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The Norris Group Real Estate News Roundup 6/14/10

Monday, June 14th, 2010

Today’s News Synopsis:

Christopher Cagan from First American predicts a dip in housing prices in the near future. A study from Harvard University seems to show that high unemployment is fueling the foreclosure crisis. Christopher Thornberg of Beacon Economics believes the recession is currently over, but he expects economic conditions to get worse over the next two years. REIS Inc predicts U.S. apartments may lead a rebound in commercial real estate.

In The News:

Orange County Register – “‘Double dip’ decline seen for housing” (6-13-10)

“In the short to near term, I expect a double dip.  This is the logical aftermath of the sugar shot from the Federal first time buyer tax credit.  It borrowed buyers from the future, and we are now going into that future.  Also we are not too far from the end of the traditional SoCal buying season.  I have already seen asking prices reduced 5% or so in May from April.”

Wall Street Journal – “Trading Down: Can It Still Bankroll Your Retirement?” (6-13-10)

“Trading down to a smaller home is a retirement-planning staple. According to an April study by the Society of Actuaries, 20% of not-yet retirees say they plan to downsize after the last child leaves the nest.”

Los Angeles Times - “Home shortages could develop as recovery unfolds” (6-13-10)

“A housing deficiency isn’t a sure thing, but the potential is certainly there, says David Crowe, chief economist at the National Assn. of Home Builders, who paints a rather ominous scenario in which house and apartment builders won’t be able to keep up with the demand. Wherever the new households come from — adult children moving out for the first time or leaving the nest a second or third time after returning to Mom and Dad’s to weather the economic storm, roommates uncoupling and going their separate ways or young couples starting families — most of them are typically renters. Therefore, the multifamily sector is apt to feel the pinch first, if only because it takes so much longer to build apartments than houses.”

Bloomberg - “U.S. Housing Market Recovery Dependent on Jobs Growth, Harvard Report Says” (6-14-10)

“Job growth will be the key factor in whether the U.S. real estate market can extend a recovery after the end of the federal homebuyer tax credit, according to a Harvard University study. High unemployment is fueling the foreclosure crisis and discouraging the household formation that drives property demand, according to the State of the Nation’s Housing report issued today by Harvard’s Joint Center for Housing Studies.”

Housing Wire – “Monday Morning Cup of Coffee” (6-14-10)

“The Federal Bureau of Investigation (FBI) is preparing a nationwide crackdown on mortgage fraud, with arrests expected to count in the hundreds, beginning as early as this week, the Financial Times reported.”

Housing Wire – “Negative GDP Growth in Q3? Really?” (6-14-10)

“Thornberg essentially noted in his speech that while the recession is over, for now, we’re not there yet in terms of a sustainable economic recovery. He exhorted attendees to enjoy 2010, as he expects the year to be a relatively good one compared to what we may see in 2011 and 2012.”

Housing Wire – “Subprime Mortgage Performance Improving as Delinquencies Drop” (6-14-10)

“The performance of historical subprime mortgages is improving according to two separate reports from Moody’s Investors Service and the Royal Bank of Scotland (RBS). And the rate of homeowners behind on their subprime mortgage is lower across all levels of days past due, albeit at different speeds.”

Housing Wire – “Fiserv Sees Buyer ‘Optimism’ Behind Home Price Increases” (6-14-10)

“Home prices trended up in more than 40% of metropolitan areas (155 of 384 markets) in Q409, including markets in California, Ohio, Michigan and Washington DC, according to analysis of price trends by financial data services provider Fiserv. On average, home prices were down 2.5% in Q409 from the year-ago quarter, which Fiserv noted could be due to continued high unemployment levels, rising interest rates and a high volume of distressed property in markets like Florida, Arizona and Nevada. The data studied for the quarterly report is based on the Fiserv Case-Shiller Indexes.”

Bloomberg - “Equity Residential May Start California Project Within a Year” (6-14-10)

“Equity Residential, the largest publicly traded U.S. apartment landlord, may start building a new development in California within the next year, Chief Executive Officer David Neithercut said. U.S. apartments may lead a rebound in commercial real estate as the economy adds jobs, property research firm Reis Inc. said in May. Vacancies probably will peak at 8.2 percent in 2010 and start to decline in 2011.”

Orange County Register – “Portola Hills homes quickest to sell” (6-14-10)

“The ‘hardest’ O.C. town to find a home to buy in terms of ‘market time’ (supply of homes for sale vs. new purchase deals inked in past month) is Portola Hills at 1.3 months to theoretically sell all for-sale homes at the current buying pace. Or, looking at it another way: quickest to sell. A year ago, this town was at 0.6 months.”

Orange County Register – “Home demand off 20% without tax break” (6-14-10)

“March and April’s surge due to the housing credit robbed May and June of normal activity. There is nothing cyclical about the recent swings in demand, but it is making its way back to normal. It should be back on track by July. Demand, the number of new pending sales over the prior month, decreased by 136 in the past two weeks and now totals 3,167. That is after a 603 home drop two weeks ago. For the first time since March 2008, demand is less than the prior year with 485 fewer pending sales.”

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 6/8/10

Tuesday, June 8th, 2010

Today’s News Synopsis:

A survey from the NFCC shows that only 23 percent of Americans consider strategic default to be acceptable when underwater on a mortgage. Starting today, Real Estate Disposition is auctioning more than 350 bank-owned foreclosures in California. According to IAS, national home prices were up 0.9% in April from March. An executive from RealtyTrac believes U.S. foreclosure activity will not stabilize until late 2011.

