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The Norris Group Real Estate News Roundup 1/29/10

Friday, January 29th, 2010

Today’s News Synopsis:

Foresight Analytics estimates that between 2010 and 2014, $770bn in commercial loans will be on properties in negative equity. According to the Commerce Department, the U.S. economy expanded in the 4th quarter at a six year record pace. RealtyTrac forecasts that foreclosures probably will reach 3 million this year. Henry Paulson claimed that Russia encouraged China to force a bailout of the largest U.S. mortgage-finance companies.

In The News:

Housing Wire – “DoJ Mortgage Probes May Overextend Authority: K&L Gates” (1-29-10)

“The Department of Justice (DoJ) initiative to beef up investigations of discriminatory mortgage lending and servicing practices will result in more numerous and forceful reviews of mortgage lenders and servicers, including investigations that appear to merge fair lending and consumer protection principles, according to an analysis of the proposal written by global law firm K&L Gates. The firm also warns that the DoJ may be over-extending departmental authority in doing so.”

Housing Wire – “Tougher Times Coming for Commercial Real Estate” (1-29-10)

“Between 2010 and 2014, $770bn in commercial loans will be on properties in negative equity, and may need to be written down, according to a study by Foresight Analytics, a real estate research firm. The report is likely to only add to the woes surrounding the current commercial real estate (CRE) sector.”

Housing Wire – “Fed MBS Purchases 93% Complete with Another $12bn” (1-29-10)

“The Federal Reserve Bank of New York in the week ending January 27th continued to buy mortgage assets from government-sponsored entities as the program winds-down to a close by the end of the quarter. The Fed bought a total of $12.5bn in mortgage-backed securities (MBS) – $5.1bn Freddie Mac (FRE: 1.1799 -0.01%) MBS, $4.7bn Fannie Mae (FNM: 0.9868 -1.32%) MBS and $2.7bn Ginnie Mae MBS, according to a summary of purchases. The New York Fed also sold $500m of MBS in the same week, bringing the net purchases to $12bn, the same as last week.”

Bloomberg - “U.S. Economy: Growth Jumps 5.7%, Fastest Pace in Six Years” (1-29-10)

“The U.S. economy expanded in the fourth quarter at the fastest pace in six years as factories cranked up assembly lines, indicating the recovery may be strong enough to be weaned from government support. The 5.7 percent increase in gross domestic product reported by the Commerce Department in Washington today exceeded the 4.8 percent median forecast of economists surveyed by Bloomberg News. Separate reports showed consumer sentiment and a barometer of business activity rose more than forecast in January.”

Bloomberg - “Obama Housing Rescue Threatened by Foreclosures, Unemployment” (1-29-10)

“Foreclosures probably will reach 3 million this year, surpassing the record of 2.82 million in 2009, according to Irvine, California-based RealtyTrac Inc. That would more than offset an estimated 448,000-unit rise in home sales, based on the average forecast of the National Association of Realtors, the Mortgage Bankers Association and Fannie Mae.”

Bloomberg - “Paulson Says Russia Urged China to Dump Fannie, Freddie Bonds” (1-29-10)

“Russia urged China to dump its Fannie Mae and Freddie Mac bonds in 2008 in a bid to force a bailout of the largest U.S. mortgage-finance companies, former Treasury Secretary Henry Paulson said.”

Orange County Register – “Will buyers rush to cash in on tax credit?” (1-29-10)

“the spring and summer buying seasons are about to kick in. The tax credit deadline will likely add to the sales volume, but it’s critical to remember that ‘first timer’ and ’second home’ contracts must not only be signed by April 30 – escrows must close by June 30! Short sale property escrows have a very hard time closing within 60 days right now.”

Realty Times – “Aging Buyers Want Easy, Comfortable Homes with First-Floor Master Bedroom” (1-29-10)

“The Baby Boomer generation makes up about 28 percent of the population and has some interesting statistics. According to BabyBoomerMagazine.com, this group has greater wealth than any other, controls 70 percent of the total net worth of American households, and accounts for 40 percent of total consumer demand.”

