The Norris Group Blog

Today’s News Synopsis:

According to First American CoreLogic, distressed home sales in Orange County are selling 34 percent under the typical market place. Altos Research reports a 0.5 percent in the national median home price. A modification becomes permanent through HAMP after the borrower makes all three monthly payments during the trial period. Fiserv estimates that home prices will not return to the past peak levels until 2025.

In The News:

My Desert – “Valley’s Housing Market Warming” (4-12-10)

“The median sales price of new and single-family homes rose 11 percent to about $200,000, about $20,000 higher than in February 2009. Home sales also rose 9.4 percent compared to the same period last year. Real estate sales have been outpacing sales from the previous year every month since October. Sales volume rose 31 percent in November, 29 percent in December, and 22.2 percent in January.”

Orange County Register – “Distressed home discounts at 6-month high” (4-12-10)

“Orange County homebuyers got a 34% price discount when they chose a distressed property vs. overall market prices in January, according to First American CoreLogic. That’s the biggest discount in six months.”

Wall Street Journal – “Second Mortgages Vex Borrowers” (4-12-10)

“Banks are coming under increasing political pressure to write off or at least write down second-lien and other junior mortgages as a way to help borrowers keep their homes or extract themselves from heavy debt. As the Wells Fargo suit shows, however, banks often are reluctant to give up on loans when they see a chance of recovering all or part of their money. This issue will be the focus of a hearing Tuesday by the House Financial Services Committee in Washington. Panel members are due to quiz executives from Wells Fargo, Bank of America Corp., Citigroup Inc. and J.P. Morgan Chase & Co. about their junior-lien mortgage policies.”

Bloomberg - “Bank Profits Dimmed by Prospect of Home-Equity Losses” (4-12-10)

“Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. may have to set aside an additional $30 billion to cover possible losses on home-equity loans, an amount almost equal to analysts’ estimates of profit at the three banks this year. The cost of these reserves was calculated by CreditSights Inc., a New York-based research firm whose prediction almost four years ago proved prescient after banks reported unprecedented mortgage-related writedowns. Recognizing the home- equity loan losses is unfinished business from the housing bubble, CreditSights said in a March 29 report.”

Housing Wire – “So, Where Will Housing Double Dip?” (4-12-10)

“Put in more plain terms, a state with a 1% foreclosure rate and an 11% delinquency rate should be expected to feel the impact of distressed properties moving through the pipeline far more than a state with a 5% foreclosure rate and a 5% delinquency rate, for example. The reasoning is simple: distressed property sales (short sales or REOs) are a drag on retail home prices. In markets that have seen comparatively less foreclosures relative to the volume of delinquencies stuck in the pipeline, the impact of those delinquencies will be felt proportionately more strongly as they are finally dealt with.”

Housing Wire – “Altos Sees House Price Decline Decelerate in March” (4-12-10)

“The median house listing price declined 0.5% in the Altos Research 10-city composite in March, improved from February’s 1.3% decline in an indication the pace of decline may be decelerating. March, the eighth consecutive month of decline, brings the Q110 price decline to 1.8%. But weekly price changes have shown a modest upward trend in the past seven weeks, which means a uptick in house prices could arrive in the coming months, Altos said.”

Housing Wire – “BofA Completes 33,000 Permanent HAMP Mods” (4-12-10)

“Bank of America (BAC: 18.66 +0.38%) completed almost 32,900 permanent mortgage modifications through the Home Affordable Modification Program (HAMP) through March, up from 20,666 in February. The Treasury Department launched HAMP in March 2009 to provide incentives to servicers for the modification of loans on the verge of foreclosure. When Treasury first reported permanent modifications in November 2009, BofA reported 98 permanent modifications. A modification becomes permanent through HAMP after the borrower makes all three monthly payments during the trial period.”

Housing Wire – “Despite HAMP, Mortgage Delinquency Grows 21% over 2009: LPS” (4-12-10)

“The number of mortgages delinquent at the end of February 2010 is 21.3% higher than the same time last year despite government-led modification efforts, according to the latest monthly report from Lender Processing Services (LPS: 37.61 +0.94%).”

Housing Wire – “Peak House Prices Will Return to Sand States after 2025: Fiserv” (4-12-10)

“Housing markets that experienced the greatest inflation in house prices — including certain metro areas in sand states California, Florida, Arizona and Nevada — will not see a return of peak-level home prices before 2025, according to financial services technology provider Fiserv.”

Wall Street Journal – “AIG, Goldman Unwind Soured Trades” (4-12-10)

” The derivatives unit of American International Group Inc. has unwound most of its soured mortgage trades with Goldman Sachs Group Inc. still left after the insurer was bailed out by the U.S. government in 2008, according to people familiar with the matter. The move by AIG Financial Products to terminate credit-default swaps insuring about $3 billion of mortgage-asset pools arranged by Goldman caused AIG to realize a $1.5 billion to $2 billion loss last year, the people said.”

Bloomberg - “Pimco Says Investors to Hold Down U.S. Mortgage Rates” (4-12-10)

“Investor demand for mortgage-backed securities will keep U.S. home-loan rates down after the Federal Reserve ended its purchases of the debt, said Pacific Investment Management Co., manager of the world’s biggest bond fund. The Fed’s unprecedented program to buy $1.25 trillion of the securities that guide home-loan costs stopped U.S. housing prices from falling, Scott Simon, who is in charge of investing in the notes at Pimco, wrote on the company’s Web site.”