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The Norris Group Real Estate News Roundup 3/12/10

Friday, March 12th, 2010

Today’s News Synopsis:

The FDIC sold $1.8bn of residential mortgage-backed securities. The Federal Reserve bought a total of $10bn worth of mbs. More than 25 percent of the home owners who received trial modifications have been removed from Obama’s program. Approximately 462,000 new unemployment claims were made last week.

In The News:

Housing Wire – “FDIC Details $1.8bn Structured Financing Transaction” (3-12-10)

“The Federal Deposit Insurance Corp. (FDIC) today closed on a sale of notes backed by residential mortgage-backed securities (RMBS) from seven failed bank receiverships. The news of the closing, summarized in an FDIC press release today, marks the first official release of information on $1.8bn of structured notes that roadshowed and priced in recent weeks.”

Housing Wire – “BofA Makes 21,000 HAMP Modifications Permanent” (3-12-10)

“Bank of America (BAC: 16.985 -0.79%) reported 21,000 permanent modifications under the Home Affordable Modification Program (HAMP) through February. The US Treasury Department launched HAMP in March 2009 to provide incentives to servicers for the modification of loans on the verge of foreclosure. BofA faced industry criticism for reporting 98 permanent modifications through November 2009.”

Housing Wire – “Fed MBS Purchases 98% Complete with Another $10bn” (3-12-10)

“The New York Federal Reserve Bank bought another $10bn of agency mortgage-backed securities (MBS) in the week ending March 10 as the $1.25trn program, now 98% complete, winds down to a close. The Fed bought $29.4bn gross of MBS — $4.4bn Freddie Mac (FRE: 1.2801 -1.53%) MBS, $25bn Fannie Mae (FNM: 1.0701 -2.72%) MBS, and no Ginnie Mae MBS. After reporting $19.4bn of MBS sales through the same week, the Fed’s net purchases came to $10bn, level with last week’s agency MBS buys.”

Bloomberg - “More Than 250,000 Borrowers Dropped From U.S. Modification Plan” (3-12-10)

“More than 250,000 of the 1 million borrowers who have received trial loan modifications through the Obama administration’s chief foreclosure prevention plan have either dropped out or been removed from the program through February, the Treasury Department said.”

Inman - “Credit Starvation Fallout” (3-12-10)

“Overall retail sales have risen 6 percent since the pit one year ago, but are still 6.5 percent below 2008. New unemployment claims are still elevated, running 462,000 last week.”

Inman - “NAR: Don’t rein in FHA” (3-12-10)

“FHA insured nearly 30 percent of purchase loans in 2009, including more than half of mortgages taken out by first-time homeowners, and NAR also wants lawmakers to make temporary increases in FHA loan limits in costly housing markets permanent. But rising claims have eroded FHA’s capital reserves below statutory limits, forcing the program’s administrators to tighten underwriting requirements and raise upfront mortgage insurance premiums.”

Orange County Register – “85,000 O.C. real estate jobs gone” (3-12-10)

“In January, Orange County real estate and finance bosses employed 199,200 workers, 24,600 below 2009 levels and 85,100 less than the recent cycle’s peak, by the state Employment Development Dept.’s freshly revised math.”

Looking Back:

One year ago, the MBA reported that commercial and residential mortgage delinquencies increased during the 4th quarter of 2008. Riverside and San Bernardino County were ranked as the 6th highest foreclosure market. U.S. foreclosures increased by 30 percent in one month. Freddie Mac’s statistics showed that 30-year mortgage rates decreased to 5.03 percent.

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The Norris Group Real Estate News Roundup 3/11/10

Thursday, March 11th, 2010

Today’s News Synopsis:

According to the MBA, the delinquency rate for CMBS increased by 1.63 percent during the last half of 2009. Statistics from RealtyTrac show that 2 percent fewer homes entered the foreclosure process in February. Nineteen percent of home listings experienced a price reduction since March 1st.

In The News:

Mortgage Bankers Association – “MBA Report Shows Economic Fallout Continues to Impact Commercial Real Estate Markets/Delinquencies in 4th Quarter 2009″ (3-11-10)

“Between the third and fourth quarters, the 30+ day delinquency rate on loans held in commercial mortgage-backed securities (CMBS) rose 1.63 percentage points to 5.69 percent. The 60+ day delinquency rate on loans held in life company portfolios decreased 0.04 percentage points to 0.19 percent. The 60+ day delinquency rate on multifamily loans held or insured by Fannie Mae rose 0.01 percentage points to 0.63 percent. The 90+ day delinquency rate on multifamily loans held or insured by Freddie Mac increased 0.04 percentage points to 0.15 percent. The 90+day delinquency rate on loans held by FDIC-insured banks and thrifts rose 0.49 percentage points to 3.92 percent.”

LA Times – “Fewer homes enter foreclosure process in February” (3-11-10)

“The number of homes caught up in some stage of the foreclosure process in February fell 2% from the previous month to 308,524, a real estate firm will report Thursday. That number is up 6% compared with the same month a year earlier but marked the smallest year-over-year increase since January 2006, according to RealtyTrac Inc.”

Housing Wire – “Sellers Cut Fewer Listing Prices as Home Price Declines Slow” (3-11-10)

“Fewer US homes for sale experienced listing price reductions this month, according to online real estate market Trulia.com. It’s further indication of a leveling out in listing price declines amid government stimulus to buy homes. A new low of 19% of listings currently on the market experienced a price cut as of March 1, 2010, based on Trulia’s database of live listings. Sellers slashed $21.6bn off of listing prices.”

Housing Wire – “COP Cites Missed Opportunities in Federal Bailout of GMAC” (3-11-10)

“GMAC, once the credit arm of General Motors and now the 14th largest bank holding company in the US, could have been placed into bankruptcy and its costly subsidiary operations wound-down, the Panel said.”

