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207-TNG Radio – Norris Group 1-1-11

Friday, December 31st, 2010

Greg Norris

(Full Bio)

 

Craig Hill

(Full Bio)

The Norris Group

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This week Bruce is joined by Greg Norris and Craig Hill. Greg is the vice president of TNG Auctions. He buys properties and resells them. Craig has been working with Bruce for 15 years, and is responsible for speaking to all potential borrowers for The Norris Group.  

Craig’s business was extremely busy during the first part of the year, but it became even busier toward the end as inventory decreased.  Inventory is down 75% for REO buyers.  

When Bruce and Craig first met, most of the business revolved around doing seconds for owner occupants in financial trouble. At this point, most of Craig’s business involves doing short term loans for investors who buy fixer properties and long term loans for investors who hold rental properties. This business works well for TNG, because banks do not want to loan money out to investors. Banks have stopped making common sense loans. The TNG hard money program allows investors to own property at 9.9% interest. These properties often cash flow well, and the monthly payment is often cheaper than rent.  

Greg has discovered that most homes found at trustee sales involve smaller rehabs, newer homes and bidder areas. Trustee sales have made Greg’s job simpler, because the best deals for REOs usually involve heavier REOs. Discounts on trustee sales are smaller than on REO sales, and trustee sales are much more competitive.  

The number of people who attend trustee sales depends on the amount of inventory and the kind of inventory. The largest number of people Greg has ever seen at a trustee sale is 50 to 70, but out of that group only about 8 to 10 were big investors.  

10 years ago, trustee sales did not involve drop-bids, people had equity, and the investors involved in the business had been doing it for a long time. In some ways, Greg thinks the changes that have occurred in the trustee sales have made it more difficult for individual investors, but in other ways, it has become easier. Some of the individual investors are using their own money, so they don’t have another investor they need to repay, and they do smaller volumes. Sometimes you cannot compete with those people, because they are doing their own rehabs and they only buy a few properties every year. Some of them will buy properties for $20,000 over what Greg would be willing to pay. Because those buyers have limited research ability, Greg prefers to simply wait for those buyers to leave.  

Greg’s typical day begins by doing research on properties with open bids, and other properties that may potentially drop into open bid. At 9AM, he attends the sales. After he attends the sales, he deals with real estate and repair contracts, and then prepares for the next day’s sales.  

TNG’s loan clients have an unmatched level of experience in the industry, and Craig truly appreciates this. Craig’s phone is nearly constantly ringing. Many people discover TNG’s program through the internet, referrals, and from Bruce’s many speeches. TNG has gained a lot of respect for being a Southern California only real estate business and for being in the investment business for a long time. The most rewarding referrals come from people who have heard about TNG from multiple people, and decide to talk to us out of curiosity. Sometimes investors in the field are referred to TNG from agents who tell the investors, “If you can get a preapproval letter from The Norris Group, I will accept the offer.” That speaks more than any referral, because it means people know that TNG only approves of deals that are closable.  

This year, Craig was surprised by how much volume picked up on long-term financing. There is a huge demand for this. Bruce believes TNG’s long term financing will perform at a very high level, because a lot of inventory will come out. This kind of financing will not work as often with an owner occupant as it will with an investor. A lot of rehabs and lower priced properties are turning into buy and holds, rather than flips. Craig believes it is challenging for investors to flip $100,000 to $150,000 homes in this market, because there are many investors willing to buy and hold. An investor who can buy and hold can probably pay more, because they will receive a cash flowing property that will give them a profit for 10 more years.  

Bruce believes the 203K FHA loan program will probably return next summer. The problem with that program is that it probably takes 45 days to fund it. That makes the loan hard to sell, because a deal can be closed much quicker than that. In some cases, TNG will do a deal in 7 days or less. The speed of the deal makes a big difference in an investor’s willingness to buy.  

The automation of TNG’s website has helped Craig tremendously, because it allows him to handle phone calls and it has automated TNG’s loan process. TNG’s loan business has doubled over the last 12 months, and the time to fund those loans has gone down.  

Greg only gets to see the inside of his potential property purchases about 5-10% of the time. Only 10-15% of those properties are unoccupied.  

Two of Greg’s employers, Joe and Kenneth, are responsible for going to every house, evaluating repairs, and talking to the owners to determine whether or not they are difficult to deal with. When Joe and Kenneth are not viewing houses, they are doing construction contracts.  

Guessing the cost of a rehab when you cannot see inside requires a lot of experience. Greg often guesses based on the age of the home. For example, a house built in the 80s will probably require more cabinets than a house in the 1990s or the 2000s. You can learn a lot more about this if you come to a TNG bootcamp.  

Realtors are very pleased with TNG homes, because they are in great condition and they are standard sales. Realtors get tired of wasting their time with REO and short sales. Also, TNG is easy to deal with so long as they do their job. Bruce Norris once attended a Realtor group meeting in which an agent stood up and said, “We wish The Norris Group would buy every REO in town, because of how they deal with properties, and how they turn out.”  

Finding a reliable contractor can be tough. TNG has improved its business because of the relationships it has built with contractors over an extended period of time. If you keep your rehabs consistent, then your rehabs will get easier for your contractors, and they will have your same mentality. When a contractor has done enough repetitive jobs with you, they can advise you on how to best rehab your properties based on previous jobs.  

It takes a while to build a good investment team, and your team doesn’t just involve your contractor; you need to have lenders and escrow partners. All those people will help you get to the finish line faster, and if you aren’t going to get to the finish line, then you will be notified sooner, so you don’t waste time on the market. Dishonest lenders do not want their deals to fall out, and will lie with the hope that some money might show up. Greg tries to make sure that he is working with a serious buyer by making them spend money to finish the deal.  

When Greg first started doing trustee sales, a lot of people were using all cash and conventional loans. A lot of people got fooled into feeling that they had to buy because of the government incentive. If they had waited 6 months, they would have gotten more than $10,000 back, because the market adjusted down. Right now, Greg is seeing a lot of VA and FHA offers, and very few conventional offers. Only 1 out of every 10 of Greg’s deals fall out. Greg does a good job of weeding out bad buyers before escrow. Bruce feels that Greg has made a wise decision to force potential buyers to put effort into the property before it goes to escrow.  

