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The Norris Group Real Estate News Roundup 6/1/11

Wednesday, June 1st, 2011

Today’s News Synopsis:

According to Interthinx, investor-committed occupancy fraud increased 25% in the first quarter. 50% of 1,000 mortgage borrowers surveyed by the National Foundation for Credit Counseling said they could not afford a 20% down payment. CoreLogic claims national home prices rose 0.7% in March. HOPE NOW said foreclosure starts fell 25% in April.

In The News:

Mortgage Bankers Association – “Mortgage Applications Decrease in Latest MBA Weekly Survey” (6-1-11)

“Mortgage applications decreased 4.0 percent from one week earlier, according to data from the Mortgage Bankers Association”

Housing Wire – “Private sector adds 38,000 jobs in May” (6-1-11)

“Automatic Data Processing Inc. said nonfarm private payrolls increased a mere 38,000 on a seasonally adjusted basis last month. That’s down from a slightly revised 177,000 for April. ”

Housing Wire – “Interthinx risk index shows occupancy fraud rose 25% in 1Q” (6-1-11)

“The Agoura Hills, Calif.-based data firm said its occupancy fraud risk index, which measures the number of incidents of investors misrepresenting occupancy, rose 25% in the first quarter.”

Bloomberg - “Construction Spending in U.S. Rose 0.4% in April on Home Improvement Gains” (6-1-11)

“The 0.4 percent gain followed a revised 0.1 percent increase in March that was smaller than previously estimated, Commerce Department figures showed today in Washington. The median estimate of economists in a Bloomberg survey projected a 0.3 percent increase.”

Wall Street Journal – “Banks Hit Hurdle to Foreclosures” (6-1-11)

“Banks trying to foreclose on homeowners are hitting another roadblock, as some delinquent borrowers are successfully arguing that their mortgage companies can’t prove they own the loans and therefore don’t have the right to foreclose.”

Bloomberg - “Treasury 10-Year Yields Drop Below 3% for First Time This Year on Economy” (6-1-11)

“Treasuries surged, pushing 10-year note yields below 3 percent for the first time in 2011, as U.S. companies added fewer jobs in May than economists forecast and manufacturing expanded at the slowest pace in more than a year.”

Housing Wire – “CMBS delinquencies fall in May as market levels off” (6-1-11)

“The CMBS delinquency rate fell five basis points from April to 9.6%, according to Trepp analytics firm which released the numbers Wednesday. About .64% are 30-days delinquent, .50% are 60-days delinquent, 2.7% are 90-days delinquent and 1.84% are real estate-owned. Many of the delinquent loans (2.98%) are in foreclosure.”

Housing Wire – “Half of mortgage borrowers could never afford 20% down payment: NFCC” (6-1-11)

“Half of the more than 1,000 borrowers surveyed by the National Foundation for Credit Counseling said they would never be able to afford the 20% down payment required under the qualified residential mortgage structure. Federal regulators proposed a rule in March requiring lenders to maintain 5% of the risk on mortgages pooled into securities, except for those loans that meet a variety of standards including a 20% down payment.”

Housing Wire – “Planned job cuts in May down 4.3% from year ago” (6-1-11)

“The Chicago-based executive outplacement company said employers have disclosed plans to shed about 204,400 jobs so far this year, which is 21% lower than the first five months of 2010. Last month’s planned cuts of 37,135 was up 1.8% from April and down 4.3% from 38,810 for May 2010.”

DSNews - “CoreLogic Price Index Shows First Monthly Increase Since Mid-2010″ (6-1-11)

“The company says its index shows that home prices in the U.S. rose 0.7 percent between March and April, the first such increase since the homebuyer tax credit expired in mid-2010. However, national home prices are down 7.5 percent compared to April 2010, after an annual drop of 6.8 percent reported for March 2011.”

DSNews - “Foreclosure Starts and Sales Post Sharp Declines in April: Report” (6-1-11)

“Foreclosure starts nationwide were approximately 163,000 in April, down 25 percent from 217,000 the prior month, reports the industry alliance HOPE NOW. An earlier assessment by the nonprofit group showed that new foreclosures had increased 21 percent over the February-to-March period.”

