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The Norris Group Real Estate News Roundup 3/31/10

Wednesday, March 31st, 2010

Today’s News Synopsis:

According to the NAR, vacation home sales increased by 7.9 percent in 2009. Mortgage loan application volume increased by 1.3 percent from last week.  Fannie Mae reports the percentage of seriously delinquent loans increased to 5.52% in January. FHA does allow mortgages to borrowers who sell their current residence under short-sale provisions and then purchase a new home without the standard 3 year wait.

In The News:

NAR - “Vacation-Home Sales Up in 2009 but Investment Sales Down” (3-31-10)

“NAR’s 2010 Investment and Vacation Home Buyers Survey, covering existing- and new-home transactions in 2009, shows vacation-home sales rose 7.9 percent to 553,000 last year from 513,000 in 2008, while investment-home sales fell 15.9 percent to 940,000 in 2009 from 1.12 million in 2008. Primary residence sales rose 7.1 percent to 4.04 million in 2009 from 3.77 million in 2008.”

Mortgage Bankers Association – “Strain on Commercial/Multifamily Real Estate Market Continues in the Fourth Quarter” (3-31-10)

“The Mortgage Bankers Association (MBA) today released its Commercial Real Estate/Multifamily Finance Quarterly Data Book for the fourth quarter of 2009. The analysis shows the ongoing strain on the commercial/multifamily real estate markets resulting from the recent recession. Many data series included in the Data Book also show significantly slower rates of decline compared to previous periods.”

Mortgage Bankers Association – “Mortgage Purchase Applications Increase in Latest MBA Weekly Survey” (3-31-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending March 26, 2010. The Market Composite Index, a measure of mortgage loan application volume, increased 1.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1.5 percent compared with the previous week.”

State of California – “2010 Tax Credit for New Home / First-Time Buyer” (3-31-10)

“These tax credits are available for taxpayers who purchase a qualified principal residence on or after May 1, 2010, and before January 1, 2011. Additionally, the New Home Credit is available for taxpayers who purchase a qualified principal residence on or after December 31, 2010, and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010. The purchase date is defined as the date escrow closes. These tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence. Taxpayers must apply the total tax credit in equal amounts over 3 successive tax years (maximum of $3,333 per year) beginning with the tax year in which the home is purchased. The tax credits cannot reduce regular tax below tentative minimum tax (TMT). The tax credits are nonrefundable and unused credits cannot be carried over.”

Housing Wire – “Fannie Delinquencies Reach All-Time High at 5.52%” (3-31-10)

“While serious delinquencies in the Fannie Mae (FNM: 1.05 0.00%) portfolio continue to reach new heights in January, mortgage-backed securitization (MBS) issuance dropped for the second month in a row in February, according to its monthly report. The serious delinquency rate at Fannie climbed to 5.52% in January – the most recent month of data – up 14 bps from December and doubling the 2.77% rate in January 2009.”

Business Week – “The 50 Most Powerful People in Real Estate 2010″ (3-31-10)

“Who are the people setting the agenda in the U.S. real estate market? As Bloomberg BusinessWeek found out, the answer is complicated and can be approached only from a range of perspectives. We spoke with industry experts about an array of functions—economists, government officials, heads of industry organizations, bankers, insurers, brokers, homebuilders, property managers, investors, and property owners—and selected 50 people we believe are leading the economic recovery or carry particular clout in shaping the landscape for homeownership.”

Orange County Register – “What? Quick loan despite a short sale?” (3-31-10)

“It turns out FHA does allow mortgages to borrowers who sell their current residence under short-sale provisions and then purchase a new home without the standard 3 year wait.  There are certain conditions that must be met–some of the conditions are a little subjective and on these I would not suggest trying to push limits.”

Orange County Register – “Hear why foreclosures dampen housing’s future” (3-31-10)

“Berson tells ocregister.com in a podcast interview that while the worst may be behind housing, there’s little reason to believe that boom times will be ahead. One big problem is that the large supply of foreclosures and other distressed properties will dampen home prices for the foreseeable future. Additionally, lenders will stay tight with their lending terms — and that’s not so bad, Berson says”

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The Norris Group Real Estate News Roundup 10/1/09

Thursday, October 1st, 2009

Today’s News Synopsis:

The NAR’s Pending Home Sales Index shows that sales increased by 6.4 percent in August. Research from Deutsche Bank Securities shows that 26 percent of borrowers owe more than their home is worth. A $250,000, four-bedroom, 1700 square feet, three-bathroom house in Los Angeles made the nation’s list of most searched for homes. A survey shows that realtors are in favor of expanding the $8,000 dollar tax credit. Regulation Z changes are now in effect. FHA first-time borrowers may see hike in down payment requirements according to new legislation introduced.  Realtors are also interested in expanding first-time tax credit to repeat buyers. Does that mean investors? One could only be so hopeful.