Housing Wire – “FDIC Pricing Second Round of ABS” (3-11-10)

“The second round of structured financed notes being issued by the Federal Deposit Insurance Corp. (FDIC) is being priced today. The news comes after the successful launch of the FDIC project to use structured finance as a way to profit from the certain assets of failed banks. It is believed the FDIC is cherry-picking the best performing loans to sell to investors as asset-backed securities (ABS).”

Housing Wire – “Jumbo RMBS Delinquencies Nearing Third Year of Rises” (3-11-10)

“The prime jumbo mortgage market, especially in California and Florida, continues to deteriorate in the residential-mortgage backed securities (RMBS) space, posting rising 60-day or more delinquencies for the 33rd consecutive month, according to Fitch Ratings. And to jumbo market players, the trend is expected to continue for some time.”

Housing Wire – “Weekly Mortgage Rates Dip Again” (3-11-10)

“Freddie Mac’s (FRE: 1.30 -0.76%) weekly survey put the average rate for a 30-year FRM at 4.95% with an average 0.7 origination point for the week ending March 11, down from the previous week when it was 4.97%. A year ago, Freddie’s survey averaged 5.03%.”

Housing Wire – “Storm Brews Over Short Sale Valuations as the Mortgage Market Prepares for HAFA” (3-11-10)

“A storm is brewing between appraisers and broker price opinion (BPO) professionals vying for valuation work for short sales conducted through the Making Home Affordable Foreclosure Alternatives (HAFA) program. The Appraisal Institute — a trade group that represents appraisers — released a public letter it wrote to Treasury Secretary Timothy Geithner on Tuesday, calling for an end of the practice of using BPOs for Making Home Affordable modifications and refinancings, as well as amending the rules for the upcoming HAFA program to require appraisals to determine value for government-incentivized short sales.”

Bloomberg - “REIT Chief Executives See Strengthening Market for Asset Sales” (3-11-10)

“Investors with abundant cash and few deals to chase are driving up commercial property prices, real estate chief executive officers said today.”

Bloomberg - “Apartment Vacancy Rates in U.S. to Decline in 2010, CBRE Says” (3-11-10)

“Apartment vacancies in the U.S., which reached a record high of 7.4 percent in 2009, will fall this year as job losses stabilize and fewer new rental homes enter the market, CB Richard Ellis Group Inc. said. The vacancy rate will decline to 6.8 percent in 2010, the property broker said in a report today. Effective rents, or what tenants pay after concessions, will end the year less than 1 percent down from the fourth quarter of 2009. Rents fell 4.7 percent in the final quarter of last year from a year earlier. “

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The Norris Group Real Estate News Roundup 2/23/10

Tuesday, February 23rd, 2010

Today’s News Synopsis:

The NAR predicts that the commercial real estate market will not recover until after 2011. In California, single family home sales decreased by 3 percent during January. The Standard & Poor’s index shows that national home prices increased slightly during December. 702 banks made the ‘Problem List’ for the FDIC in 2009.

In The News:

NAR - “No Meaningful Recovery in Commercial Real Estate Before 2011″ (2-23-10)

“Lawrence Yun, NAR chief economist, said commercial real estate almost always lags the economy. ‘Because of the lingering impact from the deep recession over the past two years, vacancy rates will trend higher and many commercial property owners will need to make rent concessions,’ he said.”

CAR - “January sales and price report” (2-23-10)

“Existing, single-family home sales decreased 3 percent in January to a seasonally adjusted rate of 539,040 units on an annualized basis compared with December 2009. The statewide median price of an existing single-family home decreased 6.3 percent in January to $287,440, compared with December 2009. C.A.R.’s Unsold Inventory Index fell to 5.8 months in January, compared with 7.3 months in January 2009.

Los Angeles Times – “Home prices show small gain in December” (2-23-10)

“The Standard & Poor’s/Case-Shiller index of home prices in 20 metropolitan areas increased 0.3% from November on a seasonally adjusted basis, with 14 cities posting gains. Compared with a year earlier, the index was down 3.1% in December, but the year-to-year rate of decline moderated in all 20 cities.”

Housing Wire – “FDIC ‘Problem’ Banks Increased 27% in Q409″ (2-23-10)

“By the end of 2009, 702 banks made the ‘Problem List’ for the Federal Deposit Insurance Corp. (FDIC), a marked increase of 27% from 552 at the end of Q309. Additionally, the total amount of assets of insured institutions increased $137.2bn to $13.7trn in Q409. Bank investments in mortgage-backed securities (MBS) also increased by $44.8bn, overall, to $1.4trn.”

Housing Wire – “Lowe’s Profits Top $200m for Q409″ (2-23-10)

“Lowe’s Companies (LOW: 22.81 -1.13%), the world’s second largest home improvement retailer, reported profits of $205m, or $0.14 per share, for its fiscal fourth quarter ending January 29. The Q409 results are up 26.5% from one year ago, when Q408 net earnings were $162m, or $0.11 per share. For the fiscal year ending January 29, 2010, net earnings were $1.78bn, or $1.21 per share, down 18.8% from one year ago, when North Carolina-based Lowe’s earned $2.195bn. In Q309, Lowe’s reported net earnings of $344m.”

Housing Wire – “11.3m Homeowners Now Underwater: First American” (2-23-10)

“11.3m homeowners now owe more on their mortgages than the value of their home at the end of Q409, with the Sand States taking four of the top five negative equity, or underwater, markets according to research released by First American CoreLogic.”

MGIC - “MGIC to Lower Mortgage Insurance Rates for Good Credit Borrowers” (2-23-10)

“The new rates will be lower for borrowers with a credit score of 720 or greater and higher for borrowers with credit scores between 620 and 679. No change is expected for those with a score between 680 and 719, according to a form 8-K filed today with the Securities Exchange Commission.”