In The News:

Inman - “Builders’ incentives to buyers under scrutiny” (6-8-10)

“Federal regulators are once again scrutinizing incentives tied to the use of homebuilders’ affiliated mortgage and title companies, looking for evidence that they cost consumers more than they’re worth, help inflate appraisals, and lower underwriting standards. The Department of Housing and Urban Development (HUD) in 2008 proposed a ban on such incentives, but backed down last year after homebuilders sued over the proposed rule change”

Housing Wire – “Strike Strategic Default: Survey Finds Mortgage Payments Remain Borrower Priority” (6-8-10)

“Less than one-quarter, or 23%, of consumers recently polled indicated that opting for foreclosure is justifiable when a borrower is underwater, owing more on a home than its worth, according to the National Foundation for Credit Counseling (NFCC). This idea of strategic default, when a borrower with the ability to pay chooses not to remain current on payments, was unacceptable to another 15% of survey respondents who said no circumstances justify walking away from the financial obligation.”

Housing Wire – “CoreLogic Adds Foreclosure Data to Distressed Property-Listing Web Site” (6-8-10)

“Data analytics provider CoreLogic (CLGX: 19.68 -1.01%), recently spun off by First American Financial (FAF: 13.51 -0.44%), will provide foreclosure data and property information to the Yahoo! Real Estate foreclosure service, the company said. The partnership adds listings of various stages of foreclosure and real-estate-owned (REO) properties to Yahoo! Real Estate’s online database of distressed properties including foreclosure and pre-foreclosure listings.”

Housing Wire - “REDC to Auction 350 Bank-Owned Foreclosures” (6-8-10)

“Beginning today, Real Estate Disposition (REDC) is auctioning more than 350 bank-owned foreclosures in Northern and Southern California, including 76 properties. Through June 12, REDC will auction more than 70 Northern California properties, including 34 occupied homes. An online-only auction, the offering ends at noon Central.”

Housing Wire – “Despite Narrow Monthly Gain, House Prices Fall 2.8% from 2009: IAS” (6-8-10)

“National house prices were up 0.9% in April from March, narrowed from the previous monthly gain of 1.1%, according to the latest data from Integrated Asset Services (IAS). The IAS house price index remains 2.8% below levels seen in the same time last year — widened from the 1.9% yearly depreciation in March. Additionally, the index is down 23.9% from its July 2007 peak.”

Bloomberg - “Four Seasons Sees Rates Returning to Peak Levels in Some Areas” (6-8-10)

“Four Seasons Hotels Inc. expects nightly rates at some of its properties will climb to the peak levels of 2008 by the end of this year as demand for luxury accommodation picks up, President Kathleen Taylor said.”

Orange County Register – “Foreclosures to be high for 18 more months” (6-8-10)

“Foreclosure activity in America won’t stabilize until late 2011, an executive for Irvine-based Realty Trac told a group of real estate writers. And with only three out of eight bank-owned homes on the market, and two-thirds of those under-valued homes yet to hit, the U.S. housing market still faces years of low prices.”

Orange County Register - “Where housing zip lives: Aliso to Yorba” (6-8-10)

“Newport Beach communities had the most housing ZIP in the first quarter. Santa Ana neighborhoods the least homebuying momentum. Our Zippy rankings weigh pricing and sales momentum — plus foreclosure frequency — as measured by DataQuick stats.”

Orange County Register – “3 charged in foreclosure ‘rescue’ case” (6-8-10)

“Gregory Flores, who managed All Fund Mortgage branches in Anaheim Hills and Murietta, was arrested in Roswell, N.M. last week. Also facing wire fraud charges charges in the case are Sheri Gale, who was a loan officer for All Fund, and Amy Hall, a former loan processor for the company. They have not been arrested but are expected to turn themselves in shortly, Assistant U.S. Attorney Sean Lokey says.”

Realty Times – “Mortgage Rates Touched New Low Friday” (6-8-10)

“The decline in mortgage rates stemmed from a big increase in mortgage-backed securities prices Friday. MBS prices, which drive mortgage rates in the opposite direction, gained +21/32 (FNMA 30-yr 4.5 at 102.23) on less than spectacular jobs numbers and more European debt concerns, this time in Hungary. Typically when we see significant declines in stocks as we have lately, mortgage rates improve.”

Wall Street Journal – “Baker: Turn Fannie, Freddie Into Government-Owned Corporations” (6-8-10)

“Want an easy, simple solution to Fannie Mae and Freddie Mac? Take the mortgage-finance giants, which have been effectively nationalized, and turn them into government-owned corporations, says Dean Baker, the co-director of the Center for Economic and Policy Research, a liberal think tank. In an op-ed in USA Today, Mr. Baker makes the case that nationalizing Fannie and Freddie isn’t as radical as it sounds. For one, both companies are effectively owned and operated by the government today.”

Looking Back:

One year ago, an AP test showed that recession “stress” decreased 5 percent from March to April. Robert Shiller estimated that home prices would likely continue to decline for years to come. JP Morgan estimated that U.S. home foreclosures would probably total 6.4 million by mid-2011.

