Mike Novak-Smith

REO agent

RE/Max

(Full Bio)

Ted Boeker

Owner and Broker

RE/Max

(Full Bio)

This week Bruce Norris is joined by Mike Novak-Smith and Ted Boeker. Mike Novak-Smith is not only one of the largest REO agents in the Inland Empire, but the nation. Mike is in the top 1% of all real estate agents nationwide and is experienced in REO, short sales, bankruptcies, asset management, and negotiating. Mike specializes in REOs in Riverside, Moreno Valley, San Bernardino, Perris, Rialto, Colton, and Corona. Ted Boeker is the owner of the company that Mike is at and has brokered for RE/Max Results in Moreno Valley. Having started the company in 1989, Ted has vast experience in real estate and has been able to train and lead 35 of Southern California’s highest producing real estate brokers and agents to close deals quickly and efficiently for a variety of clients in commercial, residential, multifamily, and office real estate. Nationwide Home Loans Inc. and RE/Max Results escrow division are associated companies. Before that, Ted practiced law.

Ted opened a business in 1989, which was a peak year. Things changed radically after this, and Bruce wondered if this was something that as a part of his business model he saw changing very quickly or if it surprised him. Ted said he would love to say he foresaw a lot of things, but he really did not see much coming. He had come out of commercial real estate, which died after the 1986 Tax Reform Act; and he said there was nothing in commercial to do so he should look at residential. It looked attractive at the time, but he never dreamed they would see the ups and downs that they have. Ted said it was probably good to start when he did because it did steal him through some of the early tough times. The flexibility of a business model all of a sudden became absolute. You could not do farming and be surviving in the ‘90s, and you could not do it after 2006 either.

Bruce went to a meeting at Ted’s company where he talked, and remembered prior to the meeting when they were talking about volume of sales. They were talking about the number of closings that Mike had and the other people who were ahead. Bruce also envisioned a meeting he was not at in 2006 where everybody is doing pretty well, and he wondered how you tell somebody that is doing well that their model is about to radically change and they have to do it before it actually happens. Ted said it is not easy as real estate agents are a wide variety of people, some well educated and others not so much. The biggest example is 3 years ago Ted started harping on short sales, being able to hopefully foresee what was coming. However, agents two years ago said Ted was crazy and they were not going to do what he was talking about. Ted said today about 40% of his sales are short sales. The agents who refused it are probably gone, and the ones who embraced it are doing relatively well to the marketplace. There are not a lot of easy commission checks anywhere.

Mike has been involved in the REO listing side for 21 years. The first REO ever listed was in January 1991. He worked at a Century 21 Office where they could not give away the REO. It basically paid 5% commission instead of 6%. He made a referral, but he was number 9 one the list; so when they finally got to him he knew the economy was declining. The Persian Gulf War had started, and things were tough. He thought if he could do the deal at 2% he could still make the house and car payments and could eat another month. This was why he carried out the deal. Anybody that declined the deal at the time is no longer in the business. Prior to doing the REOs, Mike’s business model was to show up at a Century 21 office and try to live off the floor time and advertise, which he did well. People would just walk in and say they wanted to buy or sell a house and you wrote up the deal. It was easy. Mike also started in 1989 at the very peak year and then quickly transitioned into unknown territory. The 90s was not replicated and it was not the normal downturn. In the ‘80s we had the radical interest rate change, but we did not have a price decline because we were able to borrow the cheap financing and move it forward to other buyers. In the 90s we took a 5% gradual decline every year for a while, and this was news to everyone who owned California real estate.

Bruce wondered how the 2006-2011 downturns differed from what Ted experienced in the 90s as a business owner. Ted said he did not remember the 90s as well because they never really got up to speed. It took them ten years to get up to a critical mass of agents and holding on through the tough times. The early 2000s were good, and then the falloff was a real shock. When they saw the change in 2008, it was the big change for them. In 2008 and 2009 they had a lot of REOs, and then nothing for two years. This is the biggest challenge he has ever had. They have really been able to tighten up and cut out expenses, but that is the key.

As far as the cycles went, Mike said in the 90s he could predict better what was going to happen. He could see the start and the end game. Now it just seems like it is never going to end. It was easier back then to predict your business than compared to now. You get a lot of curve balls today that you did not get then. As far as quantity of listings in this current cycle, Mike said the peak year for him and for everybody in general was 2008. We did not have the government intrusion that we had in the last 3 years, and this is a big frustration.

Bruce wondered what the following years as far as percentages went after 2008 if that year was a 100% year. Mike said in 2008 it went down about 20% for him and 60% in ’10. In ’11, it picked up a little bit but still went down about 50%. Bruce also wondered if anybody on the lender side is saying to either Mike or Ted that they will not be releasing so many or if they are always telling them to step up. What he heard for a long time was to maintain the staff and not cut anybody back, and this was kind of a mistake. He carried too much overhead through a lot of 2010, and he finally decided he was going to have to cut it back. He is okay with not making any money sometimes, but he hates having to feed it. Now he has the right amount of staff, and if they pay attention and operate well, they can make money. When you talk to asset management, the general opinion of people is they do not want to sit there and say they are not going to have a job. They believe it is going to pick up and they are going to have REOs to sell so they will have a job. He believes this is what a lot of it comes down to overall, and he does not believe anybody can predict what is going to happen. They are probably not at the policy decision level. With someone in Mike’s position, one of the nation’s largest, he would probably feel that he has access to somebody inside actually telling him the real scoop. However, this does not happen. Mike said he does know some people way up the food chain from various REO organizations, and even they cannot tell you what is going to happen.

