RealtyTrac reports foreclosure filings incrased in 75% of the nation’s metro areas during the first 2 quarters. Statistics from the Department of Labor show unemployment insurance claims fell by 11,000 last week. According to Freddie Mac’s weekly survey, the average rate for a 30-year fixed-rate mortgage decreased to 4.54%. Fiserv predicts that single-family home prices will fall 4.9 percent during the next 12 months.

In The News:

NAHB - “Remodeling Dips but Shows Signs of Stabilization” (7-29-10)

“The remodeling market slid backward during the second quarter, according to the latest National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI). The RMI (combining current and future market indicators) sunk to 40.7 from 43.8 in the first quarter. Current market conditions slid back to 42.6 from 44.5 in the previous quarter. Future indicators of remodeling business declined to 38.9 from 43.1 in the last quarter.”

CNN - “Foreclosures climb in 75% of metro areas” (7-29-10)

“Foreclosure filings climbed in 75% of the nation’s metro areas during the first half of 2010, according to a report issued Thursday. RealtyTrac, an online marketer of foreclosed homes, said that California, Florida, Arizona and Nevada continue to lead the nation in the rate of foreclosures. Las Vegas was the worst-hit city.”

San Francisco Chronicle – “Feds put up $1 billion more for mortgage relief” (7-29-10)

“Congress has just come up with an extra $1 billion to help people who can’t pay their mortgage because of unemployment or a medical problem. Under this new Emergency Mortgage Relief program, eligible homeowners who are at least three months delinquent can get up to $50,000 apiece in federal loans to pay their mortgages.”

Housing Wire – “Weekly Jobless Claims Beat Consensus, Slip to 457,000″ (7-29-10)

“Initial unemployment insurance claims fell 11,000 in the week ending July 24, beating the market consensus of a 4,000-claim drop. Jobless claims slipped to a seasonally adjusted 457,000 from the previous week’s upwardly revised figure of 468,000, according to new data today from the US Department of Labor. The four-week moving average slipped 4,500 to 452,500 this week.”

Housing Wire – “Weekly Mortgage Rates Hit New Lows” (7-29-10)

“The Freddie Mac survey put the average rate for a 30-year fixed-rate mortgage (FRM) at 4.54% with an average 0.7 origination point for the week ending July 29, down from last week’s average of 4.56% and a year ago, when the average was 5.25%. It’s a new record low for the survey, which began in 1971.”

Housing Wire – “Fiserv Sees More Pain Ahead in House Prices, Projects 4.9% Decline” (7-29-10)

“Fiserv (FISV: 49.22 +0.70%), financial services technology provider, found that national average house prices rose 2% in Q110 from a year before — the first yearly gain since 2006. Fiserv projects that single-family house prices are likely to fall another 4.9% over the next 12 months as tight economic circumstances continue. Continued high unemployment and a large number of distressed properties remaining in markets like Florida, Arizona and Nevada are weighing on the housing market.”

Housing Wire – “SEC Charges Citigroup $75m for Misrepresentation of Subprime Assets” (7-29-10)

“The Securities Exchange Commission (SEC) today charged Citigroup Inc. with misleading investors about the company’s exposure to subprime mortgage assets targeting two Citi executives for their roles in the incident that will cost the company $75m. Citigroup will not dispute the fine, the SEC said, and will pay the full amount.”

Looking Back:

One year ago, the MBA reported that mortgage application volume decreased by 6.3 percent within a week. A bill was being supported by 276 members of the House, which would have audited central banks. About $2.2 trillion of U.S. commercial properties bought or refinanced since 2004 became less valuable than their original price, said Real Capital Analytics in 2009.

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

The Commerce Department new home sales increased 23.6% last month. Statistics from LPS show show 9.39% of all loans were delinquent by more than 30 days. The national vacancy rate on multifamily properties  decreased to 7.8%, according to BarCap. A survey from Campbell Survey suggests that home prices will continue to fall.

In The News:

CNN - “New home sales rebound 24%” (7-26-10)

“New home sales increased 23.6% to a seasonally adjusted annual rate of 330,000 last month, up from an downwardly revised 267,000 in May, the Commerce Department reported Monday. Sales year-over-year fell 16.7%.”

