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The Norris Group Real Estate News Roundup 12/08/10

Wednesday, December 8th, 2010

Today’s News Synopsis:

The MBA’s weekly survey shows mortgage applications decreased 22.8 percent. Morgan Stanley predicts U.S. home prices will decline as much as 11% by 2012, while Douglas Yearley of Toll Brother expects home sales to increase in 2012.

In The News:

Mortgage Bankers Association – “Mortgage Applications Decrease in Latest MBA Weekly Survey” (12-8-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending December 3, 2010.  The Market Composite Index, a measure of mortgage loan application volume, decreased 0.9 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 22.8 percent compared with the previous week, which included the Thanksgiving Holiday.”

Housing Wire – “Refinancing opportunity for $500 billion mortgage pool wiped out: Deutsche Bank” (12-8-10)

“A $500 billion pool of 30-year fixed-rate mortgages, wrapped in the 4% coupon stack on Fannie Mae and Freddie Mac bonds, is no longer available for refinancing due to rising interest rates.”

Bloomberg - “U.S. Home Prices to Fall Up to 11% Before 2012 Bottom, Morgan Stanley Says” (12-8-10)

“U.S. home prices will decline as much as 11 percent as weak demand and rising inventory extend the housing slump into 2012, according to Morgan Stanley. Prices will be as much as 36 percent below their 2006 peak before finding a bottom, Morgan Stanley analysts led by Oliver Chang wrote in a report today.”

Bloomberg - “Toll Brothers CEO Sees Nascent Rebound in U.S. Home Sales” (12-8-10)

“The worst is over for the U.S. housing market and a rebound will gain momentum in 2012, according to Douglas Yearley, chief executive officer of Toll Brothers Inc.”

Orange County Register – “Hot real estate? O.C. factories!” (12-8-10)

“Increased demand for industrial space will cause vacancy rates to fall 2.1 percentage points over the next two years, from 6.6% last summer to 4.5% by 2012. Average monthly rent will increase 30% by the spring of 2012, rising from a low of 49 cents per square foot last summer to 64 cents a foot in the spring of 2012.”

Looking Back:

One year ago, Chase Home Finance reported that 29 percent of its HAMP trial plans failed to become permanent. Research from Altos Research showed that home prices decreased in 24 of the 25 markets that the company observed. A credit analysis of 27 million consumers lead TransUnion to estimate that delinquencies of 60 days or more would drop 3 percent by the end of 2010.

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 200 podcasts in our free investor radio archive.

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The Norris Group Real Estate News Roundup 9/27/10

Monday, September 27th, 2010

Today’s News Synopsis:

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

In The News:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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 8/25/10

Wednesday, August 25th, 2010

Today’s News Synopsis:

The MBA’s weekly survey shows that mortgage loan application volume increased by 4.9%. The Commerce Department reported new homes sales decreased 12.4% in July. According to Zillow, most Western states experienced a decrease in 20-year mortgage rates last week. California’s 30-year rate decreased to 4.30%.

In The News:

Mortgage Bankers Association - “Mortgage Refinance Applications Continue to Increase as Rates Decrease in Latest MBA Weekly Survey” (8-25-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending August 20, 2010.  The Market Composite Index, a measure of mortgage loan application volume, increased 4.9 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 4.5 percent compared with the previous week”

Washington Post – “New home sales hit lowest level” (8-25-10)

“The Commerce Department reported Wednesday that new homes sold in July at an annual rate of 276,000, down 12.4 percent from June and down 32.4 percent compared with the same time last year”

Housing Wire – “Dow Closes Down Nearly 134 Points Following Bad Housing Data” (8-25-10)

“The American stock markets closed lower today following the news of homes sales dropping a staggering 27%. Stocks of big banks that have large mortgage-finance operations such as Citigroup (C: 3.68 -0.81%), Bank of America (BAC: 12.63 -0.08%), Wells Fargo (WFC: 23.4907 -0.63%) and JPMorgan (JPM: 36.179 -0.09%) closed lower despite doing large amounts of trading volume, according to the New York Stock Exchange”

Housing Wire – “Zillow: Rate on 30-Year Mortgage Remains Flat on Average” (8-25-10)

“Most western states saw a decline in rates: California’s current rate of 4.3% is down from 4.33% last week; Colorado’s at 4.17% is down from 4.19%; Washington’s at 4.29% is down from 4.33%; Illinois’ at 4.24% is down from 4.3%, and Florida’s at 4.2% is down from 4.21%.”