Mike’s REO business peaked in 2008 when we had about a 3.4% delinquency rate, and we went up to 11.2%. Mike’s peak of foreclosures resulted from a 3.2% delinquency, and then we tripled. The amount of REOs he probably should have been handling should have been some gigantic percentage above the peak and its decline. The shadow inventory term is real, but it is not where people think it is. Mike’s opinion of what shadow inventory is the process that is not being finished. There are a lot of defaults going on, but the timeframe between when somebody misses the first payment to the time they foreclose is probably in many cases 18 months to 2 years. He asks a lot of people how long since they made their payment and this is the answer he usually gets. He rarely gets anybody less than a year; but he thinks the whole process has just slowed down, and this is your shadow inventory. It is not like the banks are sitting on millions of houses they own; they just don’t finish the foreclosure. Bruce wondered if there is a valid reason why they don’t do this, and Mike said part of the reason is if they just foreclosed every which way they could, they would not have the capability to handle the property. He hears of agents telling him they are in a really bad situation and don’t even want to foreclose because they do not want the house back. They don’t want to be responsible for the code liens and the taxes.

Bruce said what is interesting to him is somebody always tells him that the lenders are too smart in regards to carrying out foreclosures, but in 2008 they did exactly what they should not have done. They foreclosed on properties aggressively, and we ended up with something like 17 months of inventory and a price decline of about 3 or 4% a month. Once you are there on that low level of price and everybody is upside down; it is much easier to make a decision to walk when you have negative 50% equity. When the civil Code 1169 came into effect in California, you could be fined $1,000 a day if you are the lender owning the property or a trustee sale buyer owning a property. They have someone come out and visit your place, and you have a week or two to fix whatever they are going to see.

When Mike resells REOs, Bruce wondered if there was a big problem with liens that had been placed on the property. Mike said they have a lot of problems with liens. He has a full-time employee whose job is dealing with liens, code violations, and HOA problems. Part of the problem with a lot of the banks is they do not have the internal staff anymore to handle these problems. It used to be they had attorneys on staff that would fix a lot of the code violations and a lot of the liens, and now a lot of that is not done. We do not figure it out until we start marketing the property and they come up. He said he fronts a lot of money to pay code violations and liens because typically the agents expect you to pay them and then be reimbursed. They are on it full-time, checking properties every day as he does not want any code violations and does not want to front the money for it. It is a lot bigger problem than it once was.

Bruce wondered what percentages of his listings were occupied by somebody at the end of the foreclosure process, which Mike said was about 75%. The attitude of the person behind the door is usually bewilderment as they wonder how something like this could happen, and most of these people are tenants of the former borrower. They did not know they were about to be asked to go.

On the topic of Cash for Keys, once this type of thing happens it becomes a street lore and urban legend. You can go ahead and ask for cash for keys, plus with some of the clients they are told how much cash for keys is going to be. A large problem Mike has is a lot of clients are very generous with cash for keys and some are not. Many of them ask why they only receive $1500 when their friend received $8,000. Bruce said if the Learning Annex was still in business, he could be almost certain there was a class held at night. The Cash for Keys is a big deal, but the offers vary a lot, and this can cause some problems. Bruce wondered if it has to do with the size of the loan or just the motivation of the lender, to which Mike said it is the latter. The more well known you are today as a lender, the more you want to pay.

Bruce wondered how big of a problem MERS robo-signing presented to California lenders. Mike said he has not seen much of it where it was a problem. He does believe with a lot of their deals a lot of the loans are in pools and portfolios, and sometimes they get slowed down because someone is going to check the whole portfolio, whether most of the loans are in Chicago or Florida. Sometimes this will slow them down. Something that was originally going to close, for example, in January will not close until March. However, the bigger issue is they are in a mix of properties.

On the myth of bulk sales and bulk REO listings, Bruce said he has only fallen victim to this one time as he went around an looked at 100 houses in two days to get his piece of the dream. However, there have been people who spent a year and ruined themselves by following something that seemed imminent that they were going to cash in on 100 houses. Mike does deal with a lot of REOs, and Bruce wondered if he has dealt with successful bulk deals in California only. He said Fannie Mae and several others do pool sales and advertise for it, but it is usually beyond the capability of the small investors. It does happen, but where he gets the calls is from some person who wants to buy ten houses in bulk, and the problem with that is with many of the lenders there are ten different investors on the deals. It is not the same real seller when you get down to the bottom line. Bruce wondered if he feels there are sufficient properties going that route that it affects the volume that they see, but Mike said this was not the case.

