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The Norris Group Real Estate News Roundup 1/6/11

Thursday, January 6th, 2011

Today’s News Synopsis:

According to Freddie Mac, rates on 30-year FRMs fell to 4.77% this week. Altos Research reports home prices fell 1.63% in December. Timothy Geithner requested from Congress to increase the national debt limit. The current debt limit is $14.29 trillion, and the nation’s current debt level is just $335 billion short of the limit.

In The News:

Research Institute for Housing America – “A Study of Real Estate Markets in Declining Cities” (1-6-11)

“many places will likely resume growth and fully recover within the next decade or so. This is almost certainly not to be the case for all metropolitan areas. In fact, a number of large metropolitan statistical areas (MSAs) experienced severe recessions during the latter half of the 20th century and prior to the Great Recession and never fully recovered or took many years to do so”

USA Today – “30-year fixed mortgage rate dips to 4.77% average in latest week” (1-6-11)

“Freddie Mac says the average rate on 30-year mortgages dropped to 4.77% from 4.86% the previous week. It hit a 40-year low of 4.17% in November.”

Realty Times – “Consequences of Defaults and Foreclosures” (1-6-11)

“One of the most startling impacts of a foreclosure appears on one’s credit report. Your credit score may plummet by 200 to 300 points. In this economic climate, where credit lending standards are already tightened, you may then find it difficult to do everything from buying a car to renting an apartment. What’s worse is that the notation of foreclosure stays on your report for up to seven years.”

Housing Wire – “Altos: Home prices down 1.63% in December, new listings even lower” (1-6-11)

“Home prices fell 1.63% in December, but new listings are hitting the market well below that, according to analytics firm Altos Research. Prices fell in each of the 27 markets studied by Altos. Prices fell 4.77% in San Francisco — the steepest drop of any area, 3.71% in San Diego”

Housing Wire – “Commercial mortgage modifications become huge trend in just two years” (1-6-11)

“Of all loan modifications in the commercial mortgage industry over the past decade, 96% occurred in the last years, according to Standard & Poor’s. The rating agency said 354 commercial real estate loans with a principal balance $15.6 billion were modified from January through November, up significantly from 216 loans valued at $7.06 billion for all of 2009.”

Housing Wire – “DebtX November CRE loan volume down to 80.3%” (1-6-11)

“The decline in the value of commercial real estate loans in November was due primarily to an increase in Treasury rates”

Housing Wire – “Geithner urges Congress to increase national debt limit” (1-6-11)

“Geithner wrote a letter to Congress Thursday requesting an increase in the federal debt limit. According to his numbers, the current debt limit set last February is $14.29 trillion. As of the writing of the letter, the outstanding debt subject to the limit standards is $13.95 trillion — just $335 billion shy of the maximum.”

Housing Wire – “Equator’s Vella: Short sales set to swell 25% in 2011″ (1-6-11)

“With one in five borrowers underwater on their home and an estimated 1.5 million foreclosures scheduled for 2011, the opportunity for short sales will be better than ever. Investors usually see a 20% to 30% better execution on a short sale versus an REO sale when it comes to loss severity. With the foreclosure volume, current and pending REO inventories, servicers will be pressed to do more short sales in 2011.”

Housing Wire – “New Fannie interactive Web tool provides foreclosure avoidance options” (1-6-11)

“Fannie Mae’s new WaysHome interactive multimedia tool walks homeowners through options if they are struggling to pay the mortgage — even allowing them to select a character and be a part of an interactive video.”

Looking Back:

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

For m ore 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 9/27/10

Monday, September 27th, 2010

Today’s News Synopsis:

California air-quality regulators adopted 10- and 25-year targets for reducing greenhouse gases. Fannie Mae is developing a loan forbearance program for military families. Nearly 33% of Americans have credit scores below 620. John Burns predicts that sales of distressed properties will peak in 2011 at 2.3 million transactions.

In The News:

San Francisco Chronicle – “Top 1% of earners get 20% of the money” (9-26-10)

“Former Clinton administration labor secretary Robert Reich, now a public policy professor at UC Berkeley, argues that working class incomes have stagnated for so long that ordinary consumers – who account for about 70 percent of all economic activity – have lost the buying power to pull the country out of recession.”

Los Angeles Times – “Trashing the dollar to save the economy” (9-25-10)

“If something’s got to be sacrificed to put the domestic economy on the road to a sustainable recovery, the dollar’s value against other currencies seems a good candidate. That’s what the Federal Reserve signaled this week — and what Congress, in no uncertain terms, is telling the Chinese.”