Every year or two, trends change in the loan business. In 2009, TNG dealt almost exclusively with REO. In 2010, we got more trustee sale buyer refinances. Those were people like Greg who would attend trustee sales, and then refinance to leverage the property. In the last six months, Craig has noticed an increase in people buying short sales. The short sale process is no longer a half year long process. Some short sales can be completed in less than 60 days. The bulk of TNG’s business is still REOs. This is probably due to the fact that TNG’s clients are experienced, and they have relationships with REO agents.  

Short sale agents do repetitive business with buyers they are comfortable with, so developing a relationship with an agent can lead to repetitive purchases. The nice thing about a short sale is that you get to see the inside of the property, title insurance, and it is less likely to be in bad condition.

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The Norris Group Real Estate News Roundup 12/13/10

Monday, December 13th, 2010

Today’s News Synopsis:

22.5% of all mortgages were underwater in the 3rd quarter, according to CoreLogic. The FHA extended deadlines for condo projects seeking to renew their mortgage insurance. Altera Real Estate reports demand for O.C. homes decreased by 12%.

In The News:

Associated Press – “Fewer homeowners underwater in the third quarter” (12-13-10)

“About 10.8 million households, or 22.5 percent of all mortgaged homes, were underwater in the July-September quarter, housing data firm CoreLogic said Monday. That’s down from 23 percent, or 11 million households, in the second quarter.”

ZipRealty - “Prices cut on nearly half of for-sale homes” (12-13-10)

“The share of homes for sale that had experienced at least one price reduction in November jumped 24.1 percent compared to the same month last year, according to a monthly review of multiple listing service listings in 26 major markets conducted by national brokerage ZipRealty.”

Housing Wire – “BarCap: Private sector to boost MBS purchases in 2011″ (12-13-10)

“Private investors could buy as much as $365 billion in agency mortgage-backed securities in 2011, taking over the government’s role in the secondary market, according to the analysts at Barclays Capital.”

Housing Wire – “FHA extends deadlines for condos to recertify mortgage insurance” (12-13-10)

“The Federal Housing Administration extended deadlines for condominium projects seeking to renew their mortgage insurance with the federal agency. New guidelines established by the FHA in 2009 require that condo projects be recertified and approved every two years.”

Housing Wire – “Fed expands TILA scope to loans up to $50,000″ (12-13-10)

“Loans or leases written to consumers for up to $50,000 will be subject to protections under the Truth in Lending Act, up from $25,000, according to a new rule announced by the Federal Reserve Monday. The raised exemption threshold will go into effect July 21, the same day the Consumer Financial Protection Bureau is set to launch. Under the Dodd-Frank Act, the Fed was required to set a new threshold for exempt loans in order expand the protections of TILA.”

Housing Wire – “Amherst Securities: Number of modified, reissued Ginnie Mae loans remains high” (12-13-10)

“The level of Ginnie Mae loans modified and reissued in mortgage-backed securities remains high but probably won’t increase in 2011 from this year, according to one MBS broker-dealer.”

Housing Wire – “Monday Morning Cup of Coffee” (12-13-10)

“In a November letter to regulators, Wells said only mortgages with a more than 30% downpayment should be exempt from the risk-retention rule under Dodd-Frank. Under the reform, federal regulators must determine which mortgages an originator should still be on the hook for after being packaged and sold in the secondary market.”

Orange County Register – “Demand for O.C. homes falls 12%” (12-13-10)

“After remaining the same for the better part of a month, demand dropped by 12% (in the past two weeks), or 311 homes, to 2,382 homes. Last year at this time, demand was at 2,646 pending sales, 264 additional homes compared to today. For the remainder of the year and the first few weeks of the New Year, demand will continue to drop. This is cyclically the slowest time of the year for Orange County real estate.”

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.

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204-TNG Radio – Tom Anderson 12-11-10

Friday, December 10th, 2010

Tom Anderson

Chairman and Founder of PENSCO Trust Company


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This week Bruce is joined again by Tom Anderson. Tom is the chairman and founder of PENSCO Trust Company. He is considered by many to be the national expert on the topic of self directed IRAs. He focuses on how investors can increase their wealth-building potential with real estate and private equity investments. He has written articles for nearly all the nation’s and financial magazines. He was recently invited to Washington as part of the “Future of Finance Initiative” for the Obama Administration.

You can loan money to your IRA if you attempting to protect the existence of the IRA. You cannot loan money to your IRA to buy new lots. The loan must also be interest free. If it did have an interest rate, the loan would be considered self dealing, because you would be taking profit out of your IRA. Lastly, if the loan extends more than 60 days, you must provide the custodian with a note explaining that the IRA owes you money.

Tom recently spoke to a member of the Department of Labor who created this exemption, and the member confirmed that you could loan money to your IRA to bail it out of mortgage delinquency.

There are some IRA investments which may or may not be considered illegal depending on which government official is reviewing the investment. For example, Tom once heard of a man who used his IRA to buy a classic car. Because the car is a classic, there is good reason to believe the car will appreciate. However, a government official might consider this self dealing, because they may or may not perceive the classic car to be for personal use. If the government perceives the car to be for personal use, then the car purchase would be labeled self dealing. Depending on which day the car purchase was reviewed, and depending on who reviewed the purchase, this may or may not be a legal IRA purchase. You can perform a large variety of transactions within your IRA, but you must be careful not to purchase anything that the government might perceive as self dealing. If the government believes you are self dealing with your IRA, then your IRA will lose its tax-deferred status.

Bruce’s business is set up to buy and sell real estate. Bruce asks Tom if there is a limit on how much money, or how many houses, he could use for his IRA. Tom believes that this is up for interpretation. In Bruce’s case, he owns a real estate business, so if he performs many transactions through his IRA, the government may possibly perceive Bruce to be running a business through his IRA. All businesses must pay taxes, and if the government determined that Bruce was running his business through his IRA, then he might lose the tax-deferred status of his IRA. Tom believes that if Bruce was both working in his IRA for retirement investments, and out of it for business use, then it would be hard for the government to label Bruce’s IRA as a business. However, if Bruce was retired, and he only purchased and sold properties through his IRA, then the government may perceive Bruce to be running a business through his IRA. You should consult with your CPA to determine whether or not you will be subject to taxes.

A disqualified person is a term in the Internal Revenue Code 4975 which defines certain entities as people you cannot perform transactions with. The government does not want you to touch your IRA assets, because they want your assets to be there when you retire. So you cannot buy a condo in a vacation spot with your IRA, and then use that condo on the weekends. Disqualified persons include yourself, your spouse, your children, and the spouses of your children. Most people in your family are considered disqualified persons, except for siblings, nephews and uncles. If you deal with a sibling or nephew, you should not offer them less than market rates. Giving a member of your family the benefit of low payments through an IRA asset could be considered self dealing.