Housing Wire – “Home Depot Posts $342m Q4 Profit” (2-23-10)

“Home improvement retailer Home Depot (HD: 30.75 +1.42%) reported a profit of $342m, or $0.20 per share, for its fiscal year fourth quarter ending January 31. That’s an improvement from last year’s fiscal fourth quarter, when Home Depot lost $54m, or $0.03 per share. But it’s lower than Home Depot’s Q309 net earnings of $689m, or $0.41 per share. Home Depot said its sales performance was driven by gains in kitchen and bath, paint, flooring and plumbing as well as its international businesses.”

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The Norris Group Real Estate News Roundup 1/25/10

Monday, January 25th, 2010

Today’s News Synopsis:

According to the NAR, existing home sales decreased by 16.7 percent in December. The HVCC repeal bill, named HR 1728, has passed in the House of Representatvies and is waiting approval from Congress. The FDIC took over 5 more failed banks last week. FTN Financial reports that declining home values have had little effect on the nation’s economic recovery.

In The News:

NAR - “December Existing-Home Sales Down but Prices Rise; 2009 Sales Up” (1-25-10)

“Existing-home sales – including single-family, townhomes, condominiums and co-ops – fell 16.7 percent to a seasonally adjusted annual rate1 of 5.45 million units in December from 6.54 million in November, but remain 15.0 percent above the 4.74 million-unit level in December 2008.”

Washington Post – “Stakes are high as government plans exit from mortgage markets” (1-25-10)

“Over the past year, these programs have enabled prospective home buyers to get cheap loans, helping those buying and selling property as well as those eager to refinance existing mortgages. If the end of the initiative drives up interest rates, say from 5 percent to 5.5 percent, homeowners could be deterred from refinancing, industry officials say. A sharper increase in rates could make homes too expensive for many buyers, forcing them from the market and causing the recent pickup in home sales to stall.”

Inman - “Bailout’s impact on deficit debated” (1-25-10)

“The cost of subsidizing the operations of Fannie Mae and Freddie Mac should be accounted for in the federal budget as if they were federal agencies, the Congressional Budget Office argues in a new report — an accounting change that would add nearly $400 billion to the growing national deficit. The Obama administration has argued that only cash the Treasury Department pumps directly into Fannie and Freddie — about $95.6 billion since the mortgage guarantors were placed into conservatorship in September 2008 — should be included as budget expenditures.”

Housing Wire - “FHA Cracks Down on 4 Mortgage Lenders” (1-25-10)

“The lenders losing approval are: Strategic Mortgage Corporation, ProMortgage, Americare Investment Group, which does business as Premier Capital Lending and TopDot Mortgage. The MRB suspended FHA approval on Home Mortgage Inc. (HMI) for six months. In addition to losing its FHA approval, TopDot faces action from the Government National Mortgage Association, or Ginnie Mae.”

Housing Wire – “Home Valuation Code of Conduct is Better for Business, AMCs Say” (1-25-10)

“A trade group for the appraisal management company (AMC) industry warned that if proposed legislation repealing the Home Valuation Code of Conduct (HVCC) is passed, it may lead to the same damaging business practices that puts undue pressure put on property appraisers. The specific legislation that catches the ire of the Title/Appraisal Vendor Management Association (TAVMA) is HR 1728 which passed the House of Representatives and is awaiting Senate approval. The financial reform bill includes a provision to repeal the HVCC.”

Housing Wire – “FDIC May Securitize Assets of Failed Banks” (1-25-10)

“There is a large supply of failed bank assets on-hand, with the latest round of five failures on Friday leaving the FDIC with at least $20.1m in total assets for later disposition. The FDIC is said to be diversifying its options for offloading failed banks when no buyer can be found.”

Housing Wire – “Foreclosure and Price Decline is not Fatal to Recovery, Says FTN Financial” (1-25-10)

“Declines in house prices mixed with increases in foreclosures are not showing a hugely negative knock-on impact for the nation’s overall economic recovery, according to a weekly report by FTN Financial, a portfolio manager and analytics provider for the investment and banking industry.”

Bloomberg - “Fannie Mortgage-Bond Spreads Unchanged After Widening Four Days” (1-25-10)

“Yields on Fannie Mae and Freddie Mac mortgage securities were unchanged relative to government notes after widening for four days. The difference between yields on Washington-based Fannie Mae’s current-coupon 30-year fixed-rate mortgage bonds and 10- year Treasuries remained at about 0.75 percentage point, after climbing as high as 0.77 percentage point, according to data compiled by Bloomberg. The spread has grown since reaching 0.66 percentage point on Jan. 6, the tightest in more than 17 years.”

Orange County Register – “South coast distressed homes slip, slide” (1-25-10)

“Two weeks ago, Dana Point’s percentage of short sales and foreclosures was 23.3%, which has risen to 24.7% this week, according to a biweekly report by Steven Thomas of Altera Real Estate. San Clemente also saw an increase in distressed properties. Two weeks ago, 30.8 percent of the city’s active home stock was distressed. Now, 32.8% of homes for sale are distressed.”

Orange County Register - “Smallest apartments get biggest rent cuts” (1-25-10)

“The biggest percentage cuts were made in rents for ‘junior one-bedroom’ units — essentially a small one-bedroom or a studio apartment with an alcove or space that can be used as a bedroom. The average rent for those units fell 11.4% to $1,172 a month. Studio apartments, one-bedroom and two-bedroom units had the next biggest percentage cuts, with reductions of just over 7%.”

Looking Back:

One year ago, California’s unemployment rate increased to 9.3 percent. Proposition 13 prevented California from raising property taxes for the budget crisis. Mortgage rates increased by 0.5 percent within a week and a half. The Federal Reserve was expected to keep its rates at a record low.