In The News:

One year ago, the CBIA announced that 65,380 building permits were issued from 2008 to 2009. The Commerce Department reported that sales of single-family homes decreased by 14.7 percent. The House of Representatives approved a $819-billion stimulus package. Freddie Mac reported that the 30-year fixed mortgage dipped to 5.10 percent.

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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 1/14/10

Thursday, January 14th, 2010

Today’s News Synopsis:

According to Freddie Mac, the 30-year fixed mortgage rate fell to 5.06 percent this week. 2.8 million properties received a foreclosure notice in 2009. Interactive Mortgage Advisors is selling $130 billion worth of Ginnie Mae’s servicing portfolio. President Obama is proposing a tax on all companies who received bailout money, which would last until all bailout money is paid back.

In The News:

Chicago Tribune – “Rates on 30-year mortgages drop to 5.06 pct, second straight weekly decline” (1-14-10)

“Rates for 30-year home loans edged lower for the second straight week, a report said Thursday, but remained above last month’s record lows. The average rate on a 30-year fixed mortgage was 5.06 percent this week, down from 5.09 percent a week earlier, mortgage company Freddie Mac said.”

Housing Wire – “Foreclosure Filings Hit New Record in 2009: RealtyTrac” (1-14-10)

“In 2009, a record 2.8 million properties received a foreclosure filing, a 21% jump from 2008 and a 120% increase from 2007, according to online marketplace RealtyTrac, which reported the numbers Thursday.”

Housing Wire – “Barack Wants ‘Responsibility Fee’ to Get Bank Bailout Funds Back” (1-14-10)

“President Barack Obama is proposing a ‘Financial Crisis Responsibility Fee’ to tax large financial institutions that received government funds through the Troubled Asset Relief Program (TARP). The news comes in the midst of reports that the government may earn billions of dollars on bailouts. The proposed fee would last for at least 10 years, until all taxpayer dollars are repaid. The fee would apply to the debt of financial institutions with more than $50bn of consolidated assets.”

Housing Wire - “Congressman Proposes 50% Tax on Wall Street Bonuses” (1-14-10)

“Rep. Peter Welch (D-VT) introduced legislation this week to levy new taxes on yearly employee bonuses at financial institutions receiving assistance from the Troubled Asset Relief Program (TARP). Under the bill, bonuses above $50,000 in either cash or stock would be taxed at a rate of 50%.”

Housing Wire – “BofA Permanent HAMP Modifications Jump from 98 to 3,200 in December” (1-14-10)

“The Bank of America (BAC: 16.82 +1.20%) book of permanent loan modifications under the Home Affordable Modification Program (HAMP) grew from 98 mortgages by the end of November 2009 to 3,200 by January 2010, according a company announcement. In the US Treasury Department’s November progress report, BofA completed 98 permanent modifications from the program’s launch in March 2009 through November. Since then, nearly 3,200 borrowers received a completed HAMP modification, and another 12,000 of the BofA borrowers sent their finally modified loan documents under HAMP to be signed and returned by BofA.”

Housing Wire – “Height-of-Boom Subprime Performance Keeps Getting Worse: Moody’s” (1-14-10)

“The basket of mortgage backed securities that the credit rating agency reviewed for its report deal with loans originated during the recent boom years in housing finance. Moody’s is now projecting cumulative losses of 18.7% for 2005 vintage securitizations, 38.4% for 2006 RMBS and 48.1% for 2007 RMBS.”

Housing Wire – “IMA to Sell $130m Ginnie Mae Servicing Portfolio” (1-14-10)

“Interactive Mortgage Advisors (IMA) is facilitating the sale of a $130m Ginnie Mae bulk servicing portfolio on behalf of an undisclosed seller, an independent mortgage banker, according to an offering obtained by HousingWire. The offering covers 937 loans with a combined principal balance of more than $130m. The loans bear a weighted average interest rate of 6.17% and a weighted average service fee of 0.53%.”

Bloomberg - “Issa Proposes Inspector General for Fannie, Freddie Agency” (1-14-10)

“The companies’ regulator, the Federal Housing Finance Agency, has been without an inspector general for at least 17 months since the Federal Housing Finance Board that oversaw the 12 regional Federal Home Loan Banks was merged with Fannie Mae and Freddie Mac’s former overseer to create FHFA. The companies in that time have been taken over by FHFA and given access to what is now an unlimited amount of emergency Treasury Department funding.”