In The News:

NAR - “Record Streak Continues for Pending Home Sales” (10-1-09)

“The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in August, rose 6.4 percent to 103.8 from a reading of 97.6 in July, and is 12.4 percent above August 2008 when it was 92.4. The index is at the highest level since March 2007 when it was 104.5.”

Bloomberg - “Leaving Affordable Mortgage May Become Winning Gambit” (10-1-09)

“In the U.S., 26 percent of borrowers owe more than their home is worth, said Karen Weaver, global head of securitization research for New York-based Deutsche Bank Securities. In parts of California, Florida and Nevada, it’s as high as 75 percent.”

Inman - “30-year fixed rate below 5% again” (10-1-09)

“Rates on 30-year fixed-rate mortgages for borrowers with good credit fell below 5 percent this week for the first time since May, Freddie Mac said in releasing the results of its Primary Mortgage Market Survey.”

Inman - “Lenders want one set of rules” (10-1-09)

“A draft bill floated by Rep. Barney Frank, D-Mass., would create an agency along the lines of the proposal put forward by the Obama administration in June, while attempting to address some lending-industry concerns. Unlike the Obama administration’s proposal, for example, Frank’s bill would not give the agency the power to require that lenders offer ‘plain vanilla’ mortgages.”

Orange County Register – “Property tax revenues flat nationwide” (10-1-09)

“The Census Bureau’s quarterly count of state and local government collections nationwide of taxes shows property-related taxes (that on land and structures) as well as personal propert levies) for the second quarter at $81.86 billion — the largest slice tracked by Census — and flat vs. a year ago.”

Realty Times – “Title, Escrow Services Necessary” (10-1-09)

“Title companies are hired, in part, to issue title insurance protection for home buyers and lenders. Lenders require the service to protect them against loss resulting from claims by others against your new home. The title company investigates the title to make sure it is clear of any encumbrances, such as liens or judgments, forgeries or fraud and any other title anomalies and then issues a policy to protect you from any claims that turn up later. Because title searches are conducted each time the home changes hands or, perhaps, during a refinancing, the searches rarely turn up title claims, but you have to pay for the search.”

Los Angeles Times – “Long Beach property joins the list of most-searched-for U.S. homes online” (10-1-09)

“Priced at $250,000, the four-bedroom, three-bathroom house with 1,768 square feet on 0.15 acres (6,650 square feet) continues to make the list.”

Housing Wire – “Regulation Z Changes Are Here” (10-1-09)

“The Federal Reserve’s new Regulation Z statutes went into effect Thursday, after more than a year of preparations by the mortgage industry. Regulation Z is a truth in lending regulation meant to protect consumers who buy higher-priced mortgages — those loans with annual percentage rates (APR) above the average prime offer rate for a comparable transaction by at least 1.5 percentage points for first mortgages or 3.5 percentage points for second mortgages.”

Housing Wire – “GSE REO Portfolio Near 100,000″ (10-1-09)

“Freddie’s portfolio is nearly 35,000 properties, while Fannie’s is closing in on double that figure at nearly 64,000. While the rate of growth in the two portfolios has declined, Freddie acknowledges it expects to experience further losses from REO properties.”

Housing Wire – “Realtors Favor Expansion of Tax Credit to Repeat Buyers” (10-1-09)

“Realtors indicated in a recent survey the first-time homebuyer tax credit up to $8,000 has had a significant impact on spurring consumer interest in getting into the housing market. Some even called for an expansion of the program past its current expiration date and to homeowners that do not yet qualify.”

Bloomberg - “FHA Borrowers May Need Bigger Down Payments in Bill” (10-1-09)

“Legislation introduced in the U.S. House of Representatives would require higher down payments from borrowers seeking federally backed loans as lawmakers try to prop up the Federal Housing Administration’s insurance fund.”

The Atlantic – “OCC Report Shows Mortgage Modification Trend And Woes” (10-1-09)

“As the chart below shows, in the first quarter of 2009 principal reduction was only used 3.1% of the time. In the second quarter, however, that percentage increased to 10%. That’s a pretty drastic increase, with one-in-ten modifications now reducing principal.”

