A survey shows that 45% of homebuyers think they should always buy mortgage discount points. Freddie Mac ended the first three months of the year with a positive net worth of $1.2 billion, and will need no additional funding from Treasury for the first quarter. Automatic Data Processing Inc said the private sector added 179,000 jobs in April.

In The News:

Mortgage Bankers Association – “Latest MBA Weekly Survey Shows Increase in Mortgage Applications, Driven by Refinances” (5-4-11)

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

Washington Post – “House GOP set to move ahead with legislation to limit new consumer bureau” (5-4-11)

“The political tug of war over the new Consumer Financial Protection Bureau will enter another round Wednesday, when House Republicans forge ahead with legislation aimed at curbing the fledgling watchdog’s powers even before it officially opens its doors in July.”

Sign On San Diego – “Quiz: Homebuyers lack mortgage know-how” (5-4-11)

“Forty-five percent of those surveyed think they should always buy mortgage discount points, which are prepaid interest. The fact is, the decision hinges on how long you plan to own the property. It would not be worthwhile to buy them in certain cases.”

Bloomberg - “U.S. May Pursue More Lenders After Suing Deutsche Bank on Faulty Mortgages” (5-4-11)

“The U.S. Department of Justice may pursue claims against other lenders after suing Deutsche Bank AG for more than $1 billion, alleging the firm lied while arranging federal insurance on faulty mortgages.”

DSNews - “Trepp Reports Jump in CMBS Delinquencies to New Record-High” (5-4-11)

“The New York-based research firm says the percentage of loans 30-plus days delinquent, in foreclosure, or REO climbed 23 basis points last month to hit 9.65 percent. That number is, once again, the highest reading in the history of the CMBS market, according to Trepp.”

DSNews - “Freddie Mac Turns $676M Profit in Q1, Needs No Taxpayer Funding” (5-4-11)

“The nation’s second largest mortgage company reported Wednesday that it pulled in net income of $676 million during the first three months of this year. Freddie Mac closed the quarter with positive net worth of $1.2 billion. As a result, no additional funding from Treasury was required for the first quarter of 2011.”

Housing Wire – “Private sector added 179,000 jobs in April” (5-4-11)

“Automatic Data Processing Inc. reported the private sector tacked on 179,000 jobs last month. The payroll giant conducts the monthly survey, which excludes federal jobs, in conjunction with Macroeconomic Advisers.”

Housing Wire – “FDIC study blames mortgage servicing mess on big banks” (5-4-11)

“The Federal Deposit Insurance Corp. took a look into the foreclosure operations at the largest mortgage servicers and found significant breakdowns at almost every stage of the process. However, these issues are largely isolated to the servicers that hold the largest share of the mortgage finance business.”

Housing Wire – “Revival in commercial real estate, mortgage finance needs more jobs” (5-4-11)

“absent strong improvement in U.S. job markets and demand for business space, the nation’s commercial real estate sector will likely continue its slow, bifurcated recovery over the coming year — with top urban markets outpacing recovery in secondary, non-gateway markets.”

Looking Back:

One year ago, pending home sales increased by 5.3 percent in February. Statistics from PMI indicated the home price reduction risk was significantly decreasing across most U.S. regions. The percentage of loans 30+ days delinquent, in foreclosure or real estate owned (REO) status increased to 8.02 percent in March 2010. McGraw-Hill reports the residential sector is up 35% in the first three months of 2010 compared to the same time one year ago.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

Existing home sales dropped 9.6%, according to the NAR. A San Joaquin County investor pleaded guilty to rigging foreclosure auctions, and is now facing a federal prison sentence and $1 million in fines. LPS claims the current mortgage delinquency rate is 8.8%.

In The News:

NAR - “February Existing-Home Sales Decline following Sustained Gains” (3-21-11)

“Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 9.6 percent to a seasonally adjusted annual rate of 4.88 million in February from an upwardly revised 5.40 million in January, and are 2.8 percent below the 5.02 million pace in February 2010.”

