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The Norris Group Real Estate News Roundup 3/8/10

Monday, March 8th, 2010

Today’s News Synopsis:

Multifamily home building will likely become more expensive in San Diego, as a new water meter program gains popularity. According to RealtyTrac, one in every 25 Los Angeles homes received a notice of foreclosure in 2009. Silicon Valley Bank forecasts an increase in foreclosures in Napa Valley.

In The News:

MBA – “MBA and Others Express Grave Concerns About Regulations Proposed Under SAFE Act” (3-8-10)

“HUD is proposing to exceed its statutory authority under the SAFE Act establishing a backup system and determining whether state laws meet the SAFE Act’s minimum requirements.  In this regard, HUD indicates it may require states to treat servicer employees engaged in loan modifications as originators for the purposes of the Act.  If the regulation is finalized as proposed, HUD risks significantly curtailing the ability of servicers to complete loan modifications until their employees are registered or licensed.”

Sign On San Diego – “S.D. could require multifamily water meters” (4-8-10)

“The City Council takes up a proposed ordinance tomorrow after months of fine-tuning. The proposal is widely expected to pass, creating what several water experts said would be a first in the county. It would require submetering for new complexes with three or more units and in cases when an entire interior drinking water system is replaced for a complex with three or more homes. Some exemptions apply.”

Housing Wire - “Los Angeles to Pull Investments from Foreclosure-Heavy Financial Firms” (3-8-10)

“According to the real estate data provider, RealtyTrac, the Los Angeles metropolitan statistical area (MSA) had the 32nd highest foreclosure rate in the country in 2009 as foreclosures remained concentrated the sand states. There, one in every 25 homes received a foreclosure filing, a 37% increase from 2008. California leads all states with the most permanent modifications under the Home Affordable Modification Program (HAMP), according to the US Treasury Department.”

Housing Wire – “State Applications Open for Federal Underwater Borrower Aid” (3-8-10)

“Select state Housing Finance Agencies (HFAs) can submit proposals for using $1.5bn from the HFA Hardest-Hit Fund to prevent foreclosures and stabilize local housing markets, according to the US Treasury Department. Eligible HFAs can apply for clearance to fund principal-forgiveness, unemployment and second-lien reduction programs.”

Housing Wire – “Investors Shun Fund of Funds for Higher Hedge Gains: Barclays” (3-8-10)

“The migration of money away from fund of funds and directly into the hedge fund space indicates investors are being drawn by the recent successes in the industry, which look set to continue, according to market analysts. The business for hedge funds in the United States is growing posting an estimated inflow of $7.1bn — or 0.5% of assets — in January, according to TrimTabs Investment Research and hedge fund data vendor BarclayHedge.”

Housing Wire – “Failed Banks May Get Pension-Fund Backing as FDIC Seeks Cash” (3-8-10)

“The Federal Deposit Insurance Corp. is trying to encourage public retirement funds that control more than $2 trillion to buy all or part of failed lenders, taking a more direct role in propping up the banking system, said people briefed on the matter.”

Bloomberg – “Vineyard Defaults Surge as Bargain Wines Hurt Napa” (3-8-10)

“In California’s Napa Valley, producer of the most expensive U.S. wines, 2010 may be a vintage year for foreclosures as the industry is squeezed by falling land values and a consumer shift to cheaper brands. As many as 10 wineries and vineyards in Napa will change hands in distressed sales or foreclosures this year and next, up from none in 2008, according to Silicon Valley Bank.”

Looking Back:

One year ago, the number of borrowers who defaulted after the first payment tripled. The Government predicted a 10.3 percent unemployment rate. 650,000 jobs dissapeared in one month.

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

Wednesday, March 3rd, 2010

Today’s News Synopsis:

Bruce Norris estimated that lenders may lose up to $2.1 to 3.8 trillion before all the bad loans are taken off their books. According to the MBA, mortgage application volume increased from last week. The FHFA reports that Orange County home values increased by 6.38 percent in 2009. Last year, nearly 1,400 lawsuits were filed against lenders by homeowners in foreclosure.

In The News:

Press Enterprise – “Loan losses from home foreclosures could more than double” (3-3-10)

“Lenders who already have realized $1.5 trillion in losses due to home foreclosures could see their losses mount to an estimated $2.1 trillion to $3.8 trillion before all the bad loans are wiped off their books, a Riverside real estate expert told a gathering over the weekend. Bruce Norris, a real estate analyst, investor and principal of the Riverside-based Norris Group, told more than 400 real estate brokers and investors meeting in Costa Mesa Saturday that he had compiled these figures from data and estimates he obtained from ForeclosureRadar.com, Bloomberg Financial, Goldman Sachs, the International Monetary Fund, RGE Monitor and T2Partners.”

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

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending February 26, 2010.  The Market Composite Index, a measure of mortgage loan application volume, increased 14.6 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 15.5 percent compared with the previous week.”