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The Norris Group Real Estate News Roundup 1/8/10

Friday, January 8th, 2010

Today’s News Synopsis:

Economists are criticizing Gov. Schwarzenegger’s $10,000 homebuyer tax credt and claiming it to be a waste of money. According to Amherst Securities Group, default and prepayment rates on mortgage-backed-securities remained consistent from October through November. Colony Capital Acquisitions bought 1,200 commercial mortgages from the FDIC. Multiple appraisal institutions filed complaints to the Department of the Interior regarding the absence of a qualified Chief Appraiser.

In The News:

Sacramento Bee – “Home Front: Some economists not buying proposed homebuyer tax credit” (1-8-10)

“Gov. Arnold Schwarzenegger’s proposed new $10,000 homebuyer tax credit is thrilling the real estate universe, but don’t think it’s a done deal. Opponents, who include economists and advocacy groups, are weighing in. Their point: it’s a poor use of money in a state that’s whacking community college budgets and health programs for poor kids”

Washington Post – “FDIC considers plan to penalize banks whose pay practices encourage risky moves” (1-8-10)

“The Federal Deposit Insurance Corp. is considering financial penalties for banks whose pay practices encourage reckless behavior, potentially opening a new front in the federal government’s effort to reshape the way bankers are paid, according to people familiar with the matter. Officials at the FDIC and other federal agencies are concerned that some banks reward executives for increasing revenues and profits in the short term even if those executives also are increasing the company’s risk of losses in the long term.”

Housing Wire – “Settling the Chinese Drywall Fight” (1-8-10)

“Homeowners and builders are facing difficulties seeking recourse from manufacturers of a toxic drywall that’s been alleged to emit sulfur fumes, causing damage to heating, ventilation and air conditioning (HVAC) components and health problems ranging from watery eyes to respiratory issues. The problem? It’s difficult for plaintiffs to serve foreign manufacturers in US courts. In this case, the problem with the manufacturers of Chinese drywall is exactly what you’d expect: the manufacturers are in China.”

Housing Wire – “Redefault Rates ‘Tragic’, Says Amherst” (1-8-10)

“According to Amherst Securities Group, default and prepayment rates on non-agency, private-label mortgage-backed securities (MBS) were constant in November. However, re-performance rates, where payments return to less than two months delinquent, were down and re-default rates ‘tragic’ in November, according to market commentary provided by the firm.”

Housing Wire – “Carlton Selling $307M Distressed Asset Portfolio” (1-8-10)

“Carlton Advisory Services is selling a portfolio of non-performing loans and real estate owned (REO) assets worth a combined $307m. The portfolio includes office, industrial, retail, multi-family, assisted-living facility, and self-storage assets located across 24 states. The New York-based firm said its services were retained by the commercial mortgage-backed securitization (CMBS) trusts that currently hold the assets.”

Housing Wire – “FDIC Sells Equity Stake in $1bn Portfolio of Distressed CRE Loans” (1-8-10)

“Colony Capital Acquisitions won the bidding process on a sale of equity interest in 1,200 commercial mortgages the Federal Deposit Insurance Corp. (FDIC) seized from depository institutions that failed within the past 18 months. FDIC created a limited liability company, called a multibank structured transaction, to hold commercial real estate assets from 22 failed bank receiverships. As winner of the bidding process, Los Angeles-based Colony Capital purchases a 40% ownership interest in the company.”

Housing Wire – “Call for Chief Appraiser Gains Momentum” (1-8-10)

“A handful of appraiser organizations joined together Thursday to send a letter to the US Department of the Interior, urging the hire of a chief appraiser. The groups – the Appraisal Institute, the American Society of Appraisers, the American Society of Farm Managers and Rural Appraisers and the National Association of Independent Fee Appraisers – noted a December report (download here) from the Interior Department’s Inspector General directs the filling of such a position, which has not been filled by qualified executive in almost three years.”

Housing Wire – “Fed’s MBS Purchases Slow and Spreads Hold, For Now” (1-8-10)

“The Federal Reserve Bank of New York bought $12bn of mortgage-backed securities (MBS) from mortgage giants Freddie Mac (FRE: 1.45 -3.33%), Fannie Mae (FNM: 1.15 -2.54%) and Ginnie Mae in the week ending January 8.”

Bloomberg - “Fed Won’t Raise Until After Jobless Rate Peaks, Crescenzi Says” (1-8-10)

“The Federal Reserve won’t raise its target rate for overnight loans between banks until many months after unemployment peaks, according to Pacific Investment Management Co.’s Tony Crescenzi.”

Bloomberg - “U.S. Office Vacancies Climb to 15-Year High on Employment Cuts” (1-8-10)

“Office vacancies in the U.S. surged to a 15-year high in the fourth quarter and rents fell the most on record as the deepest recession in more than half a century slashed demand for commercial space, according to Reis Inc. The vacancy rate climbed to 17 percent from 14.5 percent a year earlier, the New York-based research company said. Effective rents, the amount tenants actually pay landlords, dropped 8.9 percent, the biggest year-over-year decline since Reis began tracking the data in 1980.”

Inman - “Economy: Bad is the new good” (1-8-10)

“A renewed, two-group consensus drove the jump: The economy is in a solid recovery, or even if it isn’t, immense Treasury borrowing will force rates higher. Both groups agree that the Fed should stop its assistance, either because the economy no longer needs it, or because even if the economy does need help, to continue assistance would produce inflation. I think this consensus is mistaken. There is no meaningful recovery under way, and the Fed has already pulled up short. More data like today’s will add to policymaking tension, force the administration’s hand, and soon have the Fed back to buying mortgages, Treasurys or both.”

