The Norris Group Blog

Today’s News Synopsis:

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

In The News:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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