Orange County Register – “O.C.: Hottest U.S. housing market?” (3-3-10)

“Orange County home values — by one FHFA index that derives values from purchase records — rose 6.38% in 2009. That’s tops among the 25 major U.S. markets tracked by this methodology. Yes, O.C. is No. 1! We’re followed by Denver (+5.48%); Houston (+3.71%); and Pittsburgh (+3.26%).”

Sign On San Diego – “Hefty tax bill may hit those who lost home” (3-3-10)

“With less than six weeks before taxes are due, an estimated 16,000 former homeowners statewide will owe $15 million in extra income taxes this year and $29 million through 2012.”

Mercury News – “Increasing numbers of Californians are suing lenders to avoid foreclosures” (3-3-10)

“In the last five years, the number of foreclosure lawsuits filed in federal court in California has ballooned — like an exploding adjustable-rate mortgage — from only 29 statewide in 2005 to nearly 1,400 last year.”

Housing Wire – “Winter Weather Slows Residential Real Estate Growth: Beige Book” (3-3-10)

“In the January Beige Book, all but two Fed districts reported increased activity or improved conditions, with Philadelphia and Richmond seeing mixed results. Residential real estate markets remained weak or softened further in the New York, Atlanta, and Chicago districts and there was little change in the San Francisco district, the Federal Reserve Board said.”

Orange County Register – “Why loan mods & short sales take so long” (3-3-10)

“Hard to collect all necessary documents from borrower/owner. This may be because the banks never seem to receive the documents until they’ve been faxed in 5 or 6 times. It may be because it takes the borrower/owner or agent some time to respond to requests for documents.”

Inman - “90% of agents down on HAMP” (3-3-10)

“A mere 10 percent of real estate agents think the Obama administration’s Home Affordable Modification Program (HAMP) is reducing foreclosures in their market, according to a survey released Wednesday by real estate media and marketing provider Homes and Land. The company’s Market Pulse Survey Report asked more than 100,000 real estate agents nationwide to participate in a 10-question survey to gauge the state of housing in local markets. Nearly 5,800 agents responded; 51 percent had been a Realtor for more than 10 years. The company conducted the survey in February.”

Looking Back:

One year ago, Citigroup developed a plan which allowed unemployed homeowners to decrease their monthly payment to a minimum of $500. The NAR reported that home sales decreased by 7.7 percent within a month’s time. Bernanke claimed that the federal government needed to increase its fiscal involvement in the banking system. The government launched its $1 trillion TALF program.

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The Norris Group Real Estate News Roundup 2/26/10

Friday, February 26th, 2010

Today’s News Synopsis:

According to the NAR, existing home sales decreased by 7.2 percent in January. The rise in GDP exceeded the median forecast of economists surveyed by Bloomberg. Freddie Mac reports the 30-year FRM increased to a rate of 5.05 percent. A recently proposed plan from the Obama administration would give homeowners an extra 30 days after receiving the HAMP non-approval notice before the foreclosure sale can proceed.

In The News:

NAR - “Existing-Home Sales Down in January but Higher than a Year Ago; Prices Steady” (2-26-10)

“Existing-home sales – including single-family, townhomes, condominiums and co-ops – dropped 7.2 percent to a seasonally adjusted annual rate1 of 5.05 million units in January from a revised 5.44 million in December, but remain 11.5 percent above the 4.53 million-unit level in January 2009.”

CNBC - “Housing Recovery Is Looking A Lot Shakier Than Expected” (2-26-10)

“Even the optimists never expected a traditional housing recovery with unemployment stubbornly high, the consumer balance sheet still in repair mode and credit conditions stingy, but right now there’s palpable worry about momentum—especially given a string of solid months in mid- to late-2009.”

Bloomberg - “U.S. Economy Grew at 5.9% Annual Pace Last Quarter” (2-26-10)

“The U.S. economy expanded at a 5.9 percent annual rate in the fourth quarter, more than the government reported last month, reflecting stronger business investment and a greater contribution from inventories. The rise in gross domestic product, which exceeded the median forecast of economists surveyed by Bloomberg News, marked the best performance in more than six years, the Commerce Department said today in Washington. Inventories added 3.88 percentage points to GDP, more than previously reported, and investment in software and equipment grew at the fastest pace in almost a decade.”

Inman - “30-year fixed punches through 5 percent” (2-26-10)

“Rates on 30-year fixed-rate mortgages broke through the 5 percent mark this week for the first time in three weeks, Freddie Mac said in releasing the results of its weekly Primary Mortgage Market Survey. The 30-year fixed-rate mortgage averaged 5.05 percent with an average 0.7 point for the week ending Feb. 25, up from 4.93 percent last week but down from 5.07 percent a year ago.”

Housing Wire – “As Commercial Real Estate Weakens, Moody’s Considers Action on Related CDOs” (2-26-10)

“The credit rating agency Moody’s Investors Service put a total of $6.2bn of commercial real estate linked CDOs up for possible downgrade today, citing growing concerns over the ability of the underlying assets to continually perform.”