Housing Wire – “Deutsche Bank Summarizes Future of GSEs, Government Guarantee” (8-25-10)

“Key elements included re-launching of the MBS guarantee business backed by catastrophe insurance from the US government. This guarantee would implicitly serve as a backstop to the TBA pass-through market. In a panel with investors in the space, both of these aspects were considered key to maintaining adequate liquidity at the GSEs.”

Housing Wire – “House Prices Begin to Climb, Up 0.9% in Q2 in FHFA Index” (8-25-10)

“The agency said its second quarter HPI – calculated using information from mortgages acquired by Fannie Mae and Freddie Mac – rose 0.9% on a seasonally adjusted basis from the prior quarter, yet fell 1.6% from the year ago. Still, prices of other goods and services in the second quarter were 3% higher than the year earlier. This puts the second quarter inflation-adjusted home price about 4.4% higher than last year, according to the FHFA.”

Housing Wire - “Americans Continue to Deleverage with Credit Card Debt Below $5k per Person” (8-25-10)

“The average national credit card borrower debt slid downward for the fifth consecutive quarter by 4.1% to $4,951, marking the first time the average has been below $5,000 since 2002, according to a report released today by TransUnion. This, coupled with the fact the national credit card delinquency rate for borrowers 90-plus days delinquent plummeted to 0.92% in Q210 (down 17.1% from the first quarter and 21.3% from last year) suggests that borrowers are saving more and spending more responsibly.”

Orange County Register – “Thinking of a refi? Tips for borrowers” (8-25-10)

“This summer’s bout of falling mortgage rates has sparked yet another frenzy of homeowners looking to refinance their loans. Now could be a good time to do it, too, with interest rates at their lowest in decades — lower than in 2001, lower than in 2003 and even lower than in 2004, when we last told you rates were at record lows. They’re lower now.”

Orange County Register – “O.C. housing risk 9th highest in U.S.” (8-25-10)

“Orange County home prices have 99.7% chance of price loss in two years, or by the winter of 2012. PMI Group doesn’t say how big of a price drop that would be, so the declines could be small or large. Nationwide, the average risk for price drops was 51.9% — down from 53.8% the previous quarter.”

Looking Back:

One year ago, the CAR reported Home sales increased 12 percent in July in California. Nationally home prices fell 6.1 percent in the second quarter from 2008, claimed the FHFA.

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 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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187-TNG Radio – Sean O’Toole 8-14-10

Friday, August 13th, 2010

Sean O’Toole

Founder and CEO of ForeclosureRadar


 

 

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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 Sean O’Toole. Sean is the Founder and CEO of ForeclosureRadar.com. ForeclosureRadar is the only company that tracks every foreclosure in California, Arizona, Nevada, Washington and Oregon. It makes updates daily on all foreclosure auctions. Prior to ForeclosureRadar, Sean spent 15 years building and launching software companies. In 2002, Sean entered the foreclosure business, and bought and sold over 150 properties.

Bruce thinks everyone who is a trustee sale buyer should be a member of ForeclosureRadar. When Sean started Foreclosure Radar, there were only about 40 trustee sale buyers who bought the majority of the deals within the state, but now there are thousands. The invention of the lower bid has created activity. We wish they would drop their opening bids even lower.

5 to 10 billion dollars worth in properties go to the courthouse steps every month. 80 percent of those properties go back to the bank as REOs. The number of REOs have decreased 50 percent from July 2008. However, there are still a huge number of properties being taken back by banks. From a historical perspective, we still have an outrageously high number of REOs.

People tend to have this mentality that nothing bad can happen from here on out, because they don’t think the lenders will unload a bunch of inventory into the market. However, in 2007 and 2008, that is exactly what they did. Up until the end of 2008, regulations required you to file a notice of default after 60 to 90 days of delinquency. In September of 2008, Paulson changed the rules, and since then, they have changed the rules to mark to market. Lenders now have this mentality that discourages them from foreclosing so long as there is some hope of receiving payment at some point in the future.

