Today’s News Synopsis:
According to SiteSelection, California is experiencing a loss in total migration. FHA will now permit lenders to give more borrowers refinanced loans backed by the government. Trepp reports the delinquency rate for commercial mortage-backed securities increased to 8.92%. Zillow claims mortgage rates increased to 4.27% last week.
In The News:
Telegraph - “No defence left against double-dip recession, says Nouriel Roubini” (9-5-10)
“Dr Roubini said the US growth rate was likely to fall below 1pc in the second half of the year, despite the biggest stimulus in history: a cut in interest rates from 5pc to zero, a budget deficit of 10pc of GDP, and $3 trillion to shore up the financial system.”
Philly - “U.S. housing value down at least $4 trillion” (9-5-10)
“Since the real estate boom ground to a painful close about 31/2 years ago, the nation’s housing stock has shed from about $4 trillion to $7.1 trillion in value. The amount depends on who’s counting. A study by Equifax Inc. and Moody’s Analytics Inc. says the downturn began in early 2007 and cost $4 trillion through March. The Federal Reserve says the downturn began in the fourth quarter of 2006 and cost $7.1 trillion through March.”
CNBC - “Housing Woes Bring New Cry: Let Market Crash” (9-5-10)
“When prices are lower, these experts argue, buyers will pour in, creating the elusive stability the government has spent billions upon billions trying to achieve. ‘Housing needs to go back to reasonable levels,’ said Anthony B. Sanders, a professor of real estate finance at George Mason University.”
Orange County Register – “More people leave California than arrive” (9-5-10)
“In California, the number of outbound moves by the 700 or so moving companies in the movers.com network increased 10.3%, while incomers rose 9.4%. In terms of population changes, New York lost 33% more people than it gained, while Texas gained 50% more people than moved out, SiteSelection says.”
San Francisco Chronicle – “Gov’t launches plan to help ‘underwater’ borrowers” (9-7-10)
“Starting Tuesday, the Federal Housing Administration will permit lenders to give these borrowers refinanced loans backed by the government. The lenders will be required to forgive at least 10 percent of the original mortgage amount. Investors who have control over the mortgages as part of their large portfolios will select which borrowers are invited to participate.”
Housing Wire - “Bank deposit balances shrink for first time since ’92″ (9-7-10)
“For the first time since 1992, bank deposit balances fell in the first half of the year. Deposits decreased 0.4% for the six months between January and June to $7.69 trillion from nearly $7.7 trillion, and the yields on the deposits fell to less than 1%, according to analysis from Market Rates Insight.”
Housing Wire – “Credit score gaps narrow for FHA loans: Quality Mortgage Services” (9-7-10)
“The credit score gap for 2010 loans through the Federal Housing Administration fell 43 points from 2006 levels, according to Quality Mortgage Services. The mortgage quality-control services firm said its data show the average credit score of FHA loans ranked as excellent in 2006 was 665 whereas the average score of a loan ranked fair was 603 for a gap of 62 points. For FHA loans originated so far this year, the firm’s data show excellent loans have average credit scores of 707 while fair loans average scores are 688 for a difference of 19 points.”
Housing Wire – “New Fed limits on yield spread premium protects mortgage servicers from defaults: Moody’s” (9-7-10)
“The new restriction prohibits a loan originator’s compensation (similar to a commission) from being based on a yield spread premium; effectively, the difference between the interest rate required by a lender and the rate the borrower actually accepts. It is essentially another another step towards borrower protection, just as Fannie Mae’s prohibition on appraisal cutting became effective last week.”
Housing Wire – “CMBS delinquencies accelerate toward 9% in August: Trepp” (9-7-10)
“After two months of moderated growth in delinquent loans backing commercial mortgage-backed securities (CMBS), the delinquency rate in August increased 21 basis points to 8.92%, according to the analytics firm Trepp. It’s an increase from the 8.71% measured in July and another new record. The August delinquency rate is more than double the 4.03% rate a year ago. Since the beginning of 2010, the delinquency rate has increased more than 200 bps.”
Housing Wire – “Zillow: 30-year, fixed rate inched up to 4.27% last week” (9-7-10)
“The 30-year, fixed mortgage rate inched up last week to 4.27% from its nadir of 4.26% the week prior, according to the Zillow Mortgage Marketplace weekly update. California’s current rate of 4.26% is down from 4.28% last week and 4.3% the week prior.”
Orange County Register – “O.C. on track for fewest mortgages in a decade” (9-7-10)
“The Pomona-based Real Estate Research Council of Southern California reported that the number of loans issued to buy or refinance Orange County homes fell 23% to 46,195 during the first half of 2010. In the first half of 2009, lenders recorded just over 60,000 ‘trust deeds,’ or home loans.”
Looking Back:
One year ago, nearly one-third of those who obtained home loans during the boom years of 2005 and 2006 couldn’t get one. The eight-county Sacramento region counted more than 42,000 foreclosures from 2007 to 2009. A report showed that 20 percent of Californians were unemployed.
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