Looking Back:

One year ago, FHA was given $300 billion dollars for a new foreclosure prevention program. The MBA’s weekly survey showed that mortgage applications had decreased by 28.4 percent from the prior year. Warren Buffett invested $3 billion dollars into General Electric. Foreclosures tripled in Los Angles during the third quarter.

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The Norris Group Real Estate News Roundup 9/30/09

Wednesday, September 30th, 2009

Today’s News Synopsis:

Experian and Wyman estimate that the number of strategic defaults in 2008 were up to 600,000. Senators are supporting new legislation that would lend 200 million dollars for the prosecution of mortgage and real estate fraud cases.  The MBA reports that the mortgage loan application volume decreased by 2.8 percent on a seasonally adjusted basis. The $8,000 dollar tax credit is soon to expire while approximately 1.8 million people are expected to receive the credit. Freddie Mac announced that it will work with Titanium Solutions to do door-to-door loan modifications.

In the News:

Appraisal Institute – “Appraisal Institute Urges Practicing Fundamentals, Hiring Qualified Appraisers, Enforcing Regulatory Oversight” (9-30-09)

“At a residential real estate roundtable hosted by the National Association of Home Builders, representatives of the Appraisal Institute urged the mortgage and housing industries to hire qualified appraisers and encouraged government regulators to redouble efforts on enforcement. Appraisal Institute President Jim Amorin, President-Elect Leslie Sellers and Bill Garber, director of government and external relations, participated on the panel last week with industry and government officials.”

DSNews - “Who Walks Out? New Studies Shed Light on Strategic Defaults” (9-29-09)

“According to Experian and Wyman, numbers of strategic defaults are far greater than you might expect. Nearly 600,000 borrowers nationwide fell into this category in 2008, more than double the number in the previous year. That number also represents 18 percent of all serious delinquencies from last year.”

Arizona Republic – “Kyl bill targets real-estate fraud” (9-30-09)

“New national legislation calls for setting up a $200 million fund to help states prosecute mortgage and real-estate fraud cases. Sen. Jon Kyl, R-Ariz., is teaming with Sen. Charles Schumer, D-N.Y., to back the Fighting Real Estate Fraud Act of 2009, which would set up a grant program that local prosecutors, state attorneys general and Native American tribes could apply for to fund investigations.”

Washington Post – “Lack of Equity Slows Federal Aid Program” (9-30-09)

“A federal program to allow borrowers with little or no equity in their homes to refinance is struggling to gain traction, according to government data released Tuesday, showing that only 93,070 borrowers have been helped since the effort was launched in April. The program has encountered difficulties that government regulators had not expected, such as the limited capacity of lenders to carry it out and the large proportion of borrowers who could not initially qualify because their home values had fallen so sharply.”

The Raw Story – “US secretly tried to make deal with Goldman Sachs in wake of financial crisis” (9-30-09)

“The government secretly tried to orchestrate a deal involving Goldman Sachs in the week following Lehman Brothers’ collapse and considered using the Federal Reserve to help support such a transaction, Andrew Ross Sorkin reports in the new issue of Vanity Fair.”

Seeking Alpha – “Mortgage Delinquencies Rising” (9-30-09)

“All types of delinquencies were up, but most distressing was the information about serious delinquencies, or mortgages that are more than 60 days past due. They reached 5.3% of all mortgages, up from 4.7% in the first quarter, an increase of 11.5%. Foreclosures-in-process reached 2.9% of all mortgages, up from 2.4% in the first quarter — a 16.2% increase.”

Real Estate Channel – “FHFA Refinance Report Underscores Impact of Interest Rates on Refinance Volumes” (9-30-09)

“Fannie Mae and Freddie Mac refinanced more than 3.2 million mortgage loans in 2009 through August of this year. In the month of August alone, nearly 360,000 mortgages were refinanced. The numbers were announced today by Edward J. DeMarco, Acting Director of the Federal Housing Finance Agency (FHFA), in its monthly report on Enterprises’ refinance volumes and the Administration’s Making Home Affordable Refinance Program (HARP).”

New York Times – “CIT Plans for Exchange Offer and Potential Bankrucpty” (9-30-09)

“The CIT Group, nearing a Thursday deadline to present a comprehensive restructuring scheme, is planning to roll out a massive debt exchange offer to its bondholders, along with votes for a potential prepackaged bankruptcy, people with direct knowledge of the talks told DealBook on Wednesday. CIT, a major lender to the nation’s small and mid-sized businesses, plans to ask bondholders to exchange their current holdings for new debt and equity, these people said. The offer would be introduced within days and would run for about 20 business days.”