Housing Wire – “California pending home sales spike in February” (3-21-11)

“The California Association of Realtors’ Pending Home Sales Index rose 20.6% in February to 112.1 from 93 in January. The index uses 2008 housing market activity as a baseline because it represents a more normal level of purchases and sales. An index reading of 100 corresponds with activity in 2008.”

Recordnet.com – “Guilty plea in home auction rigging” (3-21-11)

“A San Joaquin County investor pleaded guilty Friday in federal court to charges he illegally rigged bids with others at home foreclosure auctions in Stockton, the U.S. Attorney’s Office in Sacramento reported. Gregory L. Jackson is the sixth defendant so far to plead guilty in the federal probe. He faces a federal prison sentence and $1 million in fines under terms of the negotiated plea deal.”

Orange County Register – “‘Normal’ new-home market is 3-5 years off” (3-19-21)

“We decided to add Southern California (especially the O.C. market) into our business plan since we believe this market has bottomed. In today’s home building market, there is an imbalance between used and new homes in Orange County as a limited amount of new homes have been built over the last five years.”

Orange County Register – “Demand for O.C. homes at 7-month high” (3-21-11)

“Demand, the number of new pending sales over the past month, increased by 225 in just two weeks and now totals 2,982. At the beginning of the year, demand was at 1,856 pending sales. Since then, it has increased by 61%. Last year at this time there were 288 additional pending sales, propped up by the $8,000 first time homebuyer tax credit.”

Housing Wire – “Mortgage delinquency rate drops 18.4% annually: LPS” (3-21-11)

“Out of the 40 million loans evaluated by LPS last month, 8.8% qualified as delinquent (30 days or more overdue). That delinquency rate is down 1.2% from January and 18.4% from February 2010.”

Housing Wire – “Stress tests suggest economy may slide back into crisis: IRA” (3-21-11)

“Recent stress tests conducted by the Federal Reserve suggest the banking industry and economy ‘may be sliding back into crisis’ because of deflation in the housing sector, according to a new report from Institutional Risk Analytics.”

Housing Wire – “Moody’s expects temporary GSE exemption from mortgage risk rules” (3-21-11)

“Analysts at Moody’s Investors Service said Monday regulators may exempt Fannie Mae and Freddie Mac from upcoming mortgage risk retention rules – at least temporarily.”

Housing Wire – “Distressed property sales decline on foreclosure issues facing servicers” (3-21-11)

“Overall, investors stepped up their homebuying game last month even as distressed property sales fell, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The report shows the HousingPulse Distressed Property Index — a barometer of distressed home sales — fell to 47.3% in February from 49.6% in January.”

Bloomberg – “Treasury to Sell Mortgage-Backed Holdings at Up to $10 Billion Per Month” (3-21-11)

“The U.S. Treasury Department plans to wind down its $142 billion portfolio of mortgage bonds guaranteed by Fannie Mae and Freddie Mac by selling as much as $10 billion per month.”

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

Leslie Appleton-Young Vice President of C.A.R. (Full Bio)

This week Bruce is joined by Leslie Appleton-Young. She is the Vice President and Chief Economist for the California Association of Realtors; a statewide trade organization with over 165,000 members. Leslie directs the activities of the association’s member information groups, she oversees the analysis of housing markets and broker industry trends, member communications and member development activities.  She is well known as a speaker in the California real estate community.

Leslie started with CAR in 1984. At that time, California was in the middle of a bad cycle. The biggest difference between our recent downturn and downturns of the past was the change in median home prices. In the early 80s, the median home price flattened when transactions dropped over 60%. In the early 90s, the market contracted 25% and home prices did drop, but the biggest single annual decline was less than 5%. In our recent downturn, the statewide median home price dropped 59% within one year.

In earlier cycles, sellers had equity, so if the market was doing poorly, they would rely on their equity to help them through the bad times. This time around, the flood of non-discretionary sellers overwhelmed the market, and caused the sharp descent in prices.

Surveys from ThinkTank and Fannie Mae show that homeownership is still sought after. The demand for housing from first time buyers and investors is still robust. The idea of owning a home has not been too badly damaged, however, the buyer’s ability to gauge market timing has. People are too worried that prices have not bottomed, so they are waiting until prices stabilize. Leslie also thinks people now realize that buying a home is not going to make them rich quickly.