Looking Back:

One year ago, the head of CoreLogic believed the real estate market had bottomed. According to the Commerce Department, construction spending increased 2.7 percent in May. LPS reported the number of loans 90 or more days past due — including pre-sale foreclosure — declined by nearly 3% to just over 4.07m from nearly 4.19m in March. According to Altera Real Estate, housing demand had dropped by 17%.

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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225-TNG Radio – Ray McLaine 5-14-11

Friday, May 13th, 2011

Ray McLaine

President of the Commercial REO Brokers Association


(Full Bio)

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This week Bruce is joined again by Ray McLaine. Ray is the founder and president of the Commercial REO Brokers Association. Ray began his career in commercial real estate 30 years ago. He has developed apartment complexes, condo projects and a mini warehouse.

Ray’s website is creoba.com

Ray expects more commercial REOs to show up between now and then end of 2012, but then again, he has thought that for the last two years. Many note sales and short sales are occurring in the commercial market. Banks do not like foreclosing on commercial buildings, because commercial properties are difficult to prepare for sale. For every one foreclosure in the commercial market, there are 5 to 10 notes sold. All of the banks have non-performing loans they are willing to sell, but they don’t like to advertise that, because if too many people discover that they have millions of dollars in non-performing loans then the FDIC could shut the banks down. Most banks are working with brokers who have qualified buyers.

If an investor is interested in looking at a bank’s inventory, the bank will allow you to personally come in and look through their properties, but you must have proof of funds and you must sign a non-disclosure agreement. If your offer is acceptable to the bank, they will often ask you to close the sale within two weeks using all cash.

If you are buying a portfolio of mortgages from a bank, you could get a 42% discount on the principal balance. The typical asking price is 40 to 60 cents on the dollar. Ray knows of a bank which recently created a mortgage portfolio worth $76 million and was asking investors for $36 million to buy it. Some portfolios will sell for near to full value, because they contain quality properties.

2009 was the low point in transaction volume for commercial real estate. However, that is not true for all kinds of commercial real estate. There are a variety of commercial real estate markets, and they have to be treated differently.

Ray suggests you check out the website www.firstlookcommercial.com

This website shows all the distressed assets and notes from the people Ray deals with. The website displays $40 to $50 million worth of real estate. The projects displayed are worth between $2 million and $10 million, and many of them have high vacancy. One of the properties on this website is a 440,000 sq. foot building in St. Louis. It is on the market for $4 per square foot, but it only has 50% occupancy. This type of property is known as a zombie. You can buy this type of property for cheap, but you have to deal with the vacancy problem.

California’s commercial market has not been damaged as badly as Florida and Nevada, but California has certainly been hurt. However, the difference between California and those other damaged states, is that bad inventory does not come to the market in California as quickly. In other states, REO properties come out for auction much quicker, which drives down prices.

There are many investors waiting for the commercial inventory to come out. You can easily auction any commercial property worth over $2 million. Ray listed a 326 apartment in Florida not long ago, and he had multiple offers within 5 days.

REITs typically involve trophy assets. There are trillions of dollars in assets in that market, and many investors around the world are trying to buy.

Residential typically leads the real estate market. There are currently around 7 million homes in the U.S. that are delinquent. We have about 55 million homeowners in the country, so over 10% of our homeowners are not making their payments.

Ray attended a show with Bank of America in which the bank admitted that 90% of the properties they had foreclosed on within the last 6 months were not yet released onto the market. There are a large number of homes in foreclosure right now, but the banks are trying to hold off on finishing the process for as long as possible. Ray believes that if the banks finished the foreclosure process as quickly as they should, then there wouldn’t be enough buyers for all the properties that would come out, and prices could possibly split in half again. Part of the reason why the inventory is not being released quickly is because many buyers cannot qualify under today’s standards.

Many industries are transforming so that they do not need space. For example, Netflix has made it less important for Blockbuster buildings to exist. Many businesses are moving to the online market.