Bruce heard an unusual example of someone who was taxed for self dealing. An investor owned a commercial building, and his IRA owned the let next to it. The investor would park in the lot next door, and that was considered illegal personal use. You are not allowed to gain a personal benefit from your IRA while the IRA is growing. If a mistake like this occurs, you have 14 days to correct it. However, if the custodian was the cause of the mistake, then you can argue in court that the custodian should be held responsible.

Tom’s company will not accept any member that is not a part of a regulated institution. If he did not check to determine whether or not his members were being regulated, many bad people would have the opportunity to deal through them. A non-regulated company may enter into an agreement with a bank who is a custodian. All banks, credit unions and trust companies are automatically qualified to hold IRAs. If you are not one of those institutions, then you must be authorized by the IRS. There are 257 mutual fund companies, insurance companies, and broker dealers that are licensed by the IRS.

It is good business to protect the consumer, and the government supports that mentality. PENSCO will not help someone enter into a prohibited transaction. If a lender was involved in a prohibited transaction on an IRA, then they would be subject to a 15% tax on the amount of the transaction. So a lender that made a $100,000 bill would receive a $15,000 bill. If the lender was not aware of the prohibited transaction, then they may be exempt from the tax.

When an investor is told that he cannot buy a property from himself with his IRA, he may get the idea of having a friend buy his property, and then re-buying from his friend. However, this is still considered an illegal transaction. This is considered a linked transaction by the IRS. You will not go to jail for performing a transaction like this unless you fail to pay the penalty taxes. However, the IRS tends to not inform you of your mistakes until 3 years later, so you can get caught off guard if you are not careful.

If you buy a property through your IRA while using your brother as a lender, you will not be taxed so long as your brother does not receive more than his regular fee.

A Prohibited Transaction Exemption (PTE) is a request submitted to the Department of Labor when you anticipate that your potential transaction may be prohibited. A PTE is usually granted on the basis that there is no increase or decrease in value because of the transaction. You cannot submit a PTE after the transaction takes place. The exemption comes in writing, so the Good Day rule does not apply.

There are some custodians who offer check book IRAs. Tom believes this practice will probably be extinct soon. There are only two custodians Tom knows of that will do check book IRAs, and PENSCO is one of them.

Tom’s website is www.penscotrust.com

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.

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203-TNG Radio – Tom Anderson 12-04-10

Friday, December 3rd, 2010

Tom Anderson

Chairman and Founder of PENSCO Trust Company


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This week Bruce is joined by Tom Anderson. Tom is the chairman and founder of PENSCO Trust Company. He is considered by many to be the national expert on the topic of self directed IRAs. He focuses on how investors can increase their wealth-building potential with real estate and private equity investments. He has written articles for nearly all nations and financial magazines. He was recently invited to Washington as part of the “Future of Finance Initiative” for the Obama Administration.

Tom has been in the banking business for 41 years and in the self-directed investment business for 22. The government is paying more attention to retirement issues, because there is concern over social security. Unfortunately, we are still in the dark ages in regards to knowledge of self directed investments. Many people are surprised by the idea that you can buy mutual funds with your retirement account. Many Americans are unhappy with being locked into their 401Ks, other pension plans, and other IRAs. Those retirement plans only offer a limited range of investments, and most of the options are related to Wall Street, which many people have lost a lot of money on recently. The only commodity that hasn’t taken much damage is gold, but Tom thinks most people didn’t get into Gold until after it had already experienced increases, so gold probably won’t be a good long term investment.

When Tom was in Washington, he was surprised by how interested the government was in hearing about his industry. The Retirement Industry Trust Association, which represents 90% of the self-directed custodians in the U.S., was invited to write a white paper on the need for more diversification in retirement accounts. Unfortunately, many of the government workers that Tom was speaking to before have been replace, so he has some influential ground to recover. He does feel though that the government in general has become more open to new ideas on improving retirement savings. As the president of the RITA, it is Tom’s goal to use any opportunity to discuss retirement issues with the government.

IRAs were created in 1974 as part of the ERISA Act. You could self direct an IRA back then. You could buy real estate in New Zealand if you desired to, but most people weren’t aware of that, because the securities and mutual fund companies began lobbying against real estate as a prudent retirement investment plan.

Real estate is a great long term investment. Real estate generally out paces the stock market on a long term basis. In California, you can buy properties that cashflow. When there is a down turn, it’s a great time to take advantage of real estate and ride the curve up.

Before 1974, there were pension plans but no IRAs. One of the reasons IRAs were created was because trustees were abusing their privileges. The trustees were spending the money they received to buy yachts and they would frequently lose the money given to them. Because of this, the government felt it was necessary to allow people to save on their own.

Self-directed is a frequently misunderstood word. IRAs are IRas regardless of where they are held, and the rules are dictated by the IRS. Depending on where the IRA is held, the custodian may limit what an investor can do with their IRA. There are two types of self-directed IRAs. The first is known as a self-directed brokerage account. With a self-directed brokerage account, you can pick from stocks and mutual funds to invest in, but you cannot invest in real estate or private equity. The other type of IRA allows you to invest in anything permitted by law. Some of Tom’s clients have bought companies in Spain and properties in New Zealand. When you buy outside the country, you have to consider the exchange differences. If the foreign monetary value increases against the U.S. dollar, then you can profit from both the investment and the monetary change.

There is a level of sophistication required to invest in certain categories. Tom encourages people to stick to what they know. If you own a gas station and know about gas as an investment, then you may want to use your IRA to invest in another gas station.

There are some laws regarding who and how you can deal with your IRA. There is that limits one’s ability to work with more than 3 unaccredited investors. In some cases, you cannot work with any unaccredited investors. To be an accredited investor you must have a minimum net worth of $1 million, and at least $200,000 in income for the last two years. The SEC may change their definition of “accredited investor”. Tom believes the requirements for an accredited investor will increase, because many people have lost money in stocks and private equity.

If someone wants to buy a trust deed or rental unit, they are free to do that, even if they only have $80,000 in their account.