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 5/6/10

Thursday, May 6th, 2010

In The News:

Time - “New Homebuyer Credits Aim to Replace Expired Federal Program” (5-6-10)

“The Federal Government’s $8,000 homebuyer tax credit program may now be over, but at least two real estate brokerage firms and the state of California are aiming to fill the void. Coldwell Banker Real Estate LLC launched its national ‘Buyer Bonus’ program this week, whereby homebuyers will be offered a 3% credit on the home’s purchase price — up to a maximum of $8,000 — at the time of closing.”

NAR - “Survey Shows Realtors® Persevere in Market Transition, Optimistic About Future” (5-6-10)

“With the real estate market improving, three-quarters of Realtors® are very certain they will remain active in the market for two more years, according to the 2010 National Association of Realtors® Member Profile. Only 8 percent were uncertain about their future. The study’s results are representative of the nation’s 1.1 million Realtors®, who account for 60 percent of the 1.85 million active real estate licensees in the U.S. The typical NAR member has 10 years of experience, and many have increased their training, Web presence and use of social media over the past year. More than half use social networking sites, up from 35 percent in 2009.”

CBIA - “Shopping for Your Home Loan” (5-6-10)

“Buying a home is an important financial decision that should be considered carefully. This booklet will help you become familiar with the various stages of the home-buying process, including deciding whether you are ready to buy a home, and providing factors to consider in determining how much you can afford to spend. You will learn about the sales agreement, how to use a Good Faith Estimate to shop for the best loan for you, required settlement services to close your loan, and the HUD-1 Settlement Statement that you will receive at closing.”

Housing Wire – “House Prices Up 5.1 Percent in April Amid Slower REO Growth” (5-6-10)

“Home prices in April gained 5.1% from last year, while REO levels across the country slowed their climb, according to the real estate data provider Clear Capital. The firm measures home prices on a rolling three-month period. On that timescale, prices dropped another 5% in April after a 3.9% decrease in March. But the 5.1% gain from last year matched the yearly gain shown in March.”

Housing Wire - “Henry Paulson Says Flawed System, Weak Regulation Caused Financial Crisis” (5-6-10)

“Former Treasury Department secretary Henry Paulson told the Financial Crisis Inquiry Commission (FCIC) today that the US mortgage finance system — and in particular the government-sponsored enterprises (GSEs) — ran under an ‘inherently flawed’ structure and outdated regulation that failed to keep up with a changing market.”

Housing Wire – “Mortgage Rates Hit Six-Week Low at 5 Percent” (5-6-10)

“The Freddie Mac weekly survey put the average rate for a 30-year fixed-rate mortgage at 5% with an average 0.7 point origination point for the week ending May 6, down from last week’s average of 5.06%. A year ago, the 30-year FRM averaged 4.84%.”

Bloomberg - “Soured Mortgages Fall for First Time in Four Years” (5-6-10)

“The amount of soured U.S. housing debt backing the securities that roiled the global financial system declined last month for the first time in at least almost four years, according to Amherst Securities Group LP. Mortgages at least 60 days delinquent in so-called non- agency bonds without government-backed guarantees, or “re- performing” after reaching that status, fell 0.3 percent to $608.6 billion, according to a report e-mailed yesterday by the Austin, Texas-based securities firm.”

Bloomberg - “Prudential Is Happy to Lend on Commercial Real Estate” (5-6-10)

“Prudential Financial Inc., the U.S. life insurer that predicted a rebound in commercial real estate in December, said the prospect of increased property values makes mortgage originations an attractive business.”

Orange County Register – “State warns of ‘short sale’ scams” (5-6-10)

“The state Department of Real Estate is warning troubled homeowners seeking a ‘short sale’ — a deal where the lender agrees to accept less than what is owed at closing — that they are suspectible to unscrupulous ‘helpers’ who may improper demand fees; give misguided advice or take the property away at an unfair price.”

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The Norris Group Real Estate News Roundup 4/16/10

Saturday, April 17th, 2010

Today’s News Synopsis:

California unemployment increased to 12.6 percent last month. The SEC charged Goldman Sachs with fraud. According to the Commerce Department, Housing starts climbed to an annual rate of 626,000 last month. Fannie Mae is developing a new program to help families in foreclosure gain access to a new mortgage within 2 years.

In The News:

Sacramento Bee – “Jobs rebound, but California unemployment at 12.6 percent” (4-16-10)

“California’s unemployment inched up to 12.6 percent last month even though the state added 4,200 jobs, the federal government reported today. The numbers from the Employment Development Department are further evidence of the economy beginning to stir.”

Los Angeles Times – “Housing starts, permits rise as builders rebound” (4-16-10)

“Housing starts climbed to an annual rate of 626,000 last month, up 1.6 percent from February’s revised 616,000 pace, which was higher than initially estimated, Commerce Department figures showed Friday. Building permits, a sign of future construction, climbed to the highest level since October 2008.”

Wall Street Journal – “Mortgage Rates Reverse Course and Fall” (4-16-10)

“The 30-year fixed-rate mortgage averaged 5.07% for the week ended April 15, down from 5.21% last week. A year ago, the mortgage averaged 4.82%. The 15-year fixed-rate mortgage averaged 4.40%, down from 4.52% last week and 4.48% a year ago.”