Mortgage Bankers Association – “Study Examines the Variety of Alternative Mortgage Loan Products Around the World” (9-27-10)

“The study entitled, ‘International Comparison of Mortgage Product Offerings’, which was conducted by Dr. Michael Lea, Director of the Corky McMillin Center for Real Estate at San Diego State University and sponsored by MBA’s Research Institute for Housing America (RIHA), examines the predominant mortgage designs and characteristics that exist in different international markets and how they have performed prior to and during the crisis. The study examined 12 developed countries with distinctly different mortgage market and product configurations.”

North Bay Business Journal – “Business groups object to greenhouse gas targets” (9-27-10)

“State air-quality regulators late last week adopted 10- and 25-year targets for reductions in greenhouse gases in the major metropolitan areas in the state over the objections of some business groups and certain policy planners that the targets for the Los Angeles and greater San Francisco Bay areas will result in high fuel and transportation costs and more environmental-impact lawsuits for real estate developers.”

Sacramento Bee – “Fannie Mae offers housing aid to military families” (9-27-10)

“Mortgage giant Fannie Mae plans to give military families a break on their home loan payments if they are struggling because of the death or injury of a service member.”

Orange County Register – “1 in 3 unlikely to qualify for mortgage” (9-27-10)

“Borrowers with credit scores under 620 who requested purchase loan quotes for 30-year fixed, conventional loans were unlikely to get even a single loan quote on Zillow Mortgage Marketplace, even if they offered a relatively high down payment of 15 to 25%, Zillow says. According to myFICO.com, nearly one-third of Americans, or 29.3%, has a credit score that low.”

Housing Wire – “DebtX August CRE loan value up to 81%” (9-27-10)

“The value of commercial loans priced in August by The Debt Exchange that collateralize commercial mortgage-backed securities rose to 81% of the original balance, the loan sale advisor said. DebtX priced 57,586 commercial real estate loans last month worth a combined $679.1 billion that collateralize 626 CMBS trusts. The aggregate August value is up from 79.4% in July and higher than the 77% a year earlier.”

Housing Wire – “Fannie Mae EarlyCheck looks to reduce future repurchase risk” (9-27-10)

“Between 2005 and 2007, many of the loans originated did not meet crucial standards set by the GSEs. Banks are now being forced to repurchase those loans. But director of the Federal Housing Finance Agency, Edward DeMarco, said in his congressional speech two weeks ago that the GSEs had more than $11 billion in outstanding repurchase requests at the end of the second quarter. Fitch Ratings predicted in August that the buyback amount for just the big four banks could reach $180 billion.”

Housing Wire – “Rating agencies disregarded mortgage quality risks, former Clayton exec says” (9-27-10)

“Between the first quarter of 2006 and the second quarter of 2007, Clayton reviewed more than 911,000 mortgages for its clients, such as Deutsche Bank and Goldman Sachs, that sold them as security pools. Johnson told the FCIC only half of them, 54%, met the kinds of standards these Wall Street firms were advertising to investors. The other 46% were “bad loans” written on unchecked information such as borrower stated income.”

Housing Wire – “Monday Morning Cup of Coffee” (9-27-10)

“Sales of distressed properties will peak in 2011 at 2.3 million transactions before falling to more normal levels at 850,000 in 2016, according to a report from John Burns Real Estate Consulting.”

Press Enterprise - “2010 real estate survivors celebrate and look at market” (9-27-10)

“Bruce Norris, who hosted the Sept. 17 reception, dinner and panel discussion, took a minute to inform the panelists, including representatives from Fannie Mae and Freddie Mac, that the audience would love the chance to buy and fix up foreclosed houses in bulk. Several times the panelists, who also included outspoken economist Christopher Thornberg and experts in the appraisal, mortgage banking and auctioning sectors, pointed to the discrepancy between high mortgage delinquency rates and a limited number of bank-owned homes available for purchase.”

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

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

Wednesday, September 1st, 2010

Today’s News Synopsis:

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

In The News:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Looking Back:

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

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

Tuesday, August 10th, 2010

Today’s News Synopsis:

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

In The News:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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The Norris Group Real Estate News Roundup 7/9/10

Friday, July 9th, 2010

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

Today’s News Synopsis:

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

In The News:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Looking Back:

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

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

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