In 2006, a lot of people were buying homes because they wanted more room, nicer neighborhood, and better school districts. Leslie believes most home buyers are not buying for these reasons any more.

1 in 4 mortgages are underwater today. Leslie believes this will impact the strength of the housing market over the next couple years.

In 2005, net cash to seller was a median of $220,000. Last year it was $35,000. In the distressed sales market, the net cash to seller was around negative $143,000. This means many of those people will not have the necessary cash to buy a home in the near future. A survey showed that only 33% of sellers were planning on re-buying a home in the near future.

When we released 500,000 home sales in 2010, that means we have to manufacture 250,000 buyers that aren’t showing up out of natural causes. Leslie is very glad we have investors to help create buyers for those sales.

Approximately 23% of California home sales are bought for cash. In the luxury markets, those numbers are significantly higher. Bruce read a survey stating that 60% of Beverly Hills homebuyers use all cash in their purchase. Many of the people buying in that area are global home buying clients, and California looks very attractive and affordable to them.

Leslie believes the homebuyer tax credits were the most beneficial of the real estate programs to come from the government. The $8,000 tax credit was very effective at encouraging buyers to enter the market. It also encouraged investors to get their properties ready for potential buyers.

Leslie believes the home market will not receive much federal aid in 2011. Also, the reduction in the $729,000 loan limit will occur this year. She believes the government will go back to a $625,000 loan limit. The government’s efforts to wind-down Fannie and Freddie means financing will be more expensive. However, Fannie and Freddie are not currently expected to be taken away quickly, because the government believes that would negatively impact the economy. Because financing will become more expensive once Fannie and Freddie leave, people will be encouraged to buy sooner rather than later.

Leslie cannot imagine a scenario where interest rates will ever be lower than they are now. Bruce does not think monthly payments for housing will ever be lower. Down payment requirements are going up as well as credit score requirements. This should make people rush to buy.

In January of 2011, there was a 6.7 months supply of homes in the California market. This means that at the pace in which homes were selling during January, it would take over six months to get rid of the entire inventory. The typical average for inventory supply is 6 and 7 months, so that is actually fairly balanced. However, when you break the inventory down by price category, properties priced above 1 million have a 13.8 months supply, $750,000 to $1 million properties have a 9 month supply, $500 to $750 properties have a 7 month supply, $300 to $500 properties have a 6.5 month supply, and under $300,000 is 6.3 months supply. This is a critical piece of information for buyers and sellers.

The most expensive prices have the most discretionary sellers. The more expensive the home, and the more expensive the community, the lower number of distressed sales there will be. Many higher priced sellers also have a lot of equity in their home.

If sellers are discretionary then they are not being forced out of their home. Short sales are considered to be non-discretionary sales. That category is expected to grow considerably. Realtors are hoping lenders will be encouraged to look at short sales in a more positive light. Lenders typically get a higher price for short sales than if the sale goes through foreclosure.

The 6.7 months of inventory does not account for inventory that should be on the market but is not. We have a large number of delinquent properties that should be in foreclosure and entering the market, but are not.

Leslie’s website is www.car.org

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

Today’s News Synopsis:

In The News:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

The NAR said existing home sales rose 2.7% in January. The FHA’s REO inventory has increased 47% year over year.  A California judge upheld the rights of the Mortgage Electronic Registration Systems to the trust deed, granting MERS the right to foreclose. A Federal Reserve economist predicts the government will soon provide an alternative to the national homebuyer tax credit

In The News:

NAR - “Existing-Home Sales Rise Again in January” (2-23-11)

“Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 2.7 percent to a seasonally adjusted annual rate of 5.36 million in January from a downwardly revised 5.22 million in December, and are 5.3 percent above the 5.09 million level in January 2010.”

Mortgage Bankers Association – “Mortgage Applications Increase in Latest MBA Weekly Survey” (2-23-11)

“mortgage loan application volume, increased 13.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 14.8 percent compared with the previous week. The Refinance Index increased 17.8 percent from the previous week. The seasonally adjusted Purchase Index increased 5.1 percent from one week earlier.”