Housing Wire – “Fannie Mae Director Outlines Program to Turn Homeowners into Renters” (4-16-10)

“Miguel Gutierrez said the goal of Fannie Mae is to minimize family displacement for borrowers that participate in a deed-in-lieu of foreclosure program, launched early in November 2009, while managing it in a way so as to not put any undue pressure on Fannie’s ever-growing rental portfolio. The homeowner-turned-renter is required to pay fair market rent to stay in their home for up to 12 months. The renter must have enough income to sustain a 31% income-to-rent ratio and rental payments are not subsidized by Fannie Mae, but could include renters eligible for Section 8 payments.”

Housing Wire – “Fannie Shortens Wait for Some Distressed Borrowers to Get New Loans” (4-16-10)

“Fannie Mae (FNM: 1.24 -4.62%) announced it is reducing the wait time for some borrowers between when they complete a short sale or deed-in-lieu of foreclosure transaction and when they can obtain a new mortgage. Previously, a borrower was required to wait four years before getting a new mortgage, or two years if their home sold in a short sale. Under the new guidelines, a borrower that previously completed a deed-in-lieu of foreclosure transaction can get a new mortgage in two years, provided the borrower has a 20% down payment.”

Housing Wire – “SEC Charges Goldman Sachs with Fraud Over Subprime RMBS CDO” (4-16-10)

“The Securities and Exchange Commission (SEC) today charged Goldman Sachs (GS: 160.70 -12.79%) and one of its vice presidents for allegedly defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages, demanding a jury trial for the allegations to be heard.”

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The Norris Group Real Estate News Roundup 4/1/10

Thursday, April 1st, 2010

Today’s News Synopsis:

California citizens planning to buy within the next 3 months may be able to take advantage of both a state and federal tax credit. The Commerce Department reports that construction spending decreased by 1.3 percent across the United States. The delinquency rate for CMBS loans increased to 7.61% in March. The delinquency rate for single family mortgages increased to 4.08 percent in February.

In The News:

San Francisco Chronicle – “Good timing could reap double tax credits” (4-1-10)

“Some home buyers in California could get a federal tax credit worth up to $8,000 plus a new state credit worth up to $10,000 if they time their purchase just right over the next three months. But double-dipping will be tricky and won’t come without risks.”

Mercury News - “Construction spending at lowest point since 2002″ (4-1-10)

“The Commerce Department reported Thursday that spending on construction projects around the country fell by 1.3 percent to a seasonally adjusted annual rate of $846.23 billion. That was the lowest level since November 2002.”

Housing Wire – “Spiking CMBS Delinquencies May Collapse Mid-Sized Banks in 2010: Trepp” (4-1-10)

“According to a report from the analytics firm Trepp, spiking delinquencies in CMBS could cause bank failures to increase as much as 30% in 2010. The delinquency rate for loans in commercial mortgage-backed securities (CMBS) spiked to 7.61% in March from 6.72% in February, according to the report.”

Housing Wire - “Freddie’s Single-Family Mortgages Grow to 4.08% Delinquent” (4-1-10)

“Delinquent mortgages continue to mount at government-sponsored enterprise (GSE) Freddie Mac (FRE: 1.26 -0.79%). The delinquency rate of Freddie’s single-family mortgages grew 5bps from January to 4.08% in February. That’s up almost double from 2.13% at the same time last year. The delinquency rate among multifamily mortgages grew 2bps to 0.17%.”

Housing Wire – “Shrugging Off Critics, Private Equity Says Defaults Remain Below Projections” (4-1-10)

“Private equity-backed companies seem to be pulling through the financial crisis in better shape than other comparable business, especially issuers of speculative grade or high-yield debt offerings, according to a study from the Private Equity Council (PEC). The study measured the annualized default rate for more than 3,200 private equity-backed companies acquired between 2000 and 2009 and held through 2008 to 2009, which is where the PEC bracketed the recession. The default rate for those companies reached 2.8% in that time, compared to 6.2% for other firms.”

Bloomberg - “California Hotel Foreclosures Climb as Unemployment Cuts Travel” (4-1-10)

“Hotel foreclosures in California climbed 27 percent in the first quarter from a year earlier as unemployment cut business travel. Foreclosures, including the 469-room Los Angeles Marriott Downtown, rose to 79 properties from 62 in the first three months of 2009. Defaults increased 6.5 percent to 327, Irvine, California-based Atlas Hospitality Group said in a statement. The company specializes in selling hotels.”

Reuters - “Data boosts self-sustaining recovery hopes” (4-1-10)

“Initial claims for state unemployment benefits slipped 6,000 to 439,000 in the week ended March 27, the Labor Department said. The data, which mirrored market expectations, offered few clear hints on Friday’s job figures because it covered a week outside the survey period for the March employment report. The four-week moving average of new claims, considered a better measure of underlying labor market trends, fell 6,750 to 447,250, the lowest level since September 2008.”

Inman - “Residential construction spending dips” (4-1-10)

“The rate of spending on private residential construction dropped 2.1 percent in February compared to January, and was down 3.8 from January 2009, the U.S. Census Bureau reported today. The seasonally adjusted annual spending rate has plunged 62.9 percent from a peak of $676.4 billion in March 2006 to its latest level of $250.8 billion in February 2010. This rate is a projection of a monthly spending total over a 12-month period, adjusted to account for typical seasonal fluctuations in construction activity.”

