The CBIA reports 2,454 new homes and condominiums were closed statewide in June, compared to 3,848 a year earlier. A survey from Trulia shows that 68% of renters believe they will have to wait at least two years before even considering buying a home. According to HUD, 616,839 HAMP modifications have been canceled and 434,716 modifications have been made permanent since the program began. The Congressional Budget Office expects the Troubled Asset Relief Program to cost a total of $66bn.

In The News:

Daily Bulletin - “Uncertain times” (8-19-10)

“Norris said a larger number of expensive homes thrown into the mix of homes sold this year may be skewing the median price up, rather than an overall price increase in homes. Norris also said home affordability is ‘off the charts’ but it does not necessarily translate to a greater demand to buy homes. Because of the real estate crash, more people are afraid to go to the finish line with home purchases, he said.”

CBIA - “California New-Home Market Continues Struggle in June, CBIA Announces” (8-23-10)

“The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New-Home Sales and Pricing Report showed that statewide new-home closings in June were off 36 percent from a year ago. During the month, 2,454 new homes and condominiums were closed across the state, compared to 3,848 a year earlier. Closings of single-family homes were down by 17 percent, while sales of townhomes were off by 57 percent and sales of condominiums were 67 percent lower than a year ago.”

Orange County Register – “Landlords pray for jobs” (8-21-10)

“I’m still concerned about future job growth and global market conditions that we don’t have control over. Unfortunately, our improvement is a condition of the housing and credit markets and reduced multifamily inventory, not significant job growth. Would-be home buyers who are no longer able to qualify to purchase a home, former home owners who lost their homes and new wage earners are sustaining our improved fundamentals. We will need consistent and sustainable job growth going forward.”

Orange County Register – “A good time to be a landlord?” (8-22-10)

“A new survey by Trulia.com shows that 1 in 4 renters say they’ll never purchase a home, and of those who will, 68% say it’ll take more than a couple of years to happen.”

Housing Wire – “Housing’s Second Leg Down” (8-23-10)

“Home prices have fallen 34% from their peak in the middle of 2006, according to Standard & Poor’s HPI data — but is that enough? Or is there further to go? How much further could we fall?”

Housing Wire – “HAMP Trial Cancelations Catching up to Permanent Modifications” (8-23-10)

“The Making Home Affordable Program (HAMP) initiated 1.3m trials as of July 2010, but is having difficulty retaining program participants through the process of making their modifications permanent. According to the July Servicer Performance Report released by the US Department of Housing and Urban Development (HUD), 616,839 modifications have been canceled while 434,716 modifications have been made permanent throughout the program’s lifetime.”

Housing Wire – “TARP Losses Recalculated to $66bn as GSE Outlook Improves” (8-23-10)

“The Congressional Budget Office (CBO) projected Friday the total cost of Troubled Asset Relief Program (TARP) over its lifetime would be $66bn. This is down from the $109bn lifetime cost projected in March. Outlays for Fannie Mae and Freddie Mac will fall from $96bn in 2009 to $41bn this year, the CBO estimates, mostly because the two entities are expected to recognize fewer losses on their mortgage investments and guarantees.”

Housing Wire – “Econoday Reports Swings in Housing Starts Due To Multifamily Volatility” (8-23-10)

“July housing starts rose 1.7% to 546,000 from June’s revised figure of 537,000, which is the lowest level since October. The June revision and volatility in the multifamily component led to the monthly gain, according to Mark Rogers, senior economist at the Calif.-based research firm.”

Housing Wire – “Monday Morning Cup of Coffee” (8-23-10)

“The Office of the Comptroller of the Currency (OCC) released Friday a list of Community Reinvestment Act (CRA) performance evaluations for 39 national banks and insured federal branches of foreign banks. Of the banks, nine received an outstanding rating, 30 received a satisfactory rating and none needed to improve. None were of substantial noncompliance.”