Housing Wire – “BB&T Originations Nearly Doubled in 2009″ (2-26-10)

“BB&T Corp. (BBT: 28.53 +1.06%) said it originated 72,500 mortgages through its retail operation, including 53,500 refinance loans and 19,000 purchase mortgages, a 97% increase from 2008’s origination level. In addition, BB&T said it closed 6,600 loans worth nearly $1.3bn Homeowners Affordability and Stability Plan, as known as the Making Home Affordable program, to help stave foreclosure for distressed borrowers.”

Housing Wire – “Homeowner Estimates as Good as Zillow? Appraisal Academics Think So” (2-26-10)

“When it comes to using the Zillow.com automated valuation model (AVM) to get a free listing price on a house, users may be getting what they paid for, according to a report published by the Appraisal Institute that finds the Web site overestimates the values on homes almost as often as the actual homeowners.”

Housing Wire – “Obama Aims to Prohibit Foreclosure to Give HAMP a Chance” (2-26-10)

“The Obama Administration is drafting a proposal that would prohibit foreclosure on delinquent mortgages until servicers get a chance to evaluate a borrower for the Home Affordable Modification Program (HAMP). According to the presentation to lenders obtained by HousingWire, the Administration would also give borrowers an extra 30 days after receiving the HAMP non-approval notice before the foreclosure sale can proceed.”

Housing Wire – “Republicans Say Government-Led Mortgage Modifications are a Failure” (2-26-10)

“The US Treasury Department launched HAMP in March 2009 to allocate capped incentives to servicers for the modification of loans on the verge of foreclosure. The $75bn program aims to modify 3-to-4m mortgages by the time it expires in 2012. Through January, participating servicers provided 116,000 permanent modifications, an increase from 66,000 in December. In November 2009, the Treasury initially estimated 375,000 permanent modifications by the end of the year.”

Realty Times – “Top Affordable U.S. Housing Markets” (2-26-10)

“The HOI [Housing Opportunity Index] showed that 70.8 percent of all new and existing homes sold in the final quarter of 2009 were affordable to families earning the national median income of $64,000, slightly higher than the previous quarter and near the record-high 72.5 percent set during the first quarter of 2009, according to a press statement from the National Association of Home Builders.”

Realty Times – “Commercial Real Estate Losses Could Reach $1 Trillion” (2-26-10)

“We estimate that between $800 billion and $1 trillion of losses to commercial real estate equity and debt will be realized over the next few years. The annual volume of commercial mortgage maturities is expected to increase each year through 2013, according to Ken Rosen, during the Commission’s first hearing on January 15, 2010.”

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The Norris Group Real Estate News Roundup 2/24/10

Wednesday, February 24th, 2010

Today’s News Synopsis:

The MBA reports that mortgage loan application volume decreased 8.5 percent from last week. According to the Commerce Department, purchases of new single-family homes decreased by 11.2 percent in January. Informa Research Services announced that the average interest rate on 30-year fixed-rate jumbos dropped to 5.79%. Freddie Mac’s net losses for 2009 ended at $25.7bn.

In The News:

Mortgage Bankers Association – “Mortgage Applications Decrease in Latest MBA Weekly Survey” (2-24-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending February 19, 2010.  The Market Composite Index, a measure of mortgage loan application volume, decreased 8.5 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 7.3 percent compared with the previous week.”

Los Angeles Times – “Jumbo mortgage market is beginning to thaw” (2-24-10)

“Two weeks ago, the average interest rate on 30-year fixed-rate jumbos dropped to 5.79%, a nearly five-year low, according to rate tracker Informa Research Services of Calabasas. It edged up to 5.88% on Tuesday, still very attractive by historical standards. The average is down from well above 7% in late 2008.”

Washington Post - “New home sales hit record low in January” (2-24-10)

“Purchases of new single-family homes dropped 11.2 percent in January from December to a seasonally adjusted annual rate of 309,000, the Commerce Department reported. Sales fell in every region of the country except the Midwest, and the raw number of new homes on the market rose for the first time in nearly three years.”

Inman - “CAR: Home prices up, sales down” (2-24-10)

“Median home prices increased 15 percent year-over-year in January, according to a report by the California Association of Realtors. Closed escrow sales of existing, single-family detached homes fell 10.6 percent year-over-year, to a seasonally adjusted annualized rate of 539,040 units, and fell 3 percent month-to-month, the report said.”

Housing Wire – “The GSEs Might Save Mortgage Rates After the Fed After All!” (2-24-10)

“Fed purchases since January 2009 consumed most of the new pass-through supply coming into the market from Fannie and Freddie (and a chunk of Ginnie’s too); Its demand has been a powerful tractor-beam pulling the spread between pass-through yields and mortgage rates over other high quality debt instruments to historic lows; Removing that demand could allow pass-through yields and mortgage rates to widen dramatically”

Housing Wire – “Backlog of California Homes Declines in January” (2-24-10)

“Nationwide, the credit rating agency Standard & Poor’s (S&P) estimated the “shadow inventory” of bank-repossessed properties, as well as distressed mortgages facing foreclosure, will take nearly three years to clear at the current national sales rate. As for the total amount of homes in the shadow inventory, Amherst Securities places the total at 7m. The Royal Bank of Scotland found 2.7m, and First American CoreLogic counted 1.7m.”