Inman - “Confidence slips among agents, brokers” (1-8-10)

“Confidence among real estate agents and brokers dipped in December after a heady rise in November, according to a monthly survey conducted by real estate tech company Point2 Technologies.”

Looking Back:

One year ago, Fannie Mae and Freddie Mac decided to halt all foreclosure sales and evictions until January 9, 2009.  A panel of economists predicted that home sales would not increase, despite the Federal Reserve’s attempts to lower interest rates.  Consumer borrower dropped by $7.8 billion last November.

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The Norris Group Real Estate News Roundup 12/16/09

Wednesday, December 16th, 2009

Today’s News Synopsis:

The Wall Street Journal reports that people are increasingly willing to abandon mortgage payments for becoming renters, housing starts climb almost 9%, the FDIC offers some reprieve from securities accounting rules for the next year, and the Bureau of statistics released their real earnings report stating that average hourly earnings fell by .5%.

In The News:

DSNews - “Trulia and RealtyTrac Release Survey Results of Homebuyers’ Attitudes Toward Foreclosures” (12-15-09)

“n Tuesday, Irvine, California- based RealtyTrac and Trulia Inc., headquartered in San Francisco released the results of a new survey revealing insights to how consumers feel about purchasing a foreclosed property, conducted on their behalf by Harris Interactive, a market research firm based in New York City. Beginning in May 2008, the survey has been conducted every six months, making this the fourth survey of its type.”

Wall Street Jounral – “American Dream 2: Default, Then Rent” (12-16-09)

“People’s increasing willingness to abandon their own piece of America illustrates a paradoxical change wrought by the housing bust: Even as it tarnishes the near-sacred image of home ownership, it might be clearing the way for an economic recovery.”

Mortgage Brokers Association – “Mortgage Applications Increase Slightly in Latest MBA Weekly Survey” (12-16-09)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending December 11, 2009. The Market Composite Index, a measure of mortgage loan application volume increased 0.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 0.3 percent compared with the previous week.”

Bloomberg – “Housing Starts in U.S. Climb 8.9% to 574,000 Pace “ (12-16-09)

“Builders in November broke ground on more U.S. homes, a sign the recovery in homebuilding may carry through into 2010. Housing starts rose 8.9 percent to an annual rate of 574,000, the Commerce Department said today in Washington. Building permits, a sign of future construction, climbed to the highest level in a year.”

DSNews – “FDIC Offers Reprieve for Securities Accounting Rules” (12-16-09)

“The FDIC has finalized a new regulatory capital rule that will give lenders who package and resell mortgages a little breathing room when it comes to accounting for these assets on their books. The federal agency’s rule directly addresses FAS 166 and 167, which beginning January 1, 2010 moves most securitizations – including residential and commercial mortgage-backed securities – back onto the issuer’s balance sheet. Banks had pushed for a three-year transition period to phase in the new accounting directives. The FDIC gave them 12 months.”

DSNews – “HUD Establishes Standards for State Compliance with SAFE Act” (12-16-09)

“On Tuesday, HUD announced the publication of a proposed rule setting the minimum standards that states must meet in licensing loan originators to comply with the Secure and Fair Enforcement Mortgage Licensing Act of 2008 (Safe Act). The proposed rule was posted in Tuesday’s federal register and on HUD’s website.”

National Mortgage Magazine – “NAMB forms Legislative & Regulatory Action Fund to protect broker industry” (12-16-09)

“The National Association of Mortgage Brokers (NAMB) has announced the launch of its Legislative & Regulatory Action Fund to collect donations that will be used for protecting the interests of the mortgage broker industry. The mortgage broker profession has underwent extensive scrutiny and is being portrayed unfavorably in the mainstream media, as the housing industry undergoes sweeping legislative and regulatory initiatives to stimulate the economy and implement safeguards aimed at preventing another housing bubble. NAMB has worked hard to defend mortgage brokers against deceptive and misleading information, and has been successful in many instances. NAMB continues the fight to protect and preserve your industry.”

Housing Wire – “Fed Orders Credit Suisse to Cease and Desist” (12-16-09)

“The US Department of Treasury’s Office of Foreign Assets Control (OFAC), along with the US Department of Justice and the New York County District Attorney’s Office, separately announced a $536m settlement with Credit Suisse. The firm will pay $268m each to the US and to New York.”

Housing Wire – “FDIC OKs Delay of FAS 166, 167 Effect on Capital” (12-16-09)

“The board of directors at the Federal Deposit Insurance Corp. on Wednesday finalized a new capital rule that addresses industry concerns raised by Financial Accounting Standards (FAS) 166 and 167. FAS 166 and 167, which take effect in January, will require financial institutions to bring certain securitized assets onto balance sheets.”

Bureau of Labor and Statistics – “Real Earnings” (12-16-09)

“Real average hourly earnings fell 0.5 percent from October to November, seasonally adjusted, the Bureau of Labor Statistics reported today. A 0.5 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) more than offset a 0.1 percent increase in average hourly earnings for production and nonsupervisory workers.”

HUD – “Shopping for Your Home Loan” (12-16-09)

“The Real Estate Settlement Procedures Act (RESPA) requires lenders and mortgage brokers to give this booklet to buyers within three days of applying for a mortgage loan. RESPA is a federal law that helps protect consumers from unfair practices by settlement service providers during the home-buying and loan process.”

Looking Back:

One year ago, the California Association of Realtors projected a 12.5% increase in California real estate prices for 2009 with the prediction that REOs would be absorbed in 2009. The National Association of Realtors came out with concerns on the commercial real estate forecast and Bloomberg reported that the cost of credit writedowns topped one trillion.

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The Norris Group Real Estate News Roundup 12/07/09

Monday, December 7th, 2009

Today’s News Synopsis

The MBA reports that delinquency rates increased during the third quarter for most mortgage investor groups. Bernanke claims that the recovery should continue for at least a year, but the U.S. still has some trouble to overcome. Six more banks were shut down Friday, which will cost the FDIC a total of $2.384billion.