Bloomberg - “Lehman Wins Court Approval to Spend $1.4 Billion to Buy Loans” (1-14-10)

“Lehman Brothers Holdings Inc., the investment bank liquidating in bankruptcy, won a U.S. judge’s approval to spend $1.4 billion to buy loans and mortgages from an insolvent German affiliate, Lehman Brothers Bankhaus.”

Looking Back:

One year ago, the NAR estimated that a homebuyer tax credit could result in 555,000 home sales. Barclay’s Capital claimed that allowing judges to reduce the principal amount on mortgages would not reduce foreclosures. Fannie Mae created a policy allowing people leasing a property to continue occupying their property for a short time after the foreclosure process. PMI Mortgage Insurance estimated that home prices would continue to fall until the 3rd quarter of 2009.

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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 1/6/10

Wednesday, January 6th, 2010

Today’s News Synopsis:

California Governor Schwarzenegger announced a new home buyer tax credit. The Mortgage Bankers Association reports that mortgage applications have increased by .4 percent since Christmas. The FOMC confirmed plans to buy $1.25 trillion in mortgage-backed-securities from Freddie Mac, Fannie Mae and Ginnie Mae. Eugene Ludwig believes that commercial real estate losses will break historical records in 2010.

In The News:

CBIA - “Homebuilders Applaud Governor Schwarzenegger for Prioritizing Jobs, Economic Recovery and Housing in State of the State Address” (1-6-10)

“Enacting a new homebuyer tax credit and streamlining the building process would definitely help continue that positive momentum and help our economy recover more quickly.”

Mortgage Bankers Association - “Mortgage Applications Drop the Week of Christmas and Remain Flat the Week After in Latest MBA Weekly Surveys” (1-6-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the weeks ending December 25, 2009 and January 1, 2010. For the week ending December 25, 2009, the Market Composite Index, a measure of mortgage loan application volume, decreased 22.8 percent on a seasonally adjusted basis from the prior week. For the week ending January 1, 2010, this index  increased 0.5 percent on a seasonally adjusted basis.  Both weeks’ results include an adjustment to account for the Christmas and New Year’s Day holidays. On an unadjusted basis, the Index decreased 46.9 percent the week before Christmas and increased 0.4 percent the week after.”

Housing Wire - “FOMC Eyes Extending Scope of MBS Purchases” (1-6-10)

“The Federal Open Market Committee, in its mid-December meeting, considered extending and expanding its initiatives to buy assets from mortgage agencies Fannie Mae (FNM: 1.10 -4.35%), Freddie Mac (FRE: 1.38 -3.50%) and Ginnie Mae. The FOMC also confirmed plans to buy $1.25trn of agency mortgage-backed securities (MBS) and $175bn of agency debt by the end of Q110, according to minutes released Wednesday.”

Housing Wire – “FHA Proposal Will Stifle Competition, Claims NAMB” (1-6-10)

“The National Association of Mortgage Brokers (NAMB) criticized a Department of Housing and Urban Development (HUD) proposal that would change how brokers and lenders operate in the Federal Housing Administration (FHA) loan program. The association contends HUD’s actions will adversely affect competition in the FHA loan market and have far-reaching economic impacts on lenders and correspondents both.”

Housing Wire – “Dodd to Leave Senate, Banking Committee Chair” (1-6-10)

“Senate Banking Committee chairman Christopher Dodd (D-Conn) on Wednesday said he will leave his post in Congress when his term expires and not seek reelection.”

Bloomberg - “Commercial Property Is Biggest Risk, U.S. Bank Examiners Find” (1-6-10)

“‘Losses from commercial real estate will be quite high by historic standards,’ said Eugene Ludwig, former Comptroller of the Currency who is now chairman of Promontory Financial Group, a Washington-based consulting firm to financial institutions.”

Bloomberg - “Regional Mall Vacancies in U.S. Rise to Record on Unemployment” (1-6-10)

“Vacancies at the largest U.S. shopping centers reached a record 8.8 percent in the fourth quarter as unemployment rose and consumers spent less, Reis Inc. said. Vacancies at smaller neighborhood and community centers increased to 10.6 percent, the highest level since 1991, from 8.9 percent a year earlier, New York-based Reis, a real estate research company, said today in a statement.”