Inman - “New CoreLogic market reports incorporate MLS data” (2-23-11)

“CoreLogic’s Listing and Market Activity Report — the first in a series of new products the company is developing to generate revenue from the data it receives from cooperating MLSs — provides key information including updated listings, comparable sales, property valuations, days on market, price trends and inventory.”

Housing Wire – “FHA REO inventory up 47% from one year ago” (2-23-11)

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

Housing Wire – “Freddie Mac finalizing major revamp of mortgage servicers” (2-23-11)

“Freddie Mac is in the final stages of changing how its 1,400 mortgage servicing companies handle its loans, and will implement a new scorecard measuring their performance. Furthermore, the government-sponsored enterprise is announcing that it will case review the way servicers treat delinquent borrowers, in order to ensure quality control.”

Housing Wire – “Bank failures hit 18-year high in 2010″ (2-23-11)

“The Federal Deposit Insurance Corp. held 884 financial institutions on its ‘Problem List’ as of the end of 2010, and the 157 insured banks that failed was the highest amount since 1992.”

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

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

Housing Wire – “Fannie Mae to start grading mortgage servicers” (2-23-11)

“Fannie Mae will launch a new program for evaluating the performance of its mortgage servicers over the next 30 days. The Servicer Total Achievement and Rewards (STAR) program will gauge how servicers support the housing recovery and keep homeowners out of foreclosure.”

Housing Wire – “Fed economist pushes homebuyer tax credit alternative” (2-23-11)

“A Federal Reserve Bank of Cleveland research economist predicted Wednesday that the government would soon provide an alternative to the national homebuyer tax credit that expired in April.”

Bloomberg - “Existing Home Sales in U.S. Probably Fell in January From Seven-Month High” (2-22-11)

“Sales of U.S. previously owned homes probably dropped in January from a seven-month high, showing any recovery will take time to develop, economists said before a report today. Purchases decreased 1.1 percent from December to a 5.22 million annual rate, according to the median forecast of 73 economists surveyed by Bloomberg News.”

Looking Back:

The NAR predicts that the commercial real estate market will not recover until after 2011. In California, single family home sales decreased by 3 percent during January. The Standard & Poor’s index shows that national home prices increased slightly during December. 702 banks made the ‘Problem List’ for the FDIC in 2009.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

The CBIA reports total building permits issued during 2010 increased 23% from 2009. Statistics from Trulia show that owning a home is cheaper than renting one in 72% of the largest cities in the United States. Commercial property values rose 0.6% in November, according to Moody’s.

In The News:

Los Angeles Times – “Estimate of mortgage interest tax deduction’s effect on federal deficit is lowered” (1-23-10)

“$88 billion less in revenue losses are now projected over the next three fiscal years — than the committee estimated early in 2010.”

CBIA - “It’s Official: 2010 is Second-lowest Year on Record for Homebuilding in California” (1-24-10)

“CBIA said just 44,601 permits were issued statewide last year for new homes, apartments, condominiums and townhomes, up 23 percent from 2009, but down 31 percent from 2008, which had held the distinction of the second-lowest total on record with 64,962 permits issued. Records began being kept in 1954 with the lowest yearly total set in 2009 with 36,421 permits issued.”

Inman - “Cheaper to buy than to rent in 72% of largest U.S. cities” (1-24-10)

“Despite the rising number of renters across the country, it is cheaper to buy a home rather than rent one in 72 percent of the 50 largest cities in the U.S., according to an index released by real estate search and marketing site Trulia.”

New York Times – “Mortgage Giants Leave Legal Bills to the Taxpayers” (1-24-10)

“Since the government took over Fannie Mae and Freddie Mac, taxpayers have spent more than $160 million defending the mortgage finance companies and their former top executives in civil lawsuits accusing them of fraud.”

Housing Wire – “Moody’s CPPI rose 0.6% for November, down 4.3% since May” (1-24-10)

“The price of commercial property rose 0.6% in November, marking the third-consecutive month of gains following sharp declines for the previous three months, according to Moody’s Investors Service.”

