The Norris Group Blog

Today’s News Synopsis:

The federal government plans to “tinker” with mortgage interest reporting. The $30 billion ticking time bomb of ARMs. First American estimates that California has approximately $30 billion dollars worth of bad home loans. A review of over 24 million credit files showed that people with good credit scores were more likely to ‘strategically default’. The building industry shows improvement, as Lennar Corp. expects a profitable year, despite a bad 3rd quarter.

In The News:

Los Angeles Times – “Feds plan to tinker with mortgage interest reporting” (9-20-09)

“The Government Accountability Office wants lenders to add more details about mortgages on Form 1098, which would make it easier for the IRS to determine whether taxpayers are complying with the rules.”

San Francisco Chronicle – “$30 billion home loan time bomb set for 2010″ (9-20-09)

“Next year, many option ARM payments will begin to readjust, slamming borrowers with dramatically higher monthly mortgage bills. Analysts say that could unleash the next big wave of foreclosures – and home-loan data show that the risky loans were heavily used in the Bay Area.”

Los Angeles Times – “Homeowners who ‘strategically default’ on loans a growing problem” (9-20-09)

“Research using a massive sample of 24 million individual credit files has found that homeowners with high scores when they apply for a loan are 50% more likely to ‘strategically default’ — abruptly and intentionally pull the plug and abandon the mortgage — compared with lower-scoring borrowers.”

Bearish News – “FHA: Bailout Waiting to Happen?” (9-19-09)

“The FHA has effectively replaced sub-prime lenders who went bust. They’re under pressure to prop-up housing prices, and are insuring heaps of risky loans in an effort to do so. Their guidelines are slipping and loan-volumes are skyrocketing. Delinquencies are skyrocketing too, reaching 14.4% in the 2nd quarter of 2009, according to the NYT (borrowers at least one payment late).”

Bloomberg - “Lennar Predicts Fiscal 2010 Profit, Purchases Land” (9-21-09)

“Lennar Corp., the third-largest U.S. homebuilder, expects to turn a profit in fiscal 2010 even after reporting a wider third-quarter loss, President and Chief Executive Officer Stuart Miller said today.”

Bloomberg - “Housing Risking Relapse Confronts Bernanke Conundrum” (9-21-09)

“The Obama administration is studying whether to let a first-time home buyers’ tax credit expire as scheduled at the end of November. Bernanke and his Fed colleagues may continue talking this week about how to wind down purchases of mortgage- backed securities, according to Peter Hooper, chief economist at Deutsche Bank Securities Inc. in New York. The two programs have helped stabilize real-estate demand, with new-house sales rising 9.6 percent in July from the prior month, the most since 2005.”

Bloomberg - “Moody’s Property Index Resumes ‘Steep’ Fall in July” (9-21-09)

“The Moody’s/REAL Commercial Property Price Indices fell 5.1 percent in July from the month before, Moody’s said today in a statement. The index is down almost 39 percent from its October 2007 peak. The decline in June was 1 percent.”

Orange County Register – “Surf City’s high-end homes mirror trend: They sit” (9-21-09)

“Huntington Beach is somewhere in the middle ranges of Orange County cities in the ratio of distressed properties. Highest is Anaheim at 67.5%. Lowest is Seal Beach, at 1.5%. Other coastal neighbors: Newport Beach, 10.3%; Corona del Mar, 3.4%; Newport Coast, 9.7%.”

Orange County Register – “Buyers pay 3% premium for foreclosures” (9-21-09)

“Steve Thomas at Altera Real Estate in Aliso Viejo reports that the number of O.C. distressed properties (homes listed by agents as foreclosures or short sales) was 2,384 last week, -132 vs. two weeks earlier or a -5.2% change.”

Inman - “Facebook dos and don’ts for agents” (9-21-09)

“Regardless of which social media platform you use, your ultimate goal is to engage in conversations that lead to online friendships or that produce followers for your business. Some participants at a recent Real Estate BarCamp conference said that they don’t even mention their real estate business when they’re on Twitter and Facebook. Others mention their business only occasionally. Virtually everyone who is succeeding online agreed on this point; however, 90-95 percent of your posts should be contributing to the online conversation by helping others. Only 5-10 percent should be about what you are doing.”

Inman - “Rehabbing habitat” (9-21-09)

“While each of the 1,500 Habitat for Humanity affiliates in the United States sets its own strategies, purchasing foreclosures has been gaining traction this year. In a typical year, Habitat affiliates complete about 6,000 homes, and about 10 percent are foreclosures. This year, Seidel expects that figure to jump to as high as 25 percent.”