Inman - “A changing role for real estate agents” (4-1-10)

“A good Realtor is so much more than a home-finder or a chauffeur. As I work with informed, tech-savvy consumers, I can clearly see the value that I add for them. It comes down to experience. Most people buy a few or maybe only a couple of homes in their lives. It is my experience that makes the buyers I work with comfortable with making the largest purchase of their lives. They don’t need to be sold a home, they need help finding the right one and they need to buy it with confidence.”

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The Norris Group Real Estate News Roundup 12/23/09

Wednesday, December 23rd, 2009

Today’s News Synopsis:

Homebuilders pulled 46 percent fewer permits from November of last year. According to the Mortgage Bankers Association, mortgage application volume decreased by 10.7 percent from last week. Freddie Mac purchased 13 percent fewer mortgage purchases from the previous month. Equifax reports that HELOC originations fell 36 percent from one year ago.

In The News:

CBIA - “Housing Production Posts Decrease in November, CBIA Announces” (12-13-09)

“According to statistics compiled by the Construction Industry Research Board (CIRB), homebuilders pulled permits for 2,540 total housing units in November, down 12 percent from October, and down 46 percent from November 2008. Permits for single-family homes totaled 1,710, down 20 percent from the previous month, but up 18 percent from the same period last year, while multifamily permits totaled 830, up 9 percent from October but down 74 percent from a year ago.”

Mortgage Bankers Association – “Mortgage Applications Decrease in Latest MBA Weekly Survey” (12-23-09)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending December 18, 2009.  The Market Composite Index, a measure of mortgage loan application volume decreased 10.7 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 10.9 percent compared with the previous week.”

Housing Wire – “BofA Sues MGIC Over Unpaid Insurance Claims” (12-23-09)

“Bank of America’s (BAC: 15.18 -0.98%) Countrywide Home Loans unit sued Mortgage Guaranty Investment Corp. (MTG: 5.7798 -9.12%) over allegations the Wisconsin-based mortgage insurer denied millions of valid claims.”

Housing Wire – “Freddie Buys 7% More Refi Mortgages in November” (12-23-09)

“Mortgage giant Freddie Mac (FRE: 1.3295 -1.52%) reported $27.9bn in mortgage purchases and issuances in November, a 13% drop from $32.1bn in October, according to a monthly summary of the agency’s portfolio.”

Housing Wire – “HUD Delays New FHA Appraiser Guidelines” (12-23-09)

“According to an FHA memo obtained by HousingWire, the January 1, 2010 implementation of Mortgagee Letter (ML) 2009-28 (download here) won’t take affect until February 15, 2010. The new FHA regulations are similar to those implemented by the government-sponsored enterprises (GSEs) to ensure appraiser independence with the Home Valuation Code of Conduct (HVCC).”

Housing Wire – “Equifax: HELOC Origination Down 36%” (12-23-09)

“Origination of new home equity lines of credit (HELOC) accounts is down 36% from year-ago levels, Equifax (EFX: 31.28 -0.26%) said. There were 75,600 HELOC accounts originated in September 2009, down from 117,800 in September 2008, according to the Atlanta-based credit bureau’s most recent monthly credit trend report, derived from Equifax’s nearly 200m US consumer credit files.”

Bloomberg - “U.S. Economy: Spending and Incomes Climb, New-Home Sales Drop” (12-23-09)

“American consumers’ spending and incomes climbed in November, indicating the biggest part of the economy is poised to strengthen as the labor market recovers. Purchases rose 0.5 percent as households took advantage of discounts on autos and electronics, figures from the Commerce Department showed today in Washington. The gain was smaller than anticipated as unseasonably warm weather depressed utility use. Another report showed new-home sales unexpectedly fell as potential buyers were discouraged by the scheduled expiration of a tax credit. The tax break was later extended.”

Bloomberg - “General Growth Has Deals to Restructure $11.6 Billion of Debt” (12-23-09)

“General Growth Properties Inc., the second-largest U.S. mall owner, has won approval from creditors and a federal court to restructure loans totaling $11.6 billion, according to a lawyer.”

Looking Back:

One year ago, existing home sales fell 8.6 percent from October to November. Mortgage default filings against homeowners decreased for the first time in 3 years. Moorlach predicted that 10 municipal bankruptcies would occur in 2009. The U.S. economy shrank by 0.5 percent from the previous month.

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The Norris Group Real Estate News Roundup 11/17/09

Tuesday, November 17th, 2009

Today’s News Synopsis:

Home sales increased by 2.8 percent from September to October in six Southern California counties. The MBA reports that 6.7 million households with mortgages are behind on their payments, or are in the foreclosure process. TransUnion conducted a study of 27 million credit files and found that 6.25 percent are delinquent.

In The News:

Office of Thrift Supervision - “Federal Regulators Issue Final Model Privacy Notice Form” (11-17-09)

“Eight federal regulatory agencies today released a final model privacy notice form that will make it easier for consumers to understand how financial institutions collect and share information about consumers. Under the Gramm-Leach-Bliley Act (GLB Act), institutions must notify consumers of their information-sharing practices and inform consumers of their right to opt out of certain sharing practices. The model form issued today can be used by financial institutions to comply with these requirements.”

DQNews - “Southland home sales up again, drop in median price smallest in 2 years” (11-17-09)

“Last month 22,132 new and resale houses and condos closed escrow in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was up 2.8 percent from 21,539 in September and also up 2.8 percent from 21,532 a year earlier, according to MDA DataQuick of San Diego.”