The commercial market typically follows the residential market, and Ray does not believe the residential market will recover until we get rid of the 7 million people not making their payments. How can we get to full employment before we start building houses? We need to get rid of this inventory before a recovery can start. Ray worries that a full recovery might be 10 years away.

California has higher taxes than many other states, but every one still wants to do business here. Bruce believes that if our employment picks up, then people and businesses will move back to California, because California is a desirable place to be.

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 3/24/11

Thursday, March 24th, 2011

Today’s News Synopsis:

Freddie Mac said mortgage rates increased to 4.81% last week. The Federal Bureau of Economic Analysis reports California income levels rose 2.5% in 2010. Jobless claims fell 1.3% last week, according to the Labor Department. Freddie Mac told servicers managing its loans to stop foreclosing in MERS’ name.

In The News:

San Francisco Chronicle – “Rate on 30-year fixed mortgage rises to 4.81 pct.” (3-24-11)

“Freddie Mac said Thursday the average rate on the 30-year fixed mortgage rose to 4.81 percent from 4.76 percent the previous week. It hit a 40-year low of 4.17 percent in November.”

The Sacramento Bee – “California incomes rose 2.5% in 2010″ (3-24-11)

“Californias’ incomes rose 2.5 percent in 2010, a year after the state’s first year-to-year decline in personal income since World War II, the federal Bureau of Economic Analysis reported Wednesday. The bureau said 2010 income statewide was more than $1.6 trillion, up from 2009′s $1.56 trillion and a return to 2008 levels.”

Bloomberg - “Wells Fargo Chief Sees Home-Equity Losses as Top Concern, Bernstein Says” (3-24-11)

“Wells Fargo & Co. (WFC) Chief Executive Officer John Stumpf said home-equity losses remain his ‘top concern’ because unemployment in the U.S. is still high, according to Sanford C. Bernstein & Co.”

Orange County Register – “FBI informant charged in Lennar stock scam” (3-24-11)

“An ex-con turned fraud crusader accused of defaming homebuilder Lennar Corp. and its chief Orange County-based executive was accused in federal court Thursday of using his status as an FBI informant to get insider information used in his stock trades.”

Housing Wire – “New CoreLogic tool automates the decision-making in loan mods” (3-24-11)

“CoreLogic says the tool allows servicers to bypass manual loan modification calculations by submitting borrower profiles through IntelliMods, which is designed to determine a borrower’s loan modification eligibility.”

Housing Wire – “Jobless claims fall for second week in a row” (3-24-11)

“The number of initial jobless claims filed by unemployed Americans fell 1.3% last week to 382,000 claims submitted on a seasonally adjusted basis, the Labor Department said Thursday morning.”

Housing Wire – “Freddie Mac tells servicers not to foreclose in MERS name” (3-24-11)

“Freddie Mac told servicers managing its loans this week that they can no longer foreclose in the name of Mortgage Electronic Registration Systems.”

Looking Back:

One year ago, CBIA reported that 3,404 building permits were pulled in February. Governor Schwarzenegger is expected to sign the $10,000 home buyer tax credit bill soon. According to the Commerce Department, home sales fell 2.2 percent last month. UCLA does not expect to see a second dip in economic performance.

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 3/14/11

Monday, March 14th, 2011

Today’s News Synopsis:

FHA extended HARP until June 30, 2012. The Supreme Court of  New York ruled in favor of MERS, confirming it’s ability to foreclose on a mortgage and assign it. An attorney general accused Meredian Financial of tricking homeowners into believing it was their current mortgage company and took fees for refinancing services that never transpired. California home values decreased 4.25% for the year ended January, according to MDA DataQuick.

In The News:

Mercury News – “Peninsula keeps adding housing, but few moving in” (3-12-11)

“The 2010 U.S. Census report released last week shows that San Mateo County added just 10,453 housing units in the past decade, and two-thirds of the extra homes are empty”

Housing Wire – “BarCap expects minimal secondary market impact from HARP extension” (3-14-11)

“The Federal Housing Finance Agency extended HARP for one year. The program launched in March 2009, allowing borrowers to refinance their Fannie Mae and Freddie Mac mortgage out of negative equity and into a lower-rate mortgage. The program is now set to expire June 30, 2012.”