CBIA - “Housing Starts Rise Again in June, CBIA Announces” (7-26-10)

“According to statistics compiled by the Construction Industry Research Board (CIRB), permits were pulled for 4,238 total housing units in June, up 19 percent from the same month a year ago and up 34 percent from May. It was the largest monthly total since December of 2008 when 4,658 total permits had been issued. Permits for single-family homes totaled 2,628, down 9 percent from June 2009 but up 33 percent from the previous month, while multifamily permits totaled 1,610, up 140 percent from a year ago and up 35 percent from May.”

Wall Street Journal – “Mortgage Delinquencies Fall in June, Still Near Record Highs” (7-26-10)

“Some 9.39% of all loans were 30 days or more past due, down from 9.54% in May, according to LPS Applied Analytics, which tracks loan data. An additional 3.69% of mortgages were in some stage of foreclosure, down from 3.72% in May and the record high of 3.81% in March.”

Housing Wire – “Multifamily Rental Demand Catching up to Supply: BarCap” (7-26-10)

“The multifamily net absorption rate, or the amount of space leased after deducting the amount of supply, increased by more than 46,000 units in Q210, the highest increase in 10 years, according to BarCap. The national vacancy rate on multifamily properties also decreased to 7.8% from 8% over the same time”

Housing Wire – “As FHA Mortgage Volume Increases From 2009, Serious Delinquencies Spike” (7-26-10)

“The rate of seriously delinquent mortgages backed by the Federal Housing Administration (FHA) declined slightly from May to June, but the gross number of mortgages that are either 90 or more days past due or in foreclosure increased 35% year-over-year. According to the FHA June single-family operations report, the total volume of mortgage in-force increased more than 24% to 6.4m in June compared to the same month one year ago. The total value of unpaid FHA mortgages was $865.5bn in June, up 30.3% from $663.8bn one year ago and up 3.3% from $837.8bn in May.”

Housing Wire - “The New Math Surrounding HAMP Doesn’t Add Up” (7-26-10)

“There is no other way to say this: we’re being lied to. Willfully. Anyone who managed to read headlines around the U.S. Treasury’s latest HAMP report card last week would likely have thought the program a huge success –- with more than one media outlet trumpeting impossibly miniscule re-default rates among permanent HAMP mods. At HW, we chose not to run with the HAMP redefault numbers except to note that Treasury officials had added them into the latest report card. And this choice was made with purpose: we knew these numbers were fake. Nobody gets a 1.7% redefault rate 6 months after modification –- not even Uncle Sam”

Housing Wire – “Campbell Survey: Housing Prices Drop in June and Will Continue to Fall” (7-26-10)

“A 32% plummet in new home sales in May correlates with a drop in overall homebuyer activity, although updated data out today from the Census Bureau shows a nearly 24% surge in new home sales in June.”

Housing Wire – “Monday Morning Cup of Coffee” (7-26-10)

“The Federal Deposit Insurance Corp. (FDIC) took receivership of seven banks last week with a combined cost to the Deposit Insurance Fund (DIF) of $468.2m. It brings the total closings in 2010 to 103 banks. At this time last year, there were 64 closings. Bank failures in 2009 took until October to pass 100.”

Housing Wire – “MIT-Harvard Study: Foreclosure drops house value by 27%” (7-26-10)

“A foreclosure reduces the value of a house by 27%, on average, and accounts for a much steeper price drop than other forced sales, according to a study by an Massachusetts Institute of Technology (MIT) economist and two Harvard University researchers. In comparison, when a house is sold after the death of an owner, the price drops 5% to 7% on average. When an owner declares bankruptcy, the value sinks 3%, according to the report.”

Bloomberg - “U.S. Small-Business Aid May Create $300 Billion of `Junk’ Loans” (7-26-10)

“The U.S. Senate may vote this week on a bill to funnel $30 billion of capital to community banks, whose business customers typically are small firms. Banks could leverage the sum to make $300 billion in loans that create jobs, according to a Senate summary. That could more than double the commercial and industrial loans at eligible banks as of the first quarter, according to data compiled by KBW Inc.”