Bloomberg - “U.S. Office, Shopping Center Construction Spending May Fall 13%” (1-6-10)

“Construction spending on hotels, office buildings and retail centers may fall 13 percent this year, the second straight annual decline amid a drop in property prices, the American Institute of Architects said. ”

Bloomberg - “Mortgage-Bond Spreads Narrow to Lowest in More Than 17 Years” (1-6-10)

“Yields on Fannie Mae and Freddie Mac mortgage securities fell to the lowest relative to Treasuries in more than 17 years, narrowing further on news Federal Reserve officials last month reiterated they may favor expanding their program to purchase $1.25 trillion of home-loan debt. ”

Looking Back:

One year ago, the NAR reported that the pending home sales index decreased by 4 percent from October to November. President Obama promised a tax break for business that would cover 5 years of expenses. Gary Watts forecasted that home prices below $500,000 would strengthen in 2009. Grubb & Ellis Co. anticipated that apartment rentals would increase during 2009.

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The Norris Group Real Estate News Roundup 12/28/09

Monday, December 28th, 2009

Today’s News Synopsis:

Statistics show that more people are leaving California than are entering. Approximately 31,000 homeowners have received permanent mortgage modifications of the 4 million that applied for them. Pacific Marketing Associates estimates that condominiums in the Bay Area will soon see a price increase. The Federal Reserve bought $15 billion in mortgage-backed securities from Fannie Mae, Ginnie Mae and Freddie Mac.

In The News:

CNN - “Biggest losers: Where Americans aren’t moving” (12-27-09)

“For years more people have fled the Golden State than have arrived. In the year ended July 1, California was the country’s biggest loser, with nearly 100,000 more residents leaving than moving in. Still, that was an improvement over earlier losses: In 2006 the net decline was 313,081.”

New Observations – “Housing Inventory Still Dramatically Oversupplied — Before You Add In The Foreclosures” (12-27-09)

“supply exceeds long-term inventory averages by 32% — a significant hurdle despite a count of months-of-supply inventory which is just 12% above average and is practically normal (see below). The disconnect in the measure of excess between units for sale and months of supply suggests a logical problem with the data.”

Yahoo - “Credit crunch: Home equity lending evaporates” (12-25-09)

“At the peak of the housing boom in 2006, banks made $430 billion in home equity loans and lines of credit, according to the trade publication Inside Mortgage Finance. From 2002 to 2006, such lending was equal to 2.8 percent of the nation’s economic activity, according to a study by finance professors Atif Mian and Amir Sufi of the University of Chicago.”

Yahoo - “No consequences for lying borrowers” (12-25-09)

“The federally funded Home Affordable Modification Program was aimed at getting banks to rework mortgages for homeowners in order to slow the pace of foreclosures. The government set a goal of modifying up to 4 million mortgages over the next three years. The program isn’t working like it’s supposed to. Since March, just 31,000 homeowners have won permanent relief. One big reason why is that lenders are doing what they should have been doing all along — requiring things like proof of income.”

McClatchy – “How Goldman secretly bet on the U.S. housing crash” (12-28-09)

“In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting. Goldman’s sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation’s premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies. Only later did investors discover that what Goldman had promoted as triple-A rated investments were closer to junk. ”

Housing Wire – “FHA Loans Could Spark Condo Sales in Bay Area” (12-28-09)

“Pacific Marketing Associates, which provides sales and marketing services for real estate developers in California, anticipates increased demand and limited supply will boost prices in the condominium market.”

Housing Wire – “Fed’s Agency MBS Purchases Slow Ahead of 2010″ (12-28-09)

“The Federal Reserve Bank of New York bought $15bn of mortgage-backed securities (MBS) from mortgage giants Fannie Mae (FNM: 1.27 +20.95%), Freddie Mac (FRE: 1.61 +27.78%) and Ginnie Mae in the week ending December 23.”

Orange County Register – “Dramatic 2011 housing rebound eyed” (12-28-09)

“At current levels of undervaluation, distressed inventory is being absorbed faster than it is being introduced, and this trend will continue in Orange County and throughout California. 2010 won’t feel like a dramatic improvement in either price or sales volume, but small, incremental economic and market improvements will continue through next year, with more dramatic improvements forecast for 2011.”