Tom believes that IRAs are a great form of capital formation in the U.S. PENSCO started out with no assets and now has $3 billion worth of assets. PENSCO is also now funding thousands of companies that could not be started without IRAs, because they couldn’t get funding from traditional sources. There are about $4 trillion in IRA accounts.

Tom had a client who opened a $300 ROTH IRA. His company charges a $375 fee, so Tom knew the client must have had a plan. The client instructed PENSCO to send a $10 check to a lawyer in order to consummate a real estate option contract. This contract gave them the right for 30 days to buy property from a developer. The developer needed cash for $350,000. While the contract was being negotiated, the client found a buyer for a property for $525,000. Once he took the $525,000 from the buyer, he paid the seller $350,000, and moved the profit into his IRA account.

A ROTH IRA offers tax free growth for life and a great rate of return. One of Tom’s clients started a ROTH IRA with $1,800. This client used his ROTH IRA to develop a successful venture, and in 2002, that client cashed out with $32 million. He then took that $32 million and invested in other start ups. He has now increased his IRA holdings into 9 digit levels. Bruce thinks it is hard to believe that the IRS isn’t suspicious of this kind of tax free profit. Tom explains that this client helped create thousands of jobs. This fortunate client stimulated the economy and created tax revenue. 40% of new jobs are from start ups, and 70% are from small, private companies.

We still have 35 days to take advantage of a one time opportunity. Your IRA is now a portable pension plan, and can be converted into a ROTH IRA regardless of your income. Before 2006, this was not allowed. Before January 2010, if you made more than $100,000, you were prohibited from such conversions. You also have the opportunity this year to do the conversion to ROTH IRA and defer the taxation on the converted amount to 2011 and 2012. This means that if you convert in 2010, then in 2011 you must claim 50% of the converted amount on your income. The other 50% of the 2010 amount must be claimed in 2012. If you are expecting to be in a lower tax bracket in the future, this is a great opportunity for you. The government is very supportive of these conversions, because they get to collect the tax upfront.

If you bought assets that are currently depreciating, and if you have these assets in your IRA, then you can convert to a ROTH IRA and pay tax at a lower amount. This can allow those assets some time to recover. It is much better to convert a depreciated asset than an appreciated asset.

Capital gains rules do not apply within an IRA. When you take money out of an IRA, that money is taxed at a normal rate. However, if you have a ROTH IRA that has existed for 5 years, and if you are at age 59 and a half, then you can take out all your money tax free.

If you have a traditional IRA, at age 70 and a half, you have to take out minimum distributions. However, if you have a ROTH IRA, you can leave the money in the IRA as long as you want, and you can leave it to your children after you have died. There is also no estate tax, because the taxes have already been paid.

The use of leverage to purchase real estate is allowed with a ROTH IRA. It is possible to borrow up to 70% on any income producing property types on an IRA. You must put at least 30% down on the property though, because if the loan is recourse, then you would be self-dealing, which is prohibited. The 70% limit is according to bank policy, and they have had great success with this limit. They have very few foreclosures. Rates for loans are generally two points above prime. Many things can be negotiated as well.

There is actually a rule which allows you to bail out you IRA. If you got a 70% loan on a $100,000 house, and you put $30,000 down with your IRA. If you lose your tenant, and you do not have enough money in your IRA to make the payment, then you would typically be foreclosed on. In this kind of situation, there is a Department of Labor provision called AD-26, which allows you to lend money to your own IRA without limitation, so long as the money is being used to bail out the IRA account.

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.

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The Norris Group Real Estate News Roundup 12/02/10

Thursday, December 2nd, 2010

Today’s News Synopsis:

The NAR reports pending home sales increased 10.4% in October. According to RealtyTrac, foreclosure sales decreased 25% in the 3rd quarter. Statistics from the Labor Department show jobless claims rose 6.3% last week. Greg Lippmann of LibreMax Capital predicts national home prices will drop another 10%.

In The News:

NAR - “Strong Rebound in Pending Home Sales” (12-2-10)

“The Pending Home Sales Index,* a forward-looking indicator, rose 10.4 percent to 89.3 based on contracts signed in October from 80.9 in September. The index remains 20.5 percent below a surge to a cyclical peak of 112.4 in October 2009, which was the highest level since May 2006 when it hit 112.6.”

San Francisco Chronicle – “Mortgage rates rise to 4.46 pct. as economy lifts” (12-2-10)

“Freddie Mac said Thursday that the average rate for 30-year fixed loans rose to 4.46 percent from 4.40 percent last week. Three weeks ago, the rate hit 4.17 percent, the lowest level on records dating back to 1971.”

Los Angeles Times – “Sales of foreclosed and distressed properties fall 25% in third quarter” (12-2-10)

“Irvine-based RealtyTrac, a company that publishes listings of foreclosed properties online, said in a report Wednesday that sales of U.S. properties in some stage of foreclosure dropped 25% in the third quarter from the previous quarter and 31% from the third quarter of 2009.”

Housing Wire – “Jobless claims continue bouncing around with 6.3% rise last week” (12-2-10)

“Initial jobless claims rose 6.3% last week to 436,000 after coming in at the lowest level in two years the prior week. The Labor Department said the seasonally adjusted figure of actual initial claims for the week ended Nov. 27 increased by 26,000 from the previous week’s figure of 410,000, which was revised slightly upward.”

Wall Street Journal – “Banks in Talks to End Bond Probe” (12-2-10)

“Banks churned out more than $1 trillion of CDOs. They often created them at the request of investors who made bets against the deals. Some banks made their own bearish bets. Such bets paid off when the mortgage market crashed, though financial firms also suffered steep losses from CDOs stuck on their books.”

Housing Wire – “Basel 3 rules approved, banks still have years to comply” (12-2-10)

“banks have years to comply with key elements in the rules. For instance, a bank must hold a minimum Tier 1 capital ratio of 4.5% by 2013 and 6% by 2015. A bank’s minimum capital conservation buffer – a fund the bank can draw on in times of economic stress – must reach 0.625% by 2016 and 2.5% by Jan. 1, 2019.”

Housing Wire – “Fed data shows 60% of TALF loans repaid” (12-1-10)

“Federal Reserve data released Wednesday show more than 60% of the $71 billion lent through the Troubled Asset-Backed Securities Loan Facility has been repaid.”

Bloomberg - “Home Prices to Drop 10%, LibreMax’s Lippmann Says” (12-2-10)

“U.S. home prices will drop an additional 10 percent, according to Greg Lippmann, a founder of hedge fund LibreMax Capital LLC and former Deutsche Bank AG trader who gained fame for his bets against subprime-mortgage securities.”