Orange County Register – “Owners rush to sell O.C. homes” (7-26-10)

“Orange County housing inventory grew by the largest amount so far this year, adding an additional 418 homes in the past two weeks and now totals 11,235. The market has not breached the 11,000 mark since the beginning of April 2009. Last year at this time the inventory was at 8,895 homes, 2,340 fewer than today. The inventory has not stopped growing at all this year as more and more pent up homeowners have opted to place their homes on the market at unrealistic levels.”

Orange County Register – “O.C. distressed homes up 35%” (7-26-10)

“Last year at this time, there were 2,616 distressed homes on the market, 841 fewer than today. The number of foreclosures within the active listing inventory increased by 35 homes in the past two weeks from 578 to 613 … Short sales, where a homeowner attempts to sell a home for less than the total outstanding loans against a home, requiring lender approval, increased by 115 homes over the past two weeks and now total 2,844.”

Looking Back:

One year ago, the quarterly homeownership rate was 67.3 percent. The average rate on 30-year fixed mortgages was 5.2 percent. The state Senate approved a budget package that was believed to be capable of closing the state’s $26.3 billion deficit.

MDA DataQuick reports 70,051 Notices of Default were filed during the second quarter. The weekly survey from the MBA shows mortgage application volume increased by 7.6 percent this week. Some analysts fear the new financial reform may significantly damage the mortgage industry. The LAEDC believes Orange County will experience a building boom next year.

In The News:

DQNews - “California Mortgage Defaults Hit Three-Year Low; Foreclosures Rise” (7-21-10)

“A total of 70,051 Notices of Default (”NODs”) were filed at county recorder offices during the April-to-June period. That was down 13.6 percent from 81,054 for the prior quarter, and down 43.8 percent from 124,562 in second-quarter 2009, according to San Diego-based MDA DataQuick.”

Mortgage Bankers Association – “Interest Rate Drops Spur Refinance Applications in Latest MBA Weekly Survey” (7-21-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending July 16, 2010. The Market Composite Index, a measure of mortgage loan application volume, increased 7.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 19.5 percent compared with the previous week, which included the Independence Day holiday.”

Housing Wire – “The Nickel and Dime Impact of Financial Reform on Mortgage Servicing” (7-21-10)

“there are several aspects that directly apply to the mortgage servicing industry, and this is mainly due to several minor points through out the reform that add up to one big problem: COST. Considering that the entire bill is drafted as a systemic de-risking manifesto, these changes may actually streamline operations, not work against it. So it’s likely margins will improve, right? No, the biggest impact of the financial reform will be to nickel and dime servicers. As a research note from Deloitte says, ‘it is no exaggeration to suggest that Dodd-Frank will trigger a realignment that is set to challenge financial firms in fundamental ways. They will likely have to reexamine their business models.’”

Housing Wire – “Dodd-Frank Reform Bill Extends Tenant Act through 2014″ (7-21-10)

“PTFA, originally enacted in May 2009, allows renters whose landlords have lost their properties to foreclosure the right to stay in the home for 90 days after the foreclosure or through the term of their lease. Without the new extension in the financial reform bill, the law would have expired at the end of 2012.”

Bloomberg - “U.S. Regulatory Bill May `Flash Freeze’ Asset-Backed Market, Industry Says” (7-21-10)

“The U.S. financial-regulation bill may halt the already diminished market for asset-backed securities by increasing liability risk for credit raters, a securitization-industry group and bank analysts said. The legislation, set for signature by President Barack Obama, eliminates credit-rating companies’ shield from lawsuits when underwriters include their assessments in documents used to sell debt. Moody’s Investors Service and Fitch Ratings have already told Wall Street that because of an increased risk of being sued, they will no longer let underwriters use ratings in bond-registration statements.”

Bloomberg - “U.S. Mortgage Brokers Get Criminal Check, Tests Under New Rules” (7-21-10)

“Brokers in the nation’s most populous state will be required by July 31 to have passed criminal-background and credit checks, as well as licensing exams. California, along with about a third of U.S. states, previously didn’t require mortgage sellers to have individual licenses. Brokers will be assigned identification numbers to enable regulators and borrowers to track their lending histories.”