In The News:

Mortgage Bankers Association – “MBA Report Shows Third Quarter 2009 Commercial and Multifamily Mortgage Performance Falls in Weakened Economy” (12-7-09)

“Delinquency rates continued to increase in the third quarter for most commercial/multifamily mortgage investor groups, according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report.”

MSNBC - “Bernanke: Too soon to tell if recovery will last” (12-7-09)

“The Fed chief repeated his belief that the recovery will continue at least into next year. But he cautioned that the economy is confronting some ‘formidable headwinds’ — including a weak job market, cautious consumers and still-tight credit.”

Housing Wire – “TARP Costs Narrow as Treasury Sheds Capital One Investment” (12-7-09)

“Initial projections put the cost of the financial stabilization efforts at more than $500bn, which factored into the President’s budget in February. Of that projection, $300bn was expected directly from TARP, and another $250bn was included in the budget to cover needed resources beyond TARP’s $700bn.”

Housing Wire – “Fannie Prepays Plunge ‘Unexpected’ 6%: BarCap” (12-7-09)

“The prepayment rate among Fannie Mae (FNM: 0.91 -1.09%) 30-year notes slipped 6% ‘unexpectedly’ after the government-sponsored entity (GSE) suspended buyouts related to the Home Affordable Modification Program (HAMP), according to monthly commentary by Barclays Capital. The buyout delay in this month’s reporting period for Fannie indicates a spike in buyouts — and the prepayment speed — next month as mortgages are modified and withdrawn from mortgage-backed security (MBS) pools, according to researchers.”

Housing Wire – “Monday Morning Cup of Coffee” (12-7-09)

“Regulators shut down six banks Friday, bringing to total number of failed institutions to 130 this year. The total estimated cost to the Federal Deposit Insurance Corp.’s (FDIC) deposit insurance fund is $2.384bn.”

Housing Wire – “Mortgage Insurers Deny 20-25% of Claims: Moody’s” (12-7-09)

“Mortgage insurance rescission rates jumped to 20-25% in recent quarters, relative to historical 7% averages. Moody’s said mortgage insurers rescinded about $6bn of claims since January 2008 and could rescind another $2bn to $4bn of claims during the next few years.”

Orange County Register – “O.C. mechanics liens drop 23%” (12-7-09)

“The Real Estate Research Council of Southern California reports that in the third quarter the number of Orange County mechanics liens filed were 730 – that’s -23.4% vs. a year ago. Mechanics liens are typically filed when contractors working on a real estate property — home or commercial, new or old — go unpaid for their services.”

Orange County Register - “Hear why O.C. property tax collections jumped” (12-6-09)

“Considering the wave of the ugly economic news out there, we were surprised to learn that early Orange County property tax collections were up $54 million as the Dec. 10 deadline for first installment payments neared.”

Looking Back:

One year ago, the delinquency rate for one-to-four-unit residential properties stood at 6.99 percent. 500,000 jobs were cut within one month’s time. The U.S. Treasury offered a multi-billion dollar proposal to lower the interest rate on 30-year mortgages to 4.5 percent.

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The Norris Group Real Estate News Roundup 12/04/09

Friday, December 4th, 2009

Today’s News Synopsis:

The unemployment rate declined to 10 percent during November. As of September, less than 0.3 percent of all trial modifications have become permanent. The FDIC announced plans that may require some lenders to make principal reductions on mortgages, rather than forbearing payment and reducing interest rates.

In The News:

Wall Street Journal – “Unemployment Rate Falls to 10%” (12-4-09)

“U.S. job losses in November posted the smallest drop since the start of the recession and the unemployment rate unexpectedly declined, a sign the labor market is finally healing as the economy recovers.”

Time - “Why the Loan-Modification Program Isn’t Working” (12-4-09)

“The problem the Administration is out to tackle is related to the structure of the Home Affordable Modification Program (HAMP). The first three months of a mortgage rewrite are something of a probation period— and very few homeowners are making it out of that trial. More than 650,000 borrowers have been placed in trial modifications, but as of September, fewer than 2,000 had become permanent.”

Housing Wire – “Moody’s Links Option ARM, Subprime Performance” (12-4-09)

“More than $200bn of outstanding pay-option adjustable-rate mortgages (ARMs) originated and securitized from ‘04-’07, according to market commentary by Moody’s Investors Service this week. This sector shows ‘dismal’ performance, with more than 40% of borrowers 60 or more days past due on payments. And many of these loans have yet to experience a recast event, when initial minimum monthly payments jump as much as 60%, according to sources interviewed by HousingWire for an upcoming issue.”

Housing Wire – “Forget Forbearance; FDIC Eyes Principal Forgiveness” (12-4-09)

“Institutions that acquire failed banks taken over by the Federal Deposit Insurance Corp. (FDIC) may soon be required to cut principal off mortgages instead of simply forbearing a portion until a later day or lowering interest rates, according to comments and FDIC official made to Bloomberg this week. The principal forgiveness might apply to as much as $45bn of mortgages from failed banks. Regulators so far in 2009 shut down 124 banks, costing the FDIC’s insurance fund billions of dollars and putting billions more in assets up for acquisition.”

Housing Wire – “Foreclosure Activity Outpaces Mods in October: Hope Now” (12-4-09)

“The mortgage servicing industry completed 271,563 total loan workouts in October, according to Hope Now, the private sector alliance of mortgage servicers, investors, insurers and non-profit counselors. Workouts included 198,373 repayment plans and 73,190 modifications. At the same time, the industry completed 94,450 foreclosure sales and initiated another 222,107 foreclosure starts.”

