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The Norris Group Real Estate News Roundup 9/24/10

Friday, September 24th, 2010

Today’s News Synopsis:

Attorney General Brown is interfering with Ally Financial’s mass foreclosure operation, and may force the company to cease all foreclosure activity in California. Multiple government agencies have put out statistics on home sales. Freddie Mac’s total mortgage portfolio decreased 5.2% last month. Thirty-day delinquent inventory fell to 9.22%, according to LPS. S&P predicts the current level of shadow inventory will take 40 months to clear.

In The News:

Mortgage Bankers Association – “MBA Testifies on Potential Revisions to The Home Mortgage Disclosure Act (HMDA)” (9-24-10)

“One issue the Fed must keep in mind in determining what data elements to collect is that HMDA requirements should not turn into a safe harbor of allowable credit variables to be considered when making a loan. Freezing credit models into an official sanctioned set of variables would have a deleterious impact on credit availability going forward, limiting the growth of lenders who believe they have a better idea of how to do things. For example, over the years some lenders have come to believe that credit scores are not as important as the number of times a potential borrower has been late with housing-related payments. Some lenders now will simply refuse to make a loan to a borrower who has walked away from a previous mortgage, or appears to be positioning himself or herself for such behavior.”

Office of the Attorney General – “Brown Directs Nation’s Fourth Largest Home Lender to Suspend Foreclosures Until It Proves It Is Complying with the Law” (9-24-10)

“Recent reports indicated that the head of Ally Financial’s document processing team testified he routinely approved and signed foreclosure documents without confirming they were accurate and legally sufficient, as he was required to do. This admitted misconduct raises serious doubts about whether Ally Financial’s practices provide California borrowers facing foreclosure the protections guaranteed by law. Accordingly, Brown is demanding that Ally Financial, the fourth largest home loan institution in the country, demonstrate its compliance with California law or else halt all foreclosure operations in the state. Ally Financial earlier this week suspended evictions of homeowners and foreclosure sales in 23 states”

Mortgage Bankers Association - “MBA Applauds House Passage of National Flood Insurance Program Extension” (9-24-10)

“The Mortgage Bankers Association (MBA) applauded yesterday’s passage of legislation by the House that will extend the National Flood Insurance Program (NFIP) through September 30, 2011. The bill passed the Senate Tuesday and will now go to the President for his signature. Without agreement on an extension, the program was set to expire on September 30, 2010.”

CNN - “No mortgage mods for many of the jobless” (9-24-10)

“Unemployed homeowners cannot count jobless benefits as income when applying for mortgage modifications if they have loans backed by Fannie Mae. That could greatly limit their ability to get a long-term reduction in their monthly payments.”

Los Angeles Times – “New home sales remain at record low in August” (9-24-10)

“New single-family dwellings sold at a seasonally adjusted annual rate of 288,000 units, according to the Commerce Department. That estimate was flat compared with July’s pace, which remained a record low even after being revised up. The August pace was a 28.9% decline from the same month a year earlier.”

Housing Wire – “Census Bureau: August single-family sales fall 28.9% from year earlier” (9-24-10)

“Sales of new single-family homes in August fell 28.9% from a year earlier, according to the Census Bureau and Department of Housing and Urban Development. The Census Bureau said the seasonally adjusted rate of homes sales in August was 288,000, flat with July’s revised rate and well below the 405,000 a year ago. These federal figures are based on pending contracts of home sales.”

Housing Wire – “Freddie Mac mortgage portfolio continues four-month decline” (9-24-10)

“The Freddie Mac (FRE: 0.00 N/A) total mortgage portfolio decreased at an annualized rate of 5.2% in August after a 3.9% drop in June. The portfolio hasn’t seen an increase since April. Mortgage purchases and issuance at the government-sponsored enterprise reached $29.1 billion in August, up from $28.4 billion in July and down 39% from last year. The year-to-date total has reached $236.5 billion.”

Housing Wire – “August delinquency inventory falls on highest foreclosure starts since January: LPS” (9-24-10)

“LPS reported 282,528 foreclosure starts last month, up 1% from July and 3.8% higher than the year earlier. The year-to-date foreclosure rate is now 20.4% higher than 2009. Thirty-day delinquent inventory fell to 9.22%, the lowest level in over a year. The percentage was 9.3% in July and 9.7% a year ago. The inventory of 90-day delinquent loans decreased to 8.22%, down from 8.3% in July. The percentage was 8% a year earlier.”

Housing Wire – “$460 billion shadow inventory will take 40 months to clear: S&P” (9-24-10)

“The high pace of residential mortgage defaults has flooded the shadow inventory market with $460 billion in outstanding principal balance, according to Standard & Poor’s second-quarter report on housing liquidation timelines.”

Housing Wire – “JPMorgan to offer $1.1 billion CMBS” (9-24-10)

“JPMorgan is coming to market with $1.1 billion in commercial mortgage-backed securities notes across 13 classes, according to a pre-sale report from Fitch Ratings.”

Housing Wire – “August new home sales scrape bottom, remain flat month-over-month: NAFCU” (9-24-10)

“New homes sales remained flat month-over-month in August at 288,000 annualized units, according to a report released today by the National Association of Federal Credit Unions. Sales are scraping bottom at 28.9% less than one year ago and barely above the record low of 282,000 units in May.”