Housing Wire – “Strengthening CRE Market Pushes Defeasance Levels Up: Moody’s” (8-23-10)

“Moody’s said loans originally secured by multi-family properties saw the highest level of defeasance during the first six months, accounting for 46% of total defeasance. Retail properties represented 22% of all defeasance for the period with lodging properties at 17%. And 61% of all defeased loans during the period had two years or less remaining on the loan. Defeasance activity is when a borrower in a commercial real estate securitization substitutes some type of capital-generating collateral – often Treasury securities – in lieu of a hard payment.”

Bloomberg - “Bernanke Must Raise Benchmark Rate 2 Points, Rajan Says” (8-23-10)

“Raghuram Rajan accurately warned central bankers in 2005 of a potential financial crisis if banks lost confidence in each other. Now the International Monetary Fund’s former chief economist says the Federal Reserve should consider raising rates, even as almost 10 percent of the U.S. workforce remains unemployed.”

Bloomberg - “Housing Slide in U.S. Threatens to Drag Economy Into Recession” (8-23-10)

“‘If foreclosures continue to mount and depress home prices, that could send the economy back into a recession,’ said Celia Chen, an economist who tracks the industry for Moody’s Analytics Inc.”

Orange County Register – “‘How to torpedo your short sale’” (8-23-10)

“Many of the lenders won’t pay past due HOA dues, and the short sale can’t be closed without bringing the HOA dues current. If you can, keep your HOA dues current or plan to bring money to close to pay for them.  Sometimes the lender will pay them, sometimes the buyer will, and sometimes we need can succesfully negotiate the amount, but late HOA dues can torpedo a short sale on your Orange County home.”

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 event 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.

According to MDA Dataquick, the median home price in Southern California decreased by 6 percent from December. CBIA reports that home sales in new communities decreased by 15 percent from last month. John Burns estimates that 5 million houses and condominiums with delinquent mortgages will end up in foreclosure over the next few years. TransUnion reports that mortages over 60 days delinquent increased to 6.89% in quarter four of 2009.

In The News:

NAR - “NAR’s HouseLogic: The Logical Source for Today’s Homeowners” (2-16-10)

“Today the National Association of Realtors® launched HouseLogic, a new, comprehensive consumer Web site about all aspects of homeownership. HouseLogic helps homeowners make smart decisions and take responsible actions to maintain, protect and increase the value of their homes. The free Web site helps homeowners plan and organize their home projects and provides timely articles and news; home improvement advice and how-to’s; and information about taxes, home finances and insurance.”

DQNews - “Southland home sales, median price edge above year-ago level” (2-16-10)

“Southern California home sales eked out a modest gain in January compared with a year earlier but fell sharply – as they normally do – from December. The median price paid rose above the year-ago level for the second consecutive month, but fell 6 percent from December as foreclosures and lower-cost inland markets claimed a higher share of sales, a real estate information service reported. A total of 15,361 new and resale homes closed escrow last month in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was down 31.2 percent from December’s 22,328, but up 0.9 percent from 15,227 in January 2009, according to MDA DataQuick of San Diego.”

CBIA - “California New-Home Market Ends 2009 in Lackluster Condition, CBIA Announces” (2-16-10)

“The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New-Home Sales and Pricing Report showed that sales in new-home communities of 10 units or more were 15 percent below December 2008. While the decline was disappointing, it remains an improvement from most months in 2009 in which year-over-year declines were substantially larger. During December, 1,372 new homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 1,607 in December 2008. Sales of single-family homes were down by 25 percent, while sales of townhomes and ‘plexes’ – duplexes, triplexes, etc. – were off by 5 percent and sales of condominiums were 18 percent higher than a year ago.”

San Francisco Chronicle – “Resale prices steady for San Francisco condos” (2-16-10)

“San Francisco’s median resale condominium prices from November through January stayed steady from the same period a year ago, leading some analysts and real estate agents to conclude that values have settled into a range where they are likely to remain for some time. According to city data analyzed by the Polaris Group, a San Francisco real estate firm that crunches housing numbers, the median price for a resale condo in the city – as opposed to a newly built unit – was $638,000 in the threemonth period ending Jan. 31.”

Wall Street Journal – “Foreclosures Seen Still Hitting Prices” (2-16-10)

“The John Burns study estimates that five million houses and condominiums on which mortgages are now delinquent will go through foreclosure or related procedures that put them on the market over the next few years. That would represent the bulk of the estimated 7.7 million households behind on their mortgage payments.”