Press Enterprise - “Low interest rates are no panacea for region’s housing” (12-4-09)

“Inland experts say a shortage of inventory is suppressing sales of existing homes. Also, the high cost of land that home builders acquired makes it impossible for most of them to construct houses that can sell cheaply enough to compete with the foreclosure-ridden resale market.”

Mercury News – “Now’s really the time to buy a home, many say” (12-4-09)

“Mortgage rates are hovering at historic lows, home prices are just starting to edge up from total collapse, and the government is offering tax breaks to first-time and move-up buyers. It all adds up to this: In the real estate agent’s overworked phrase, there may never be a better time to buy a house. And this might not last for long, brokers and real estate agents say, especially since mortgage rates are probably headed up.”

Inman - “Buyer discounts continue slide” (12-4-09)

“For the ninth month this year, buyer discounts — the price paid compared to the last listing price of homes — shrank in October to a median of 2.7 percent, according to Zillow’s Real Estate Market Reports. That’s down from 2.9 percent in September and 4.6 percent in January.”

Bloomberg - “Banks Take Losses on Short Sales as Foreclosures Soar” (12-4-09)

“Banks are beginning to go along with short sales in increasing numbers, three years into a U.S. housing slump that pushed the economy into a recession and cut resale values by 30 percent from the peak in July 2006. Short sales almost tripled to 40,000 in the first six months of 2009 from the same period a year earlier. Yet for each short sale, there were 25 foreclosures started or completed in the first half of this year, according to data from the Office of Thrift Supervision and the Office of the Comptroller of the Currency. ”

Looking Back

One year ago, a little over 42,293 new and resale houses and condos were sold for the year. Orange County was listed as the 9th riskiest home lending market. Bernanke estimated that as many as 20 percent of all homeowners owed more on their homes than their homes were worth.

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The Norris Group Real Estate News Roundup 11/30/09

Monday, November 30th, 2009

Today’s News Synopsis:

Edward Pinto expects 20 percent of FHA’s mortgage loans to default. The Federal Reserve bought $16 billion worth of mortgage-backed securities last week. According to Michael Barr, Over 650,000 mortgage modifications are currently being processed, and over 375,000 borrowers will receive permanent modifications by the end of this year. A survey from Barclay’s shows that as a U.S. citizen’s net worth increases so does the proportion of their wealth invested in real estate.

In The News:

CNBC - “Fannie Mae to Tighten Lending Standards” (11-26-09)

“Fannie Mae plans to raise minimum credit score requirements next month and limit the amount of overall debt that borrowers can carry relative to their incomes”

The Daily Reckoning – “Federal Housing Administration Encourages More Bad Mortgage Loans” (11-26-09)

“An astounding 20 percent of the Federal Housing Administration’s $725 billion portfolio of mortgage loans will go into default as the result of the agency’s recent campaign to subsidize first-time homebuyers with little cash and weak credit. That prediction comes from an industry insider who has seen it all happen before: former chief credit officer of Fannie Mae, Edward Pinto, who recently testified before a House committee on the gathering storm of FHA mortgage defaults.”

Orange County Register – “Banks forced to buy back more loans” (11-26-09)

“Banks had to buy back $7.1 billion in defaulted single-family loans in the third quarter to reimburse mortgage investors, up from $1.9 billion in the previous quarter. Federal Deposit Insurance Corp. Call Report information shows that most of the buyback demands fell on JPMorgan Chase and Bank of America. Chase repurchased $2.7 billion in defaulted loans and BoA repurchased $2.3 billion to satisfy investor demands.”

Finance My Money – “FDIC too broke to Takeover Banks? No Bank Failure Friday on Black Friday. Can 5,300 Employees Deal with $5.3 Trillion in Deposits?” (11-30-09)

“The Federal Deposit Insurance Corporation (FDIC) was hammered this week when a third quarter report demonstrated that the FDIC was running in the red to the sum of $8.2 billion. This is troubling since the FDIC protects deposits in member banks up to $250,000 and funds covered by the deposit insurance fund (DIF) are over $5.3 trillion, this amount is over one-third of our nationwide GDP. The FDIC as of Q1 of 2009 has 5,381 employees.”

San Francisco Chronicle – “Gov’t increases pressure on mortgage industry” (11-30-09)

“The Treasury Department said Monday it will withhold payments from mortgage companies that aren’t doing enough to make the changes permanent. Officials will monitor the largest of the 71 participating mortgage companies via daily progress reports. The goal is to increase the rate at which troubled home loans are converted into new loans with lower monthly payments. At the end of October, more than 650,000 borrowers, or 20 percent of those eligible, had signed up for trials lasting up to five months.”

Inman – “Non-investors get Fannie REOs first” (11-27-09)

“Fannie Mae has launched a new program that’s intended to give public entities and buyers looking for a home to live in, rather a property to flip, a first crack at homes Fannie has foreclosed on. Under Fannie Mae’s ‘First Look’ initiative, only offers from buyers who intend to be owner occupants and buyers using public funds will be considered during the first 15 days a property is on the market. Offers from investors will be considered only after the first 15 days have passed.”

Housing Wire – “Fed Continues Slower Agency MBS Purchases” (11-30-09)

“The Federal Reserve continued its slower mortgage bond purchases, buying up $16bn of mortgage-backed securities (MBS) from government-sponsored entities in the week ending November 25. The Fed’s purchases shifted more toward Freddie Mac (FRE: 1.03 -6.36%), with $6.5bn of Freddie MBS purchased this week, from $5.9bn last week. The Fed bought $6bn from Fannie Mae (FNM: 0.88 -6.38%), compared with $4.55bn last week. The Fed also bought $3.5bn from Ginnie Mae this week, according to details released by the New York Fed.”