Wall Street Journal – “Fannie, Freddie Probe Focuses on Disclosure” (3-14-11)

“A Wells notice indicates that the SEC staff is preparing to recommend civil enforcement actions and gives individuals the opportunity to persuade regulators against such an action. Similar notifications have been sent to at least two other officials who worked with Mr. Mudd at Fannie, according to people familiar with the matter.”

Housing Wire – “New York Supreme Court upholds MERS ability to foreclose” (3-14-11)

“The Supreme Court of the State of New York ruled in favor of Mortgage Electronic Registration Systems last week, validating the company’s ability to foreclose on a mortgage and assign it.”

Housing Wire – “Internet whistle-blower e-mails show loose link to Bank of America” (3-14-11)

“An activist internet group called Anonymous dumped a string of confidential, internal Balboa Insurance Group e-mails online Monday morning. The group is claiming the correspondence reveals improprieties in how the firm handled mortgages — even possibly hiding foreclosure tracking information — while Balboa was still under the Bank of America umbrella.”

Orange County Register - “Minn. prosecutor sues Costa Mesa mortgage firm” (3-14-11)

“The Minnesota Attorney General’s office is suing a Costa Mesa mortgage firm, saying that the company, Meredian Financial Corp., duped homeowners into believing it was their current mortgage company, then took fees for refinancing services that never transpired.”

Housing Wire – “Some government backing beneficial to multifamily REITs: Moody’s” (3-14-11)

“A Treasury Department reform plan that creates a fee-based emergency fund to support the mortgage market in times of crisis is the best plan for multifamily real estate investment trusts, according to Moody’s Investors Service (MCO: 31.96 -1.24%). The plan is one of three possible mortgage market reforms outlined by the Treasury in February.”

Orange County Register – “Calif. home prices’ biggest fall in 14 months” (3-14-11)

“Statewide values were down 4.25 percent for the year ended January vs. a 2.6 percent year-to-year drop in the previous month. The last time California prices were falling at a faster rate was 14 months earlier — November 2009, when year-to-year depreciation ran 4.78 percent.”

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 3/4/11

Friday, March 4th, 2011

 

Home Sales Set to Drop 2.3 percent this year: Reuters poll

Mortgage Applications Decrease in Latest MBA Weekly Survey

California Housing Production Dips in January, CBIA Announces

Pending Sales of U.S. Existing Homes Decline by 2.8%, More than Forecast 

Obama plan would accelerate sale of unneeded federal real estate

HSBC Suspends All U.S. Foreclosures

Short sales still take too long on average, report says

House committee votes to end FHA Short Refi program

California lawmakers revive bill that would kill dual-track foreclosures

Today’s News Synopsis:

Capital One Home Loans has chosen not to foreclose on any California mortgages. The government applauded TALF for netting $600 million in income. According to S&P, lenders need 13 months on average to foreclose in a judicial state. Altos Research claims home prices decreased 2% in February.

In The News:

Washington Post - “Obama officials, attorneys general closer to possible deal with banks in foreclosure mess” (3-4-11)

“Senior Obama administration officials, newly joined by state attorneys general, were on the brink Thursday of finalizing major elements of a possible settlement with large U.S. banks accused of flawed and fraudulent foreclosure practices, sources familiar with the discussions said.”

Housing Wire – “Capital One slows foreclosures to a trickle in California” (3-4-11)

“Capital One Home Loans is determined to not foreclose on any of the mortgages it services in California, according to sources inside the company.”

Housing Wire - “Pending home sales down everywhere, except the South: S&P” (3-4-11)

“Pending home sales nationwide are down for the second consecutive month, except for in the South where sales rose 1.4% between the months of December and January, according to a new report from Standard & Poor’s.”

Housing Wire – “Fed touts TALF for generating $600 million in income” (3-4-11)

“Government officials testifying before Congress Friday applauded the Term Asset-Backed Securities Loan Facility program, known as TALF, for netting $600 million in income.”