Housing Wire – “BofA Makes 12,700 HAMP Modifications Permanent” (2-16-10)

“Bank of America (BAC: 15.16 +4.91%) reported 12,700 permanent modifications under the Home Affordable Modification Program (HAMP) through January, an increase from 3,200 a month earlier. The US Treasury Department launched HAMP in March 2009 to provide capped incentives to servicers for the modification of loans on the verge of foreclosure. Through December, servicers provided 66,000 HAMP permanent modifications.”

Housing Wire – “Mortgage Delinquencies Rise for 12th Straight Quarter: TransUnion” (2-16-10)

“Mortgage delinquencies of 60 or more days rose for the 12th straight quarter, hitting a record high 6.89% in Q409, according to market research by credit bureau TransUnion. The rate of deceleration seen in previous quarters in the rise in delinquencies appears ‘short lived,’ the credit bureau said. Year-over-year, the delinquency rate is up about 50% from 4.58% delinquent in Q408.”

Housing Wire – “Borrowers Overwhelmingly Pick Fixed-Rate Refinancings in Q4″ (2-16-10)

“Freddie Mac (FRE: 1.23 +0.82%) reported Monday that 95%of refinance loans during the last quarter of last year were of the fixed-rate variety. And while traditional 30-year fixed-rate mortgages are still the most preferred product among refinancings, 15-year fixed-rate mortgages gained favor among borrowers who previously held 30-year fixed-rate mortgages, balloon mortgages and adjustable-rate mortgages (ARMs), the GSE said in a statement.”

Bloomberg - “U.S. Homebuilder Confidence Rises More Than Forecast” (2-16-10)

“The National Association of Home Builders/Wells Fargo index of builder confidence increased to 17, higher than anticipated, from 15 the prior month, the Washington-based group said today. Readings below 50 mean most respondents view conditions as poor. ”

Looking Back:

One year ago, Congress considered making improvements to the $7,500 tax credit under the $789 billion economic stimulus package. A prediction was made that the 5 biggest banks would soon loose over $524 million.

According to the CBIA, condominium sales were 39 percent higher from last year. The MBA’s weekly survey shows that mortgage loan application volume increased by 14.3 percent from last week. Jumbo residential mortgage-backed securities increased to 9.2 percent from December 2008 to December 2009. All but two of the Federal Reserve districts reported increased activity or improved conditions.

In The News:

CBIA - “California New-Home Market Dips Slightly in November, CBIA Announces” (1-13-10)

“The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New-Home Sales and Pricing Report showed that sales in new-home communities of 10 units or more were 4 percent below November 2008, representing a less impressive result than last month’s year-over-year increase, but was nevertheless an improvement from most months in 2009. During November, 1,860 new homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 1,934 in November 2008. Sales of single-family homes were down by 18 percent, while sales of townhomes and “plexes” – duplexes, triplexes, etc. – were up 8 percent and sales of condominiums were 39 percent higher than a year ago thanks to strong sales at projects in the Los Angeles and San Diego areas.”

Mortgage Bankers Association – “Mortgage Refinance Applications Increase While Purchase Applications Remain Flat in Latest MBA Weekly Survey” (1-13-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 8, 2010.  The Market Composite Index, a measure of mortgage loan application volume, increased 14.3 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 66.0 percent compared with the previous week, which was a shortened week due to the New Year’s holiday.”

San Francisco Chronicle – “State adopts greenest building codes in U.S.” (1-13-10)

“The new code, dubbed Calgreen, will take effect next January and requires builders to install plumbing that cuts indoor water use, divert 50 percent of construction waste from landfills to recycling, use low-pollutant paints, carpets and floorings and, in nonresidential buildings, install separate water meters for different uses. It mandates the inspection of energy systems by local officials to ensure that heaters, air conditioners and other mechanical equipment in nonresidential buildings are working efficiently. And it will allow local jurisdictions, such as San Francisco, to retain their stricter existing green building standards, or adopt more stringent versions of the state code if they choose.”

