500,000 would strengthen in 2009. Grubb & Ellis Co. anticipated that apartment rentals would increase during 2009.

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The Norris Group Real Estate News Roundup 12/30/09

Wednesday, December 30th, 2009

Today’s News Synopsis:

A survey from Bank of America shows that only 12 percent of the institutions who received TARP relief believe that the program positively impacted their operations. Barclay’s estimates that credit availability may increase during the next 6 to 12 months. Default Research reports that pre-foreclosure filings in California decreased in several counties. Statistics from Freddie Mac show that mortgage purchases decreased by 13% in November.

In The News:

Housing Wire – “Only 12% of Bank Execs Think TARP Leaves Positive Impact” (12-30-09)

“While larger financial institutions complete full repayment of the Troubled Asset Relief Program (TARP), as is the case with the $45bn repaid last week by Citi (C: 3.32 -1.48%) and Wells Fargo (WFC: 26.82 +0.52%), a bank survey completed by the Bank Administration Institute (BAI) claims only 12% of respondents feel the program positively impacted their operations.”

Housing Wire – “Origination Funding May Increase as Credit Restrictions Ease in 2Q10, Analysts Predict” (12-30-09)

“A recent set of research focusing on 2010 strategies for investors of agency mortgage-backed securities (MBS) by analysts at Barclays Capital finds that credit availability for mortgage originations may increase in the next six to 12 months. However, the situation will remain tight in the next three to six months, they add, as the market grapples with ongoing risk aversion sentiments, loan repurchases stabilization and new regulatory procedures that will need this time to take hold.”

Housing Wire – “Foreclosure Notices Drop in Major Counties: Default Research” (12-30-09)

“The number of pre-foreclosure filings in California, which include notices of default and notices of trustee sales, dropped across several counties in November, according to statistics from Default Research, which tracks the notices. The hard-hit Los Angeles County had a 10% decline from last month to 3.08% in November. Orange County, where 3.4% received a filing, had a drop of 8% in November. In Riverside County, 9.2% received a pre-foreclosure filing, a 13.7% decline from October.”

Housing Wire – “NAMB Criticizes Regulation Z Amendment” (12-30-09)

“In a letter to the Federal Reserve Board, the National Association of Mortgage Brokers (NAMB) said that certain aspects of the proposed rule to amend Regulation Z would impede market competition. Section 404 of the Helping Families Save their Home Act of 2009 took effect in May and requires a 30 day notice to mortgage borrowers of their loans being transferred for securitization. Called Regulation Z, the Fed’s interim final rule enforces the requirement under the Act.”

Housing Wire - “Fannie’s Serious Delinquencies Nears 5% in November” (12-30-09)

“After mortgage giant Freddie Mac (FRE: 1.42 -5.33%) reported a 13% drop in mortgage purchases in November, Fannie Mae (FNM: 1.16 -7.20%) shows its book of business declined at an annualized rate of 6.7% in the same month, according to its monthly summary”

Housing Wire – “List of HAMP Servicers Moves Past 100″ (12-30-09)

“The US Treasury Department added four new servicers to the Home Affordable Modification Program (HAMP), raising the total number of participants to 103, according to the latest Troubled Asset Relief Program (TARP) transaction report.”

Bloomberg - “GMAC Said to Discuss U.S. Aid Package of $3 Billion or More” (12-30-09)

“GMAC Inc., the home and auto lender that counts the U.S. government as the largest stakeholder, is discussing with the Obama administration a third bailout of $3 billion to $4 billion, said a person familiar with the matter.”

Orange County Register – “Tough market eyed for high-end housing” (12-30-09)

“There is a chance this is not the bottom for the all price ranges! However, under $500,000 looks to be in pretty good shape, although appreciation will continue to be very faint! Above $500,000 it will continue to be a tough market, as there are very few move-up buyers from the lower price ranges with money to support the higher price structure”

Looking Back:

One year ago, the Case Schiller index showed that home prices dropped by 18 percent in 20 major U.S. cities. Lockhart estimated that the government would need to provide lower borrowing costs to Fannie Mae and Freddie Mac. The Federal Reserve forecasted that mortgage modifications would be significantly hindered by second mortgages. Fannie Mae’s portfolio of mortgages increased by 9.3 percent in one month.