Housing Wire – “Freddie Mac’s Losses Narrow in Q409″ (2-24-10)

“Freddie Mac (FRE: 1.22 +1.67%) posted a loss of $7.8bn, or $2.39 per share, in Q409, bringing the government-sponsored enterprise’s (GSE) total loss in 2009 to $25.7bn. But Freddie said its net worth as of December 31, 2009 was $4.4bn, and no additional funding was required from the Treasury Department under the terms of the purchase agreement for the fourth quarter.”

Housing Wire – “NAR to Congress: Turn Fannie and Freddie into Non-Profits” (2-24-10)

“A trade organization for real estate agents, the National Association of Realtors (NAR) is recommending to Congress that the government-sponsored enterprises (GSEs) Fannie Mae (FNM: 1.02 +2.11%) and Freddie Mac (FRE: 1.22 +1.67%) be converted into non-profit secondary market authorities.”

Bloomberg - “Toll Says Loss Narrowed as Homebuilder Reduced Costs” (2-24-10)

“Toll Brothers Inc., the largest U.S. luxury-home builder, said its first-quarter loss narrowed as costs fell 31 percent. Orders almost doubled. The net loss for the three months ended Jan. 31 shrank to $40.8 million, or 25 cents a share, from $88.9 million, or 55 cents, a year earlier, the Horsham, Pennsylvania-based company said today in a statement. The average estimate of 10 analysts in a Bloomberg survey was for a loss of 29 cents a share.”

Looking Back:

One year ago, the CBIA announced that housing production fell to a record low. Ben Bernanke claimed that 2010 could be a year of recovery, if foreclosures stabilized. Case-Schiller reported that home prices declined at a record pace in the 4th quarter of 2009.

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The Norris Group Real Estate News Roundup 2/19/10

Friday, February 19th, 2010

Today’s News Synopsis:

According to the MBA, the delinquency rate for one-to-four unit residential properties decreased to 9.47 percent. President Obama is starting a $1.5 billion housing support program for California, Arizona, Nevada, Florida and Michigan. A homeowner mentality survey from Zillow shows that 20 percent of homeowners believe their homes decreased in value during 2009. The Federal Reserve recently bought $11.3bn in mortgage-backed securities from Freddie Mac, Fannie Mae, and Ginnie Mae.

In The News:

MBA - “Delinquencies, Foreclosure Starts Fall in Latest MBA National Delinquency Survey” (2-19-10)

“The delinquency rate for mortgage loans on one-to-four-unit residential properties fell to a seasonally adjusted rate of 9.47 percent of all loans outstanding as of the end of the fourth quarter of 2009, down 17 basis points from the third quarter of 2009, and up 159 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate increased 50 basis points from 9.94 percent in the third quarter of 2009 to 10.44 percent this quarter.”

CNN - “Housing help for unemployed, underwater borrowers” (2-19-10)

“Under pressure to do more for troubled homeowners, President Obama announced Friday a $1.5 billion program to help borrowers in the five states hit hardest by the housing crisis. The initiative calls for pumping money into state housing agencies in California, Arizona, Nevada, Florida and Michigan to fund programs to prevent foreclosure for people who are unemployed or who owe more than their homes are worth.”

Housing Wire – “Some Homeowners Overly Cynical on Home Property Values: Zillow” (2-19-10)

“According to the quarterly survey, one in five, or 20%, of the 2,200 homeowners surveyed believed their property value increased during 2009. That’s the lowest percentage in seven quarters. In reality, 28% of homes increased in value during the year, according to Zillow’s Fourth Quarter Real Estate Market Reports.”

Housing Wire – “Capital Returns on Commercial Real Estate Reach Record Low: IPD” (2-19-10)

“The report monitors the trends in underlying market value and returns of $76.5bn of assets held by real estate funder managers in the US. Capital returns fell 23.9% in 2009 for a total decline of 33.4% from the peak of real estate values in December 2007. Capitalization rates – or the ratio between the net income from the asset and its original price – sunk another 140 bps over 2009 to 7.1%, the highest level in six years.”

Housing Wire – “Fed MBS Purchases 96% Complete With Another $11bn” (2-19-10)

“The Fed bought a total of $11.3bn in mortgage-backed securities (MBS) – $4.47bn Freddie Mac (FRE: 1.23 +0.82%) MBS, $3.97bn Fannie Mae (FNM: 1.02 0.00%) MBS and $2.85bn Ginnie Mae MBS, according to a summary of purchases. The New York Fed also sold $300m of MBS in the same week, bringing the net purchases to $11bn, the same as last week.”

Housing Wire – “Fannie Mae Approves Four New Mortgage Insurers” (2-19-10)

“Fannie Mae (FNM: 1.02 0.00%) approved four new mortgage insurers for conventional first mortgage loans, according to a letter sent to lenders. With the new approvals, Fannie is ready to accept loans with mortgage insurance from Essent Guranty, MGIC Indemnity Corp., PMI Mortgage Assurance Co. (PMAC) and Republic Mortgage Insurance Company of North Carolina.”