Housing Wire – “HFA delinquency rate hits record high in S&P report” (9-24-10)

“Delinquencies for housing finance agency loans increased 0.62% in the second quarter to 6.67%, according to a Standard & Poor’s report released today. This is the highest percentage the firm has seen since it started tracking such data in Q2 2006 and up 1.37% from Q209.”

Housing Wire – “White-collar criminals and unemployment income cut from HAMP eligibilty” (9-24-10)

“New guidelines from Fannie Mae and the Treasury Department out this week are restricting the eligible income of borrowers considered for the Home Affordable Modification Program. The mandates will also disqualify criminals convicted of certain white-collar offenses.”

Looking Back:

One year ago, research from the Construction Industry Research Board showed the number of home building permits taken in August was down 5 percent from July. The NAR reported that existing home sales decreased by 2.7 percent from July to August. A study showed that foreclosure prevention laws in California failed to significantly help home owners. The Federal Reserve intended to continue its stimulus plan and would continue to buy mortgage securities.

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

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The Norris Group Real Estate News Roundup 9/21/10

Tuesday, September 21st, 2010

Today’s News Synopsis:

Loan originations increased 25% from 2008, according to the Federal Financial Institutions Examination Council. The Commerce Department reports new home and apartment construction rose 10.5% last month to a seasonally adjusted annual rate of 598,000. Zillow claims interest rates fell again to 4.25%.

In The News:

San Francisco Chronicle - “More mortgage loans – first time since ’05 peak” (9-21-10)

“U.S. mortgage lending rose for the first time in four years in 2009 as a decline in borrowing rates spurred refinancings, according to regulatory data. The number of loans originated climbed 25 percent to 8.95 million from 2008, according to a report released Monday in Washington by the Federal Financial Institutions Examination Council. Refinancings rose 66 percent to 5.76 million, while loans to purchase homes dropped 11 percent to 2.78 million. Home-improvement and multifamily-dwelling loans also fell.”

Los Angeles Times – “Home construction jumps 10.5% in August” (9-21-10)

“Construction of new homes and apartments rose 10.5% in August from July to a seasonally adjusted annual rate of 598,000, the Commerce Department said Tuesday. That’s the highest level since April.”

Housing Wire – “Flattened Ginnie roll rates in 2Q could mean slower prepays: Credit Suisse” (9-21-10)

“The amount of Ginnie Mae-held loans rolling from 60 days to 90 days delinquent slowed in the second quarter, after spiking last year. According to research from Credit Suisse, this could signal slower involuntary prepayments going forward. The Ginnie Mae share of agency fixed-rate issuance dropped to 33% in August, from 36% in July. Its total 30-year gross and net issuances in August were $28.8 billion and $22.7 billion respectively, both down from $31.4 billion and $15.2 billion in July.”

Housing Wire – “CRE investment gearing up, but analysts don’t expect comeback until 2012″ (9-21-10)

“Trouble in the commercial real estate sector is not likely to be resolved until the economy picks up and job creation boosts demand for office, retail, hotel and other commercial properties, according to a Standard & Poor’s commentary released Monday. Even though the market research firm sees a trough in some CRE subsections, overall improvement isn’t expected until at least 2012.”

Housing Wire – “Zillow: 30-year, fixed rates reach another low at 4.25%” (9-21-10)

“Interest rates continue to set all-time lows, as Zillow reported its Mortgage Marketplace showed the average rate for a 30-year, fixed mortgage is currently 4.25%. The real estate information firm said the rate if down seven basis points from 4.32% the week earlier and at the lowest level since the report launched in April 2008.”

Housing Wire – “Home sales level off in August after recent plunge: RE/MAX” (9-20-10)

“August home sales dropped 0.5% after plummeting in July, according to real estate franchise RE/MAX. Home sales are still down 17.9% from August of last year. While some real estate agents reported increased showings, few have translated into closed transactions after the expiration of the homebuyer tax credit at the end of April.”

Bloomberg - “Fed Under Pressure Amid Confusion Over New Easing” (9-21-10)

“Federal Reserve officials are under pressure to avoid creating confusion among investors about any new effort to spur the U.S. recovery. The Federal Open Market Committee, which meets today, triggered a stock selloff with its last statement on Aug. 10 as investors took it as a signal the economy will falter. The Standard & Poor’s 500 Index tumbled 7.1 percent during the two weeks following the statement after reaching a three-month high on Aug. 9. The MSCI World Index fell 7.3 percent.”

Orange County Register – “CA. mortgage defaults climb 4th month in row” (9-21-10)

“Notices of default filings in California, the first step in the foreclosure process, climbed for the 4th month in a row in August, up by 16.6% from July and 16% from August, 2009, ForeclosureRadar reports. Homes in the state that went back to lenders were up 20% over July and 0.8% from August last year. Foreclosure sale cancellations were down 11%. The inventory of bank-owned homes went up 3.63% from last month and 8.28% year over year.”

Orange County Register – “Fed keeping cheap money policy” (9-21-10)

“the pace of recovery in output and employment has slowed in recent months. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. Housing starts are at a depressed level. Bank lending has continued to contract, but at a reduced rate in recent months.”