Philly.com – “Government tweaks mortgage-change efforts” (9-30-09)

“Speaking today at the Philadelphia Federal Reserve Bank, Treasury Department senior policy analyst Mark McArdle said changes were in place or become effective next week to better monitor performance of the 62 servicers involved in the Home Affordable Modification Program (HAMP), which has a Nov. 1 target of 500,000 ‘trial’ modifications, designed to test whether borrowers can handle easier terms on their home loans.”

Mortgage Bankers Association – “Mortgage Applications Decrease in Latest MBA Weekly Survey” (9-30-09)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending September 25, 2009. The Market Composite Index, a measure of mortgage loan application volume, decreased 2.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3.1 percent compared with the previous week and increased 44.3 percent compared with the same week one year earlier. ”

Mortgage Bankers Association – “Commercial/Multifamily Market Feels Impact of Continued Economic Pressures” (9-30-09)

“The Mortgage Bankers Association (MBA) today released its Commercial Real Estate/Multifamily Finance Quarterly Data Book for the Second quarter of 2009. The analysis focuses on how the continued economic downturn in the United States placed further pressure on the commercial and multifamily real estate markets during the second quarter. While the second quarter likely marks the recession’s end, it also marks a very low point in terms of jobs, consumer spending, industrial production and other drivers of commercial real estate demand. As a result, various areas of the commercial/multifamily real estate market have been impacted including originations, mortgage debt outstanding and mortgage performance. ”

San Francisco Chronicle – “First-time home buyer tax credit set to expire” (9-30-09)

“The $8,000 federal tax credit for first-time home buyers is soon to expire, causing anxious house hunters to hustle and prompting a debate in Congress over extending a program that some say is central to the fragile real estate recovery. Critics argue that American taxpayers are simply footing a windfall for purchasers who would have bought homes anyway. Real estate industry statistics suggest that approximately 1.8 million people are expected to receive the credit. They also indicate that the rebate spurred 350,000 home sales.”

Inman - “Freddie doing loan mods door-to-door” (9-30-09)

“Freddie Mac on Tuesday announced it’s going even farther, hiring a company to go door-to-door to meet with delinquent borrowers in their homes to collect missing information and documents needed to begin three-month trial loan modifications under the Obama administration’s Making Home Affordable Program.”

Inman - “Lenders more generous with loan mods” (9-30-09)

“More than three out of four loan modifications made by lenders during the second quarter reduced borrowers’ monthly payments, up from 54 percent in the first three months of the year, according to a report released today by federal bank regulators.”

Orange County Register – “O.C. house building down 85% in a decade” (9-30-09)

“Just one California metro area did better percentage wise than O.C.: The Vallejo-Fairfield area saw single-family home building permits rise 36% as of August, the only California metro with an increase.”

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The Norris Group Real Estate News Roundup 9/29/09

Tuesday, September 29th, 2009

Today’s News Synopsis:

C.A.R.’s sales and price report shows that single-family home sales increased 9 percent in August. The Standard & Poor’s/Case-Shiller home price index shows that prices are down 13.3 percent from a year ago, but declines have slowed. Fannie Mae announced that the number of homes behind on payment or in foreclosure have increased by 4.17 percent. Also, FDIC Chairman Sheila Bair proposes that the agency get banks to prepay three years of fees to help cover the cost of bank failures, expecting a $100-billion cleanup bill through 2013.

In The News:

CAR – “August sales and price report” (9-29-09)

“Existing, single-family home sales increased 9 percent in August to a seasonally adjusted rate of 526,970 on an annualized basis. The statewide median price of an existing single-family home increased 2.6 percent in August to $292,960, compared with July 2009. C.A.R.’s Unsold Inventory Index fell to 4.3 months in August, compared with 7 months in August 2008.”

Los Angeles Times – “Consumer confidence unexpectedly falls in September” (9-29-09)

“The New York-based Conference Board, a private research group, said that its Consumer Confidence Index dipped to 53.1 in September, down from the revised 54.5 reading in August. Economists surveyed by Thomson Reuters had expected a reading of 57.”

Sacramento Bee – “Index shows home prices rose for 3rd month in July” (9-29-09)

“The Standard & Poor’s/Case-Shiller home price index of 20 major cities rose 1.2 percent from June to a reading of 143.05. Though home prices are still 13.3 percent below July a year ago, the annual declines have slowed in all 20 cities for the sixth straight month.”

CNBC – “FDIC Staff Propose Banks Prepay Fees” (9-29-09)

“Federal Deposit Insurance Corp staff recommended Tuesday that the agency get banks to prepay three years of fees to help cover the cost of bank failures, expecting a $100-billion cleanup bill through 2013.”