Housing Wire – “Campbell Surveys: Strong distressed property sales bookend robo-signing debacle” (1-24-10)

“First-time homebuyer activity remained relatively strong last month, though still near historic lows, as purchasers rushed to close transactions before interest rates rise further, according to housing industry consultancy group Campbell Surveys. In December, the firm’s HousingPulse distressed property index shows these transactions make up 47.2% of the market, up from 44.5% in November and nearly matching the 47.5% peak reached in September.”

Housing Wire – “JPMorgan: Annual homes sales must average 5.5 million to absorb liquidations” (1-24-10)

“JPMorgan Securities said existing home sales need to average about 5.5 million units a year to absorb a projected 2.25 million to 2.5 million in liquidations.”

Orange County Register – “Demand for O.C. homes jumps 10%” (1-24-10)

“Demand, the number of new pending sales over the prior month, increased by 10% in the past two weeks, adding an additional 194 homes, and now totals 2,154 pending sales. That’s virtually identical to 2009 when it posted 2,146. Last year, there were 393 additional pending sales, but everybody was poised to take advantage of the $8,000 first time home buyer tax. From here, expect demand to continue to improve as the market prepares to enter the spring market, the strongest time of the year for Orange County housing.”

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

UCLA economists expect unemployment to remain above 10% until the end of 2012. TransUnion predicts the national mortgage delinquency rate could fall below 5% in 2011. A survey from RealtyTrac shows 60% of Americans believe housing will not recover for another 2 years. According to HOPE NOW, 1.54 million permanent mortgage modifications were completed in the first 3 quarters of this year.

In The News:

The Press Enterprise – “Economic recovery to stay muted” (12-7-10)

“Unemployment in California should start to decline next year but is likely to remain above 10 percent until the end of 2012, an economic forecast released today found. The quarterly forecast from UCLA’s Anderson School of Management suggests that the state will see something in 2011 that has been lacking for more than two years: job growth.”

Wall Street Journal – “U.S. Mortgage Delinquency Rate Could Fall to 5% in ’11″ (12-7-10)

“The percentage of U.S. consumers who are delinquent on their mortgages could fall to about 5% by the end of 2011, from an expected 6.2% at the end of this year, according to a leading credit bureau. Even so, the proportion of consumers who are 60 or more days overdue on their mortgages would still be sharply higher than the historical range of 1.5% to 2%, according to TransUnion LLC, which analyzed about 27 million randomly selected consumer records from its database.”

Housing Wire – “JPMorgan sees GSE prepayment rates slowing in January” (12-7-10)

“The prepayment speeds on Fannie 15-year mortgages increased 5% last month from October, while Freddie prepayments climbed 8%, according to JPMorgan.”

Housing Wire – “Private mortgage modifications reach 1.5 million to date, 125,000 in October” (12-7-10)

“Hope Now, a private sector mortgage alliance, said the mortgage industry has completed more than 1.54 million permanent loan modifications for homeowners from January through October, as foreclosure suspensions affected foreclosure sales and starts.”

Housing Wire – “American homebuyers suffer from a crisis of faith: survey” (12-7-10)

“A housing conference call organized by real estate listing websites, Trulia and RealtyTrac, revealed 48% of potential homebuyers in America have lost faith in the ability of the mortgage industry and 24% percent lost faith in the ability of the government to manage said market.”

Bloomberg – “Half of Americans Say Home Recovery at Least Two Years Away” (12-7-10)

“Almost six in 10 U.S. adults say a housing recovery is at least two years away, and more than a third say flawed lender practices are partially to blame, according to a survey by Trulia Inc. and RealtyTrac Inc.”

Orange County Register – “Chapman says prospects dim for housing” (12-7-10)

“Although Chapman University foresees modest price gains and increased homebuilding in Orange County next year, lingering problems from the housing bust will continue to dog the market. The number of homes for sale will be large, defaults and foreclosures will grow and consumer anxiety will be high, according to Chapman University’s 2011 economic forecast.”