Inman - “Survey: Home-price outlooks sour in Q3″ (9-21-10)

“Ninety percent of real estate agents and brokers expect home prices to either fall or stay the same over the next six months, according to a survey by online real estate marketing site HomeGain. HomeGain conducted the survey from Sept. 7-14, with participation from more than 1,100 real estate agents and brokers and 2,600 homeowners nationwide.”

Looking Back:

One year ago, the federal government claimed it had plans to “tinker” with mortgage interest reporting. First American estimated that California had approximately $30 billion dollars worth of bad home loans. A review of over 24 million credit files showed that people with good credit scores were more likely to ‘strategically default’. Lennar Corp. forecasted a profitable year, despite a bad 3rd quarter.

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 9/20/10

Monday, September 20th, 2010

Today’s News Synopsis:

The NAHB’s monthly survey shows builder confidence remained at the previous month’s low level. Trepp claims that commercial real estate loans were the cause of 5 of the 6 bank failures that occurred over the weekend. FHA insured mortgages accounted for 37% of all originations last year, according to the Federal Financial Institutions Examination Council. In a recent survey, nearly 50% of economists claimed that economic growth in 2011 would be below the Fed’s estimated 2.5% annual pace. GMAC is denying the claim that it instituted a foreclosure moratorium in 23 states.

In The News:

Calculated Risk - “Q2 Flow of Funds: Household Net Worth off $12.3 Trillion from Peak” (9-18-10)

“According to the Fed, household net worth is now off $12.3 Trillion from the peak in 2007, but up $4.7 trillion from the trough in Q1 2009.”

Mish’s Global Economic Trend Analysis - “One Sided Policies” (9-18-10)

“The bailouts did not produce inflation, but the middle class bailed out the banks and got nothing in return but higher taxes, fewer services, and looking ahead, years of stagnation. Moreover, the bondholders (such as China, Japan, and PIMCO) were made whole, while the homeowners are still mired in debt. Adding to the misery, banks lord it over on homeowners with total nonsense about the morality of walking away.”

Wall Street Journal – “Defaults Account for Most of Pared Down Debt” (9-18-10)

“Over the two years ending June 2010, the total value of home-mortgage debt and consumer credit outstanding has fallen by about $610 billion, to $12.6 trillion, according to the Federal Reserve. That’s an annualized decline of about 2.3%, which is pretty impressive given the fact that such debts grew at an annualized rate in excess of 10% over the previous decade.”

CBIA - “Energy Efficiency and Solar Incentives” (9-20-10)

“A number of federal, state and local entities have made available incentives and rebates that promote renewable energy and energy efficiency in new construction. This section is intended to be a one-stop shop for information on state, federal, local and utility incentives and policies that promote such standards.”

NAHB - “Builder Confidence Unchanged in September” (9-20-10)

“Builder confidence in the market for newly built, single-family homes held unchanged in September from the previous month’s low level of 13, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.”

Bloomberg - “Ally’s GMAC Mortgage Halts Home Foreclosures in 23 States” (9-20-10)

“Ally Financial Inc.’s GMAC Mortgage unit told brokers and agents to halt foreclosures on homeowners in 23 states including Florida, Connecticut and New York.”

Business Journal – “GMAC Mortgage denies foreclosure moratorium” (9-20-10)

“GMAC Mortgage said Monday that recent media reports stating that the lender has instituted a moratorium on all residential foreclosures in Minnesota and 22 other states are not true.”

Reuters - “Recession ended in June 2009: NBER” (9-20-10)

“The recession ended in June 2009, making it the longest downturn since the Great Depression of the 1930s, the National Bureau of Economic Research said on Monday.”

Housing Wire – “Commercial real estate problems lead to latest bank failures: Trepp” (9-20-10)

“Troubled commercial real estate loans brought down five of the six bank failures reported by the FDIC over the weekend, according Trepp, an analytics firm. There were six bank closings over the weekend, totaling 126 for the year. The Federal Deposit Insurance Corp. estimated the six closings this week to cost the Deposit Insurance Fund (DIF) a total of $347.6 million.”

Housing Wire – “SEC calls for more transparency about short-term borrowing” (9-20-10)

“The Securities Exchange Commission voted unanimously over the weekend to propose regulation that would increase transparency between investors and public companies about short-term borrowing arrangements. The SEC wants companies to disclose short-term transactions as they happen instead of the current reporting standard where the info is delivered at the end of the period.”

Housing Wire - “FHA insured 37% of mortgage originations in 2009: Fed survey” (9-20-10)

“Mortgages insured by the Federal Housing Administration accounted for 37% of all originations in 2009, up from 26% in 2008 and 7% in 2007, according to the Federal Financial Institutions Examination Council.”

Housing Wire – “Survey finds house prices still stable in August as buyer interest hits ‘brick wall’” (9-20-10)

“Average prices increased 6.3% for damaged REO and 2.5% for refurbished REO. Prices also increased 3.8% for short sales. Non-distressed home prices showed a slight 0.9% decline for the month.”

Housing Wire – “One year of First Look: Fannie Mae sells 29,000 REOs to owner occupants” (9-20-10)

“A year into its First Look program, Fannie Mae vendors have sold 29,000 REO properties to owner-occupants and 5,000 to public entities under the Neighborhood Stabilization Program. Fannie launched First Look in August 2009 to allow both owner occupants and those using NSP grants to submit offers 15 days ahead of investors.”