Wall Street Journal – “Ten Questions on the Volatile Housing Market” (11-17-09)

“But more than 6.7 million U.S. households with mortgages, or about 13%, are behind on their payments or are in the foreclosure process, according to the Mortgage Bankers Association. Eventually, many of them will lose those homes, sending more supply onto the market. Unemployment has continued to rise, and the housing market is unlikely to show a sustained recovery until job growth resumes.”

Housing Wire – “TransUnion Sees Delinquency Rise for 11 Quarters” (11-17-09)

“Overall mortgage delinquency of 60 or more days reached a record 6.25% in TransUnion’s ongoing study of a random selection of 27m credit files from its national consumer database. The rate is up from 5.81% in Q209 and is expected by the credit bureau to come in just under 7% by year-end 2009.”

Housing Wire – “Home Improvement Stores See Sales Declines” (11-17-09)

“Earnings were down in Q309 at the country’s two largest home improvement chains, The Home Depot (HD: 26.99 -2.39%) and Lowe’s (LOW: 21.48 -1.20%) as homeowners and renters alike show reluctance to begin improvement projects amid continued financial stress and increasing joblessness.”

Housing Wire – “CIT Posts 10th Straight Quarterly Loss” (11-17-09)

“CIT Group, a lender to small- and mid-sized businesses, posted a Q309 loss of $1.03bn, or $2.47 per share, as the company attempts to emerge from bankruptcy protection by the end of the year.”

Bloomberg - “Insurers Face $23 Billion Loss on Commercial Property” (11-17-09)

“U.S. life insurers, a group led by MetLife Inc. and Prudential Financial Inc., may lose as much as $22.6 billion on investments in commercial real estate through 2011, Fitch Ratings said.”

Bloomberg - “FDIC Sells Most Real Estate Since 1994 on U.S. Banking Debacle” (11-17-09)

“The FDIC raised $727 million from building and land sales in the first nine months of 2009 compared with $1.16 billion in the whole of 1994, according to FDIC data. The Washington-based agency sold 1,706 properties, according to its Web site, the highest number since 2,045 in 1996.”

Bloomberg - “Homebuilder Confidence in U.S. Lower Than Forecast” (11-17-09)

“The National Association of Home Builders/Wells Fargo index of builder confidence held at 17 for a second month, the Washington-based association said today. A reading below 50 means most respondents view conditions as poor. The median forecast of economists in a Bloomberg News survey was for a reading of 19.”

NAHB - “2009-2010 Home Buyer Federal Tax Credit Fact Sheet” (11-17-09)

“Existing home owners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for a tax credit of 10% of the home purchase price, up to a maximum of $6,500.”

Looking Back:

One year ago, the NAHB claimed that 56.1 percent of all new and existing homes that were sold were affordable to families who earned the national median income of $61,500 per year. Citigroup announced its plans to cut over 50,000 jobs. The FDIC hinted at a possible revisation of the $1.4 trillion debt-insurance program.

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The Norris Group Real Estate News Roundup 10/29/09

Thursday, October 29th, 2009

Today’s News Synopsis:

Moody’s estimates that prices will continue to decline until Q3 of 2010. According to Freddie Mac, interest rates on 30-year fixed rate loans have increased to 5.03 percent. The U.S. Census Bureau reports that the number of vacant properties rose to 18.7 million, but the homeownership rate has maintained at 67.6 percent.

In The News:

San Francisco Chronicle – “Economy growing but recovery could be at risk” (10-29-09)

“Federal support for spending on cars and homes drove the economy up 3.5 percent from July through September. But the government aid — from tax credits for home buyers to rebates for auto purchases — is only temporary. Consumer spending, which normally drives recoveries, is likely to weaken without it.”

Housing Wire – “House Price Declines Weigh on Alt-A, Jumbo RMBS Ratings: Moody’s” (10-29-09)

“Moody’s Investors Service on Thursday said it will begin taking ratings actions in Q409 as needed to account for updated assumptions underlying US residential mortgage-backed securities (RMBS) loss projections. The loss projection revisions come as Moody’s expects house prices to continue to decline to a Q310 trough. Based on recent loan loss severities, the rating agency will increase its projected lifetime loan losses for pools backing US Jumbo, Alt-A, Option ARM and subprime RMBS issued from ‘05 to ‘08.”

Housing Wire – “Sallie Mae To Lose $95M on Mortgage, Real Estate Sale” (10-29-09)

“Student loan giant SLM Corp. (SLM: 10.20 +1.09%) will recognize a loss of as much as $95m on the sale of mortgages and real estate-related assets this quarter, according to a Securities and Exchange Commission (SEC) filing.”

Housing Wire – “CIT Gets Second Private Capital Bailout” (10-29-09)

“CIT Group Inc. (CIT: 0.9146 -13.72%), a commercial lender offering financing to small and medium businesses, this week expanded an existing $3bn senior secured credit facility to obtain $4.5bn in new credit.”

Housing Wire – “Freddie Sees Weekly 30-Year Fixed Rate Pass 5%” (10-29-09)

“Freddie Mac’s (FRE: 1.2901 +11.22%) weekly survey put the 30-year fixed-rate mortgage (FRM) interest rate at 5.03% with an average 0.7 point for the week ending Oct. 29, up from 5% in the previous week. A year ago, the rate was 6.46%.”