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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 12/23/09

Wednesday, December 23rd, 2009

Today’s News Synopsis:

Homebuilders pulled 46 percent fewer permits from November of last year. According to the Mortgage Bankers Association, mortgage application volume decreased by 10.7 percent from last week. Freddie Mac purchased 13 percent fewer mortgage purchases from the previous month. Equifax reports that HELOC originations fell 36 percent from one year ago.

In The News:

CBIA - “Housing Production Posts Decrease in November, CBIA Announces” (12-13-09)

“According to statistics compiled by the Construction Industry Research Board (CIRB), homebuilders pulled permits for 2,540 total housing units in November, down 12 percent from October, and down 46 percent from November 2008. Permits for single-family homes totaled 1,710, down 20 percent from the previous month, but up 18 percent from the same period last year, while multifamily permits totaled 830, up 9 percent from October but down 74 percent from a year ago.”

Mortgage Bankers Association – “Mortgage Applications Decrease in Latest MBA Weekly Survey” (12-23-09)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending December 18, 2009.  The Market Composite Index, a measure of mortgage loan application volume decreased 10.7 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 10.9 percent compared with the previous week.”

Housing Wire – “BofA Sues MGIC Over Unpaid Insurance Claims” (12-23-09)

“Bank of America’s (BAC: 15.18 -0.98%) Countrywide Home Loans unit sued Mortgage Guaranty Investment Corp. (MTG: 5.7798 -9.12%) over allegations the Wisconsin-based mortgage insurer denied millions of valid claims.”

Housing Wire – “Freddie Buys 7% More Refi Mortgages in November” (12-23-09)

“Mortgage giant Freddie Mac (FRE: 1.3295 -1.52%) reported $27.9bn in mortgage purchases and issuances in November, a 13% drop from $32.1bn in October, according to a monthly summary of the agency’s portfolio.”

Housing Wire – “HUD Delays New FHA Appraiser Guidelines” (12-23-09)

“According to an FHA memo obtained by HousingWire, the January 1, 2010 implementation of Mortgagee Letter (ML) 2009-28 (download here) won’t take affect until February 15, 2010. The new FHA regulations are similar to those implemented by the government-sponsored enterprises (GSEs) to ensure appraiser independence with the Home Valuation Code of Conduct (HVCC).”

Housing Wire – “Equifax: HELOC Origination Down 36%” (12-23-09)

“Origination of new home equity lines of credit (HELOC) accounts is down 36% from year-ago levels, Equifax (EFX: 31.28 -0.26%) said. There were 75,600 HELOC accounts originated in September 2009, down from 117,800 in September 2008, according to the Atlanta-based credit bureau’s most recent monthly credit trend report, derived from Equifax’s nearly 200m US consumer credit files.”

Bloomberg - “U.S. Economy: Spending and Incomes Climb, New-Home Sales Drop” (12-23-09)

“American consumers’ spending and incomes climbed in November, indicating the biggest part of the economy is poised to strengthen as the labor market recovers. Purchases rose 0.5 percent as households took advantage of discounts on autos and electronics, figures from the Commerce Department showed today in Washington. The gain was smaller than anticipated as unseasonably warm weather depressed utility use. Another report showed new-home sales unexpectedly fell as potential buyers were discouraged by the scheduled expiration of a tax credit. The tax break was later extended.”

Bloomberg - “General Growth Has Deals to Restructure $11.6 Billion of Debt” (12-23-09)

“General Growth Properties Inc., the second-largest U.S. mall owner, has won approval from creditors and a federal court to restructure loans totaling $11.6 billion, according to a lawyer.”

Looking Back:

One year ago, existing home sales fell 8.6 percent from October to November. Mortgage default filings against homeowners decreased for the first time in 3 years. Moorlach predicted that 10 municipal bankruptcies would occur in 2009. The U.S. economy shrank by 0.5 percent from the previous month.

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