Housing Wire – “Servicers: Sometimes leasing makes sense” (9-20-10)

“Servicers are beginning to see the benefits of keeping properties occupied with cost-savings such as lower property preservation expenses. Rentals allow the servicer to have more control over when they decide to release the property onto the market for sale because property deterioration that comes with vacancies becomes less of a concern.”

Housing Wire – “MBA economists predict new refinancings to cut in half in 2011″ (9-20-10)

“Expect another year of somewhat depressing economic outlooks, as we’re in a time of great uncertainty in the mortgage industry and the country as a whole, according to economists of the Mortgage Bankers Association. And leading up the list, the MBA expects that the rate of new refinancings, which currently account for the majority of current mortgage originations, will be cut in half by 2012.”

Bloomberg - “Escaping Double Dip to Growth Recession Means No Job Relief” (9-20-10)

“While the economy isn’t so weak that it’s clearly in need of more monetary stimulus, it may not be strong enough to keep unemployment from increasing. Twenty seven of 58 economists polled by Bloomberg News this month see growth in 2011 below the 2.5 percent to 2.8 percent pace Fed policy makers peg as the long-term trend. Twenty eight see the jobless rate rising above last month’s 9.6 percent sometime in the next nine months. That combination would constitute a growth recession.”

Looking Back:

One year ago, Laurence Fink warned that government programs to help homeowners would slow the recovery in the mortgage market. The FHA announced that its reserves would fall below congressional requirements. MDA DataQuick reported that fifteen percent of the homes sold in August were bought by investors. Statistics from Trulia showed that price cuts in Irvine were more likely to occur in luxurious areas rather than popular areas.

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 9/16/10

Thursday, September 16th, 2010

Today’s News Synopsis:

According to MDA DataQuick, 6,698 houses and condos closed escrow in the Bay Area last month. Also, 34,239 houses and condos were sold statewide. BarCap expects that of all the subprime mortgages still current and originated in 2005, 70% will default.

In The News:

CBIA - “An Updated, Upgraded Deck Made Easy With Composites” (9-16-10)

“According to a recent study by the Joint Center for Housing Studies at Harvard University, remodeling spending is expected to increase on an annual basis by the end of the year with growth accelerating to the double-digits in the first quarter of 2011. Fueled by increased confidence in the economy, more homeowners are investing in their homes again.”

MDA DataQuick – “California August Home Sales” (9-16-10)

“An estimated 34,239 new and resale houses and condos were sold statewide last month. That was down 2.7 percent from 35,202 in July, and down 14.0 percent from 39,811 for August 2009. California sales for the month of July have varied from a low of 29,764 in 1992 to a peak of 73,285 in 2005, while the average is 48,805. MDA DataQuick’s statistics go back to 1988.”

MDA DataQuick – “Bay Area Home Sales Drop to 1992 Level; Median Price Slips Again” (9-16-10)

“A total of 6,698 new and resale houses and condos closed escrow in the nine-county Bay Area last month, down 1.1 percent from 6,773 in July and down 10.9 percent from 7,518 in August 2009, according to MDA DataQuick of San Diego.”

MBA - “MBA Report: Give FHA More Resources and Authority to Strengthen Program” (9-16-10)

“The Federal Housing Authority (FHA) commissioner should be granted the resources to better manage the agency through the current housing market crisis and to allow the agency to continue to thrive when the market recovers, according to new report from the Mortgage Bankers Association. Increasing resources for staffing and technology are among the 12 recommendations to improve the FHA and the Government National Mortgage Association (Ginnie Mae) by the MBA’s Council on the Future of FHA and Ginnie Mae. Convened in November 2009, the council consists of senior executives from 27 companies, representing both large national lenders and small independent mortgage bankers.”

CNN - “Foreclosure rates hold steady” (9-16-10)

“The number of homeowners falling enough behind on their loans to attract initial notices of default was down 30% in August, RealtyTrac said Thursday. Eventually, that should translate into fewer people losing their homes.”

San Diego Union Tribune – “Most oppose walking away from mortgage” (9-16-10)

“A majority of Americans believe it is ‘unacceptable’ for homeowners to stop paying mortgage payments and walk away from their homes, says a Pew Research Center survey. Of the 2,967 adults surveyed during the second half of May, 59 percent said they believed it was wrong for a homeowner to stop making mortgage payments and surrender their home to a lender. Still, 19 percent said it was OK to walk away while another 17 percent said it depended on the homeowner’s circumstances.”

Housing Wire – “CoreLogic sees distressed housing sales rising in coming months” (9-16-10)

“CoreLogic (CLGX: 18.29 -0.76%) said tax credit-induced sales helped push distressed sales to a seven-month low in June, but the share of distressed sales is expected to bounce back in coming months, according to the firm’s inaugural U.S. Housing and Mortgage Trends report. The bi-monthly report will track housing sales, valuation, negative equity and foreclosure activity. In June, the distressed sale share fell to 24% of overall sales, down from a peak of 35% in early 2009, according to CoreLogic.”

Housing Wire – “Mission Capital principal: Banks stoke the economy with distressed sales” (9-16-10)

“Activity has dramatically picked up since the fourth quarter of 2008. This is in large part due to speculation on the part of funds and high net worth individuals in loan assets, as well as in the stock and debt of the underlying financial institutions. As banks have become more healthy and their financial projections more visible, they have stoked the economy by simultaneously lending and selling distressed loans at a discount. This creates a virtuous cycle of investment activity in that investors are investing in credit-impaired assets, rehabilitating them and then refinancing right-sized debt.”