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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 11/6/09

Friday, November 6th, 2009

Today’s News Synopsis:

Fannie recently developed the “Deed-for-Lease” program which allows qualified borrowers to deed their properties back to Fannie and continue to live in the house for up to 12 months. Fannie Mae is asking for $15 billion in support from the Treasury Department. Ronald Pressman from GE Capital Real Estate believes that the commercial real estate market is far from a recovery. The U.S. unemployment rate increased to 10.2 percent in October.

In The News:

Housing Wire – “BarCap Sees ‘Limited Use’ of Fannie’s Deed-for-Lease Program” (11-6-09)

“The Deed-for-Lease (D4L) program allows qualified borrowers to voluntarily deed the property back to Fannie and remain in the home on lease for up to 12 months. It targets borrowers that do not qualify for other workout alternatives like the Home Affordable Modification Program (HAMP), which allocates federal incentives to servicers that pursue modifications before foreclosure.”

Housing Wire – “Higher Unemployment Means Many More Distressed Properties to Come” (11-6-09)

“The US Conference of Mayors, a nonpartisan organization that represents cities with populations greater than 30,000, is sending out an industry warning that they expect employment rates to continue to climb in 2010, reaching levels as high as 15% in some municipalities. Servicers in these areas should prepare to face a much heavier distressed asset portfolio as borrowers struggle to cope with lose of income, says Dave Gatton, a director at the firm.”

Housing Wire – “Fannie Asks Treasury for $15Bn, May Sell Housing Tax Credits” (11-6-09)

“Financial fallout at mortgage giant Fannie Mae (FNM: 1.0299 -8.04%) continues to develop following the $19.8bn quarterly net loss, with the agency’s conservator confirming Fannie may sell as much as $2.6bn of low-income housing tax credits to investors and is requesting another $15bn in support from the US Treasury Department.”

Housing Wire – “Calif. Commercial Delinquency Rate Drops to 0.23%: CMBA” (11-6-09)

“The delinquency rate for commercial loans in California slipped 3bps from 0.26% to 0.23% in Q309, according to a survey conducted by the California Mortgage Bankers Association (CMBA).”

Housing Wire – “Fed Buys Another $16Bn of Agency MBS” (11-6-09)

“The Federal Reserve Bank of New York bought $16bn of mortgage-backed securities (MBS) from housing finance agencies Freddie Mac (FRE: 1.19 -4.80%), Fannie Mae (FNM: 1.03 -8.04%) and Ginnie Mae in the week ending November 4. The Fed bought $3.27bn from Freddie, $12.55bn from Fannie and $175m from Ginnie. For the first week in months, were no MBS sales listed in the week ending November 4.”

Bloomberg - “Commercial Property ‘Long Way’ From Rebound, GE’s Pressman Says” (11-6-09)

“The U.S. commercial property market is far from recovery and needs job growth, sustained low interest rates and further government support, said GE Capital Real Estate Chief Executive Officer Ronald Pressman. ”

Reuters - “Surge in temp jobs points to stronger U.S. economy” (11-6-09)

“U.S. temporary staffing — historically one of the first areas to show evidence of a jobs recovery — surged in October, adding about 34,000 jobs in a positive sign for the overall economy even as the overall employment rate rose above 10 percent.”

Orange County Register – “1 in 4 Surf City home sales distressed” (11-6-09)

Three charts are displayed which contain data on Huntington Beach listings and escrows.

Inman - “15 best iPhone apps for mobile agents” (11-6-09)

“Home Tracker. You’ve seen a lot of homes and it can make your head spin. Home Tracker keeps track for you. Store information on each property such as address, ZIP code, price and size; add notes; take photos; rate the property condition, location and appeal; star your favorites; map the property; and best of all, e-mail the summary of home tours to your clients.”

Realty Times – “Is Your Agent Experienced in Distressed Properties?” (11-6-09)

“the National Association of Realtors (NAR) is coming to the rescue with real estate agents specifically schooled in those subjects. A new Short Sales and Foreclosure Certification Program (SFR) trains agents how to manage short-sales, foreclosures, and real estate owned (REO or bank owned) transactions, and keeps agents current on national and state-specific information and regulations on these issues.”