Orange County Register – “Forecast: O.C. homebuilding up 51% in ‘11″ (7-21-10)

“Orange County builders will start a home construction surge next year, growing the number of building permits filed for future construction by 51% vs. this year’s expected total. That’s a bold projection — especially considering all the mid-summer angst about the economy — within the Los Angeles Economic Development Corp.’s latest regional forecast. LAEDC sees Orange County builders pulling permits for 2,600 units of housing in total for this year. And that’s a 19% improvement above last year’s highly depressed level. Local building permits have fallen 5 out of the past 7 years.”

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.

Sources:
http://www.latimes.com/business/realestate/la-fi-foreclosures-20100715,0,5786857.story?source=patrick.net
http://www.boston.com/business/articles/2010/07/09/banks_fight_changes_to_accounting_rules/
http://www.aba.com/Industry+Issues/FASB_advocacy.htm
http://www.dsnews.com/articles/gses-face-lawsuit-over-resistance-to-going-greener-energy-loans-2010-07-15
http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-150
http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-145
http://www.dsnews.com/articles/senate-approves-landmark-financial-reform-legislation-2010-07-15
http://www.dsnews.com/articles/senate-approves-landmark-financial-reform-legislation-2010-07-15
http://www.reuters.com/article/idUSTRE66E4FP20100715

Today’s News Synopsis:

According to MDA DataQuick, 43,964 new and resale houses and condos were sold in California last month. The California Employment Development Department reports that unemployment levels remained stagnant in June while 400,000 people lost their unemployment benefits. The SEC is charging Goldman Sachs with a $550 million fee for misleading its investors. HR 4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act, is expected to be signed. This bill will end the HVCC.

In The News:

DQNews - “California June Home Sales” (7-15-10)

“An estimated 43,964 new and resale houses and condos were sold statewide last month. That was up 7.3 percent from 40,965 in May, and down 0.5 percent from 44,167 for June 2009. California sales for the month of June have varied from a low of 35,202 in 2008 to a peak of 76,669 in 2004, while the average is 50,405. MDA DataQuick’s statistics go back to 1988.”

Los Angeles Times – “California job climate stagnant in June” (7-16-10)

“California’s jobs climate stagnated in June as part-time federal census workers lost their jobs and about 400,000 out-of-work people lost their unemployment benefits. Although the monthly, seasonably adjusted unemployment rate crept down a tenth of a percentage point to 12.3%, the economy lost 27,600 jobs, according to the California Employment Development Department. The state’s unemployment rate was 11.6% in June 2009. Nationally, it hit 9.5% last month.”

Sacramento Bee – “Home Front: Idea to reduce principal is gaining” (7-16-10)

“The financial system, federal government and California’s state government have favored loan modifications, and more recently, short sales. Both are chaotic. Neither has proved equal to the problem of negative equity. About 45 percent of Sacramento-area borrowers still owe more than their houses are worth. About 12 percent of Sacramento-area home loans are delinquent or headed toward foreclosure.”

San Francisco Chronicle – “Bill would shield homeowners’ credit ratings” (7-16-10)

“Struggling homeowners who get loan modifications to stave off foreclosure often discover that their credit score takes a big hit. A bill introduced on Thursday by U.S. Rep. Jackie Speier, D-Hillsborough, would shield homeowner credit ratings after a loan modification.”

Housing Wire – “Goldman to Pay $550m and Reform Subprime Mortgage Investment Activity” (7-15-10)

“The Securities and Exchange Commission (SEC) today announced that Goldman, Sachs & Co. (GS: 146.45 +0.85%) will pay the largest-ever penalty by a Wall Street firm.”

Housing Wire – “House Approves Flood Insurance Reform” (7-15-10)

“The US House of Representatives on Thursday approved a flood insurance reform bill that would reauthorize the National Flood Insurance Program (NFIP) for five years. The provision, which extends the program to Sept. 30, 2015, passed by a wide margin, 329 to 90, with support from both Democrats and Republicans.”

Housing Wire – “Home Asking Prices, Listing Inventory Up in Q210: Altos Research” (7-16-10)

“The June median listing sales price for single-family existing homes was $477,937 in June, down $146, about 0.03%, below the May 2010 median of $478,083 for homes in Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco, and Washington DC.”