Bloomberg – “Fannie Mae Mortgage Defaults Climb to Record in July” (9-29-09)

“Mortgages at least 90 days late or in foreclosure among the single-family loans that Fannie Mae owns or guarantees rose to 4.17 percent in July, from 3.94 percent in June and 1.45 percent a year earlier, the Washington-based company said in its monthly volume summary today.”

Bloomberg – “Vacation Timeshares Drop at Record Pace as Americans Cut Back” (9-29-09)

“U.S. vacation timeshare sales may fall the most this year since the industry gained popularity in the 1970s as consumers forgo spending to ride out the recession.”

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The Norris Group Real Estate News Roundup 9/28/09

Monday, September 28th, 2009

Today’s news Synopsis:

The Federal Reserve has printed $860 billion in mortgage-backed securities. Under the new U.S. Treasury Department program,  states that provide  mortgages to low-income borrowers may receive up to 35 billion dollars in Federal aid. According to SoCal MLS, distressed sales accounted for 40 percent of all Orange County sales in July.

In The News:

Los Angeles Times – “Don’t bank on your home as an ATM” (9-27-09)

“The economic fundamentals that drove home values up in the 20th century — sustained growth in incomes, population and household wealth — have been sputtering for decades. Though the future isn’t necessarily bleak, economists say there’s no reason Americans should continue to see a home purchase as a path to wealth.”

San Francisco Chronicle – “Be wary of buying into homeowner association” (9-27-09)

“While there are advantages to living in a place where all the owners share the cost of operating and maintaining amenities individual owners couldn’t afford on their own, it’s also true that condo and homeowner associations obligate all members with substantial financial and legal liabilities.”

Los Angeles Times – “Beyond Fannie and Freddie” (9-27-09)

“Homeownership may be the American dream, but lately it has been an expensive one for taxpayers. The deduction for mortgage interest cost about $80 billion in lost revenue in 2009, and a tax credit for home buyers in this year’s stimulus bill will add $15 billion to the tab. Taxpayers have provided Fannie Mae and Freddie Mac, two giant, troubled mortgage finance companies, nearly $100 billion that they have little chance of recouping. Mounting defaults also threaten the Federal Housing Administration, the agency that guarantees many home mortgages, raising the odds for yet another multibillion-dollar federal bailout. Meanwhile, the Federal Reserve has effectively been printing money to reduce mortgage interest rates, using the new dollars to buy more than $860 billion in mortgage-backed securities.”

Bloomberg - “Housing Agencies May Get $35 Billion in Treasury Aid” (9-28-09)

“State housing agencies in the U.S. that provide mortgages to low-income borrowers would get as much as $35 billion in federal aid under a new U.S. Treasury Department program, people familiar with the matter said. The program would provide up to $15 billion in fresh funding for as long as three years and would purchase as much as $20 billion in tax-exempt mortgage bonds issued by state- sponsored housing finance agencies through the end of this year, a person familiar with the matter said. The program may be announced as early as Sept. 30, said the person, who didn’t want to be named because the plans haven’t been made public.”

Bloomberg - “Negative Bond Returns Converge With Mortgage Miracle” (9-28-09)

“Federal Reserve Chairman Ben S. Bernanke has some good news for investors: Treasury bondholders will lose money for the first time in 10 years amid an unprecedented decline in the gap between the interest rate on 30-year mortgages and government notes, signaling an end to the worst financial crisis since the Great Depression.”

Orange County Register – “Calif. has nation’s highest mortgage burdens” (9-28-09)

“Do we need a Census Bureau survey to tells us how costly it is to own a home in California? Well, the 2008 edition of the American Community Survey does deeply detail California’s steep homeowning costs.”

Orange County Register – “Buying non-foreclosed homes surges in O.C.” (9-28-09)

“But the Southern California Multiple Listing Service estimated that short sales accounted for around 18% of all Orange County resales from February through July. Overall, “distressed” sales (foreclosures and short sales combined) accounted for four out of every 10 sales in July, by SoCal MLS’s math.”

Inman - “Loan shoppers: their own worst enemy?” (9-28-09)

“The proposed new disclosures will be required at the point of application. This is a great idea, if it is properly implemented. Proper implementation means that the information lenders must submit at the point of application will help consumers select from among loan providers. Stated somewhat differently, the information must reveal differences between lenders that will cause borrowers to prefer one over another.”

Looking Back:

One year ago, Citigroup chose to buy Wachovia’s banking business.  Morgan Stanley sold 21 percent of its stock to Japan’s Misubishi UFJ. Permits for new housing construction in Orange County dropped by 94 percent in one month.