Bloomberg - “U.S. Home Vacancies Rise to 18.8 Million on Defaults” (10-29-09)

“The number of vacant properties, including foreclosures, residences for sale and vacation homes, rose from 18.4 million a year earlier and 18.7 million in the second quarter, the U.S. Census Bureau said in a report today. The record high was in the first quarter, when 18.95 million homes were vacant. The homeownership rate, meaning households that own their own residence, stood at 67.6 percent.”

Bloomberg - “BlackRock, T. Rowe Price Seek Fed Loans to Buy Bonds” (10-29-09)

“Mutual funds run by companies including BlackRock Inc. and T. Rowe Price Group Inc. have begun buying bonds through a $1 trillion government lending program after a June regulatory ruling cleared the way.”

Bloomberg - “PHH Targets Realogy for Mortgages, Keeps Merrill, New CEO Says” (10-29-09)

“PHH, the fourth-largest U.S. originator of mortgages directly to consumers, can win a greater share of Realogy customers because more than 130 lenders have failed since 2007 and remaining rivals keep changing underwriting rules, Selitto said in an interview Oct. 27. Merrill Lynch contributed 21 percent of 2008 originations at PHH and was sold in January to Bank of America, which has its own mortgage unit.”

Orange County Register – “UCLA sees 16% home-price gain in 2010″ (10-29-09)

“Double-digit housing appreciation will return to Orange County next year, with the median home price rising somewhere from 15.9% to 16.6%, UCLA economists forecast in a report released today.”

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The Norris Group Real Estate News Roundup 10/27/09

Tuesday, October 27th, 2009

Today’s News Synopsis:

The Senate is considering a proposal that would extend and cap the tax credit at $7,290. Interthinx estimates that mortgage fraud risk increased by 11 percent from quarter 2 to quarter 3 of 2009. Goldman Sachs claims that home price stabilization will not last, but Bank of America feels that the outlook for home prices is more positive.

In The News:

Los Angeles Times – “Campaign targets mortgage modification scams” (10-27-09)

“Wachter along with other industry experts still worry that rising unemployment and more foreclosures could stifle the rebound. Another unknown is whether a temporary federal tax credit for first-time buyers will be extended to help boost sales. First-time homebuyers can receive a credit of 10 percent of the sales price, up to $8,000. The real estate industry is lobbying Congress to extend the credit past the Nov. 30 deadline. Top Democrats in the Senate are pressing a plan that would prolong the credit but gradually phase it out over the next year.”

Housing Wire – “House Price Stabilize a Year Ahead of Schedule: RBS” (10-27-09)

“The US economy and housing market in particular are recovering well ahead of the schedule previously anticipated by analysts and market observers, according to commentary by Royal Bank of Scotland (RBS) economists.”

Housing Wire – “House Prices Post Seven Months of Yearly Improvement: Case-Shiller” (10-27-09)

“Home prices in the Standard & Poor’s (S&P)/Case-Shiller 10-City and 20-City Composite Home Price Indices, declined 10.6% and 11.3%, respectively, in August 2009 compared to August 2008.”

Housing Wire – “Mortgage Fraud Risk Surges 11% from Q209: Interthinx” (10-27-09)

“Fraud risk in the mortgage industry surged more than 11% from Q209 to Q309, according to a mortgage fraud risk index compiled by Agoura Hills, Calif.-based mortgage software developer Interthinx.”

Bloomberg – “MetLife, Lincoln May Avoid Commercial Mortgage Losses” (10-27-09)

“MetLife Inc., the biggest U.S. life insurer, and Lincoln National Corp. will probably sidestep commercial-mortgage losses because their biggest loans are ‘handily’ below property values, Barclays Plc said.”

Bloomberg – “Capmark Increased Office, Hotel Loans as Zell Saw Top” (10-27-09)

“In 2006 and 2007, Capmark originated $60 billion in commercial mortgage loans, most for office buildings, according to the Oct. 25 bankruptcy filing. While Capmark was lending, Zell was selling Equity Office Properties Trust at the top of the market for $39 billion, including debt.”

Bloomberg – “Goldman Sees ‘False Bottom,’ Merrill Sees ‘Treat’” (10-27-09)

“The stabilization in U.S. home prices won’t last, according to economists at Goldman Sachs Group Inc. in New York. Their counterparts at BofA Merrill Lynch Global Research see a ‘treat’ rather than a retreat”

Bloomberg – “Senate Close to Deal Replacing Homebuyer Tax Credit” (10-27-09)

“The deal would reduce the size of the tax credit to 10 percent of the sale’s price, capped at $7,290, the people said. The credit would be available on home purchases that are under contract by April 30, and borrowers would have 60 days more to close the sale. The existing credit is due to end Nov. 30.”

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The Norris Group Real Estate News Roundup 10/20/09

Tuesday, October 20th, 2009

Today’s News Synopsis:

RealtyTrac’s Rick Sharga believes that approximately 450,000 to 500,000 repossessed properties have not yet been placed on the market. Default notices in California have decreased by 10.3 percent from the previous quarter and have increased by 18.5 percent from last year. The Commerce Department reports that housing and apartment construction increased by .5 percent from last month.

