The Norris Group Blog

Today’s News Synopsis:

The NAR reports that existing-home sales increased by 10.1 percent in October. Statistics show that California workers, who earn the national median income, can afford 59.1 percent of the new and existing homes during the 3rd quarter. According to the MBA, multifamily lenders provided $88 billion in new financing for apartment buildings with 5 or more units during 2008.

In The News:

NAR - “Existing-Home Sales Record Another Big Gain, Inventories Continue to Shrink” (11-23-09)

“Existing-home sales – including single-family, townhomes, condominiums and co-ops – surged 10.1 percent to a seasonally adjusted annual rate¹ of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, and are 23.5 percent above the 4.94 million-unit level in October 2008. Sales activity is at the highest pace since February 2007 when it hit 6.55 million.”

CBIA - “California Housing Affordability Continues to Decrease, CBIA Announces” (11-23-09)

“On a statewide basis, the HOI found that a family earning the median-income could have afforded 59.1 percent of the new and existing homes that were sold during the third quarter, down from 62.7 percent in the second quarter.”

Mortgage Bankers Association – “MBA Reports Multifamily Lending 40 Percent Lower in 2008 Than 2007; Market Remained Broad and Diverse” (11-23-09)

“In 2008, 2,877 different multifamily lenders provided a total of more than $88 billion in new financing for apartment buildings with five or more units, according to an annual report from the Mortgage Bankers Association (MBA). The 2008 dollar volume represents a 40 percent decline from 2007 levels.”

Bloomberg - “Commercial Property Prices to Fall Up to 55%” (11-23-09)

“Commercial real estate prices may fall as much as 55 percent from October 2007’s peak and the recovery will be slow amid rising unemployment and tepid consumer spending, Moody’s Investors Service said.”

Inman - “Front-loaded loans: bad for borrowers?” (11-23-09)

“A necessary consequence of full amortization with equal monthly payments is that the composition of the payment between interest and principal changes over time. In the early years, the payment is mostly interest; in the later years, it is mostly principal. At 6 percent, it does indeed take 21 years to pay down the balance of the $100,000 loan to $50,000. This is the factual foundation of the front-end-loading argument.”

Orange County Register – “Weakest home market in O.C.? Garden Grove” (11-23-09)

“How’d Garden Grove 92844 do so poorly? It ranked 82nd of 83 for pricing; 67th for sales; and 69th in terms of foreclosures frequency in the community. In the previous quarter, this ZIP ranked 56 of 83 overall.”

Orange County Register – “Will ‘good faith’ be bad for borrowers?” (11-23-09)

“Another purpose of the GFE2010 is to ‘bring clarity’ to the market ‘through a simpler and better understanding of their costs.’ To do this HUD took the previous 1 page Good Faith Estimate that clearly delineates all charges and tailored perfectly into the HUD/RESPA required Truth In Lending disclosure (which discloses APR) and created a three page form that does not delineate any fees, lumps charges for non-related services together, separates out services required by the loan process from those the borrower can select and has no relation to the Truth In Lending disclosure or the Good Faith Estimate required under Reg Z by the Fed.”

Realty Times – “Washington Report: Congress Pressures FHA” (11-23-09)

“Congressman Spencer Bachus of Alabama said FHA’s declining capital reserves, estimated by independent auditors as barely one quarter of the congressionally-mandated minimum, raises the possibility that FHA could come hat in hand to Congress seeking a bailout. ”

Realty Times – “The Cost of the Home Buyer Tax Credit” (11-23-09)

“If the stats hold true, and that is about half of all buyers are first-timers, then there were 2.25 million buyers that qualified (assuming they didn’t go beyond the income limits – which many did). But for simplicity, we’ll say they all qualified. Simple math puts the tax credits at $18 billion for 2009 that doesn’t have to be paid back. For all the money that’s being floated out there to stimulate the economy, this is probably the best plan in play.”

Looking Back:

Wells Fargo made plans to cut 80 percent of all of its wholesale mortgage jobs. Citigroup’s year losses had reached $20 billion, and the company cut 52,000 jobs. A study showed that borrowers who attended home ownership education programs were 20 times less likely to foreclose.