Housing Wire – “Prime Jumbo RMBS Delinquencies Swell to 9.2%: Fitch” (1-13-10)

“Delinquency of more than 60 days among prime jumbo residential mortgage-backed securities (RMBS) nearly tripled to 9.2% in December 2009, from 3.2% at the end of 2008, according to Fitch Ratings.”

Housing Wire – “GSEs Could Lose $448bn of MBS Guarantee Business, Says Amherst” (1-13-10)

“Losses on the combined credit-guarantee books of government-sponsored enterprises (GSEs) Freddie Mac (FRE: 1.41 +2.17%) and Fannie Mae (FNM: 1.14 +1.79%) could reach 9.6% – or $448bn – according to market analysis by Amherst Securities Group.”

Housing Wire – “Housing Sales Up, Prices Remain Steady: Beige Book” (1-13-10)

“All but two Fed districts reported increased activity or improved conditions, with Philadelphia and Richmond seeing mixed results. In the December 2 edition of the Summary of Commentary on Current Economic Conditions, commonly called the Beige Book, eight districts reported an uptick in their perspectives economy. The book is published eight times a year and is a nationwide economic indicator compiled from the 12 Fed districts.”

Housing Wire – “Government to Earn Billions on Bailouts” (1-13-10)

“The US Treasury Department expects profits of at least $19bn from bank investment programs under the Troubled Asset Relief Program (TARP), according to market commentary Wednesday by the American Bankers Association (ABA). Originally projected to cost $76bn according to the ABA, the outlook for TARP bank programs was updated in December in anticipation of actual profits.”

Housing Wire – “FinestExperts Ranks Top 2010 Real Estate Investment Markets” (1-13-10)

“FinestExpert.com named Dallas-Fort Worth as the hottest real estate investment market for 2010. After analyzing more than 10,000 real estate markets to identify stable, growth-oriented for investors, San Francisco-based FinestExpert.com formed its first top-20 hottest real estate investment market list for 2010.”

Housing Wire – “Cancelled Foreclosures Outnumber Sales in California: ForeclosureRadar” (1-13-10)

“The amount of California foreclosure cancellations increased 26.5% in December to 13,243, primarily due to loan modifications. And for the first time this number overtook foreclosures reaching real-estate owned (REO) status, according to ForeclosureRadar, which tracks foreclosure activity in the state. In December, the amount of foreclosures heading back to the banks, REO, dropped 11.9% from the previous month to 12,437. Significant declines in foreclosure discounts by lenders drove the decrease in sales to third parties, according to the report.”

Bloomberg - “Obama to Announce Fee on 20 Banks to Recoup TARP” (1-13-10)

“President Barack Obama will announce tomorrow his intention to impose a fee on roughly 20 of the country’s largest banks and financial institutions to help recoup taxpayer bailout money and trim the federal budget deficit. Obama will outline his proposal to raise as much as $120 billion at 11:45 a.m. local time at the White House, Obama’s press secretary, Robert Gibbs, told reporters. Gibbs said the president’s economic team has worked on a structure to prevent the levy from being passed onto consumers.”

Bloomberg - “Real Estate Bull Laub Sees Unprecedented Workout From Bad Debt” (1-13-10)

“Kenneth Laub has been through three commercial real estate boom and bust cycles during almost five decades as a broker and consultant to corporations such as Hess Corp. and International Paper Co. He says the current downturn will overshadow all of the others, Bloomberg Markets reports in its February 2010 issue.”

Looking Back:

One year ago, the NAHB encouraged congress to use a portion of the $700 billion bailout to increase credit for home purchases, and to stem foreclosures. California lost a total of 144,000 people from 2008 to 2009. Ben Bernanke warned that a fiscal stimulus would not cause an economic recovery. In November of 2008, 4 percent of homes were bought with adjustable rate mortgages.

According to RealtyTrac, foreclosure activity decreased  by 8 percent in November. Hanley Wood Market Intelligence reports that Orange County builders had their first positive month in October, after 13 months of contract declines. A survey from HomeGain shows that 48 percent of agents and brokers believe that home prices will stay the same, and 24 percent believe that prices will increase.  Data from the U.S. Treasury Department shows that 31,382 of the 1 million three-month modifications have become permanent.