Housing Wire – “BarCap estimates more subprime defaults from troubled vintages” (9-16-10)

“BarCap analysts are predicting high default rates on still-current subprime mortgages originated between 2005 and 2007. Of those subprime mortgages still current and originated in 2005, 70% are expected to default. In 2006, the expected default rate for current subprime is 89%, and 84% of current subprime from the 2007 vintage.”

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 9/10/10

Friday, September 10th, 2010

Sources:
http://www.mortgageorb.com/e107_plugins/content/content.php?content.6632
http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-189
http://blogs.wsj.com/economics/2010/09/09/irs-needs-strategy-to-recoup-home-buyer-tax-credit/
http://realtytimes.com/rtpages/20100907_political.htm
http://www.dsnews.com/articles/shadow-inventory-shrinks-for-fifth-consecutive-month-barclays-2010-09-03
http://www.dsnews.com/articles/real-estate-investment-firm-acquires-stake-in-760m-fdic-loan-portfolio-2010-09-07
http://online.wsj.com/public/resources/documents/retro-HOUSINGM08.html
http://realtytimes.com/rtpages/20100907_political.htm
http://jan.ocregister.com/2010/09/05/more-people-leave-california-than-arrive/44597/
http://www.siteselection.com/issues/2010/jul/North-American/
http://www.housingwire.com/2010/09/07/bank-deposit-balances-shrink-for-first-time-since-92

Today’s News Synopsis:

Real Capital Analytics reports distressed commercial properties rose $5.1 billion in July. President Barack Obama appointed Austan Goolsbee as leader of the Council of Economic Advisors. Mortgage servicers completed 65% more permanent modifications on Fannie Mae and Freddie Mac loans through HAMP in the 2nd quarter. According to Harris Trifon, average losses on loans packaged into U.S. CMBS totaled $501 million last month.

In The News:

Housing Wire – “Troubled commercial loans may be near the peak: Real Capital” (9-10-10)

“Distressed commercial properties increased $5.1 billion in July, the lowest addition since October 2008, according to the research firm Real Capital Analytics. The July additions were also less than half the monthly average for all of 2009 and through 2010 so far. The total amount of distressed commercial loans stands at $189.1 billion.”

Housing Wire – “Obama names Goolsbee leader of Council of Economic Advisors” (9-10-10)

“President Barack Obama announced today the appointment of Austan Goolsbee as leader of the Council of Economic Advisors. He will be one of four principal members of the team who’s duties include finding ways to add more jobs to the economy and lower the unemployment rate.”

Housing Wire - “Securities industry takes a beating in 2Q” (9-10-10)

“Issuance of mortgage-related securities in the second quarter totaled $356.5 billion; down 8.4% from the first quarter and 45.7% from the year earlier. Issuance from the government sponsored entities Fannie Mae and Freddie Mac still dominate the space with Ginnie Mae.”

Housing Wire - “CMBS delinquencies pass 8% despite record loan mods” (9-10-10)

“Special servicers modified a record $2.1 billion in loans backing commercial mortgage-backed securities (CMBS) in August, but delinquencies continue to grow, according to the credit-rating agency Fitch Ratings. The delinquency rate on CMBS loans reached 8.48%, a 23 basis point increase from July. There were $3.1 billion in new delinquencies, driven mostly by five loans recent defaults of loans worth more than $100 million.”

Housing Wire – “HAMP modifications on Fannie, Freddie loans up 65% in 2Q” (9-10-10)

“Mortgage servicers completed 88,551 permanent modifications on Fannie Mae and Freddie Mac loans through the Home Affordable Modification Program (HAMP) in the second quarter, a 65% increase from the previous quarter, according to a report from the Federal Housing Finance Agency.”

Housing Wire - “Moody’s: banks to write off another $286 billion in loans through 2011″ (9-10-10)

“Moody’s Investors Service expects continued trouble in the domestic banking industry with another $286 billion of loan losses yet to hit the books. Earlier this week, analysts said U.S. banks rated by Moody’s have incurred $476 billion of charge offs since 2008.”

Housing Wire – “ACUMA holds high expectations for credit union mortgage originations” (9-10-10)

“The American Credit Union Mortgage Association expects mortgage volumes for this year to rise above the $90 billion in originations its members completed in 2009.”

Bloomberg – “Commercial Property Losses Mount as Loan Servicers Triage Real Estate Debt” (9-10-10)

“Average losses on loans packaged into U.S. commercial mortgage-backed securities totaled $501 million in August compared with $245 million in April, according to Harris Trifon, a Deutsche Bank analyst in New York who based the estimate on a three-month average. In August 2009, the number was $41 million.”

Inman - “‘Just let housing go’” (9-10-10)

“The Fed’s Beige Book said the obvious: ‘Continued growth … mid-July through the end of August, but with widespread signs of a deceleration.’ Not double-dip, not yet. In the absence of fearful dippers buying bonds, the 10-year T-note rose to a one-month high 2.8 percent, although doing no particular damage to mortgage rates, still near 4.5 percent. The new rage: ‘Just let housing go.’ These people do not seem to remember the benefits of letting Lehman go, the simple life without banks and their deposits.”