Looking Back:

One year ago, the MBA’s weekly survey showed that mortgage applications increased by 2.1 percent from the previous week. Trepp reported that overall delinquency rates for commercial mortgage-backed securities increased to 5.65 percent. According to ADP Employer Services, 169,000 jobs were cut in one 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 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.

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The Norris Group Real Estate News Roundup 11/22/10

Monday, November 22nd, 2010

Today’s News Synopsis:

According to CoreLogic, shadow inventory levels increased to 2.1 million units in August. TransUnion reports mortgage delinquency rates fell to 6.7%. Data from Campbell Surveys shows the current foreclosure problems are significantly delaying closings.

In The News:

Orange County Register - “Calif. ranked 3rd best U.S. home market” (11-20-10)

“Tops on the list for year-over-year price gains for all transactions — distressed sales, included — was New York (up 2.67 percent) then North Dakota (a 1.73 percent gain.) After California came Nebraska (+.78 percent), and Virginia (+.77 percent).”

Inman - “Lenders scoring lower on customer satisfaction” (11-22-10)

“Customer satisfaction with mortgage originators is on the decline as the time from loan application to approval has grown to 27.5 days, up from 20 days last year, according to a study by J.D. Power and Associates.”

Wall Street Journal – “Shadow Inventory of Homes Rising” (11-22-10)

“The ‘shadow inventory’ of unlisted bank-owned homes and potential foreclosures increased to 2.1 million units in August, up 10% from one year earlier, according to new estimates from CoreLogic, a real-estate research firm.”

Housing Wire - “Investors eye opportunities in distressed properties and loans” (11-22-10)

“Market indications, not just living on rumors of a billion dollar Pimco fund for distressed loans and properties, are such that global investors are also looking more at the U.S. According to a global distressed property monitor from the Royal Institute of Chartered Surveyors, investor interest in distressed sales is now double that of a year ago.”

Housing Wire – “Moody’s: CRE prices rose 4.3% in Sept. to highest since May” (11-22-10)

“Commercial real estate property prices increased for the first time since May with a 4.3% gain for September, according to Moody’s Investors Service.”

Housing Wire – “Mortgage delinquency rate tumbles 3.5% in 3Q: TransUnion” (11-22-10)

“The national mortgage delinquency rate fell 3.5% from the second to the third quarter to a rate of 6.7%, according to a report released Monday by TransUnion. This is the largest quarterly drop the firm witnessed since the fourth quarter of 2006. The rate still remains 3% higher than the third quarter of 2009, however.”

Housing Wire - “Foreclosure mess scares off homebuyers: Campbell/Inside Mortgage Finance” (11-22-10)

“Servicing problems disrupted both short sales and REO sales. Survey results show that 24% of closings scheduled for October were delayed or canceled due to issues with short sales, while 12% were delayed or canceled due to REO title issues.”

Bloomberg - “Mortgage Documentation Failures Extend Past Securitizations, Cantor Says” (11-22-10)

“In some cases faulty files are lowering loan prices or extending the time it takes to complete sales, said Jason Kopcak, the head of whole-loan trading at the New York-based broker. Residential and commercial mortgages owned by banks looking to sell often lack the papers required by buyers, including documents needed to foreclose, Kopcak said.”

Orange County Register – “O.C. homes: 4th costliest vs. income” (11-22-10)

“FiServ’s recent home-price outlook contained intriguing stats on 212 markets and the relationship between the median selling price of homes (for second quarter 2010) in major metropolitan areas across the nation and the local household median incomes from 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 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.

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200-TNG Radio – Alvarez, Cantu, & Solis 11-13-10

Friday, November 12th, 2010

Tony Alvarez

Veteran Investor

(Full Bio)

Mike Cantu

Veteran Investor

(Full Bio)

Rick  Solis

Veteran Investor, Appraiser

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This week Bruce is joined by Mike Cantu, Rick Solis and Tony Alvarez. Mike Cantu has been an investor in the Inland Empire for over 25 years. He has been a builder, rehabber and property manager. Rick Solis appraises all of The Norris Group’s loans, and he is also an investor. Tony Alvarez has been an appraiser, residential and commercial property buyer and author. This is The Norris Group’s 200th radio show.

Bruce begins by asking Mike about what he learned from the 90s that helped in the most recent down turn. All things come full circle. A good market will eventually become a bad market. The down turn took longer this time, but it hit much harder. Sales dropped off the cliff, but fortunately, Mike began preparing for the down turn in 2004. Tony agrees with Mike.

During the evening of Obama’s election, a newsletter was put out, which was titled “Obama Administration Sings New Tune on Foreclosures”. The article is laughable. The media went from saying “no foreclosures” to “foreclosures are the answer to this problem”.

Rick began investing in 1989. He was not very active in the 90s. The main thing he learned from the 90s was that you can miss many opportunities when you ignore the market. A lot of people are afraid of the market right now, but Rick won’t let that fear control his investing plans.

Bruce believes that fear certainly is affecting the market now. People are afraid to buy properties despite the fact that prices have dropped 50% and interest rates are historically low. Its hard to believe that not buying could be perceived as a rational decision. Rick Solis has never seen a better time to buy houses since he began investing. Bruce definitely believes that it is the best time to buy and hold.

Tony just bought a completely rehabbed duplex. In 2007, it sold for $175,000, but he bought it for $35,000. The saddest part is that the duplex sold with multiple offers. The reason why so many people are afraid of buying is because they are paying too much attention to the media’s opinion.

Mike knows many investors, but only a small number of them are still investing. The number one problem that caused them to fall out of investing is their overly expensive life style. A lot of people learned how to make money in real estate, but not many people learned how to keep it. The investor pool has shrunken significantly. Many people would like to invest in real estate right now, but they made bad decisions at the top of the market, which handicapped them from buying. Mike agreed with Rick and Tony when they said that now is the time to buy.

Mike is a fairly frugal person. Bruce laughed when he saw Mike’s 1998 Toyota truck. It has 441,000 miles, but it runs like a champ. When a dog gets old, you don’t get rid of it, you just take better care of it. Mike has a hard time spending money on a vehicle when you can get a rental house for the cost of a new car. Every time Mike sets money aside for a new truck he ends up spending it to buy a new house, and he realizes that his truck is just fine.