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The Norris Group Real Estate News Roundup 9/25/09

Friday, September 25th, 2009

Today’s News Synopsis:

The Commerce Department reports that new home sales increased by .7 percent to a 429,000 annual pace. The Federal Reserve has decided to pump $1.25 trillion more dollars into the mortgage market. Freddie Mac’s 30 year fixed mortgage rates survey shows that rates are currently at an average of 5.04 percent.

In The News:

Bloomberg - “New-Home Sales in U.S. Climb to Almost One-Year High” (9-25-09)

“Sales increased 0.7 percent to a 429,000 annual pace, less than anticipated, figures from the Commerce Department showed today in Washington. Other reports showed orders for durable goods unexpectedly fell and consumer sentiment climbed.”

Bloomberg - “KB Home’s Net Loss Exceeds Estimates; Shares Fall” (9-25-09)

“KB Home, the Los Angeles-based homebuilder that sells to first-time buyers, reported a third- quarter loss exceeding analysts’ estimates and said a housing recovery isn’t imminent. The shares fell as much as 8.4 percent.”

Bloomberg - “Fed’s Strategy Reduces U.S. Bailout to $11.6 Trillion” (9-25-09)

“The Federal Reserve decided to keep pumping $1.25 trillion of new money into the mortgage market to focus on rescuing the U.S. economy as the financial system revives and banks ask for less help. The Fed is allowing some of the 10 support programs it created or expanded after the credit crisis began in August 2007 to expire or shrink. That caused the first decline in the amount of money the U.S. has committed on behalf of taxpayers to end the recession, according to data compiled by Bloomberg.”

Orange County Register – “O.C. home prices slip in early Sept.” (9-25-09)

“Single-family homes resell for 32% less than their peak pricing (June ‘07) while condos sell 38% below their peak in March 2006. Builder prices for new homes are 46% below their February ‘05 top.”

Inman - “Tax credit big factor for first-timers” (9-25-09)

“Nearly one in five prospective first-time homebuyers say an extension of the tax credit for first-time homebuyers would be the biggest factor in deciding whether to buy a home by the end of 2010, according to a survey by real estate listings and valuation site Zillow.com.”

Inman - “Mortgage rates stay at 3-month lows” (9-25-09)

“The 30-year fixed-rate mortgage (FRM) averaged 5.04 percent with an average 0.6 point for the week ending Sept. 24, unchanged from a week ago and down from 6.09 percent a year ago, Freddie Mac said in releasing the results of its Primary Mortgage Market Survey.”

Realty Times – “More Biz in a Tough Market: The One Question More Realtors Need to Ask” (9-25-09)

“go out of your way to position yourself as a problem solver. In other words, if someone says they’re interviewing several Realtors™, and she’d like to talk to you about the possibility of working together, go out of your way to understand her situation and add value where you can.”

Realty Times – “Simplifying The Landlord Job” (9-25-09)

“A new site called PayYourRent.com aims to ease the process, eliminate the headaches for landlords, property managers, and tenants, and help facilitate rents payments. ‘What we do is we set up a merchant account that will send funds directly from the tenant’s account right into the owner’s account. It’s all completely electronic. The owner will receive an email that the payment has been made and the money will be deposited into the account,’ says Kevin Eberly, CEO of PayYourRent.com.”

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The Norris Group Real Estate News Roundup 9/24/09

Thursday, September 24th, 2009

Today’s News Synopsis:

Research from the Construction Industry Research Board shows that the number of home building permits taken in August was down 5 percent from July. The NAR reports that existing home sales decreased by 2.7 percent from July to August. A study showed that foreclosure prevention laws in California have failed to significantly help home owners. The Federal Reserve intends to continue its stimulus plan and will continue to buy mortgage securities.

In The News:

CBIA - “Housing Production Slips Again in August, CBIA Announces” (9-24-09)

“According to statistics compiled by the Construction Industry Research Board (CIRB), homebuilders pulled permits for 2,911 total housing units in August, down 5 percent from July. When compared to August of last year, production in 2009 was way down.”

NAR - “Existing-Home Sales Ease Following Four Monthly Gains” (9-24-09)

“Existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 2.7 percent to a seasonally adjusted annual rate1 of 5.10 million units in August from a pace of 5.24 million in July, but remain 3.4 percent above the 4.93 million-unit level in August 2008. In the previous four months, sales had risen a total of 15.2 percent.”