Bloomberg - “Fed Discount-Rate Move Signals End to Emergency Steps” (2-19-10)

“The Federal Reserve Board sent its most explicit signal yet that the emergency supply of liquidity to financial markets is done and the most aggressive monetary policy easing in its 96-year history will eventually reverse. Chairman Ben S. Bernanke and his colleagues at the Board of Governors raised the rate charged to banks for direct loans by a quarter-point to 0.75 percent, effective today. It was the first increase in the discount rate since June 2006.”

Inman - “Home-price declines ease in December” (2-19-10)

“National home prices were down 3.7 percent from a year ago in December, a ’significant improvement’ over November’s 5.3 percent decline, according to a home-price index compiled by First American CoreLogic.”

Realty Times – “Clean Homes Show Better–Five Areas To Scrub to Make Yours Sparkle” (2-19-10)

“Tile. When you’re showing your house, hopefully, you’ll get lots of foot traffic. This, however, can lead to very dirty flooring and grout. Yes, you can supply those footies and the sign placed by the door asking buyers to remove their shoes or put the footies on before entering your home, but, the truth is, not all will comply. Still, the tile and the condition of the grout will matter to buyers should they decide to make an offer. There are certainly many products to get the dirt out of those tiny grout lines; one that I’ve had success with is called Heavy Duty Acidic Cleaner for tile.”

Looking Back:

One year ago, the NAR reported that broker activity decreased by 6 percent in the 4th quarter of 2008. Research from the NAHB showed that 62.4 percent of all new and existing homes that were sold in the final quarter of 2008 were affordable to citizens earning the median income. Statistics collected by DQNews displayed that the median home price in the Bay Area dropped to approximately $300,000. California’s legislative branch approved of a plan for tax increases, spending cuts and borrowing to close a $40 billion deficit.

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The Norris Group Real Estate News Roundup 2/18/10

Thursday, February 18th, 2010

Today’s News Synopsis:

Freddie Mac’s weekly survey shows that mortgage rates dropped this week. According to MDA DataQuick, 4,853 new and resale houses and condos closed escrow last month in the Bay Area. The U.S. Treasury claims that its foreclosure prevention program has cut mortgage payments for approximately 947,000 homeowners. S&P estimates there are approximately 947,000 houses in shadow inventory, which will take nearly 3 years to sell.

In The News:

Market Watch – “Mortgage rates drop” (2-18-10)

“Mortgage rates fell again this week, with the 30-year fixed-rate mortgage dropping to an average 4.93%, according to Freddie Mac’s weekly survey of conforming rates, released on Thursday.”

DQNews - “Bay Area home sales fall; median price up from last year, down from December” (2-18-10)

“A total of 4,853 new and resale houses and condos closed escrow in the nine-county Bay Area last month. That was down 38.0 percent from 7,828 sales in December and down 3.9 percent from 5,050 sales in January 2009, according to MDA DataQuick of San Diego.”

Wall Street Journal – “More Households Benefit From Loan-Mod Program” (2-18-10)

“The U.S. Treasury said its foreclosure-prevention program has cut mortgage payments for about 947,000 households, at least temporarily.”

Inman - “S&P: Shadow inventory to grow” (2-18-10)

“Lenders are likely to add at least 1.75 million homes to their real estate owned (REO) property rolls that will take nearly three years to sell and put pressure on home prices, according to a new report from Standard & Poor’s Financial Services LLC.”

Housing Wire – “California Leads States In HAMP Mortgage Modifications” (2-18-10)

“The Treasury launched HAMP in March 2009 to provide capped incentives to servicers for the modification of loans on the verge of foreclosure. Nationwide, more than 116,000 permanent modifications took place through January, up from 66,000 modifications in December. There are more than 830,000 active trial modifications currently under the program. California led all states with more than 191,000 permanent and active trial modifications through January, according to the Treasury.”

Housing Wire – “House Prices Swing Up to Close 2009, Still Down from 2008″ (2-18-10)

“Radar Logic’s monthly Residential Property Index (RPX), a composite HPI of 25 major US markets, increased 0.2% from November 17 to December 17. It’s the first November to December increase the index has experienced since 2004. Prices increased 1.5% from October to November.”

Bloomberg - “Fed Officials Set Goal of ‘Eventual’ Exit From Housing Finance” (2-18-10)

“Central bankers are planning to eventually remove $1.43 trillion of housing debt from the balance sheet after critics such as Stanford University economist John Taylor accused them of straying beyond monetary policy. Philadelphia Fed President Charles Plosser said yesterday that the Fed’s purchases of housing debt expose it to demands from politicians to support other industries.”

Looking Back:

One year ago, the Commerce Department reported that housing construction decreased by 16.8 percent in January. The MBA’s weekly survey showed that mortgage application volume had increased. CAR statistics showed that 59 percent of the California population could afford a home.

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

Wednesday, February 10th, 2010

Today’s News Synopsis:

The MBA reports that mortgage application volume decreased by 1.2 percent from last week. According to the NAHB, there were approximately 234,000 homes for sale at the end of 2009. Statistics from Zillow show that the national median price was $186,200 in Q409 of 2009. The total number of FHA-insured single-family mortgages in default reached 531,671 in Q409 of 2009.