Mike’s daughter recently began investing in real estate. Mike helped her develop a 5 year plan for buying cash flow houses in good neighborhoods. Their goal is to help her get $3,500 of cash flow per month, and they are half way there.

If Tony could have done anything differently throughout his career, he would have focused harder on one segment of the market place. He wishes he had been more aware of the value of his time. Tony spent a lot of time driving to deals that didn’t have much potential.

Tony prefers to buy and sell, but he currently owns 40 rentals. Before the peak, he had 100 homes. He wanted to get out before the peak, but Bruce encouraged him to not sell for another 3 years. Bruce’s advice helped Tony gain an extra $3 million in profit. Tony is now buying some of the same houses that he sold near the peak. In the past, Tony would buy almost any property he could. Some of the properties he bought and sold were in such a terrible condition that they have now been destroyed. He doesn’t buy properties that are that terrible any more, but he is still willing to buy wood structure homes and other properties that people tend to stray away from.

If Rick could have done anything differently in his career, he would have sold all his properties by 2006. Rick has accumulated quite a few properties, and he is glad to have them, but he is not looking forward to managing them.

Mike chose not to sell his properties despite the fact that values were sinking, and he does not regret that decision at all. Mike got into real estate for the cash flow, so that all his expenses would be taken care of. He knows people who are struggling right now and have to make a deal every month to keep food on the table. The value of his rental properties is immaterial to him. He has not had to reduce rents by any more than $50, and he has had no difficulty in keeping them occupied.

Mike was the person who introduced Tony to the concept of exchanged junky homes for quality rental homes. Exchanging for quality rental properties allows you to keep rentals in competitive areas, and it helps reduce the amount of time spent on property management.

Bruce has learned a lot from observing the business models of other people. When Mike told Bruce that he wanted to obtain 10 rental properties, Bruce decided to try and do the same. Having free and clear properties gives you sanity when making investment decisions. If you are playing catch up on equity, or if you are relying on today’s deals to pay tomorrow’s meals, you tend to make riskier decisions. Bruce and Mike don’t have to make potentially risky decisions because they both have enough cash flow to get by.

One of the big differences that Tony has noticed between 2010 and 2009 is that many investors have left his market. Also, approximately 80% of his purchases went from being new listings from agent calls to pending deals. Fifty percent of the deals occurring in Tony’s area fall out of escrow 1 to 3 times. This has caused Tony to become more cautious when buying. He has dropped his rents by 20% in the last 12 months. He has also lost some of his tenants.

Rick noticed that when the stimulus program was going on, entry level properties experienced up to a 10% increase in value. Moreno Valley and Corona had a big increase in activity. That 10% increase has now disappeared. Rick will not buy a house right now unless the deal can work as a rental. Many investors have recently bought homes they thought would easily resell, and they are now stuck with them. Bruce will not buy a home on leased land.

From the beginning of 2009 to the end, we went from a period of market uncertainty to confidence. In 2008, Mike decided not to do a retail deals unless he could keep those houses as rentals. Mike does not use any July comps any more; comps must be within the months of August, September and October. There is a 5 to 20% difference between homes being sold now and homes sold in July.

Mike believes there are still a lot of people who will not accept the fact that their home values have significantly decreased. A lot of the private market is still in denial.

Rick invests primarily in Rialto, Hesperia and Victorville. Rick and his business partner work with rehab properties. He rents his properties slightly below market value and they are in good shape, so he has a lot of demand. Many times he has a security deposit and a tenant lined up before he closes escrow. He does not have any trouble with rents dropping. His typical house is a 3 bedroom, 2 bath. He loves it when he can squeeze a 4th bedroom into the house by cutting the living room in half. He usually rents the 3 bedroom houses for $1,000, and the 4 bedroom houses for $1,100.

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.

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The Norris Group Real Estate News Roundup 11/2/10

Tuesday, November 2nd, 2010

Today’s News Synopsis:

Homeownership rates remained unchanged at 66.9% in the 3rd quarter, according to the Census Bureau. The 30 day delinquency rate on Fannie Mae mortgages fell to 4.7% in August. Zillow claims the 30-year mortgage rate remained at 4.14% last week.

In The News:

Contra Costa Times – “Homeownership stays at lowest level in a decade” (11-2-10)

“The percentage of households that owned their homes was unchanged at 66.9 percent in the July-September quarter, the Census Bureau said Tuesday. That’s the same as the April-June quarter. ”

Sacramento Bee – “California expects mortgage-aid program to begin in weeks” (11-2-10)

“Struggling California homeowners will have to wait several more weeks for the start of a $1.83 billion government aid program that will pay down loan balances and provide monthly cash assistance.”

Housing Wire – “Moody’s downgrades 10 regional banks after Fed dollars dwindle” (11-2-10)

“Moody’s Investors Service downgraded deposit ratings on 10 large, regional banks because of reduced levels of support from the federal government, if the banks should fail. Five of the banks are in the top 20 of mortgage originators in the county.”

Housing Wire – “Radian earns $112 million in 3Q on declining mortgage defaults” (11-2-10)

“Mortgage insurer Radian Group (RDN: 8.56 +14.90%) earned $112.2 million in the third quarter, or 84 cents a share as mortgage defaults saw a double-digit drop from a year ago.”

Housing Wire – “Fannie Mae, Freddie Mac mortgage delinquencies continue to fall” (11-2-10)

“The 30-plus day delinquent mortgage rate on Fannie Mae’s book fell to 4.7% in August, the latest month of available data, down 12 basis points from the previous month, according to its monthly summary. For Fannie, it’s the sixth straight month of declines.”

Housing Wire – “Zillow: National rates for 30-year FRMs unchanged, East Coast states fluctuate” (11-2-10)

“The 30-year, fixed-rate mortgage remained steady from the two weeks past, ending at a 4.14% national average, according to the Zillow Mortgage Marketplace weekly update.”

Bloomberg - “JPMorgan Is Said to Be Investigated Over Disclosures in Subprime CDO Deals” (11-2-10)

“JPMorgan Chase & Co. is the subject of an investigation to determine if it failed to tell investors in a financial product linked to subprime mortgages that hedge fund Magnetar Capital helped select the underlying assets before betting against them, a person familiar with the matter said.”

Bloomberg - “Roubini Says Advanced Economies to Show Anemic Growth” (11-2-10)

“Nouriel Roubini, the New York University professor who predicted the global financial crisis, said another ‘disaster’ will happen if U.S. house prices fall again and prime mortgage defaults increase.”