Another topic is bulk note sales, where you have big companies buy thousands of loans at a shot. Bruce wondered if this is significant in its impact in the REO listings. Mike said he is not sure he has seen them, even if it is possible they are going on. You do not see them in California has much as you see them in other places. In Orange County, there is a company in Irvine that buys very large pools, but the majority of the loans are not in California yet. Even if the purchaser received 60% off of the face, it would be hard to say that there would be a lot of room.

Bruce was a moderator of a panel on bulk buying that HousingWire.com had a couple years ago. He was very fascinated with the concept and thought it could really happen to somebody. Of the three, one of the companies that was on the panel was capable of buying 1,000 homes in a very short notice was Williams and Williams Auction Company. Bruce knew Tommy Williams personally, so he talked to him, the person he thought would really know. Having auctioneers all over the country, their infrastructure is such that they literally could get a 1,000 property listing within two or three days, legitimately see every one of them, and come to a number. They had not bought a property in a year, so they had the capacity, but there was not any inventory that was going that route in that kind of volume. Bruce just heard of another scenario yesterday about a bulk sale from one particular lender, so it is such a great theory. However, Ted said somebody actually has to go out and look at the properties to make sure they are even there. Ted said they have had REOs they have gone out to look at that are not even there and had burned down about a year earlier.

It seems one of the things RE/Max would really have a grasp on is how much infrastructure there is as far as capacity to move inventory already in place. They do not have to invent a thing. Bruce wondered how many more listings they could have, if they could have a multiple of 300-400% alone. This is replicated everywhere. Someone could drop a lot of properties into the United States REOs, and it would get absorbed by current staff. Another option is trained staff is added, and this would make more sense more than selling thousands of homes to a hedge fund. There were couple of things in a report Bruce read, and one of the things was doing a big bulk deal. A couple days later he saw a headline for a $650 million pool by one of the well known big companies that they were going to buy REOs and retain them as rentals. This sounds significant until you look at the numbers of how much debt there is in excess. You basically have a $3 trillion problem when you start throwing $50 million at it and see how it is such an insignificant thing. In short of saying they are going to forgive everybody, whoever owes more than their house is worth, we are probably in for a long haul. There is really no end in sight and no end game. Neither is there a change in the aggression of lenders saying they should cut to the chase and take all the REOs back. If a lot of the houses were sold to hedge funds, they would be a lot more aggressive because they would not care about their name being drug through the mud. They do not have a public name or a retail presence, and this is most likely part of the reason why things are slow in some cases.

One of the suggestions in the white report was getting a deed in lieu of foreclosure and giving the people right to buy the property back some years later. Bruce wondered what their thoughts were on the same owner returning as owner at a later time. However, Ted said this is silly. Once a person has given up on the property as we have seen and stopped making payments a year or two earlier, when you go to that person see them start making payments again, that person just laughs at the agents in charge. Bruce does not know how you rationalize this with the person next door making payments on the same loan. You start asking yourself if you can get the deal too. Mike and Ted said one of their clients offered the ability for the occupants to lease the property for a year. Mike and Ted said they have started a few of these, but they have yet to see anybody finish before they failed and ended up being evicted. For them, not paying is a good deal and they want it to continue.

Bruce read another news article where they were talking to a family that had not made a payment in a couple years, and it was a very positive experience for them as far as what it did for them financially. If you think about it, they have an expectation that this is okay, and there is an expectation that it is almost sad when it ends. Of the people who have not made a payment in two years, the ones who have saved all the payments is 0%. There is a statistic that 4,100,000 people that are 90 days late or beyond, including REOs, there is only a 1% chance that they will willingly write a check to make it current. 99% of the pile is going to go the route of a lowered opening bid at a trustee sale, a short sale, or an REO.

In RE/Max’s business model, the short sales have really aggressively gained momentum. Bruce wondered if they are ahead of REOs as far as closings. However, Ted and Mike believe they are even. Last year, roughly, they had about 20% normal sales and about evenly divided between short sales and REOs. Bruce has looked at charts for years, and he said he has not come up with a real meaning with what was just said regarding REOs and short sales until recently. When you close 100 sales, only 20 buyers emerge. This really hit Bruce that in the Inland Empire 80% of the closings are either going to be vacant or bought by someone new migrating here or someone in credit damage or investor for cash. This is not a lot of people. Unfortunately, it is many of the people who walked from their homes three years ago and now have repaired their credit and are able to buy again. There are very few of those, but it is shocking in today’s world that the person who did the wrong thing three years ago seems to be saving the system. Had we foreclosed on somebody instead of waiting, the people who are behind by 2 ½ years have not had one day of new credit.

Tune in next week as Bruce continues his interview with Mike Novak-Smith and Ted Boeker. For more information on RE/Max, visit www.remax-results-ca.com/.

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

The Mortgage Bankers Association reported mortgage applications are at their lowest level in 15 years.  Members of Vintage East Condominium Association sued JPMorgan Chase & Co in order to take back a property they said JP Morgan was taking too long to foreclose on.  Rents are still on the rise as they continued to increase in July for the 11th straight month.