In The News:

Mortgage Bankers Association – “Purchase Applications Decline in Latest MBA Weekly Survey” (2-10-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending February 5, 2010. The Market Composite Index, a measure of mortgage loan application volume, decreased 1.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 0.6 percent compared with the previous week.”

Wall Street Journal – “Spec Houses Rise as Builders Bet on Buyers Before Tax Credit Ends” (2-10-10)

“Houses typically take between four and six months to build, so the window to start construction is closing quickly. And current inventory is low. At the end of 2009, there were 234,000 homes for sale, the lowest level since April 1971, according to the National Association of Home Builders. It’s difficult to measure the total number of spec homes nationwide. But according to a survey conducted by John Burns Real Estate Consulting, based in Irvine, Calif., home builders have about three finished homes with no buyer per community. That’s up slightly from 2.8 finished homes in November but much lower than the peak of six finished homes in July 2008.”

Mercury News – “Bay Area home prices may drop, real estate firm warns” (2-10-10)

“The median estimated value of all Santa Clara County homes at the end of the fourth quarter was $568,401, up a fraction from $564,360 in the third quarter, Zillow reported. In San Mateo County, prices have already begun to fall. The median estimated value of all homes was $635,264 in the fourth quarter, down 0.68 percent from $639,600 in the third quarter. Home values fell in San Mateo County from September through December, Zillow said, after four months of increases from May through August.”

Housing Wire – “Zillow Warns on Double Dip in House Prices” (2-10-10)

“The Zillow Home Value Index put the national median price at $186,200 in Q409, a 5% decrease from Q408. Compared to Q309, prices declined 0.5% during the last quarter of 2009. The index is a measure of median home values of all single-family residences, condominiums and cooperatives, both on the market and not for sale. Q409 marked the 12th consecutive quarter of year-over-year declines, Zillow said.”

Housing Wire – “Defaults on FHA Mortgages Pass 9 Percent” (2-10-10)

“The default rate in the single-family FHA portfolio reached 9.12% in Q409, climbing from 6.82% in Q408, according to the Federal Housing Administration December monthly report. The total number of FHA-insured single-family mortgages in default reached 531,671 in Q409, a 66% increase from 319,741 in Q408. In that same period, modifications on FHA-backed loans increased 54% to 23,973 in Q409.”

Housing Wire – “Feds Outline Mortgage Securities Exit Strategy” (2-10-10)

“And according to Federal Reserve chairman Ben Bernanke, a series of policy wind-down methods are being tested. The Fed may first drain excess reserves built up over many months through extraordinary asset-purchase programs, and then begin to raise interest rates. Or the Fed could pursue both options simultaneous to facilitate a quicker exit. Ultimately, economic developments will determine the exit process.”

Housing Wire – “Freddie Mac Will Buy Out 120-Day Delinquent Mortgages” (2-10-10)

“Government-sponsored mortgage securitizer Freddie Mac (FRE: 1.24 +3.33%) said today it will buy ’substantially all’ mortgages delinquent by at least 120 days from the company’s related fixed-rate and adjustable-rate mortgage (FRM and ARM) Participation Certificate (PC) securities. Freddie said the loan purchases will show up in the PC factor report published after March 4, 2010. The corresponding principal payments on affected PCs will pass through to FRM and ARM PC holders on March 15 and April 15, respectively.”

Housing Wire – “Option ARMs Don’t Measure Up in HAMP: BofA” (2-10-10)

“Of all mortgage collateral sectors, pay-option adjustable-rate mortgages (ARMs) are the least modifiable under a federally-subsidized modification program, according to research Monday by Bank of America Merrill Lynch (BofAML). Researchers found that, in general, collateral with higher delinquencies see higher modification rates. But despite the wave of option ARMs set to recast monthly payments over the next several years, these types of loan fall in ‘the least modifiable sector’ under the Home Affordable Modification Program (HAMP) because of their failure to measure up to eligibility requirements and net present value (NPV) test requirements.”

Orange County Register – “Expect more price cuts on high end homes” (2-10-10)

“Data from 2009 MLS sales for Laguna Beach show that last year started out extremely slow. February 2009 recorded a record low of only 6 residential properties sold for the entire month. By contrast, buying activity picked up enough by year end that December was the highest single month of sales since May 2006.”

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The Norris Group Real Estate News Roundup 2/8/10

Monday, February 8th, 2010

Today’s News Synopsis:

The U.S. Treasury Department reported 66,465 permanent loan modifications over 8 months. Delinquencies on prime jumbo loans increased to 10 percent in January. According to Altera Real Estate, distressed property sales increased in Dana Point and Laguna Beach. Unemployment in the U.S. construction industry increased to 24.7 percent in January.

In The News:

California Builder – “2010 Economic Forecast: The Bear Turns Bullish” (2-8-10)

“In April of 2009, we reversed our tune and called for a ‘W,’ which would be an improvement in the market until the tax credit expired. However, with the federal tax credit extended through June for all buyers, and affordability far better than we imagined at the time, the risk of a second leg down has been significantly reduced.”