Looking Back:

One year ago, the NAR’s Pending Home Sales Index increased by 6.1 percent within a month. The Mortgage Bankers Association reported that mortgage bankers and subsidiaries made an average profit of $1,358 per loan. The Housing Financial Services Committee approved of an amendment that would terminate the HVCC. The total number of bank failures in 2009 reached 115.

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.

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197-TNG Radio – I Survived Real Estate 2010 10-23-10

Friday, October 22nd, 2010

I Survived Real Estate 2010

I Survived Real Estate 2010


 

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September 17th, 2010, The Norris Group returns with its award winning event I Survived Real Estate 2010. The video also now available on The Norris Group website.

The Norris Group has assembled an incredible line up of industry experts to discuss the state of REO from the inside. Topics will include regulatory intervention and aftermath, bulk buying, myths and facts, and opportunities emerging for real estate professionals. 100 percent of the proceeds support the Orange County affiliate of Susan G. Komen for the Cure. This event would not be possible without generous help from the following platinum partners: Foreclosure Radar and Sean O’Toole, the San Diego Creative Real Estate Investors Association and Bill Tan, Investors Workshops and Shawn Watkins and Angel Bronsgeest, Invest Club for Women and Iris Veneracion and Bobby Alexander, Claudia Buys Houses, The Business Press, Frye Wiles, MVT Productions, and White House Catering.

This week The Norris Group Real Estate Radio Show is broadcasting I Survived Real Estate 2010.

Investors buy about 1/3 of Freddie Mac’s properties. Freddie Mac does not offer financing for most of those investor purchases, but Fannie Mae does. Fannie Mae has a program called Home Path. Many investors can qualify for Home Path financing on rehab properties. The financing on the rehab program includes the cost of repair. It is somewhat similar to the 203K loan. The problem Bruce has experienced with these programs is they don’t offer enough financing to significantly help investors. Bruce is usually only offered about $4,000 for rehab financing.

It is hard to pull a pool of properties together in a way that is just as attractive for an investor as finding one good property.

Inventory levels are increasing. Freddie Mac started this year with 45,000 properties in inventory, but today we have about 70,000. 55% of those properties are in the redemption, eviction and prelist phase. That phase is taking longer now. Approximately 55% of Freddie’s properties are becoming occupied. Freddie has about 15,000 homes on the market, and the rest are in the closing process.

As inventory levels increase, and as the 90-day strategies fail, then Freddie might move to a ballroom or online auction. However, if a property has had sale fallouts or could use significant improvement, then it may be relisted. Freddie’s goal is to figure out what selling strategy will have the best recovery rate. On day 75 of the listing, Freddie gives the broker a two week notice, and then moves onto the auction process.

Fannie Mae has a web-based portal for investors who desire to qualify for bulk purchases. You must provide information about yourself, provide your tax I.D. number, and allow Fannie Mae to do a background check on you. Once you qualify, you are given access to the web-based portal. This portal contains listings of properties, and it allows investors to submit a bid. This portal is for the larger pools. The properties in the pool are located across the country.

Bruce believes that tax payers could be saved a lot of money if properties were sold to investors rather than being given to NSP programs. Sarah Letts suggests that those investors go to the auctions.

In the last 12 month, Fannie Mae sold 30,000 properties to owner occupants during the first look period, and 5,000 properties to people using NSP funds.

Tommy Williams was the person who suggested that Bruce should read The World Is Flat. One of the most significant quotes in the book says, “No institution will go through fundamental changes, unless it believes it is in deep trouble and must do something different to survive.” Tommy believes that no other country in the world provides us with the same amount of opportunity as the free enterprise system of the U.S. That opportunity is built upon the initiative of the individual. We need to focus on turning that individual initiative loose. When you restrict individuals from making free market decisions, there are greater repercussions.

Tommy believes in the auction process. The stock market is like an auction, and everybody agrees with that auction every day. What if tomorrow morning, the DOW Jones said, “If Microsoft doesn’t bring us 25 dollars, we won’t sell”? It wouldn’t work. This is the problem we are dealing with in our current housing problem. Three years ago, the market told us that we had to rethink what houses were worth. Unfortunately, we have found out how accurate the market was worth. Tommy Williams believes that Sean O’Toole’s estimates are accurate, but he wises it wasn’t true. Tommy believes we have a long road ahead of us before we reach real market value. The quicker we get to that value, the better.

“Unfortunately, it has been too long since America had a leader ready to call on our nation to do something hard. To give something up, not to get something more, and to sacrifice for a great national cause for the future, rather than live for today.” – The World Is Flat

Tommy believes that if a politician actually had the courage to stand up and tell America the truth, the citizens would elect that person instantly. Unfortunately, we have been given so much bs that we aren’t accustomed to politicians being honest.

A crisis is a terrible thing to waste. We’ve had two in the last decade – 9/11 and the current financial crisis. Bruce has been to baseball games where everyone stood up after the 9/11 crisis. When we have a crisis, we can make changes, but we have to have someone that we can support in the government.

Thornberg is worried about where our fiscal debt is going. We are borrowing $1.3 trillion this year. We do not currently have that much debt, because most of it is in social security. Our net debt represents about 50% of the economy right now. That seems high, but Christopher doesn’t believe that is actually extremely high. However, if you are borrowing $1.3 trillion per year, that debt percentage will quickly turn into a number over 95%. Unlike Japan, we are a nation relying on external capital. If we keep borrowing, there will come a time where the world bond market will say “enough is enough”.

Thornberg does not believe that household, and local debt is that bad. We do not have that big of a debt problem. Our pensions are in trouble, but other than that, Christopher thinks we are fine. Consumer debt spiked in proportion to asset values. It also fell significantly when the asset bubble popped, and Americans realized they had too much debt. Most of American debt is in mortgage debt from Fannie and Freddie. Non-mortgage debt didn’t really rise at all. Overall, that debt is not too significant.

Stock investments have nothing to do with GDP. When we spend stock profits, that money does not get counted into GDP. When you pay taxes on your stock portfolio, those taxes are recorded in GDP statistics, but then they have to subtract your capital gains income from the total.