In The News:

DS News - “Prices of Homes Backing GSE Mortgages Fell 0.6% in Second Quarter” (8-24-11)

“Home prices in the U.S. were 0.6 percent lower in the second quarter than in the first quarter of 2011, according to the Federal Housing Finance Agency (FHFA).”

Bloomberg - “Homeowner Associations in Need of Cash Sue to Force Foreclosures” (8-24-11)

“Members of the Vintage East Condominium Association in Miami Beach got tired of waiting for JPMorgan Chase & Co. (JPM) to foreclose on unit 9, so they sued the bank in February to take control of the property.”

Housing Wire - “Moody’s: CMBS delinquencies up to 9.24% in July” (8-24-11)

“The delinquency rate on home loans within commercial mortgage-backed securities rose 22 basis points to 9.24% in July, according to Moody’s Investors Service.  The rate stayed higher than 9% each month this year. For July 2010, the
delinquency rate was 7.89%.”

Mortgage Bankers Association - “Mortgage Applications Decrease with Purchase Index at Lowest Level Since 1996″ (8-24-11)

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

O.C. Register - “SoCal rents up 11th straight month” (8-24-11)

“The landlord-vs.-renter battle over price stayed on the owners’ side last month as SoCal rents rose for the 11th consecutive month in July. That’s according to a measurement inside the latest regional Consumer Price Index.  According the the Bureau of Labor Statistics, rents in Southern California rose at an annual rate of 1.4% in July.”

Rismedia - “Housing Affordability Hovers Near Record Level as Some Markets Begin to Stabilize” (8-24-11)

“Nationwide housing affordability during the second quarter of 2011 hovered for the 10th consecutive quarter near its highest level in the more than 20 years it has been measured, according to National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) data released recently.”

San Francisco Chronicle - “New-home sales fell for 3rd straight month in July” (8-24-11)

“Sales of new homes fell for the third straight month in July, a sign that  housing remains a drag on the economy. If the current pace continues, 2011 would  be the worst year for new-home sales in decades.”

CNN Money - “Foreclosure Settlement: Spat among the states” (8-24-11)

“A deal to help victims of improper foreclosures has been slow going, in large part because of infighting among state attorneys general over giving banks a free pass from future lawsuits.”

DS News - “Mortgage Contracting Services Appoints Assistant Vice President” (8-24-11)

“Mortgage Contracting Services LLC (MCS), a nationwide provider of property preservation, inspections, and REO property maintenance, announced Wednesday the addition of Anthony Calabrese as assistant vice president.”

San Francisco Chronicle - “U.S. Banks Facing Main Street Squeeze as Economy Saps Earnings” (8-24-11)

“Two U.S. Treasury secretaries and Federal Reserve Chairman Ben S. Bernanke  provided capital and cheap loans to banks during the last three years to help  fuel an economic revival. It hasn’t worked out.”

Looking Back:

Existing home sales experienced a dramatic decrease of 27.2 percent in July 2010, according to the NAR. Housing production decreased by 10 percent in June 2010.  CAR reported California home sales decreased 20.8 percent in July 2010. Statistics from the California Employment Development Department showed that 7,100 jobs were lost from July 2009.

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

Bill H.R. 2056 was recently passed by the House of Representatives to look into failing banks and see if the Federal Deposit Insurance Corp’s regulations are actually hurting the economy.  RealtyTrac has come out with a new tool that will allow users to go through their database of foreclosed homes more quickly and create their own list of distressed, foreclosed, and bank-owned homes.  Realty Times reported an increase in pending homes for June, making it the second month in a row to see an increase.

In The News:

Housing Wire - “House legislation would launch FDIC investigation” (8-2-11)

“The U.S. House of Representatives passed a bill in recent days that would allow authorities to study the causes of high level bank failures and to determine whether “overzealous” Federal Deposit Insurance Corp. regulatory actions are stifling economic activity by constricting bank lending.”

DS News – “RealtyTrac Tool Proveds Targeted Lists of Defaults, Auctions, and REOs” (8-2-11)

“RealtyTrac on Tuesday unveiled its new bulk foreclosure data search and download tool, known as MEGA Data.  This new product gives users the ability to sift through RealtyTrac’s database of more than 2 million foreclosure records to create targeted lists of distressed homeowners, scheduled foreclosure auctions, and bank-owned properties.”

Bloomberg - “Radian Jumps as Mortgage Insurer Swings to Profit, Has Fewer Delinquencies” (8-2-11)

“Radian Group Inc. (RDN), the second-largest U.S. mortgage insurer, climbed the most in 16 months after the company swung to a profit on derivative gains and said there was a drop in delinquencies on home loans.”

San Francisco Chronicle - “Key US markets with “pending” signs of life” (8-2-11)

“Certainly, some parts of the U.S. are looking pretty doomed right now, with massive foreclosures, property values tanked, construction halted, and unemployment up. But that is not the whole picture. Other parts of the country are doing relatively well– San Francisco among them– or are at least showing signs of improvement. And we can believe this ray of hope, at least a little bit, because it’s backed by actual data.”