Housing Wire – “House Committee Investigates HAMP ‘Effectiveness’” (2-8-10)

“The US Treasury Department launched HAMP in March 2009 to allocate capped incentives to borrowers for the modification of loans on the verge of foreclosure. After eight months in the program, the Treasury reported 66,465 permanent loan modifications in December, up from 31,382 permanent modifications in November.”

Housing Wire – “Fitch Says Prime Jumbo RMBS Near 10% Delinquent” (2-8-10)

“The performance of US prime jumbo loan performance within residential mortgage-backed securities (RMBS) slipped again in January as serious delinquencies (60+ days past due) rose for the 32nd consecutive month and edged closer to 10%, according to the latest market commentary from Fitch Ratings.”

Housing Wire – “Monday Morning Cup of Coffee” (2-8-10)

“The editorial argues the $111bn in mortgage losses covered by the Treasury Department was justifiable as an emergency measure to keep the housing market from collapsing entirely. But with continued losses projected in 2011 and 2012, covering the GSEs in perpetuity would cost more than $1.6trn, on top of the national debt of $12.3trn.”

Housing Wire – “BofA Lends $758bn in 2009″ (2-8-10)

“Bank of America (BAC: 14.48 -3.47%) said it extended more than $758bn in credit in 2009, including nearly $180bn in Q409. BofA originated $87bn in first mortgages to fund purchase or refinance loans for more than 400,000 borrowers in Q409. That total includes $23bn in mortgages made to 151,000 low- and moderate-income borrowers. For the year, BofA originated $378bn in first mortgages for more than 1.7m customers, including $87bn in mortgages to more than 561,000 low- and moderate-income borrowers. In Q409, BofA originated $3bn in home equity and reverse mortgage loans, bringing the total for 2009 to $13bn.”

Orange County Register – “South coast: short sales, foreclosures up” (2-8-10)

“Most of our south coast cities went against the grain and reflected the opposite of the countywide trend by seeing an increase in distressed properties for sale. Two weeks ago, Dana Point’s percentage of short sales and foreclosures was 24.7%, which has risen just slightly to 24.8%, according to a biweekly report by Steven Thomas of Altera Real Estate. Laguna Beach also saw a slight increase in distressed properties. The percentage of short sales and foreclosures rose from 9% two weeks ago to 9.3%.”

Orange County Register – “1-in-4 U.S. construction workers jobless” (2-8-10)

“The U.S. construction industry’s unemployment rate hit 24.7% in January as another 75,000 American construction workers lost their jobs.”

Realty Times – “Developing Referral Relationships” (2-8-10)

“The primary objective of your first contact, like the objective of any other first sales call to a new prospect, is to book an appointment. The first appointment might take the form of an exploratory session aimed at determining the wants, needs, and desires of the lead, or it might be an appointment to conduct a buyer consultation or listing presentation. The secondary objective of your first contact is to open the door, establish trust and respect, demonstrate your knowledge, and establish your position as a reliable resource.”

Looking Back:

One year ago, the MBA ranked Wachovia as the leading national commercial and multifamily loan servicer. Geithner promised that lenders receiving financial rescue would be required to offer mortgage modifications. A total of 70 banks were shut down within the first month of 2009.

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The Norris Group Real Estate News Roundup 2/3/10

Wednesday, February 3rd, 2010

Today’s News Synopsis:

According to the MBA, mortgage application volume increased by 21 percent on a seasonally adjusted basis from last week. Lender Processing Services reports that home delinquency rates increased to 10 percent from November. Inman and GMAC expect that job losses will increase in the real estate industry.

In The News:

Mortgage Bankers Association – “Mortgage Applications Increase in Latest MBA Weekly Survey” (2-3-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 29, 2010. The Market Composite Index, a measure of mortgage loan application volume, increased of 21.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 23.5 percent compared with the previous week.”

Housing Wire – “Mortgage Delinquencies Pass 10%: LPS” (2-3-10)

“Home-loan delinquency rates in the US reached 10% in December, up from the record-high 9.97% in November, according to Lender Processing Services (LPS: 39.93 +1.94%), which provides data on mortgage performance.”

Housing Wire – “PNC to Repay $7.6bn of TARP Funds” (2-3-10)

“The PNC Financial Services Group (PNC: 53.71 -1.72%) negotiated with regulators to repay $7.6bn of funds, nearly three-quarters of what it received in bailout money from the Treasury Department under the Troubled Asset Relief Program (TARP).”

Bloomberg - “GMAC Cuts More Than 500 Jobs in Mortgage, Auto Finance Units” (2-3-10)

“GMAC Inc., the auto and home lender controlled by the U.S. government, plans to cut about 554 jobs and close three offices as the firm tries to stanch loan losses.”

Inman - “Brokers boost tech spending, recruiting” (2-3-10)

“Real estate brokers are cutting office staff and reducing marketing and advertising expenses to survive the downturn, but most have still managed to beef up spending on technology and agent recruitment and training in the past year, according to a broker survey conducted by Inman News.”