Bloomberg - “Housing Bubble Leaves $4 Trillion Hangover: Chart of the Day” (7-16-10)

“The bursting of the U.S. housing bubble has left homeowners buried under about $4 trillion of excess mortgage debt, according to Dhaval Joshi, the chief strategist at RAB Capital. The CHART OF THE DAY compares the total amount of home loans outstanding with the value of residential real estate, as compiled by the Federal Reserve, for the past two decades. The latter is adjusted to reflect the average 40 percent debt-to- value ratio that prevailed from 1990 to 2005. Mortgage balances were $3.64 trillion higher than the adjusted figure as of March 31, as shown in the top panel. The actual ratio, which stood at 62 percent at the end of the first quarter, appears in the bottom panel.”

Inman - “Goodbye, Home Valuation Code of Conduct” (7-16-10)

“HR 4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act, includes appraisal independence requirements and provides grant funding for state oversight and enforcement of those regulations. The bill creates a new Bureau of Consumer Financial Protection that’s charged — among many things — with drafting new interim final regulations that specifically define acts or practices that violate the bill’s appraisal independence requirements. The regulations are to be drafted within 90 days of the bill’s signing, superseding the Home Valuation Code of Conduct, rules adopted by Fannie Mae and Freddie Mac in May 2009.”

Looking Back:

One year ago, 44,167 new and resale houses and condos were sold statewide in June. The Commerce Department announced that housing starts increased by 3.6 percent. The government was considering a proposal to allow homeowners to stay in their home as renters after a foreclosure. Voit Real Estate Services reported that office vacancies increased to 16.3% from April to May 2009.

A study from Wells Fargo suggests that California may not experience a double dip in the real estate market. FICO Inc reports 25.5 percent of customers  now have a credit score of 599 or below. HUD is offering a 10 percent discount on its REO properties for non-profit buyers. Orange County housing inventory has inflated by 48% since the beginning of the year.

In The News

Orange County Register – “Homebuilders face ’slow climb’ to recovery” (7-11-10)

“It’s a challenging market, no doubt about it. But builders can find a way to sell homes as long as they pay close attention to their potential buyers. We’ve never subscribed to the idea that the same floor plan and the same marketing campaign will be effective in every situation. It just doesn’t work that way. Builders need to understand exactly what price point, what square footage, what location and what product type will speak to the buyers in a given community. When you understand all those elements, your homes will sell. Take the live-work model, which many builders have struggled with. Earlier this year we opened a live-work community in Stanton, with prices starting at $350,000. So far we have sold all but four units.”

Orange County Register – “Short sales up 74% in region” (7-11-10)

“Riverside County had 3,444 short sales this year, the second-highest number in the region. That’s up 116% from 2009, when the county had 1,593 short sales. San Bernardino County short sales increased 96.7%, to 2,089. During the first five months of 2009, the county had 1,062 short sales.”

Orange County Register – “Tips for the first-time homebuyer” (7-10-10)

“Be prepared. You will be asked for the amount and source of your income; the same for funds for down payment and closing costs; your credit and debt obligations; and permission to run a credit report. Gather your most recent federal tax returns; W2s or 1099s, depending on how you are paid; most recent pay stubs, if salaried; and your most recent statements for bank, investment or retirement accounts. If there are recent large and unusual deposits, be ready to explain where the money came from.”

Sacramento Bee – “Wells Fargo: Housing double-dip not likely in California” (7-12-10)

“San Francisco-based Wells Fargo Bank just released its new California Economic Outlook, saying widespread fears of a derailed housing recovery aren’t likely to materialize in California.”

MSNBC - “Gov’t tries to recoup some Fannie, Freddie losses” (7-12-10)

“The regulatory agency said it has issued 64 subpoenas seeking loan files and other documents to determine whether the sellers of those securities made any false statements or omissions. Fannie and Freddie had tried to do so themselves but have faced resistance in getting the loan documents, said the agency, which was given subpoena power two years ago.”

San Francisco Chronicle – “More consumer credit scores dip to new lows” (7-12-10)

“Figures provided by FICO Inc. show that 25.5 percent of consumers – nearly 43.4 million people – now have a credit score of 599 or below, marking them as poor loan risks. It’s unlikely they will be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use. And it could be years before this group can restore their scores, even if they had strong credit histories in the past.”