Thornberg is worried about where our fiscal debt is going, but he is not sure at what point he would say “enough is enough”. We’ve never had an unmanageable amount of debt, but we’ve also never had a government that is so unwilling to acknowledge the reality of our problem. The government claims it wants to fix the deficit, but it won’t raise taxes. Thornberg is a proponent of paying taxes, and he thinks all the Bush tax cuts should be taken out. He doesn’t enjoy paying taxes, but if the citizens of the U.S. actually have to pay, then we will finally stop the government from spending it. We have developed the delusion that the Federal debt is not our debt. If the government is borrowing $1.3 trillion dollars, a lot of that money will come from the citizens. It would take $4,500 from every citizen to pay that debt.

Thornberg does not believe that deleveraging is deflationary, because leveraging is not inflationary. In the middle of the leveraging binge, Alan Greenspan was worried about deflation. When you pay debt off instead of spend, you can decrease demand somewhat. Reducing demand can reduce the velocity of money, which can cause deflationary pressure. That is why Greenspan went through quantitative easing, and he did a pretty good job.

If you have a willing buyer and seller that come to a fair price together, then you have market value. That definition of market value will never be able to stop a real estate bubble. The Norris Group built homes in Rosamond. In Rosamond, the market should have been $150,000, but Bruce was selling those homes for $280,000. In the commercial world, the appraisal has multiple pieces. You have to calculate for comps, cost of building and income generated. Bruce asks Joseph Magdziarz if he thinks we should change the structure of how we come to the proper value. Joseph believes the definition does need to be looked at. During the boom, California prices escalated quickly, but rental prices didn’t change much. So prices changed a lot, but the underlying value didn’t. Unfortunately, the government created too much artificial demand in the market, and that helped cause the market. We created programs for people who couldn’t afford a home.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor 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.

Thank you for being a Gold Sponsor for I Survived Real Estate 2010: Adrenaline Athletics, Benton Investment Group, Community RE-Invest Group, Delmae Properties, Elite Auctions, Entrust California, Everlast Photography, Inland Empire Investors Forum, Keystone CPA, Landwood Title, Las Brisas Escrow, Leivas Financial Services, Mike Cantu, North San Diego Real Estate Investors Association, Northern California Real Estate Investors Association, Personal Real Estate Investor Magazine, Realty 411 Magazine, San Jose Real Estate Investor Association, Rick and LeeAnne Rossiter, San Jose Real Estate Investor Association, Starz Photography, Summit Solutions, Tony Alvarez, Wealth Point, and Westin South Coast Plaza.

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The Norris Group Real Estate News Roundup 10/21/10

Thursday, October 21st, 2010

Today’s News Synopsis:

According to MDA DataQuick, 6,334 houses and condos closed escrow in Northern California during September. The government estimates that the financial rescue involving Fannie Mae and Freddie Mac. Bank of America is suing the FDIC for $1.75 billion. The Labor Department reports jobless claims decreased 4.8% last week.

In The News:

MDA DataQuick – “Bay Area September Home Sales Second-Lowest in 19 years” (10-21-10)

“A total of 6,334 new and resale houses and condos closed escrow in the nine-county Bay Area last month, down 5.4 percent from 6,698 in August and down 19.6 percent from 7,879 in September 2009, according to MDA DataQuick of San Diego.”

Associated Press – “Tab for Fannie, Freddie could soar to $259B” (10-21-10)

“The government spelled out Thursday just how much the most expensive rescue of the financial crisis will end up costing taxpayers — as much as $259 billion for mortgage buyers Fannie Mae and Freddie Mac.”

Housing Wire – “Moody’s analysts don’t see mortgage ownership as an issue for RMBS” (10-21-10)

“Moody’s Investors Service said mortgage ownership in trust shouldn’t be an issue within the residential mortgage-backed securities space as delayed foreclosures become more of a risk for the housing market.”

Housing Wire – “HUD Secretary: Foreclosure problems not ‘systemic’” (10-21-10)

“Department of Housing and Urban Development Secretary Shaun Donovan said recent foreclosure problems at some mortgage servicers are not ‘systemic issues.’ Donovan spoke after a meeting among regulators who will review foreclosure processes among the major servicers. Bank of America (BAC: 11.38 -3.15%), JPMorgan Chase (JPM: 37.678 -1.11%) and Ally Financial (GJM: 22.22 +0.45%) suspended foreclosures in 23 states after admitting employees signed affidavits without reviewing documents or having a notary present.”

Housing Wire – “Credit unions originated high-quality mortgages in 2010 in QMS survey” (10-21-10)

“Credit unions are originating the highest quality mortgage loans so far this year, according to survey results released Wednesday by Quality Mortgage Services. According to the data, nearly 50% of loans originated by credit unions were rated ‘excellent,’ meaning their loans had few to no defects.”

Housing Wire – “BofA sues FDIC to recover $1.75 billion for TBW investors” (10-21-10)

“Bank of America (BAC: 11.39 -3.06%) filed suit against the Federal Deposit Insurance Corp. to recover $1.75 billion for Ocala Funding investors allegedly swindled by Colonial Bank, Platinum Community Bank and Taylor, Bean & Whitaker.”

Housing Wire – “Jobless claims fall nearly 5% to 452,000″ (10-21-10)

“Initial jobless claims fell 4.8% last week to 452,000, which is roughly inline with analysts’ estimates but still too high to indicate much change in the job market. The Labor Department said the seasonally adjusted figure of actual initial claims for the week ended Oct. 16 decreased by 23,000 from the previous week’s revised figure of 475,000 that was up sharply from the 462,000 previously reported.”

Housing Wire – “Freddie Mac: 30-year fixed mortgage rate up for first time in five weeks” (10-21-10)

“The average rate on a 30-year fixed-rate mortgage increased for the first time in five weeks to 4.21% with an average 0.8 point for the week ending Oct. 21, according to the weekly Freddie Mac market survey.”

Bloomberg - “General Growth Plan Approval Resolves Biggest U.S. Real Estate Bankruptcy” (10-21-10)

“General Growth Properties Inc., the second-largest mall owner in the U.S., won court approval of the last stage of its restructuring, a year and a half after filing the biggest real estate bankruptcy in U.S. history.”

Looking Back:

One year ago, the MBA reported that mortgage applications decreased by 13.7 percent on a seasonally adjusted basis from the previous week. According to Altos Research, asking prices increased by 1.5 percent in Los Angeles. The Federal Reserve believed that commercial real estate would not begin to recover for at least 9 more months. Lehman announced that it intended to begin funding home loans again.

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.

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