Wall Street Journal – “Broader U-6 Unemployment Rate Hits 17.5%” (11-6-09)

“The U.S. jobless rate jumped up 0.4 percentage point to 10.2% in October, the highest level since April 1983. The government’s broader measure of unemployment shot up even more, rising half a point to 17.5%.”

Wall Street Journal – “Real Time Economics” (11-6-09)

“The bad news is that the jobs situation seems to have stalled out after improving dramatically through the summer. Private payroll declines actually widened slightly in September and in October. Thus, while we still strongly believe based on anecdotes, surveys, and other statistics that the labor situation is improving and that job losses will come to an end within a few months, the payroll numbers themselves do not indicate much positive momentum. In contrast to the payroll survey results, the household survey data were unambiguously negative. The unemployment rate surged to 10.2%, as the household gauge of employment plunged by almost 600,000 on top of September’s 785,000 drop. –Stephen Stanley, RBS”

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The Norris Group Real Estate News Roundup 10/28/09

Wednesday, October 28th, 2009

Today’s News Synopsis:

According to the MBA, mortgage application volume decreased by 12.3 percent, on a seasonally adjusted basis, from the previous week. Sources have confirmed that the Senate does intend to extend the home buyer tax credit with some modifications. The Commerce Department reports that the pace of new home sales decreased by 3.6 percent in September.

In The News:

Mortgage Bankers Association – “Mortgage Applications Decrease in Latest MBA Weekly Survey” (10-28-09)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending October 23, 2009. The Market Composite Index, a measure of mortgage loan application volume, decreased 12.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2.8 percent compared with the previous week, which included the Columbus Day holiday.”

Housing Wire – “San Francisco Fed Sees FHA Revive Subprime Segment” (10-28-09)

“Around 10% of originations in the San Francisco Fed’s Q406 sample were labeled by originators as ‘subprime,’ according to Krainer. In the total US mortgage market, subprime loans accounted for about 20% of originations in 2006. Despite a nearly zero market share of subprime by Q108, Krainer said, increased FHA lending — identified in the securitization industry by Ginnie Mae’s share — revived the subprime segment of the market.”

Housing Wire – “31% of BAI Survey Respondents Find Mortgage Access Worsening” (10-28-09)

“Of those surveyed, nearly one-third — or 31% — indicated access to mortgages is worse now than six months ago, while only 5% said it improved. The projections indicate 12% of respondents expected access to improve in another six months, while 15% expect access to worsen.”

Housing Wire – “Senate Will Agree to Extend Homebuyer Tax Credit: Sources” (10-28-09)

“Some reports indicate the extension would run through June 2010 and expanded to include all homebuyers, not just first-time purchasers. Another option would extend the full credit to first-time buyers until April 1, with $2,000 reductions every quarter until it dissolved at the end of 2010.”

Housing Wire – “VIEWPOINT: Ginnie Buyouts Rattle Investor Nerves” (10-28-09)

“tradable supply – is being repaired in the current environment. FHA lending and its corollary, Ginnie Mae production are currently going gangbusters. FHA’s share of mortgage lending has revived from a moribund 3% in 2006 to about 25% currently. Ginnie production, as low as 5% to 10% of monthly agency pass-through issuance 2005-7, has popped above 40% in recent months and is currently running at 20 to 25% of monthly supply.”

Bloomberg – “Las Vegas Leads U.S. With Highest Foreclosure Rate” (10-28-09)

“Las Vegas had the highest U.S. foreclosure rate in the third quarter, followed by cities in California and Florida, as unemployment left more borrowers unable to make their mortgage payments, RealtyTrac Inc. said.”

Bloomberg – “U.S. Economy: New-Home Sales Drop as Credit Nears End” (10-28-09)

“Purchases dropped 3.6 percent to a 402,000 annual pace that was lower than the most pessimistic economist’s forecast, according to Commerce Department figures issued today in Washington. Other data showed orders for durable goods climbed 1 percent in September, the fourth gain in the last six months.”