Realty Times - “June Pending Home Sales Rise” (8-2-11)

“For the second consecutive month, pending home sales figures have increased. According to the National Association of Realtors® (NAR) all regions are showing “strong double-digit” gains over last June and the index itself was up 2.4 percent for the month.”

Housing Wire – “Smaller banks push for mortgage servicing standards exemption” (8-2-11)

“Smaller banks are pushing rulemakers for an exemption to the upcoming mortgage servicing standards, claiming recent problems in the industry are almost entirely restricted to the larger firms.”

Inman - “Re/Max ranks first among buyers, sellers in JD Power survey” (8-2-11)

“Home sellers surveyed by JD Power and Associates expressed greater satisfaction with the way their properties were marketed than a year ago. But frustrated buyers seem to be blaming agents for problems that interfered with them closing a deal.”

Mortgage Bankers Association - “MBA Files Comment on Proposed Risk Retention/Qualified Residential Mortgage Rule” (8-2-11)

“On Monday, the Mortgage Bankers Association (MBA) filed a comment letter with six federal regulators in response to proposed credit risk retention regulations implementing section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.” 

DS News - “Witnesses Express Concerns at Hearing on National Servicing Standards” (8-2-11)

“At a U.S. Senate Committee on Banking, Housing, and Urban Affairs hearing Tuesday, industry leaders voiced opinions on the creation of national mortgage standards.  While there was support for national standards on the grounds that it would protect homeowners and improve customer experience, witnesses expressed a variety of concerns.”

Rismedia - “Alliance to Save Energy Hails 25-30% Advance in 2012 Energy Code for New & Renovatede Residential, Commercial Buildings” (8-2-11)

“The Alliance to Save Energy recently hailed a newly released model building energy code upgrade that will improve energy use in commercial and residential buildings in the United States by as much as 30%.”

Looking Back:

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

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.

Susan McFarland was just named the new CFO for Fannie Mae, according to Housing Wire.  Sales of existing homes decreased 3.8%, while home prices actually increased a slight .8%.  They rose slightly despite having fallen 5.7% back in April.  There was also an increase in the sale of pending homes for the first time in 17 months.

In The News:

Housing Wire - “Fannie Mae names McFarland CFO” (6-22-11)

“Fannie Mae named Susan McFarland executive vice president and chief financial officer.  She replaces David Johnson, who had been head of the government-sponsored enterprise since soon after the feds put Fannie in conservatorship. Johnson announced plans to resign in November. Deputy CFO David Hisey served in the interim.”

Bloomberg - “U.S. Commercial-Property Index Falls to Record on Distressed Properties” (6-22-11)

“U.S. commercial property prices fell in April as sales of distressed assets made up a large share of transactions, according to Moody’s Investors Service. ”

The Wall Street Journal - “Home Resales Slide 3.8%” (6-22-11)

“The housing slump has reined in Americans’ once-insatiable appetite for bigger and better homes.  The trend can be seen in the latest report on sales of existing, or previously owned, homes for May, released Tuesday by the National Association of Realtors. Overall, the report showed that sales of existing homes fell 3.8% in May, underscoring the weakness of the spring selling season and the uneven nature of the housing recovery”

Inman - “Opposition to QRM proposal picks up steam” (6-22-11)

“The campaign to shoot down a proposal by federal regulators that lenders be required to retain at least 5 percent of the risk on mortgages they securitize when borrowers make down payments of less than 20 percent continues to pick up steam.”

RisMedia - “Existing-Home Sales Decline in May with Market Constraints, Temporary Conditions” (6-22-11)

“Existing-home sales were down in May as temporary factors and financing problems weighed on the market, according to the National Association of REALTORS.”

Housing Wire - “US home prices increase a scant 0.8% in April: FHFA” (6-22-11)

“U.S. home prices rose a scant 0.8% between March and April, the Federal Housing Finance Agency said in its latest home price index report.”

DS News - “Shadows Shrink on More Distressed Sales and Fewer Delinquencies” (6-22-11)

“The shadow inventory of repossessed and soon-to-be repossessed homes not yet visible to the market has been trimmed, according to new data released by CoreLogic Wednesday.”

The Orange County Register - “Calif. sees 1st gain in pending deals in 1 1/2 years” (6-22-11)

“Pending home sales — the number of housing deals going into contract — increased in California in May for the first time in 17 months, the California Association of Realtors reported.”

Bloomberg - “U.S. Home Prices Fell 5.7% in April From Years Earlier as Housing Struggles” (6-22-11)

“U.S. home prices fell 5.7 percent in April from a year earlier, signaling the housing market is struggling to recover as foreclosures weigh down values.”

Looking Back:

The level of commercial/multifamily mortgage debt outstanding decreased to $3.31 trillion in the first quarter of 2010. The NAR reports existing home sales decreased by 2.2 percent in May of 2010. California home sales increased 1.2 percent in May 2010. An amendment to the Wall Street Reform Bill being debated on the day of June 22nd in Congress would eliminate the hotly contested Home Valuation Code of Conduct.