People are wondering when all the shadow inventory is going to show up and ruin everyone’s day. Shadow inventory has a few different holding tanks. The banks are holding it and not releasing it. In 2008, there was growing evidence that banks had inventory that were not being listed. In 2009, banks started selling more foreclosures than they were taking back. In the mean time, we had delinquencies that were over 90 days delinquent and were not going into foreclosure. Some properties are as much as 180 days delinquent. We have 1 million homeowners in California that are not making payment, but only 200,000 in foreclosure, and only 15,000 to 20,000 being foreclosed on per month.

There is a report claiming that “once a person is behind, the odds of them making that payment current again without a loan modification is 1%”. Sean thinks that may be true historically, but right now, the situation is worse than that. In the past, people went delinquent because of job problems, but this time, they are going late because we had a massive credit bubble that doubled home prices fictitiously. We have now corrected those prices, but we have 4 trillion dollars in excess mortgage debt. People are realizing that they are never going to get that money back, and paying the interest doesn’t help them.

ForeclosureRadar noticed an increase in investor activity in 2009. Subscriptions increased slightly around that time. Right now, people are concerned that the economy and housing might double-dip. Bruce thinks that a double-dip will probably occur.

A lot of ForeclosureRadar’s growth has come from builders and commercial real estate brokers. The court house steps have become much more competitive because of these two groups. They can’t just stop working because their niche isn’t doing well.

From 2002 to 2006, good investors could get a 50 to 75 percent return on capital. In 2007, the market went away because the banks weren’t dropping the bids. In 2008 and 2009, Sean heard plenty of stories about investors getting an 80 percent return on capital. It got really good for a little while, but over the past six months, the market got a lot more competitive. There are plenty of risks with buying at auctions. Bruce believes that someone makes a mistake every day at the courthouse that alters their financial life for a while.

The government has decided that it is better to avoid taking a property back to the lender. ForeclosureRadar is tracking the lenders who are willing to work problems out. Investor short sales concern Sean, especially if the deal is being bought to be flipped. Some people are claiming you can make a lot of money by doing a short sale through a double escrow. Sean thinks people who do that are going to get themselves into trouble. Bruce interviewed the FBI on this subject, and the FBI described the people who do double escrows as perpetrators. There are short sale opportunities out there, but there is a lot of risk involved. It can be difficult to convince lenders that you have added a significant amount of value to a recent short sale.

Lenders understand that auctioned properties are being sold at a discount. On a short sale, lenders believe that a market sale is being made, and they will not like the idea of selling a short sale at $100,000 below market.

Deutsche Bank recently made a report on mortgage servicers and how long it takes to do a short sale. With prime mortgages, GMAC took six months on average, CitiGroup took 7.5 months, Wells Fargo took 8 months, and Countrywide took 13 months. There is a buyer attached to the end of these deals, and no one is going to wait 13 months.

People involved with HAFA brag about their ability to sell within six months, and Bruce thinks that is ridiculous. The problem is that people are not coming to terms with the losses they are going to take. The government also has a few policies that are affecting speed. If Bruce was attached to that business, he would be very frustrated.

Mortgage insurance companies know they will have a better income and have less of a loss with a short sale, but if they have that loss right now, then they’ve got a payout to make. If they do not approve a short sale, and force a property into foreclosure, they may not have to payout for 8 or 9 months.

Sean believes that companies are moving away from principal reductions. Freddie claimed that they are not going to do principal reductions, because they have been tasked with protecting tax payer funds and they cannot just give out principal. If GSEs, who hold a lot of the mortgage debt, start giving out principal reductions, then that comes directly at the cost of the taxpayers. Freddie has a deed-in-lieu lease back program with a lease option. If someone does a deed-in-lieu under this program, they have a two year waiting period before they get to buy a property, and Bruce has the feeling that the property they will buy is that same property they were previously in. That would cause less volatility in the market, because it would discourage buyers from moving around.

Sean recently did some research for American Banker Magazine on jumbo loans. Loans under $417,000 are the fastest to be foreclosed on. Mini jumbos, which range from $417,000 to $729,000, take 30 days longer to foreclose on, and it takes even longer to foreclose on big jumbos. If lenders are struggling to deal with reality anywhere, it is at the high end of the market. Lenders sometimes try to aggressively foreclose with the hope of scaring the borrower into paying, but when they don’t get scared, the borrowers will simply vacate and move, and then the foreclosure gets cancelled. When lenders do not foreclose because they do not want the house, they are usually cancelling foreclosure by the masses. These lenders are often working to get people into the HAFA program, so that they can get a short sale or deed-in-lieu. Sean thinks the HAFA program is just like HAMP last year. It is not meant to conclude a bunch of short sales, it is meant to put people through another six months of delay only to tell them that they do not qualify.