Housing Wire – “HUD Gives Nonprofits, Governments 10% Discount on REO” (7-12-10)

“The Department of Housing and Urban and Development (HUD) will give state and local governments and nonprofits participating in the Neighborhood Stabilization Program (NSP) preference to buy its REO at 10% below the appraised value.”

Orange County Register – “Corona del Mar homes hardest to sell” (7-12-10)

“‘Hardest’ market to sell a home in terms of ‘market time’ (supply of homes for sale vs. new purchase deals inked in past month) is Corona Del Mar. Its market time was 15.3 months to theoretically sell all for-sale homes at the current buying pace. A year ago, this town was at 8.3 months.”

Orange County Register – “‘Unrealistic’ sellers flood O.C. home market” (7-12-10)

“Orange County housing inventory has inflated by 48% since the beginning of the year on the backs of unrealistic sellers. … The bottom line: sellers really need to take a hard look in the mirror and ask whether or not they really can drop to the realistic fair market value of their home. If not, they need to stop wasting everybody’s time and pull their home off of the market.”

Orange County Register – “O.C.’s distressed home market grows by 29%” (7-12-10)

“The active distressed inventory has increased from 2,555 homes at the beginning of the year to 3,307, levels not seen since May of 2009. The distressed inventory now represents 31% of the current active inventory. Last year at this time, there were 2,766 distressed homes on the market, 541 fewer than today.”

Realty Times – “Three Levels of Lead Generation” (7-12-10)

“you should have 6 pictures that show off the house to prospective buyers in under a minute and these should include: 1. The front of the house (try to skip the double garage doors!) 2. The Living Room or Area 3. The Kitchen (2 shots of the kitchen focusing on different aspects from different angles if possible) 4. The master bedroom 5. The master bathroom (put the toilet seat down!) 6. The backyard or area”

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.

Sources:
http://www.nytimes.com/2010/07/09/business/economy/09rich.html?_r=2
http://blogs.wsj.com/wealth/2010/06/29/mansion-foreclosures-surge/?source=patrick.net
http://latimesblogs.latimes.com/money_co/2010/07/30year-mortgage-rate-edges-down-to-new-record-low.html
http://www.boston.com/business/articles/2010/07/09/banks_fight_changes_to_accounting_rules/
http://www.aba.com/Industry+Issues/FASB_advocacy.htm
http://www.dsnews.com/articles/fannie-mae-adopts-new-rules-for-pre-mod-income-verification-2010-06-28
http://www.lpsvcs.com/NewsRoom/IndustryData/Documents/06-2010%20Mortgage%20Monitor/LPS_Mortgage_Monitor_May_2010_Final.pdf

Today’s News Synopsis:

According to Greg Paquin, Sacramento new home sales decreased by 21.3 percent in the second quarter. Foreign home buyers purchased $66 billion of US residential property during the year ending May 2010. The VP of the Federal Reserve Bank of Cleveland believes that the high foreclosure rate is likely to continue for some time. Multiple economic statistics show that the tax credits may have simply hid an ongoing recession in real estate.

In The News:

Sacramento Bee – “New-home sales plunge in Sacramento area” (7-9-10)

“Second-quarter new-home sales in the Sacramento area fell 21.3 percent from the first quarter and by 50.1 percent from the already dismal second quarter of 2009, said Greg Paquin, a Folsom consultant who issued the sales report.”

Housing Wire – “REITs Raised $22bn for Real Estate Investments in 2010: NAREIT” (7-9-10)

“The US Real Estate Investment Trusts (REITs) raised $22bn in initial, debt and equity capital offerings in 2010, and as a whole the industry owns $500bn of commercial real estate assets, approximately 10% to 15% of total institutionally owned commercial real estate, according to a mid-year report by the National Association of REITs, NAREIT.”

Housing Wire – “International Investment in US Housing Market Rises: NAR” (7-9-10)

“Foreign home buyers — those with residency outside the US as well as recent immigrants and temporary visa holders — purchased $66bn of US residential property, or 7.27% of the market, in the year ending March 2010, according to the National Association of Realtors (NAR). Based on NAR’s existing home sales information, $907bn of residential sales occurred in the 12 months ending March 2010.”