In The News:

DSNews - “Foreclosure Activity Recedes for Fourth Straight Month: RealtyTrac” (12-10-09)

“The foreclosure tide appears to be subsiding, according to the latest numbers from RealtyTrac. The company said Thursday that foreclosure activity fell 8 percent in November, compared to October – it’s the fourth consecutive month that RealtyTrac’s data has shown a decrease in foreclosure filings.”

CBIA - “California New-Home Market Breaks into Positive Territory, CBIA Announces” (12-10-09)

“The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New-Home Sales and Pricing Report showed that sales in new-home communities of 10 units or more were 25 percent above October 2008, a strong improvement from the lingering year-over-year decline last month and represents the first notable increase since the start of the housing downturn. During October, 2,294 new homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 1,838 in October 2008. Sales of single-family homes were up by 4 percent, while sales of townhomes and ‘plexes’ – duplexes, triplexes, etc. – were up 36 percent and sales of condominiums were 94 percent higher than a year ago thanks to strong sales at projects in the Los Angeles and San Francisco areas.”

Orange County Register – “Losing streak ends for O.C. builders” (12-10-09)

“Hanley Wood Market Intelligence says after 13 straight months of annual declines in new home sales contracts, Orange County builders recorded their first up month in October. According to the Costa Mesa research firm, homebuyers signed 90 contracts to buy a new Orange County home that month, up 13.9% from October 2008.”

Inman - “Survey: Hopeful on home prices” (12-10-09)

“Forty-eight percent of agents and brokers surveyed think home prices will stay the same and 24 percent think prices will go up, the company reported. That’s a slight increase from the third-quarter survey, when those numbers were 46 percent and 23 percent, respectively. This marks a major change from HomeGain’s first-quarter survey when 36 percent thought prices would remain flat and 11 percent thought prices would increase. The survey had 928 respondents.”

Housing Wire – “30,000 Trial HAMP Mods Go Permanent” (12-10-09)

“Of the 1m homeowners who have been offered three-month trial modification under the Home Affordable Modification Program (HAMP), 31,382 have received a permanent modification, according to from the US Treasury Department.”

Housing Wire – “Mortgage Volume to Decline in 2010, Says Dorado” (12-10-09)

“Mortgage origination volume will decline next year compared to 2009 levels, but the use of software-as-a-service (SAAS) applications will rise, San Mateo, Calif.-based SAAS developer Dorado Corporation said in its projections for next year. Dorado projects more than 30% of mortgages created next year will be originated with SAAS applications, which generally work as Web-based tools a developer hosts on its own servers and distributes access through subscription licenses.”

Housing Wire – “Treasury Used $364bn of TARP funds in 2009″ (12-10-09)

“The Treasury Office of Financial Stability (OFS) used $364bn of the $700bn available funds, mostly in investments according to the report, and $73bn of the TARP funds have already been repaid. Bank of America last week committed to repaying the $45bn it received through the program.”

Housing Wire - “Mortgage Rates Rise off Record Lows” (12-10-09)

“Freddie Mac’s (FRE: 1.12 +0.90%) survey put the 30-year fixed-rate mortgage (FRM) at 4.81% with an average 0.7 point for the week ending Dec. 10, up from the previous week when it was a record low average of 4.71%. A year ago, Freddie Mac put the 30-year FRM at 5.47%.”

Bloomberg – “Wells Fargo Cuts as Much as 30 Percent in Principal” (12-10-09)

“Wells Fargo & Co., the bank that gained a portfolio of option adjustable-rate mortgages when it bought Wachovia Corp. last year, cut the principal for delinquent borrowers in some loans by as much as 30 percent. Wells Fargo has forgiven an average of $46,000 in principal, or 15 percent, for the 43,500 option-ARM loans it has modified this year through September, said Franklin Codel, chief financial officer at the bank’s home-lending unit.”

Looking Back:

One year ago, Orange County tax collectors reported that property tax collections decreased by $145 million. One hundred twenty-seven financial companies received preliminary approval for $60.4 billion from TARP.