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

Sources:
Housing Affordability Rises to Record Level, Tight Financing Continues to Constrain Sales
U.S. Home Price Index Fell 2.5% in First Quarter of This Year
Troubled banks made up about 12 pct of total in Q1
Housing Affordability Rises to Record Level, Tight Financing Continues to Constrain Sales
U.S. Home Price Index Fell 2.5% in First Quarter of This Year
Troubled banks made up about 12 pct of total in Q1
Mortgage delinquencies inch higher
California creating mortgage fraud task force
Mortgage defaults do not predict poor credit behavior: TransUnion
Watch for strategic defaulters, economists suggest after studying Countrywide data

Today’s News Synopsis:

Two major lenders admitted to improperly foreclosing on active-duty military without court orders. The NAR claims pending home sales decreased 11.6% in April. According to Standard & Poor, the delinquency rate among loans from state HFAs reached 7.5% in the firs 2010.

In The News:

San Diego Union Tribune – “Lenders to pay $22M for foreclosures on military” (5-27-11)

“Two major U.S. lenders have agreed to pay more than $22 million to settle allegations that they improperly foreclosed on active-duty military without court orders, the Justice Department announced Thursday.”

NAR - “April Pending Home Sales Drop After Two Monthly Gains” (5-27-11)

“The Pending Home Sales Index,* a forward-looking indicator based on contract signings, dropped 11.6 percent to 81.9 in April from a downwardly revised 92.6 in March. The index is 26.5 percent below a cyclical peak of 111.5 in April 2010 when buyers were rushing to beat the contract deadline for the home buyer tax credit.”

Bloomberg - “Foreclosure Deal May Give Banks Options” (5-27-11)

“Under the proposal, Bank of America Corp. (BAC), Wells Fargo & Co. (WFC), JPMorgan Chase & Co. (JPM), Citigroup Inc. (C) and Ally Financial Inc. would pay penalties and pledge billions of dollars in relief to home buyers, one of the people said, asking not to be named because the talks are private. Firms may fulfill obligations to borrowers over time, choosing among options such as reducing loan principal, cutting fees or paying moving costs, the people said.”

Housing Wire – “Fannie Mae issuance drops to lowest level since January 2009″ (5-27-11)

“Fannie Mae issued $34.5 billion in guaranteed mortgage-backed securities in April, down from $54 billion one month ago and the lowest level since January 2009, when the government-sponsored enterprise issued $21 billion.”

Housing Wire – “Delinquencies on state HFA mortgages hit record high” (5-27-11)

“The delinquency rate among loans from state housing finance agencies reached 7.5% at the end of 2010, up a full percentage point from the previous quarter and the highest rate on record, according to Standard & Poor’s.”

Housing Wire – “Another collapse in home prices would hinder bank earnings: S&P” (5-27-11)

“Another downturn in home prices could stifle the solid recovery banks have made in the past two years, cutting into profit margins, derailing credit and threatening ratings, according to Standard & Poor’s credit analyst Devi Aurora.”

Housing Wire – “HAMP disappoints most homeowners, housing counselors say” (5-27-11)

“The GAO received 500 responses to its October 2010 survey of roughly 130 housing agencies regarding HAMP. Nearly 400 responded to the question about how the borrowers they worked with felt about the program. Only 9% of the counselors said borrowers had a ‘positive’ experience, according to the GAO report released Thursday.”

Looking Back:

One year ago, 6,462 residential property owners in San Francisco applied for temporary property tax breaks. Freddie Mac reported the average U.S. rate for a 30-year fixed mortgage fell to 4.78 percent for the week. Statistics from FHFA showed the average interest rate on conventional 30-year FRM with a principal of $417,000 or less increased to 5.12% in May.

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

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

In The News:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Looking Back:

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

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

Leslie Appleton-Young Vice President of C.A.R. (Full Bio)

This week Bruce is joined again by Leslie Appleton-Young. She is the Vice President and Chief Economist for the California Association of Realtors; a statewide trade organization with over 165,000 members. Leslie directs the activities of the association’s member information groups, she oversees the analysis of housing markets and broker industry trends, member communications and member development activities.  She is well known as a speaker in the California real estate community.

UCLA’s business school has projected that California’s unemployment will remain in the double digits until 2013. This does not surprise Leslie. We are experiencing cyclical job losses, because there are few sectors that have not been impacted. To some extent, our problem is structural. Sending jobs over seas to lower wage countries has been occurring for a long time.

During the downturn of the 90s, there were job losses concentrated in California due to a loss of migration. Leslie does not believe this is our main problem though. Our biggest issues are coming from the restructuring of corporations and businesses. 70% of costs are directly tied to labor, so the easiest way to become more efficient is to use fewer workers.

Leslie is uncertain of the impact that gas prices will have on real estate. Gas affects real estate because it impacts the overall economy. High prices means there will be less discretionary income available for purchasing. The cost of gas also impacts the ability of people to move further out. The UCLA forecast assumed there would be no significant long term reductions in gas supply, and that we would be able to weather the increases, but we do not know that.