MBA - “Commercial/Multifamily Mortgage Debt Outstanding Declines in Second Quarter 2009″ (9-24-09)

“The $3.47 trillion in commercial/multifamily mortgage debt outstanding recorded by the Federal Reserve was a decrease of $9.9 billion or 0.3 percent from the first quarter 2009. Multifamily mortgage debt outstanding grew to $914 billion, an increase of $6 billion or 0.7 percent from first quarter.”

San Francisco – “Foreclosure-mediation laws not much help” (9-24-09)

“Laws in California and other states requiring mortgage companies to talk to troubled homeowners before foreclosing on them are toothless, according to a study released Wednesday.”

Mercury News – “‘Equity share’ loans of up to $75K offered to Silicon Valley homebuyers” (9-24-09)

“Under the ‘equity share co-investment,’ or ESCO program, The Housing Trust will advance as much as $75,000 to first-time home buyers who make up to 140 percent of the region’s area median income, or about $147,700 a year for a family of four. The money will be used to match a buyer’s 5 percent to 15 percent down payment.”

Bloomberg - “Luxury Hotels in U.S. Risk Default as $850 Rooms Remain Empty” (9-24-09)

“Loans secured by more than 1,500 hotels with a total outstanding balance of $24.5 billion may be in danger of default, according to Realpoint LLC, a credit rating company that tracks commercial mortgage-backed securities. Some of the biggest loans, put on the company’s watch list because of late payments, decreasing occupancies or cash flow, were made to luxury properties where rooms can cost more than $850 a night.”

Bloomberg - “Fed Signals Growth Return Not Enough to End Stimulus” (9-24-09)

“While the economy has ‘picked up,’ the central bank’s planned asset purchases will help ensure a ‘gradual return to higher levels of resource utilization,’ the Fed’s Open Market Committee said yesterday. Policy makers committed to complete their $1.25 trillion in purchases of mortgage securities and extended the end-date of the program to March from December.”

Bloomberg - “New Home Sales in U.S. to Climb 30% in 2010, Goldman Sachs Says” (9-24-09)

“New U.S. home sales may jump 30 percent next year, buoyed by low mortgage rates and a ‘greater than 50 percent probability’ that Congress will extend a tax credit for first-time buyers, Goldman Sachs Group Inc. said.”

Orange County Register – “O.C. property investor seeks bankruptcy rescue” (9-24-09)

“Unable to pay off construction loans coming due, office developer Mammoth Equities LLC has filed four bankruptcy cases seeking to rescue half its properties from foreclosure. The San Juan Capistrano developer owes nearly $68 million on loans that came due or are about to come due on five California office buildings it owns, said senior Mammoth officer Joe Ryerson. He estimated that the collective value of those properties is about $41 million today.”

Inman - “Facebook app promotes property listings” (9-24-09)

“That caveat out of the way, CenterStage looks promising for spreading property listings information on Facebook. If you aren’t using Facebook, then CenterStage is a no-go. Though perhaps you could use it to jump-start a Facebook campaign.”

Looking Back:

One year ago, the NAR reported that existing home sales fell by 2.2 percent. Research from the CBIA showed that housing permits were down 61 percent from the previous year. The MBA’s mortgage application survey showed that mortgage applications fell by 10.6 percent from the previous week.

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116-TNG Radio – David Rosnick 4-4-09

Friday, April 3rd, 2009

David-Rosnick

David Rosnick

Economist at the Center for Economic and Policy Research

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Bruce Norris is joined this week by David Rosnick, Economist at the Center for Economic and Policy Research.

Bruce talks about reading several years back that the Baby Boom generation was worth trillions and in great position to retire. David says the Baby Boomers have a fair amount of wealth and every generation typical has grown in wealth over the years. Baby Boomers, however, have been recently hit by the stock market and housing bubble that has caused some great losses.

In a recent report written by David and his team on this very issue, it says the Baby Boom situation looks much bleaker than 8 months ago. Bruce asks how they are coping with this fact. David says the Baby Boom generation has been witnessing the trend for two years. Last summer the savings rate started to increase and consumption has really slowed. The full effects of this contraction in spending and consumption has yet to fully hit the market. David says he’d like to see the government continue the money stimulus and look into subsidizing shorter work weeks, vacation, and sick leave.

Bruce asks if the wealth members of the Baby Boom generation would be harder hit by stock prices and the poorer be more affected by the real estate declines. David says the wealthiest are indeed more likely to own stock but are also more likely to be home owners. The bottom 1/5 of households could get completely wiped out with foreclosure.