Today’s News Synopsis:

One year ago, the Federal Reserve announced the economy was stabilizing. U.S. homebuyers paid 3.3 percent less than listing price in July 2009. Bankruptcy filings increased 22% year over year. Foreclosure filings in the U.S. exceeded 300,000 for sixth straight months.

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The Norris Group Real Estate News Roundup 8/18/10

Wednesday, August 18th, 2010

Today’s News Synopsis:

HAMP’s permanent loan modifications increased 5.9% by the Bank of America, while the number of applications for mortgages increased 13%.  On the same note, according to the Mortgage Bankers Association the number fo refinancings for mortgages increased 17.1% in the previous week, while the amount of people filing for bankruptcy increased 20%.  Fannie Mae and Freddie Mac began searching for any bad loans or dishonest loan applications, while in other news Barney Frank believes Fannie Mae and Freddie Mac should no longer be allowed to operate.  However, there are no current plans for this to happen as the White House is trying to fix the problems.  Also, as the demand on homes decreases, the merging and aquisition of homebuilders may rise.  On a similar note, Veri-tax is now owned by  Blue Horizon Capital.  Finally, the Fed’s have come up with a plan to prepare for an increasing decline in the economy by using money made from securities to buy Treasuries.

In The News:

Housing Wire – “Bank of America Permanent HAMP Modifications Increase 5.9% in July” (8-18-10)

“Bank of America (BAC: 13.4305 +1.67%) pushed its total number of permanent mortgage workouts under the Home Affordable Modification Program (HAMP) to 76,300 in July, a 5.9% increase from June.”

Bloomberg - “U.S. MBA Mortgage Applications Index Rose 13% Last Week on Refinancing” (8-18-10)

“The number of mortgage applications in the U.S. increased last week, propelled by a surge in refinancing as borrowing costs hovered near record lows.  The Mortgage Bankers Association’s index rose 13 percent in the week ended Aug. 13, the Washington-based group said today. Refinancing jumped 17 percent to reach the highest level since May 2009, while purchases fell 3.4 percent.”

DSNews -“MIT Commercial Property Price Index Posts 17% Gain in Q2″ (8-18-10)

“Transaction prices of commercial properties sold by major institutional investors surged over 17 percent in the second quarter of 2010, according to an index developed and published by the Center for Real Estate at the Massachusetts Institute of Technology (MIT).”

CNBC - “Phase Out Fannie & Freddie Over Time: Rep. Frank” (8-18-10)

“Fannie Mae and Freddie Mac should be abolished but this has to be done over a period of time, Rep. Barney Frank, chairman of the House Financial Services committee, told CNBC on Tuesday.  Frank agreed that phasing out the housing behemoths would help bolster private mortgage financing, but stressed that the process would take time.”

Bloomberg - “Homebuilder Mergers Loom as `Elephant in Room,’ Citigroup Says” (8-18-10)

“Homebuilder takeovers may increase as tumbling demand for new houses and a faltering U.S. economic recovery spur companies to consolidate to gain market share, according to Citigroup Inc.”

RisMedia - “The Real Estate Book Introduces New Search Tool for House Hunters on the Go, Launches App for iPhone, iTouch, iPad” (8-18-10)

“For on-the-go home buyers, The Real Estate Book / RealEstateBook.com, the leading publisher of real estate information online and in print in North America, launches a new application that provides iPhone, iPod Touch and iPad users with access to all its listings – millions of homes for sale across the U.S. and around the world.”

DSNews - “Private Investment Firm Acquires Veri-tax” (8-18-10)

“Blue Horizon Capital, a private investment firm based in Los Angeles, California, acquired Tustin, California-headquartered Veri-tax LLC late last month.  A provider of tax verification and fraud management solutions for the mortgage lending and consumer credit industry, Veri-tax clients include two of the nation’s top four banks, as well as a slew of other lenders, originators, and financial institutions.”

Wall Street Journal - “Banks Face Fight Over Mortgage-Loan Buybacks” (8-18-10)

“While mortgage delinquencies are easing, banks are facing a new round of losses from loans made just before the financial crisis, and the fight to keep them off their balance sheets is intensifying.  Leading the charge to make originators repurchase their loans are Fannie Mae and Freddie Mac, the two government-owned finance agencies that guaranteed the mortgages. The firms are sorting through delinquent loans for signs of any violations of the representations and warranties, known as “reps and warranties.” In essence, they are looking for lies made by borrowers or lenders in loan applications.”

DSNews - ”Industry Stakeholders Descend on Washington to Debate GSE Reform” (8-18-10)

“Will Fannie Mae and Freddie Mac still be here in three years? Or will they be replaced by a new federal mortgage agency? Will the government begin a grand exodus from the housing market and leave the American Dream to the private sector?”

Orange County Register - “Realogy CEO Takes Part in U.S. Government Conference on the Future of Housing Finance” (8-18-10)

“Lenders seized fewer homes in July for a third straight month, repossessing nearly 10% fewer homes than in June.  Meanwhile, default notices filed against homeowners who have missed three or more house payments increased 9% last month from June’s levels.”

DSNews - “Rapidly Rising Inventory, Home Price Pressures in Store: Altos Research” (8-18-10)

“Real estate data provider Altos Research says its newest housing market report confirms what the company has been saying for some time: the mini “boom” of this spring was created by seasonal demand, with some extra help from the federal homebuyer tax credits.”