Wall Street Journal – “‘Civil Gideon’ Law Gets Off Ground in Golden State” (10-28-09)

“Those advocates have gotten their wish, at least in California. A new California law, signed this month by Gov. Arnold Schwarzenegger, gives poor residents the right to an attorney in civil matters such as child custody and foreclosure.”

New York Times – “GMAC Asks for More U.S. Aid” (10-28-09)

“GMAC, the troubled consumer finance company, is seeking billions of dollars in additional federal aid, a move that would be its third taxpayer bailout and could give the government a majority stake in the company, according to people briefed on the situation.”

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The Norris Group Real Estate News Roundup 10/12/09

Monday, October 12th, 2009

Today’s News Synopsis:

CBIA reports that sales in new-home communities are down 13 percent from August 2008. Governor Schwarzenegger of California signed a new law today, which will give regulatory relief to mortgage insurers. A survey from the National Association for Business Economics shows that 80 percent of economists believe that the recession is over.

In The News:

CBIA – “New-Home Sales Continue Their Sluggish Pace In August, CBIA Announces” (10-12-09)

“New home sales in California remained at historic low levels in August signaling that the state’s housing sector may be slow to recover from a stubborn recession. The California Building Industry Association reported today that sales in new-home communities of 10 units or more, though better than July’s steep decline, were 13 percent below August 2008.”

Housing Wire – “California Law Gives Insurance Regulators Greater Discretion” (10-12-09)

“A new law signed Monday by California Governor Arnold Schwarzenegger — SB 291 — will give regulatory relief to mortgage insurers and greater discretion to regulators in the state. Existing laws require a mortgage guaranty insurer to cease new business if it cannot maintain the required amount of policyholders surplus. The new law excludes the outstanding principal balance of any loan in default for which the insurer has established a loss reserve.”

Housing Wire – “Fed’s Agency MBS Purchases Hold Steady as Prepays Slow” (10-12-09)

“The Fed’s net purchases of MBS from mortgage giants Freddie Mac (FRE: 1.69 -1.17%), Fannie Mae (FNM: 1.41 -1.40%) and Ginnie Mae remained at $20bn in the week ending October 7, unchanged from a week earlier but lower than recent weekly transactions. The Fed is on track to buy $1.25trn in agency MBS, and intends to wind down the purchasing program before its anticipated conclusion at the end of Q110.”

Housing Wire – “Software Verifies FHA Borrower’s Ability to Repay” (10-12-09)

“Kroll Factual Data released a new software product that provides an additional layer of verification for correspondent lenders of Federal Housing Administration (FHA)-insured loans. Under new FHA guidelines, brokers won’t be required to receive independent FHA approval for origination eligibility. Brokers will instead be required to originate through an FHA-approved lender, leaving the liability of underwriting quality control and borrower’s ability to repay a broker-originated loan in the hands of the lender.”

Reuters – “Housing risks still lurk even as buyers return” (10-12-09)

“On the surface, a glimmer of confidence is returning to the battered U.S. housing market, after more than three years of gut-wrenching defaults, price slumps and foreclosures. But investors and homeowners in California, the most populous U.S. state and a benchmark for housing across the country, are bracing for another fall as emergency government support measures fall short or expire.”

Los Angeles Times – “Survey: Economists say recession is over, predict moderate, slow-paced recovery” (10-12-09)

“More than 80 percent of economists believe the recession is over and an expansion has begun, but they expect the recovery will be slow as worries over unemployment and high federal debt persist. That consensus comes from leading forecasters in a survey by the National Association for Business Economics released Monday.”

Bloomberg – “Writedowns on Mortgage Servicing Make Even JPMorgan Vulnerable” (10-12-09)

“The four biggest U.S. banks by assets may have to take writedowns on $55 billion of mortgage- collection contracts after marking them up by $11 billion in the second quarter, casting a shadow over earnings.”

Bloomberg – “Commercial-Mortgage Defaults Jump Sevenfold, Credit Suisse Says” (10-12-09)

“In September, installments on $22.4 billion of mortgages were at least 60 days late, up from $3.2 billion a year earlier, Credit Suisse analysts wrote in a report. The delinquency rate rose 33 basis points to 3.34 percent, according to the New York- based analysts led by Gail Lee. A basis point is 0.01 percentage point.”

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