Sean O’Toole’s website is www.foreclosureradar.com

Sean will be on the I Survived Real Estate 2010 panel in September.

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 3/15/10

Monday, March 15th, 2010

Today’s News Synopsis:

Builder confidence decreased by over 10 percent since the beginning of March. Sacramento home sales decreased by 26 percent from last year. According to LPS, the U.S. mortgage delinquency rate is currently at 10.25%. California contributed $2.6trn to the total $5.7trn of US housing wealth lost since the peak of 2006.

In The News:

NAHB - “Foreclosures Weigh on Builder Confidence in March” (3-15-10)

“Builder confidence in the market for newly built, single-family homes fell back two points to 15 in March as poor weather conditions and distressed property sales posed increasing challenges to both builders and buyers, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.”

Sacramento Bee – “A typical slow February for Sacramento home sales” (3-15-10)

“The Sacramento Association of Realtors reports this morning that home sales continue in their sluggish winter pattern, with 1,156 homes closing escrow during February in Sacramento County and the City of West Sacramento. February sales of existing homes were essentially flat from January, and down 26 percent from Feb. 2009, SAR reported. The median price of $179,900 was up from $170,000 in January and up 7.7 percent from Feb. 2009.”

Wall Street Journal – “Mortgage Fraud Declines but Remains Virulent” (3-15-10)

“First American CoreLogic, a real estate information supplier, compiles an index of the rate of fraud on home mortgages. A version of the index that excludes subprime loans peaked in 2007 at about 112 (on a scale that equates the early-2005 level to 100). It has since dropped to 84.”

Housing Wire – “Housing Recovery is Spelled R-E-O” (3-15-10)

“According to data from Lender Processing Services (LPS: 40.02 -1.43%), a whopping 7.4m loans are now non-current, compared to just 4.1m on average between January and June of 2008.”

Housing Wire - “Pace of Mortgage Delinquency Slowing: LPS” (3-15-10)

“The total loan delinquency rate of US mortgages is 10.25% as of January 2010 — a 2% increase from December 2009 and a 22.1% increase from January 2009, according to mortgage performance data and analytics provider Lender Processing Services (LPS: 40.02 -1.43%). Another 3.3% of foreclosure inventory brings the total non-current rate to 13.5% in January.”

Housing Wire – “In California, a Unique State of Mortgage Borrower Behavior” (3-15-10)

“The state contributed $2.6trn to the total $5.7trn of US housing wealth lost since the peak of the housing market in Q2 2006, according to US asset-backed securities research this week from Deutsche Bank.”

Bloomberg - “Housing Real-Estate Recovery Signaled as Fed Unwinds” (3-15-10)

“The U.S. housing market is poised to withstand the removal of government and Federal Reserve stimulus programs and rebound later in the year, contributing to annual economic growth for the first time since 2006. Increases in jobs, credit and affordable homes will help offset the end of the Fed’s purchases of mortgage-backed securities this month and the expiration of a federal homebuyer tax credit in April. Sales will rise about 6 percent this year, and housing will account for 0.25 percentage point of the 3.6 percent growth, according to forecasts by Dean Maki, chief U.S. economist for Barclays Capital in New York.”

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The Norris Group Real Estate News Roundup 10/1/09

Thursday, October 1st, 2009

Today’s News Synopsis:

The NAR’s Pending Home Sales Index shows that sales increased by 6.4 percent in August. Research from Deutsche Bank Securities shows that 26 percent of borrowers owe more than their home is worth. A $250,000, four-bedroom, 1700 square feet, three-bathroom house in Los Angeles made the nation’s list of most searched for homes. A survey shows that realtors are in favor of expanding the $8,000 dollar tax credit. Regulation Z changes are now in effect. FHA first-time borrowers may see hike in down payment requirements according to new legislation introduced.  Realtors are also interested in expanding first-time tax credit to repeat buyers. Does that mean investors? One could only be so hopeful.