Housing Wire – “DebtX Sees Commercial Mortgage Values Recover Slightly in May” (7-9-10)

“The aggregate value of commercial real estate (CRE) loans that collateralize commercial mortgage-backed securities (CMBS) rose to 76.6% of the original balance in May, from 76.4% in April, according to loan sale advisor DebtX. Values are up from 75.9% in March and 76.5% in February. CRE loan values are down from 77.6% in May 2009, according to DebtX.”

Housing Wire - “High Foreclosure Rate Likely to Persist, Cleveland Fed VP Says” (7-9-10)

“If past recessions are a guide, the nation’s high foreclosure rate is likely to persist, according to authors at the Federal Reserve Bank of Cleveland.”

Housing Wire – “Bank Bailout May Turn a Profit for Treasury, KB&W Report Finds” (7-9-10)

“The Capital Purchase Program, $205bn in financial firm relief funds from the Treasury’s $700bn stimulus package, the Troubled Asset Relief Program (TARP), is nearly repaid in full and likely to turn a profit, according to a report from broker/dealer investment bank Keefe, Bruyette and Woods.”

Housing Wire – “Ginnie Guarantees $33.4bn of MBS in June” (7-9-10)

“The Government National Mortgage Association — or Ginnie Mae — guaranteed more than $33.4bn of mortgage backed securities (MBS) in June.”

Inman - “Tax credits hid ongoing real estate slide?” (7-9-10)

“The economic data that did arrive confirmed a slipping recovery, but not a double-dip. The Institute for Supply Management service-sector report for June followed last week’s pattern: softer than prior month, and well below forecast (May 55.4, forecast 55, actual 53.8). New claims for unemployment insurance came down 21,000 last week to 454,000, but have been stuck in that range all year long. Mortgage refi applications have begun to rise, but purchase ones fell again, by 2 percent last week, now 42 percent below the end of April.”

Looking Back:

One year ago, the government-insured (FHA and VA loans) share of mortgage applications was 35.9 percent. The average 30-year rate dropped to 5.2 percent. UCLA economists predicted that commercial real estate demand would not return to 2006 levels until 2014. The Financial Crimes Enforcement Network reported that suspicious mortgage activities were increasing significantly.

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.

According to Freddie Mac, the average 30-year fixed mortgage rate dropped to 4.57 percent. International Monetary Fund warns a double dip recession is still possible, despite its prediction that GDP will increase over the next year. Fitch Ratings predicts home improvement spending will increase 3.5% this year. Clear Capital reports national housing prices rose 5.2% during the last quarter.

In The News:

Associated Press - “Mortgage rates drop to new low of 4.57 pct.” (7-8-10)

“The average rate on a 30-year fixed mortgage dropped to 4.57 percent this week, mortgage company Freddie Mac reported Thursday. That’s down from the previous record low of 4.58 percent set last week.”

Housing Wire – “International Monetary Fund Warns of Housing Double-Dip Risk” (7-8-10)

“Signs of recovery in the US economy and housing market are stronger than expected, due to policy response from the federal government, according to the International Monetary Fund (IMF). While IMF expects US gross domestic product (GDP) growth of 3.25% in 2010 and 3% in 2011, unemployment is projected to remain above 9%.”

Housing Wire – “Fitch: Homebuyer Tax Credit Will Boost Home Improvement Spending” (7-8-10)

“Fitch Ratings expects home improvement spending to increase 3.5% in 2010 over 2009 levels, partly due to an influx of home sales incentivized by the first-time homebuyer tax credit”

Housing Wire – “Wells Fargo to Lay Off 3,800 Employees, Leave Non-Prime Space” (7-8-10)

“In a restructuring of its financial division, Wells Fargo (WFC: 26.64 -0.08%) said it will eliminate 2,800 positions in the next two months and another 1,000 people by the end of the year. The bank will close 638 financial stores in the US as it will stop originating non-prime portfolio mortgage loans.”