Housing Wire – “Falling Housing Prices Drag Down Consumer Spending for 3rd Straight Month: Deloitte” (8-18-10)

“The Deloitte Consumer Spending Index, which tracks consumer cash flow to predict future spending, declined for the third straight month in July due to weaknesses in the post-tax credit housing market.”

DSNews - “TransUnion: Mortgage Delinquencies Drop for Second Straight Quarter” (8-18-10)

“The national mortgage loan delinquency rate – measuring the ratio of borrowers 60 or more days behind on their home loan payments – fell again in the second quarter of 2010, suggesting the credit conditions in the housing sector have begun to stabilize, according to TransUnion.”

RisMedia - “Builders Shrink Homes to Fit Buyers’ Newly Modest Tastes” (8-18-10)

“Realogy Corporation, a global provider of real estate and relocation services, announced that its chief executive officer Richard A. Smith traveled to Washington, D.C., today to participate in the Conference on the Future of Housing Finance. The invitation-only event is being hosted by Secretary of the Treasury Timothy Geithner and Secretary of Housing and Urban Development (HUD) Shaun Donovan.”

“The Fed’s move to begin buying long-term Treasuries with proceeds from maturing mortgage-backed securities opens up the possibility of quantitative easing if the economy declines further, according to Deutsche Bank.”

CNBC - “Call for Careful Overhaul of US Mortgage Lending” (8-18-10)

“The US does not intend to wind down completely Fannie Mae and Freddie Mac, the large government-sponsored mortgage companies that are eating up billions of taxpayer dollars, given the fragile state of the housing market.”

CNBC - “White House Taking Steps to Fix Fannie and Feddie” (8-18-10)

WebCPA - Bankruptcy Filings Jump 20 Percent (8-18-10)

“Bankruptcy filings rose 20 percent in the 12-month period ending June 30, 2010, the highest number of bankruptcy filings for any period since many of the provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 took effect.”
For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

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186-TNG Radio – Daniel Phelan 8-7-10

Friday, August 6th, 2010

Daniel-Phelan

Daniel Phelan

CEO of Pacific Southwest Realty Services


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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The Norris Group Real Estate News Roundup 8/4/10

Wednesday, August 4th, 2010

Today’s News Synopsis:

Mortgage application volume increased 1.3 percent this week, according to the MBA. Large home builders, such as PulteGroup and DR Horton, are claiming a quarterly profit. Analysts expect total payrolls to decline in official Census data which is due Friday. The American Bankruptcy Institute expressed concerns that consumer bankruptcies might total 1.6 million this year.

In The News:

Mortgage Bankers Association – “Mortgage Applications Increase in Latest MBA Weekly Survey” (8-4-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending July 30, 2010. The Market Composite Index, a measure of mortgage loan application volume, increased 1.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1.4 percent compared with the previous week.”

Washington Post – “FHA tells Congress: Mortgage insurance claims are down; home prices a concern” (8-4-10)

“Mortgages backed by the Federal Housing Administration have performed better than expected so far this fiscal year, though the improvements could be overturned if home prices sink, according to a report the agency submitted to Congress this week. That audit found that as the FHA’s loan volume expanded, its default rate rose and the excess cash it set aside to deal with unexpected losses eroded to dangerously low levels as of Sept. 30. The auditors concluded taxpayers would be on the hook for losses if worst-case scenarios played out — a first for the agency, which has always used fees it charges borrowers to pay lenders for losses.”

Housing Wire – “Healthy Quarterly Reports from Homebuilders may be Short-Lived” (8-4-10)

“The country’s top four homebuilders all posted profits in their most recent quarterly earnings report, but with the tax credit gone, analysts predict the bounceback will likely be short-lived, as demand dries up. DR Horton (DHI: 10.48 -1.13%) added its third consecutive profitable quarter while Michigan-based PulteGroup (PHM: 8.38 -0.59%) returned to profitability after years of losses as it continues to try to meet its earlier projections of a profitable 2010.”

Housing Wire – “Census Firings Expected to Weigh on Weak July Private Sector Job Growth” (8-4-10)

“Nonfarm private sector employers added an estimated 42,000 jobs to payrolls in July, according to the Automatic Data Processing (ADP) national employment report published today (download here). The ADP’s estimates do not include layoffs of temporary workers no longer needed for the 2010 Census, however, and analysts are expecting total payrolls to decline in official data, due Friday. ADP also revised its estimate for the increase from May to June up 46% to 19,000, from the initial 13,000 estimate.”

Housing Wire – “20m Borrowers Could Be Underwater before 2012: Deutsche Bank” (8-4-10)

“More than 14m borrowers were underwater as of Q110, owing more on a mortgage than the value of the underlying property. But with a further 10.8% decline in house prices expected relative to Q409 levels, another 6m borrowers are likely fall into negative equity by the end of 2011, according to commentary today by Deutsche Bank.”

Bloomberg – “U.S. Consumer Bankruptcies May Exceed 1.6 Million, Report Says” (8-4-10)

“U.S. consumer bankruptcies, after rising 9 percent last month from June, might exceed 1.6 million this year, according to the American Bankruptcy Institute. The 137,698 bankruptcy filings in July also represent a 9 percent increase from a year earlier, the institute said yesterday in a statement posted on its website, citing data from the National Bankruptcy Research Center.”