Inman - “Homebuyers gain bargaining power” (2-3-10)

“Buyers nationwide haggled a median 2.7 percent, or $5,618, off the last listing price of homes sold in December, a slight increase from 2.6 percent, or $5,538, in November, and the first and only month-to-month increase in 2009. Bargaining power decreased significantly year-over-year, however. In December 2008, buyers were able to knock a median 4.5 percent, or $10,018, off the last listing price.”

Looking Back:

One year ago, NAR reported that pending home sales increased by 6.3 percent in December. MDA DataQuick claimed 24,436 California homes sold for a million dollars or more during the previous year. The CBIA predicted that 63,400 housing units would be produced in 2009. Zillow announced that the U.S. home market lost $3.3 trillion in value in one year.

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The Norris Group Real Estate News Roundup 1/29/10

Friday, January 29th, 2010

Today’s News Synopsis:

Foresight Analytics estimates that between 2010 and 2014, $770bn in commercial loans will be on properties in negative equity. According to the Commerce Department, the U.S. economy expanded in the 4th quarter at a six year record pace. RealtyTrac forecasts that foreclosures probably will reach 3 million this year. Henry Paulson claimed that Russia encouraged China to force a bailout of the largest U.S. mortgage-finance companies.

In The News:

Housing Wire – “DoJ Mortgage Probes May Overextend Authority: K&L Gates” (1-29-10)

“The Department of Justice (DoJ) initiative to beef up investigations of discriminatory mortgage lending and servicing practices will result in more numerous and forceful reviews of mortgage lenders and servicers, including investigations that appear to merge fair lending and consumer protection principles, according to an analysis of the proposal written by global law firm K&L Gates. The firm also warns that the DoJ may be over-extending departmental authority in doing so.”

Housing Wire – “Tougher Times Coming for Commercial Real Estate” (1-29-10)

“Between 2010 and 2014, $770bn in commercial loans will be on properties in negative equity, and may need to be written down, according to a study by Foresight Analytics, a real estate research firm. The report is likely to only add to the woes surrounding the current commercial real estate (CRE) sector.”

Housing Wire – “Fed MBS Purchases 93% Complete with Another $12bn” (1-29-10)

“The Federal Reserve Bank of New York in the week ending January 27th continued to buy mortgage assets from government-sponsored entities as the program winds-down to a close by the end of the quarter. The Fed bought a total of $12.5bn in mortgage-backed securities (MBS) – $5.1bn Freddie Mac (FRE: 1.1799 -0.01%) MBS, $4.7bn Fannie Mae (FNM: 0.9868 -1.32%) MBS and $2.7bn Ginnie Mae MBS, according to a summary of purchases. The New York Fed also sold $500m of MBS in the same week, bringing the net purchases to $12bn, the same as last week.”

Bloomberg - “U.S. Economy: Growth Jumps 5.7%, Fastest Pace in Six Years” (1-29-10)

“The U.S. economy expanded in the fourth quarter at the fastest pace in six years as factories cranked up assembly lines, indicating the recovery may be strong enough to be weaned from government support. The 5.7 percent increase in gross domestic product reported by the Commerce Department in Washington today exceeded the 4.8 percent median forecast of economists surveyed by Bloomberg News. Separate reports showed consumer sentiment and a barometer of business activity rose more than forecast in January.”

Bloomberg - “Obama Housing Rescue Threatened by Foreclosures, Unemployment” (1-29-10)

“Foreclosures probably will reach 3 million this year, surpassing the record of 2.82 million in 2009, according to Irvine, California-based RealtyTrac Inc. That would more than offset an estimated 448,000-unit rise in home sales, based on the average forecast of the National Association of Realtors, the Mortgage Bankers Association and Fannie Mae.”

Bloomberg - “Paulson Says Russia Urged China to Dump Fannie, Freddie Bonds” (1-29-10)

“Russia urged China to dump its Fannie Mae and Freddie Mac bonds in 2008 in a bid to force a bailout of the largest U.S. mortgage-finance companies, former Treasury Secretary Henry Paulson said.”

Orange County Register – “Will buyers rush to cash in on tax credit?” (1-29-10)

“the spring and summer buying seasons are about to kick in. The tax credit deadline will likely add to the sales volume, but it’s critical to remember that ‘first timer’ and ’second home’ contracts must not only be signed by April 30 – escrows must close by June 30! Short sale property escrows have a very hard time closing within 60 days right now.”

Realty Times – “Aging Buyers Want Easy, Comfortable Homes with First-Floor Master Bedroom” (1-29-10)

“The Baby Boomer generation makes up about 28 percent of the population and has some interesting statistics. According to BabyBoomerMagazine.com, this group has greater wealth than any other, controls 70 percent of the total net worth of American households, and accounts for 40 percent of total consumer demand.”

In The News:

One year ago, the CBIA announced that 65,380 building permits were issued from 2008 to 2009. The Commerce Department reported that sales of single-family homes decreased by 14.7 percent. The House of Representatives approved a $819-billion stimulus package. Freddie Mac reported that the 30-year fixed mortgage dipped to 5.10 percent.

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