Housing Wire – “FHA Proposes Lenders Maintain $2.5m Net Worth” (11-30-09)

“Federal Housing Administration (FHA)-approved lenders could be required to hold increased net worth, meet stronger approval criteria and be held responsible for the actions of the mortgage brokers they do business with, if a recently proposed FHA rule is enacted. The rule is designed to reduce risks to the single-family insurance fund, which finances the FHA guarantees of mortgages in case of default. The FHA reported to Congress recently the insurance fund dipped below the Congressional-mandated 2% capital reserve threshold.”

Housing Wire – “375,000 HAMP Trials to Go Permanent, Treasury Says” (11-30-09)

“Under HAMP, the Treasury allocates capped incentives to participating servicers for the modification of loans on the verge of foreclosure. According to the latest report, more than 650,000 trials modifications are underway. Saxon Mortgage Services leads all servicers by providing trials to 44% of its eligible portfolio, according to the report. More than 375,000 borrowers are on track for a permanent modification by the end of the year, according to Michael Barr, assistant secretary for financial institutions at the Treasury.”

Bloomberg – “Wealthy Investors Plan to Buy More Real Estate, Barclays Says” (11-30-09)

“Twice as many people plan to raise their investment in commercial and residential property as intend to reduce it, the Barclays Wealth unit said in an e-mailed statement today. The richer the individual, the greater the proportion of wealth is placed in real estate, the survey found.”

Orange County Register – “Irvine home listings drop along with temps” (11-30-09)

“As of last Wednesday, there were 461 active homes for sale in Irvine, with an expected market time of 2.06 months, according to a biweekly report done by Steven Thomas of Altera Real Estate. That’s a benchmark tracking how many months it theoretically takes to sell all the inventory in the local MLS for-sale listings at the current pace of pending deals being made.”

Looking Back:

One year ago, the CIRB reported that the value of non-residential building in 2008 had reached a total of $1.3 billion. Evan Gentry of G8 Capital predicted that Orange County would need another five years before real estate began to appreciate again. New home sales decreased by 18 percent in the West during October of 2008.

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The Norris Group Real Estate News Roundup 11/24/09

Tuesday, November 24th, 2009

Today’s News Synopsis:

The CIRB reports that homebuilders pulled 6 percent less permits from September. American banks decreased lending by 2.8 percent in the third quarter. The FOMC suspects that the economy will take 5 years to return to an acceptable rate of growth.  According to First American CoreLogic, 23 percent of all US homes are less valuable than the mortgages owed on them.

In The News:

CBIA - “California Housing Starts Continue Decline in October, CBIA Announces” (11-24-09)

“According to statistics compiled by the Construction Industry Research Board (CIRB), homebuilders pulled permits for 2,815 total housing units in October, down 6 percent from September, and down 33 percent from October 2008. Permits for single-family homes totaled 2,017, down 9 percent from the previous month and down 14 percent from same period last year, while multifamily permits totaled 798, up 5 percent from September but down 57 percent from a year ago.”

Los Angeles Times – “Index shows moderate gain in home prices in September” (11-24-09)

“Home prices in 20 U.S. cities ticked up modestly in September, marking the fifth consecutive month of improvement, according to a closely watched national index released this morning. The Standard & Poor’s/Case-Shiller index increased 0.3% from the prior month on a seasonally adjusted basis, after a 1.1% rise in August. The index fell 9.4% from September 2008 and marked the narrowest year-over-year decline since the end of 2007.”

The Washington Post – “Decline in lending is largest since 1984″ (11-24-09)

“Lending by American banks plunged by 2.8 percent in the third quarter, the largest drop since at least 1984 and the fifth consecutive quarter in which banks have reduced lending, the Federal Deposit Insurance Corp. reported Tuesday morning.”

Housing Wire - “BarCap Acquires Commercial Real Estate Holdings Firm” (11-24-09)

“Barclays Capital, in a joint venture with Goff Capital, acquired Crescent Real Estate Equities Limited Partnership, or Crescent, from Morgan Stanley Real Estate Funding II.”

Housing Wire – “FOMC Sees Sustained Growth Five Years Away” (11-24-09)

“It will be at least five years before the economy experiences a sustainable rate of growth and levels of unemployment and inflation acceptable to the Federal Reserve, the Federal Open Market Committee said in its Nov. 4 meeting.”

Housing Wire – “FHFA Quarterly HPI Up Slightly in Q309″ (11-24-09)

“US house prices inched slightly higher in Q309 compared to Q209 in the Federal Housing Finance Agency’s (FHFA) seasonally adjusted purchase-only house price index (HPI). The HPI uses sales price information from mortgages acquired by the government-sponsored enterprises (GSEs), which increased 0.2% quarter-over-quarter. Year-over-year, the purchase-only HPI decreased 3.8% in the third quarter.”

Housing Wire – “Negative Equity, Not Job Loss, Primary Driver of Defaults” (11-24-09)

“if coming defaults are caused by unemployment, then the relevant response, says Goodman, would be to subsidize mortgage payments. On the other hand, if negative equity triggers defaults, then principal reduction must receive a higher priority in modification program waterfalls.”

Bloomberg - “Almost One in Four U.S. Homeowners Are ‘Underwater’” (11-24-09)

“The number of U.S. homes worth less than the debt owed on them reached almost 10.7 million, or 23 percent of all mortgaged properties, at the end of the third quarter, according to a report from First American CoreLogic.”

Orange County Register – “The biggest home seller mistakes” (11-24-09)

“Learn about your local market. What is selling and how long is it taking to sell? Find out what the trends are in your neighborhood. Is the market rising, falling or flat? How are local inventory levels?”

Looking Back:

One year ago, existing home sales decreased by 3.1 percent in October. The U.S. government announced a plan to spend 7.7 trillion dollars to ease credit problems. Downey Financial said it would file for bankruptcy.

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