Affordability is close to an all time high. The gap between California’s affordability and the U.S.’s affordability is much closer now as well. The California median home price peaked at $594,000, and the U.S. peaked at $230,000, so we were still over twice as expensive. California’s current median is $300,000, and the U.S. median is $170,000, so there is still a big gap between the two.

Bruce believes this all time low for housing affordability is going to give us a boost in migration. The challenge will be to provide job opportunities for the migration.

In a county like Riverside, where it is common to develop 250 to 300 subdivisions every year, there is going to be a huge increase in demand. The inventory that has been bought from lower priced years will be able to increase in value. Bruce notes that Riverside has only developed 10 subdivisions this year.

There has been a significant increase in household size over the last couple years, because families have been moving in with each other to weather the bad economy. Many people who chose to move in with their family will be looking to move once the economy improves, and that will create demand.

In another five years, Leslie believes down payment requirements and interest rates will be significantly higher. Getting rid of Fannie Mae and Freddie Mac will affect us for many years. The private sector will be demanding higher risk premiums to originate.

A number of surveys from Fannie Mae and others show that many people still aspire to own a home. Leslie does not believe this will change. However, financing will become a bigger burden. Leslie does not believe 30 year mortgages will be very popular in the future. Bruce believes that we must be heading towards a lower percentage of home ownership.

In business, when you have an advertising campaign that you know will work, that is called a control piece. The only way you change that control piece is by changing one thing at a time to see if something emerges as better or worse. We had a control piece called a zero down VA loan. This program produced less than 1% foreclosures, and FHA did the same thing for a long time. Unfortunately, we changed everything about how we performed loans within 5 years, and we got a bad result. Bruce does not understand why we won’t go back to the way things were before.

In 2005, the GSE delinquency rate was 7.8%, and the private label delinquency rate was 28.6%. In 2006, GSEs had a delinquency rate of 23.3%, and the private label delinquency rate was 45.1%. For loans originated in 2007, the GSE rate was 14.9%, and the private label rate was 42%. This information must have been overlooked by the people discussing what to do with our financial system in the future. Fannie and Freddie worked until 2005 and 2006 when then decided to get into the subprime and Alt-A market. Bruce is not sure if our sufferings would have been eased much had Fannie and Freddie not gotten involved in subprime lending. If they had not touched subprime, there still would have been a large amount of inventory being overpriced because of the easy financing available at that time. What we did wrong was pretend that it was okay to loan people money based on a stated income and without a down payment.

39% of defaults between 2006 and 2008 were due to home equity borrowing. Leslie does not believe it is healthy for people, as well as the real estate market, to borrow in such a way that they owe more on their home after a year of ownership. Bruce does not totally agree with that, because in the past that behavior was not as simple. Leslie believes it is bad for people to leave themselves no cushion. Bruce agrees with this statement.

In 1934, FHA did 80% LTV loans with 20 year terms. Gradually we went to 30 year terms, and the down payment requirements went to 10, to 5, to even 3%.

Bruce is concerned that if we lower loan limits, it will cause a significant price drop, and then you will have a continuous negative equity position. Bruce and Leslie hopes the government does not restrict the market too much in this manner. Leslie has noticed that the government’s decisions tend to be imbalanced.

When Bruce bought his first home and mowed the grass for the first time, it made him feel like a man. Being an owner changed the way he felt about himself. It is a big deal, and it is one of the big reasons for why people come to California.

Bruce was very frustrated when the president of MERS was questioned in front of the senate, because not one of the senators read his deposition. If you are going to make a huge decision against a very influential company like MERS, why not take an hour to try and understand the problem?

CAR’s website is www.car.org

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.

Existing home sales dropped 9.6%, according to the NAR. A San Joaquin County investor pleaded guilty to rigging foreclosure auctions, and is now facing a federal prison sentence and $1 million in fines. LPS claims the current mortgage delinquency rate is 8.8%.

In The News:

NAR - “February Existing-Home Sales Decline following Sustained Gains” (3-21-11)

“Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 9.6 percent to a seasonally adjusted annual rate of 4.88 million in February from an upwardly revised 5.40 million in January, and are 2.8 percent below the 5.02 million pace in February 2010.”

Housing Wire – “California pending home sales spike in February” (3-21-11)

“The California Association of Realtors’ Pending Home Sales Index rose 20.6% in February to 112.1 from 93 in January. The index uses 2008 housing market activity as a baseline because it represents a more normal level of purchases and sales. An index reading of 100 corresponds with activity in 2008.”

Recordnet.com – “Guilty plea in home auction rigging” (3-21-11)

“A San Joaquin County investor pleaded guilty Friday in federal court to charges he illegally rigged bids with others at home foreclosure auctions in Stockton, the U.S. Attorney’s Office in Sacramento reported. Gregory L. Jackson is the sixth defendant so far to plead guilty in the federal probe. He faces a federal prison sentence and $1 million in fines under terms of the negotiated plea deal.”