Orange County Register – “O.C. apartment rents creep up” (8-4-10)

“A 15-month run of falling rents appears to be at an end, with the biggest landlords doing an about face and raising rents again as their apartments fill up. The average rent for a large Orange County apartment complex increased $4 during the quarter ending on June 30, rising to $1,482, according to apartment tracker RealFacts.”

Looking Back:

One year ago, the NAR announced pending home sales increased by 3.6 percent during July. The nations biggest homebuilders recorded quarterly losses. Approximately 9% of eligible borrowers had received a trial loan modification under the Obama administration’s $75 billion foreclosure prevention plan.

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 8/2/10

Monday, August 2nd, 2010

Today’s News Synopsis:

Alan Greenspan expressed concern that a decrease in home prices might cause the U.S. to slip back into recession. The Census Bureau estimates the homeownership rate will fall to 62% in 2012. Moody’s reports strategic delinquencies are falling on jumbo mortgages. Construction spending remained relatively flat with just a 0.1 percent increase last month.

In The News:

Bloomberg - “Greenspan Says Drop in Home Prices Might Bring Back Recession” (8-1-10)

“Former Federal Reserve Chairman Alan Greenspan said the slowing economic recovery in the U.S. feels like a ‘quasi-recession’ and the economy might contract again if home prices decline.”

Los Angeles Times – “Builders’ pricing strategies are aimed at creating sales urgency” (8-1-10)

“The first bump occurs when ground is broken for the project. Then builders up the ante when the streets go in, and again when the model homes begin to take shape. Prices go up for a fourth time with the big opening splash.”

USA Today – “Homeownership rate continues to slide” (8-2-10)

“Fresh projections say the rate could plummet to about 62% as early as 2012 and almost certainly by the end of the decade. Homeownership rates haven’t been that low since they hit 61.9% in 1960. The share of households that own their homes has been sliding since the housing bubble burst in 2006. The rate fell again in the second quarter of this year to 66.9% — the lowest since 1999 — from a peak of 69.4% in 2004, the Census Bureau says.”

Mercury News – “June construction activity rises 0.1 percent” (8-2-10)

“Construction spending rose 0.1 percent in June, the Commerce Department reported Monday. While that was better than the decline economists had forecast, the government sharply revised down its estimate of activity in May to show a drop of 1 percent rather than the 0.2 percent dip initially reported.”

Housing Wire – “Strategic Defaults Falling on Jumbo Mortgages, Relative to Smaller Loans: Moody’s” (8-2-10)

“According to a weekly credit report from Moody’s Investors Service, jumbo mortgage delinquencies, in this case delinquencies on mortgages over $1m, are almost equal to mortgage delinquencies for smaller mortgages. The agency monitors the risk of default across mortgages that are bundled into bonds and sold as residential mortgage-backed securitizations.”

Housing Wire – “2010 CMBS Modifications Outnumber the Last 2 Years Combined: Trepp” (8-2-10)

“As delinquency increases begin to slow, modifications on CMBS loans are accelerating, according to the analytics firm, Trepp. Further, halfway through 2010, modifications have already passed the amount done in 2008 and 2009 combined. The rate of modifications is set to triple the rate in 2009. In the first seven months of 2010, there have been modifications done on $12.1bn worth of CMBS loans, a 37% increase from the $8.8bn done in all of 2009 and more than four times the $354m modified in 2008, according to Trepp.”

Housing Wire – “Government Refi Wave Could Cost GSE Bondholders $350bn: KBW” (8-2-10)

“Recent record-low mortgage rates have sparked fears amongst investors that a government-driven refinancing wave would boost prepayment speeds back to 2003 levels. According to KBW, there is a cost to such a policy shift, contrary to what supporters of action have said. The agency mortgage-backed securities (MBS) market trades a premium of almost seven basis points. If all borrowers refinanced into the current mortgage rates, roughly $350bn would transfer from bondholders to borrowers, equaling $75bn annually.”

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 7/30/10

Friday, July 30th, 2010

Sources:

http://www.govtrack.us/congress/bill.xpd?bill=h111-600

http://maplight.org/us-congress/bill/111-hr-600/357605/total-contributions.table

http://blogs.wsj.com/developments/2010/07/29/popular-zero-down-mortgage-program-makes-comeback/?blog_id=36&post_id=14060

http://www.rurdev.usda.gov/rhs/sfh/brief_rhguar.htm

http://www.rurdev.usda.gov/SupportDocuments/CA%20GRH.pdf

http://money.cnn.com/2010/07/26/real_estate/new_home_sales/?postversion=2010072612

http://www.housingwire.com/2010/07/26/multifamily-rental-demand-catching-up-to-supply-barcap

http://www.bloomberg.com/news/2010-07-27/apartment-rentals-surge-in-u-s-as-foreclosures-rise-job-growth-resumes.html

http://www.housingwire.com/2010/07/27/homeownership-vacancy-rate-level-in-q210

http://www.bloomberg.com/news/2010-07-27/job-cuts-of-500-000-next-year-predicted-for-cities-counties-over-budget.html

http://money.cnn.com/2010/07/29/real_estate/new_face_of_foreclosure

Today’s News Synopsis:

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

In The News:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Looking Back:

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

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

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