Looking Back:

One year ago, the MBA reported that delinquency rates increased during the third quarter for most mortgage investor groups. Bernanke claimed the recovery would continue for at least a year, but that the U.S. still had  some trouble to overcome. Six banks were shut down Friday, which would cost the FDIC a total of $2.384billion.

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 200 podcasts in our free investor radio archive.

A Rasmussen survey finds that 31% of homeowners expect their home prices to fall over the next year, while 50% expect their home values to increase over the next 5. According to the NAHB, builder confidence increased for the first time in 5 months. The Federal Reserve Bank of New York reports over 66%  of small businesses experienced declines in sales and revenue during the first half of the year. Robert Curran believes demand for housing will not return any earlier than late winter.

In The News:

MSNBC - “Qualified? Home lenders saying not so fast” (10-17-10)

“Banks are a lot pickier today. To protect themselves from defaults, they have sharply increased underwriting requirements — and paperwork — needed to get a loan. They’ve adopted less agreeable views on credit cards and other forms of revolving debt, investor properties and income history.”

Mish’s Global Economic Trend Analysis – “32% of Homeowners Expect Home Prices to Drop Next Year, Highest Short-Term Pessimism Ever; Recognition Phase Underway” (10-16-10)

“A new Rasmussen Reports survey finds that 32% expect the value of their home to decrease over the next year, the highest finding since Rasmussen Reports began asking the question regularly in December 2008. Just 21% believe the value of their home will go up over the next year.”

NAHB - “Builder Confidence Improves in October” (10-18-10)

“Builder confidence in the market for newly built, single-family homes rose three points to 16 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for October, released today. This was the first improvement registered by the HMI in five months, and returns the index to a level last seen in June of this year.”

Housing Wire – “Fannie issues appraiser guidance ahead of looming HVCC replacement” (10-18-10)

“Fannie Mae released appraiser independence guidance as the Federal Reserve continues work on a replacement for the Home Valuation Code of Conduct due in October. When President Obama signed the Dodd-Frank bill into law in July, regulators had 90 days to write new rules replacing the HVCC.”

Housing Wire – “NY Fed study shows limited lending to small businesses” (10-18-10)

“Data from a recent study by the Federal Reserve Bank of New York showed more than two-thirds of small businesses experienced declines in sales and revenue during the first half of the year, implying a broad weakening of finances in the industry. But only half of loan applicants were approved.”

Housing Wire – “Homebuyer tax credit casts shadow on mortgage market until next year” (10-18-10)

“During a Fitch Ratings teleconference Monday titled: Can U.S. Housing ‘Normalize’?, lead homebuilding analyst Robert Curran put the earliest return of demand for homes at late winter, with any substantial improvement not expected until the spring.”

Housing Wire – “Home construction numbers show a little optimism in residential building” (10-18-10)

“Residential building increased 6% in September to a seasonally adjusted annual rate of $116.7 billion, according to McGraw-Hill Construction.”

Bloomberg - “Obama’s Foreclosure Inaction Is Katrina Redux: Kevin Hassett” (10-18-10)

“Delayed foreclosures and litigation regarding how they are carried out might cost U.S. lenders $10 billion, according to one new estimate.”

Bloomberg - “Bank of America Plans to Revive Foreclosure Process on 102,000 U.S. Homes” (10-18-10)

“Bank of America Corp., the largest U.S. bank by assets, said it will start resubmitting foreclosure affidavits next week in 102,000 cases in which judgment is pending.”

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.

Today’s News Synopsis:

9 of the nation’s top 20 most stressed housing markets are in California. The Commerce Department reports construction spending increased 0.4 percent in August. Multiple housing analysts predict evictions to decrease dramatically. President Obama signed the bill to extend higher-loan limits for GSEs.

In The News:

Inman - “Bill targets private transfer fees” (10-1-10)

“Private transfer fee covenants typically allow a third party, such as a developer, to collect a fee equal to 1 percent of a property’s sale price every time its sold. The covenants are often in place for as long as 99 years.”