Orange County Register – “‘Normal’ new-home market is 3-5 years off” (3-19-21)

“We decided to add Southern California (especially the O.C. market) into our business plan since we believe this market has bottomed. In today’s home building market, there is an imbalance between used and new homes in Orange County as a limited amount of new homes have been built over the last five years.”

Orange County Register – “Demand for O.C. homes at 7-month high” (3-21-11)

“Demand, the number of new pending sales over the past month, increased by 225 in just two weeks and now totals 2,982. At the beginning of the year, demand was at 1,856 pending sales. Since then, it has increased by 61%. Last year at this time there were 288 additional pending sales, propped up by the $8,000 first time homebuyer tax credit.”

Housing Wire – “Mortgage delinquency rate drops 18.4% annually: LPS” (3-21-11)

“Out of the 40 million loans evaluated by LPS last month, 8.8% qualified as delinquent (30 days or more overdue). That delinquency rate is down 1.2% from January and 18.4% from February 2010.”

Housing Wire – “Stress tests suggest economy may slide back into crisis: IRA” (3-21-11)

“Recent stress tests conducted by the Federal Reserve suggest the banking industry and economy ‘may be sliding back into crisis’ because of deflation in the housing sector, according to a new report from Institutional Risk Analytics.”

Housing Wire – “Moody’s expects temporary GSE exemption from mortgage risk rules” (3-21-11)

“Analysts at Moody’s Investors Service said Monday regulators may exempt Fannie Mae and Freddie Mac from upcoming mortgage risk retention rules – at least temporarily.”

Housing Wire – “Distressed property sales decline on foreclosure issues facing servicers” (3-21-11)

“Overall, investors stepped up their homebuying game last month even as distressed property sales fell, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The report shows the HousingPulse Distressed Property Index — a barometer of distressed home sales — fell to 47.3% in February from 49.6% in January.”

Bloomberg – “Treasury to Sell Mortgage-Backed Holdings at Up to $10 Billion Per Month” (3-21-11)

“The U.S. Treasury Department plans to wind down its $142 billion portfolio of mortgage bonds guaranteed by Fannie Mae and Freddie Mac by selling as much as $10 billion per month.”

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

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

In The News:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Looking Backing:

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

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

MDA DataQuick reports 30.9% of all houses and condos sold in California during January were bought without a mortgage. The NAR claims pending home sales fell 2.8% in January. Approximately 25% of homeowners who sought assistance from Obama’s mortgage assistance program successfully had their payments reduced. A survey from Fannie Mae shows 19% of delinquent borrowers are considering a strategic default.

In The News:

MDA DataQuick - “Record Portion of California Homes Bought With Cash” (2-28-11)

“Last month 30.9 percent of all new and resale houses and condos sold statewide were bought without a mortgage – the highest level in at least 23 years, according to San Diego-based DataQuick Information Systems, whose statistics go back to 1988. Last month’s cash figure was up from 28.9 percent of sales in December and 28.5 percent a year earlier.”

NAR - “Pending Home Sales Decline in January” (2-28-11)

“The Pending Home Sales Index,* a forward-looking indicator, declined 2.8 percent to 88.9 based on contracts signed in January from a downwardly revised 91.5 in December. The index is 1.5 percent below the 90.3 level in January 2010 when a tax credit stimulus was in place.”

The Wall Street Journal – “Only 1 in 4 Got Mortgage Relief” (2-28-11)

“Just one in four of the 2.7 million homeowners who sought to participate in the Obama administration’s signature mortgage assistance program have succeeded in getting their monthly payments reduced.”

Housing Wire – “Fannie Mae’s mortgage portfolio, delinquency rate decline in January” (2-28-11)

“Fannie Mae’s gross mortgage portfolio dropped at a compound annualized rate of 16.4% in January, according to the latest monthly report from the government-sponsored enterprise.”

Housing Wire – “Fewer distressed borrowers consider defaulting on mortgage debt” (2-28-11)

“Only 19% of delinquent borrowers polled by Fannie in January said they are ‘seriously considering’ a strategic default. That compares to 25% in January of 2010.”

Housing Wire – “Fitch Ratings: Lack of new CMBS leads to limited master servicers” (2-28-11)

“The number of loans in commercial mortgage-backed securities handled by master servicers and rated by Fitch Ratings rose by 5.2% in 2010, although the total amount of the loans fell by 1.2% to $1.51 trillion.”

Housing Wire – “Warren Buffett sees housing recovery to start within a year” (2-28-11)

“Warren Buffett anticipates a recovery in the housing market to begin within one year and the investment guru said in his biennial letter to investors that mortgages written by his subsidiaries performed better than most of the competition through the financial crisis.”

Realty Times – “Closing Costs Explained” (2-28-11)

“Loan Origination and Points: You may have agreed to pay ‘points’ in order to get a lower interest rate. Think of this as pre-paid interest. For each point purchased, the loan rate is typically reduced by 1/8%. An origination fee is what you must pay the lender to write and process your loan. This can be up to several thousand dollars.”

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.