Bruce asks David how he feels about recent solutions presented by the government such as the cramdown. David says he’s not so concerned but would like to see the homes go back to the bank and perhaps the individuals getting to stay in their homes and pay market rent. David says the bank doesn’t want to try to take it over and sell the property in this market. By keeping the homeowner in the home, it’s a win-win situation. Bruce brings up that the prices are very skewed in California. David says the bank just needs to decide how they want to take the loss. By not making this mandatory the banks would not participate as they are being a stubborn. Bruce asks how the lenders would react if this was made mandatory. How much would then be available for lending? David says there will always be solid prospects and that it wouldn’t really matter.

Bruce asks David about people stating their income and if they should be held responsible for that. David says that lenders were more responsible for that as he understands it. When real estate was headed up, it didn’t matter and no one cared. This is an example of an unsustainable home bubble that people refused to acknowledge.

David created a housing cost calculator which compares owning vs. renting the same home. Bruce asks if the price to own is much more than renting. David says historically it hasn’t been that different. David says when it went way out of whack that it was almost guaranteed that there would be loss.

Bruce asks if bubbles ultimately benefit people. David says bubbles that are uncontrolled is a problem. Bruce says many were refinancing and spending the money. There must have been a short-term streak of wealth. David says people thought they were very wealthy and savings rates went way down.

Bruce asks if there should be some acceptance of risk when any investment is made. David says experts gave people a lot of bad advice and since there was a lack of an alternative voice, it wasn’t very fair. People were told that real estate was the way to wealth. Bruce asks if people should absorb that risk or if there is a backstop to save them. David says Social Security and defined benefit plans act as that backstop. Personal savings is only one alternative. David explains the difference between defined benefit plans versus defined contribution plan. Bruce says that guarantees of payout were as good as investments made. David says the bubble market really hurt these potential retirement funds. When things get so out of line, people make bad planning decision.

Bruce asks if defined benefit plans for cities like Vallejo that just declared bankruptcy will ever see that money. David says in California he’s not sure who is getting what. Bruce says that defined benefit programs typically have a projected return rate and almost all have seen losses. David says that those promises will most likely not be able to be upheld because of the economy.

Bruce asks David is he is afraid for seniors as they retire. The Baby Boomers encompasses the 45-64 age range. The older baby boomers are about to retire so there’s a little more concern there. The younger Baby Boomers have a little more time to get back on track. Overall, they aren’t looking good so far. He says the lower 1/5 could be completely wiped out because of foreclosure.

Bruce asks if we should be worried about the Social Security Program since the baby Boomers will have less population paying for benefits as they retire. He says it’s nothing urgent but today the health care costs are getting worse and are more of an issue as Medicare and Medicaid need to be helped. David says socialized medicine might be a possibility since it’s worked in other countries. We have the best medicine but the worst delivery system.

In David’s report entitled “The Wealth of the Baby Boom Cohorts After the Collapse of the Housing Bubble,” David says the net worth of Baby Boomers that owned a home was less than those that were renters in 2009 which is surprising. David says wealth isn’t just in equity and the housing and stock bubble real caused a problem.

More on this report at the Center for Economic and Policy Research at cepr.net. Next week join us as we welcome back Tommy Williams, co-founder of Williams and Williams auction company.

David Rosnick is an Economist at the Center for Economic and Policy Research in Washington, DC. He has a Ph.D. in Computer Science from North Carolina State University and an M.A. in Economics from George Washington University. He has written numerous policy papers including “The Burden of Social Security Taxes and the Burden of Excessive Health Care Costs” with Dean Baker, March 2005; “Poor Numbers: The Impact of Trade Liberalization on World Poverty”, with Mark Weisbrot and Dean Baker, November 2004; “NAFTA at Ten: The Recount,â€� with Mark Weisbrot and Dean Baker, March 2004; and “Black Swans, Conspiracy Theories, and the Quixotic Search for Fraud: A Look at Hausmann and Rigobon’s Analysis of Venezuela’s Referendum Vote” with Mark Weisbrot and Todd Tucker, September 2004; and “The Forty-Four Trillion Dollar Deficit Scare,” with Dean Baker, September 2003.

He is the architect of a growing number of calculators including CEPR’s Accurate Benefits Calculator which compares current-law Social Security benefits to the Bush Plan based on “Progressive Indexing.” He also created the Housing Cost Calculator, which compares the cost of owning a home relative to renting for a potential new homeowner. It gives homebuyers a sense of how the current bubble in the housing market might affect them. Prior to joining CEPR, he worked as a Research Associate (postdoc) at the North Carolina State University at Raleigh Department of Computer Science.

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