In The News:

NAR - “Record Streak Continues for Pending Home Sales” (10-1-09)

“The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in August, rose 6.4 percent to 103.8 from a reading of 97.6 in July, and is 12.4 percent above August 2008 when it was 92.4. The index is at the highest level since March 2007 when it was 104.5.”

Bloomberg - “Leaving Affordable Mortgage May Become Winning Gambit” (10-1-09)

“In the U.S., 26 percent of borrowers owe more than their home is worth, said Karen Weaver, global head of securitization research for New York-based Deutsche Bank Securities. In parts of California, Florida and Nevada, it’s as high as 75 percent.”

Inman - “30-year fixed rate below 5% again” (10-1-09)

“Rates on 30-year fixed-rate mortgages for borrowers with good credit fell below 5 percent this week for the first time since May, Freddie Mac said in releasing the results of its Primary Mortgage Market Survey.”

Inman - “Lenders want one set of rules” (10-1-09)

“A draft bill floated by Rep. Barney Frank, D-Mass., would create an agency along the lines of the proposal put forward by the Obama administration in June, while attempting to address some lending-industry concerns. Unlike the Obama administration’s proposal, for example, Frank’s bill would not give the agency the power to require that lenders offer ‘plain vanilla’ mortgages.”

Orange County Register – “Property tax revenues flat nationwide” (10-1-09)

“The Census Bureau’s quarterly count of state and local government collections nationwide of taxes shows property-related taxes (that on land and structures) as well as personal propert levies) for the second quarter at $81.86 billion — the largest slice tracked by Census — and flat vs. a year ago.”

Realty Times – “Title, Escrow Services Necessary” (10-1-09)

“Title companies are hired, in part, to issue title insurance protection for home buyers and lenders. Lenders require the service to protect them against loss resulting from claims by others against your new home. The title company investigates the title to make sure it is clear of any encumbrances, such as liens or judgments, forgeries or fraud and any other title anomalies and then issues a policy to protect you from any claims that turn up later. Because title searches are conducted each time the home changes hands or, perhaps, during a refinancing, the searches rarely turn up title claims, but you have to pay for the search.”

Los Angeles Times – “Long Beach property joins the list of most-searched-for U.S. homes online” (10-1-09)

“Priced at $250,000, the four-bedroom, three-bathroom house with 1,768 square feet on 0.15 acres (6,650 square feet) continues to make the list.”

Housing Wire – “Regulation Z Changes Are Here” (10-1-09)

“The Federal Reserve’s new Regulation Z statutes went into effect Thursday, after more than a year of preparations by the mortgage industry. Regulation Z is a truth in lending regulation meant to protect consumers who buy higher-priced mortgages — those loans with annual percentage rates (APR) above the average prime offer rate for a comparable transaction by at least 1.5 percentage points for first mortgages or 3.5 percentage points for second mortgages.”

Housing Wire – “GSE REO Portfolio Near 100,000″ (10-1-09)

“Freddie’s portfolio is nearly 35,000 properties, while Fannie’s is closing in on double that figure at nearly 64,000. While the rate of growth in the two portfolios has declined, Freddie acknowledges it expects to experience further losses from REO properties.”

Housing Wire – “Realtors Favor Expansion of Tax Credit to Repeat Buyers” (10-1-09)

“Realtors indicated in a recent survey the first-time homebuyer tax credit up to $8,000 has had a significant impact on spurring consumer interest in getting into the housing market. Some even called for an expansion of the program past its current expiration date and to homeowners that do not yet qualify.”

Bloomberg - “FHA Borrowers May Need Bigger Down Payments in Bill” (10-1-09)

“Legislation introduced in the U.S. House of Representatives would require higher down payments from borrowers seeking federally backed loans as lawmakers try to prop up the Federal Housing Administration’s insurance fund.”

The Atlantic – “OCC Report Shows Mortgage Modification Trend And Woes” (10-1-09)

“As the chart below shows, in the first quarter of 2009 principal reduction was only used 3.1% of the time. In the second quarter, however, that percentage increased to 10%. That’s a pretty drastic increase, with one-in-ten modifications now reducing principal.”

Looking Back:

One year ago, FHA was given $300 billion dollars for a new foreclosure prevention program. The MBA’s weekly survey showed that mortgage applications had decreased by 28.4 percent from the prior year. Warren Buffett invested $3 billion dollars into General Electric. Foreclosures tripled in Los Angles during the third quarter.

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