Wall Street Journal “Which Cities Face Biggest Housing Risks?” (10-1-10)

“Within more than 500 metro areas, the top 20 most stressed include nine in California and six in Florida, where the housing bust has been particularly acute. Among the most populous cities, Miami tops the list, followed by California’s Inland Empire, Los Angeles and San Diego.”

Sacramento Bee – “August construction spending up 0.4 percent” (10-1-10)

“Construction spending edged up 0.4 percent in August following a 1.4 percent drop in July, the Commerce Department reported Friday. While spending on government projects rose 2.5 percent, spending on private construction projects dropped to the lowest level in 12 years.”

New York Times – “Foreclosures seen slowing as document flaws emerge” (10-1-10)

“Evictions are expected to slow sharply, housing analysts said, as state and national law enforcement officials shine a light on questionable foreclosure methods revealed by two of the country’s biggest home lenders in the last two weeks.”

Housing Wire – “Obama signs bill to extend higher-loan limits for GSEs” (10-1-10)

“President Obama signed a bill into law Thursday that extends higher-loan limits for the government sponsored enterprises, Fannie Mae and Freddie Mac, for one year. The provisions under H.R. 3081 also allocate $20 billion to the Federal Housing Administration General and Special Risk Insurance Funds to continue making loans through the end of 2010.”

Housing Wire – “Foreclosure robo-signers put homebuyers’ tax credit at risk” (10-1-10)

“Homebuyers who were set to close on the purchase of a foreclosed home may not qualify now for the homebuyer tax credit after lenders suspended those sales in 23 states, real estate agents tell HousingWire.”

Housing Wire – “California AG demands JPMorgan Chase halt foreclosures” (10-1-10)

“California Attorney General Jerry Brown is the latest to call for JPMorgan Chase (JPM: 38.81 +1.97%) to halt foreclosures in the state. California is not one of the 23 states Ally Financial, formerly GMAC, and JPMorgan Chase suspended foreclosure sales in. Brown already ordered Ally to suspend foreclosures in his state.”

Housing Wire – “Fannie, Freddie instruct servicers to review foreclosures” (10-1-10)

“Fannie Mae and Freddie Mac will provide instructions to servicers Friday to review foreclosure processes, ensuring each is in compliance with state law. Major lenders and servicers are reviewing foreclosure processes following announcements from Ally Financial, formerly GMAC Mortgage, and JPMorgan Chase suspended foreclosure sales and cases in 23 states when faulty documentation was detected. Employees at those two companies were signing affidavits without knowledge of the documentation or a notary present.”

Housing Wire – “Amherst: Principal reductions could ‘re-equify’ 11m in imminent default” (10-1-10)

“The housing market is quite fragile and if government policy doesn’t change 20% of American homeowners — roughly 11 million — are in danger of losing their home, according to Amherst Mortgage Insight.”

Bloomberg - “FDIC Plans to Sell $1.12 Billion in Property Loans Seized in Bank Failures” (10-1-10)

“The Federal Deposit Insurance Corp. plans to seek bids for about $1.12 billion of commercial and residential real estate loans as part of the agency’s sale of assets seized from failed banks.”

Looking Back:

One year ago, the NAR’s Pending Home Sales Index showed that sales increased by 6.4 percent in August. Research from Deutsche Bank Securities showed that 26 percent of borrowers owed more than their home was worth.  A survey displayed that realtors were in favor of expanding the $8,000 dollar tax credit. Regulation Z changes came into effect.  Realtors were interested in expanding first-time tax credit to repeat buyers.

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.

Loan originations increased 25% from 2008, according to the Federal Financial Institutions Examination Council. The Commerce Department reports new home and apartment construction rose 10.5% last month to a seasonally adjusted annual rate of 598,000. Zillow claims interest rates fell again to 4.25%.

In The News:

San Francisco Chronicle - “More mortgage loans – first time since ’05 peak” (9-21-10)

“U.S. mortgage lending rose for the first time in four years in 2009 as a decline in borrowing rates spurred refinancings, according to regulatory data. The number of loans originated climbed 25 percent to 8.95 million from 2008, according to a report released Monday in Washington by the Federal Financial Institutions Examination Council. Refinancings rose 66 percent to 5.76 million, while loans to purchase homes dropped 11 percent to 2.78 million. Home-improvement and multifamily-dwelling loans also fell.”