In The News:

RealtyTrac – “The Case of the Missing REO Inventory” (10-20-09)

“With foreclosure activity breaking records nearly every month, where are all the REOs? It’s a fair question. In normal market situations, a bank will repossess a home and usually process it through to a listing agent to put on the MLS within 30 days. In a relatively short period of time, virtually every marketable REO property finds itself listed for sale on the local MLS. Today, that’s simply not the case; it’s likely that between 450,000 and 500,000 properties repossessed over the past year are still not on the market. And with buyers hungry for housing bargains, and agents and brokers champing at the bit ready to sell the properties, it begs for a reasonable answer.”

Broker Universe – “FHA Changes May Make HVCC and AMCs Easier to Swallow” (10-20-09)

“However, Mr. Stern believes appraisal management companies are hiring appraisers based on price – appraisers who have little knowledge of local market conditions. ‘I don’t think it’s fair that AMCs are hiring the cheapest appraisers,’ he said. Lenders One, the National Association of Realtors and appraiser groups are hoping new appraisal policies recently adopted by the Federal Housing Administration will correct some of the problems associated with HVCC and AMCs.”

DQNews - “California Mortgage Defaults Trend Down Again” (10-20-09)

“A total of 111,689 default notices were sent out during the July-through-September period. That was down 10.3 percent from 124,562 for the prior quarter, and up 18.5 percent from 94,240 in third quarter 2008, according to San Diego-based MDA DataQuick”

Cleveland - “Feds to probe ‘walkaways’ by some mortgage lenders” (10-20-09)

” Federal investigators will scrutinize the practice of lenders or mortgage companies walking away from homes they have foreclosed on. The U.S. Government Accountability Office plans to delve into these so-called bank walkaways – something some consider an alarming trend in the foreclosure crisis”

Wall Street Journal – “Home-Buyer Credit Is Focus of Inquiry” (10-20-09)

“The Internal Revenue Service is examining more than 100,000 suspicious claims for the first-time home-buyer tax break, another sign of potential trouble for the soon-to-expire program. The measure, adopted in February as part of the economic-stimulus bill, gives first-time buyers an $8,000 tax credit in an effort to boost sales and stimulate the moribund housing market. The program is set to end Nov. 30, but housing-industry leaders are lobbying Congress to extend it.”

Washington Post – “Small firms, home buyers to get a boost” (10-20-09)

“Under the program, the Treasury, along with mortgage financiers Fannie Mae and Freddie Mac, will buy the bonds used by housing finance agencies to fund mortgages, which can carry an interest rate that is a percentage point lower than loans made by private lenders. Called HFAs, these agencies have been strapped during the financial crisis because investors have been unwilling to buy their debt. The federal government is now attempting to play the role of the investors.”

Los Angeles Times – “Fewer home-building permits signal weakness ahead” (10-20-09)

“At the same time, the Commerce Department said Tuesday that construction of new homes and apartments rose 0.5 percent last month to a seasonally adjusted annual rate of 590,000 units. That was a weaker showing than the 610,000 economists had expected.”

NAR - “Housing Tax Credit Working, So Keep Momentum Going, NAR Urges Congress” (10-20-09)

“‘The data on the present home buyer tax credit show that the credit has had its intended impact—sales have jumped in recent months to a projected 5.1 million for the year and housing inventory has been trimmed, thus stabilizing home prices noticeably,’ Phipps said. He also pointed out that each home sale generates approximately $63,000 in additional economic activity, providing a tremendous economic boost to the national economy”

Mortgage Bankers Association – “MBA Testifies on State of Housing Market” (10-20-09)

“Whenever I am asked when the housing market will recover, I explain that the economy and the housing market are inextricably linked. The number of people receiving paychecks will drive the demand for houses and apartments and the recovery will begin when unemployment stops rising. Since September 2008, we have lost 5.8 million jobs in the US, more than five times the number the previous year.”

Housing Wire – “Fitch Projects More RMBS Re-Defaults as HAMP Disappoints” (10-20-09)

“Servicers of residential mortgage-backed securities (RMBS) continue to increase loss mitigation resolutions, including a significant push in the number of loan modifications, according to a report from Fitch Ratings. As of September 2009, roughly 10% of all RMBS loans and 25% of all subprime loans received at least one modification. A year ago, servicers modified only 3% of all loans, and 7% of subprime loans, according to the report.”

Housing Wire – “Servicers Prefer Foreclosure, Says NCLC” (10-20-09)

“Mortgage servicers have found it cheaper to foreclose on homeowners than offer loan modifications, according to a new report from the National Consumer Law Center. The report points out servicers in charge of modifying distressed loans are separate from the lenders, who have packaged the loans and sold them in pieces or pools to other banks and investors.”

Housing Wire – “HUD Notes Alleged FHA Violations at Lend America” (10-20-09)

“The 12 alleged violations the HUD board said Ideal Mortgage Bankers made against FHA range from submitting false certifications and failing to document the borrower’s income and creditworthiness, to approving loans that did not meet the FHA’s minimum credit requirements and closing a loan with an excessive mortgage broker fee paid to an approved FHA loan correspondent.”

Orange County Register – “Investors grab bigger share of auctioned foreclosures” (10-20-09)

“Investors bought 278, or 39%, of the 718 houses and condos sold at auctions, known as trustee’s sales, in Orange County last month, reports ForeclosureRadar.com.”

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