Housing Wire - “S&P: Foreclosures take twice as long in judicial states” (3-4-11)

“Lenders need 13 months on average to foreclose in a judicial state, more than twice the six months it takes in a nonjudicial state, according to research from Standard & Poor’s.”

Housing Wire – “Altos Research shows February home prices down 2%” (3-4-11)

“Home prices fell another 2% in February with declines in all 27 markets tracked by Altos Research. The company said prices are slowly improving and housing inventory is up 3.75% nationwide as the market moves into a much-anticipated spring selling season.”

Econoday - “Employment Situation” (3-4-11)

“Overall payroll employment in February grew by 192,000, following a revised 63,000 rise in January and a 152,000 gain in December. The February advance came in marginally lower than the updated consensus forecast for a 200,000 gain”

Looking Back:

One year ago, Bruce Norris claimed the government’s aid would not be enough to prevent the U.S. economy from sliding back into recession. The NAR reported that national pending home sales decreased by 7.6 percent in January. Commercial real estate delinquencies decreased in February. The delinquency rate for Fannie Mae loans increased to 5.38% in February.

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 2/25/11

Friday, February 25th, 2011

Today’s News Synopsis:

The NAR has been caught inflating home sales statistics, and the Commerce Department says new home sales decline 13% in January. FHA REO Inventory has increased 47% from last year. First time homebuyers who received the $7,500 tax credit will be expected to pay it back.

In The News:

Bloomberg - “Home Prices in U.S. Decline 4% on Foreclosures, FHFA Says” (2-24-11)

“U.S. home prices fell 4 percent in the fourth quarter from a year earlier as record foreclosures sapped the confidence of homebuyers, according to the Federal Housing Finance Agency.”

Bloomberg - “Sales of New U.S. Homes Dropped More Than Economists Forecast in January” (2-24-11)

“Sales declined 13 percent to a 284,000 annual pace, figures from the Commerce Department showed today in Washington. The median estimate of economists surveyed by Bloomberg News projected a decrease to a 305,000 rate. Demand dropped 37 percent in the West and 13 percent in the South.”

Housing Wire – “FHA REO inventory up 47% from one year ago” (2-22-11)

“The Federal Housing Administration held 60,739 properties repossessed through foreclosure on its books as of December 2010, up 47% from the year before.”

Housing Wire – “MERS rights upheld in largest foreclosure state” (2-23-11)

“An appellate judge in California last week upheld the rights of the Mortgage Electronic Registration Systems to the deed of trust, giving MERS the right to foreclose, according to court documents.”

Time - “Did Realtors Inflate Home Sales by 1.6 million in 2010?” (2-22-11)

“The National Association of Realtors said that existing home sales rose 2.7% in January from December, and were up 5.3% from a year ago. It was the first time in seven months that sales rose from the same month a year before. But before you put your home on the market, consider this: It appears the NAR may be inflating homes sales numbers, and not just for this January, but for years.”

Wall Street Journal – “Realtors’ Former Top Economist Says Don’t Blame the Messenger” (2-12-09)

“Mr. Lereah, who says he left NAR voluntarily, says he was pressured by executives to issue optimistic forecasts — then was left to shoulder the blame when things went sour.”

Yahoo - “Obama pushes multibillion-dollar mortgage pact: report” (2-23-11)

“The Obama administration is trying to push a settlement that could force the largest U.S. banks to pay for reductions in loan principal worth billions of dollars following breakdowns in mortgage servicing”

Bloomberg - “U.S. House Republicans Move to End Foreclosure Aid Programs” (2-24-11)

“U.S. House Republicans plan to move forward with bills that would end anti-foreclosure programs put in place by the administration of President Barack Obama, saying they are doing more harm than good.”

New York Daily News – “Payback time for first-time homeowners who took advantage of 2008 tax credit” (2-23-11)

“It sounded like a great deal: become a first-time homebuyer and pocket up to $7,500 in a tax credit. But if you bought that house in 2008 and received the credit, you’re required to start paying it back – now.”

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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