Los Angeles Times – “Home construction jumps 10.5% in August” (9-21-10)

“Construction of new homes and apartments rose 10.5% in August from July to a seasonally adjusted annual rate of 598,000, the Commerce Department said Tuesday. That’s the highest level since April.”

Housing Wire – “Flattened Ginnie roll rates in 2Q could mean slower prepays: Credit Suisse” (9-21-10)

“The amount of Ginnie Mae-held loans rolling from 60 days to 90 days delinquent slowed in the second quarter, after spiking last year. According to research from Credit Suisse, this could signal slower involuntary prepayments going forward. The Ginnie Mae share of agency fixed-rate issuance dropped to 33% in August, from 36% in July. Its total 30-year gross and net issuances in August were $28.8 billion and $22.7 billion respectively, both down from $31.4 billion and $15.2 billion in July.”

Housing Wire – “CRE investment gearing up, but analysts don’t expect comeback until 2012″ (9-21-10)

“Trouble in the commercial real estate sector is not likely to be resolved until the economy picks up and job creation boosts demand for office, retail, hotel and other commercial properties, according to a Standard & Poor’s commentary released Monday. Even though the market research firm sees a trough in some CRE subsections, overall improvement isn’t expected until at least 2012.”

Housing Wire – “Zillow: 30-year, fixed rates reach another low at 4.25%” (9-21-10)

“Interest rates continue to set all-time lows, as Zillow reported its Mortgage Marketplace showed the average rate for a 30-year, fixed mortgage is currently 4.25%. The real estate information firm said the rate if down seven basis points from 4.32% the week earlier and at the lowest level since the report launched in April 2008.”

Housing Wire – “Home sales level off in August after recent plunge: RE/MAX” (9-20-10)

“August home sales dropped 0.5% after plummeting in July, according to real estate franchise RE/MAX. Home sales are still down 17.9% from August of last year. While some real estate agents reported increased showings, few have translated into closed transactions after the expiration of the homebuyer tax credit at the end of April.”

Bloomberg - “Fed Under Pressure Amid Confusion Over New Easing” (9-21-10)

“Federal Reserve officials are under pressure to avoid creating confusion among investors about any new effort to spur the U.S. recovery. The Federal Open Market Committee, which meets today, triggered a stock selloff with its last statement on Aug. 10 as investors took it as a signal the economy will falter. The Standard & Poor’s 500 Index tumbled 7.1 percent during the two weeks following the statement after reaching a three-month high on Aug. 9. The MSCI World Index fell 7.3 percent.”

Orange County Register – “CA. mortgage defaults climb 4th month in row” (9-21-10)

“Notices of default filings in California, the first step in the foreclosure process, climbed for the 4th month in a row in August, up by 16.6% from July and 16% from August, 2009, ForeclosureRadar reports. Homes in the state that went back to lenders were up 20% over July and 0.8% from August last year. Foreclosure sale cancellations were down 11%. The inventory of bank-owned homes went up 3.63% from last month and 8.28% year over year.”

Orange County Register – “Fed keeping cheap money policy” (9-21-10)

“the pace of recovery in output and employment has slowed in recent months. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. Housing starts are at a depressed level. Bank lending has continued to contract, but at a reduced rate in recent months.”

Inman - “Survey: Home-price outlooks sour in Q3″ (9-21-10)

“Ninety percent of real estate agents and brokers expect home prices to either fall or stay the same over the next six months, according to a survey by online real estate marketing site HomeGain. HomeGain conducted the survey from Sept. 7-14, with participation from more than 1,100 real estate agents and brokers and 2,600 homeowners nationwide.”

Looking Back:

One year ago, the federal government claimed it had plans to “tinker” with mortgage interest reporting. First American estimated that California had approximately $30 billion dollars worth of bad home loans. A review of over 24 million credit files showed that people with good credit scores were more likely to ‘strategically default’. Lennar Corp. forecasted a profitable year, despite a bad 3rd quarter.

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.