Housing Wire – “Fannie, Freddie Dropped from New York Stock Exchange” (7-8-10)

“The Federal Housing Finance Agency (FHFA) directed the government-sponsored enterprises (GSEs) in June to de-list from the NYSE and any other national securities exchange. The direction came after the price of their common stock hovered near the minimum average closing price of $1 for more than 30 days for most months since the conservatorship took effect in September 2008.”

Housing Wire – “House Prices Soar 8.8% from 2009: Clear Capital” (7-8-10)

“House prices rose in June across the US in both the rolling quarter and the previous-year data, according to real estate asset valuation data provider Clear Capital. National prices rose 5.2% over the previous three-month period and 8.8% since June 2009. The quarterly and yearly growth seen in June builds on already positive data, after prices climbed 6.8% in May from the year before.”

Housing Wire – “John Burns Sees Housing Market Hit Bottom with Little Downside to Investing” (7-8-10)

“The housing market has improved in the last two years to the extent that John Burns Real Estate Consulting sees the market as possibly approaching the beginning of its next up cycle.”

Bloomberg – “Apartment Vacancies in U.S. Drop From 30-Year High, Reis Says” (7-8-10)

“The vacancy rate for apartment properties was 7.8 percent, down from a 30-year high of 8 percent in the first quarter and up from 7.7 percent a year earlier, according to a report today by the real estate research firm. First-quarter vacancies were the highest since 1980, when Reis began tracking the data.”

Orange County Register – “O.C. builders rank among U.S. top 40″ (7-8-10)

“Seven homebuilding companies based in Orange County or having a strong presence here ranked in Builder Magazine’s newest list of the nation’s Top 100 Builders. Five of them were among the nation’s top 40 builders.”

Looking Back:

One year ago, 68 percent of recent home buyers said price decreases encouraged them to buy a house. PMI forecasted that home prices would decrease through 2011. Default rates doubled for commercial properties valued at more than $108 billion.

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

The MBA reports mortgage loan application volume increased 6.7 percent from last week. Delinquencies on home equity loans decreased to 4.12% in the first quarter. 89 percent of mortgage lenders intend to, or already, offer Web-based mortgage application services. The average price discount on foreclosed properties nationwide is 26 percent.

In The News:

Mortgage Bankers Association – “Mortgage Refinance Applications Increase in Latest MBA Weekly Survey” (7-7-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending July 2, 2010.  The Market Composite Index, a measure of mortgage loan application volume, increased 6.7 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 6.5 percent compared with the previous week.”

CNet - “Freddie, Fannie reject energy retrofit loans” (7-7-10)

“The FHFA said it does not object to all energy retrofit loans, but specifically to those PACE or PACE-like energy loans that are essentially structured as property taxes and, therefore, have first lien. In the event of a foreclosure on the property, those loans are legally required to be paid off first before any money goes to the mortgage lender.”

Los Angeles Times – “Home equity loan delinquencies fall for first time in two years” (7-7-10)

“The percentage of home equity loans on which consumers were at least one payment late declined to 4.12% in the first quarter from 4.32% the previous quarter. Not since the first quarter of 2008, when the rate fell to 2.34% from 2.39%, had there been a decline. Missed payments on consumer loans overall improved for the third straight quarter, the ABA said in its quarterly Consumer Credit Delinquency Bulletin. Bank card delinquencies fell from 4.39% to 3.88% of all accounts — the first time since 2002 that card delinquencies were below 4%.”

Housing Wire – “When it Comes to Servicing Ginnie Mortgages, BofA Scores Again” (7-7-10)

“BofA-serviced Ginnie loans ranked among the lowest in terms of 60-day delinquencies (less than 1% in May), followed closely by Wells Fargo (WFC: 26.67 +6.04%) (just over 1%). Countrywide loans had the highest 60-day delinquency rate of around 3%”

Housing Wire – “Tech Developer’s Survey Finds Lenders Expect Surge in Online Mortgage Volume” (7-7-10)

“18% of mortgage lenders offer so-called ’smart’ Web-based mortgage application services. The survey defines ’smart’ software products as those that are interactive mortgage-application systems that are a fully transactional, Web-based solution that intelligently guides borrowers through the application, adjusting the questions for applicants according to responses. Of the remaining companies that current do not offer the service, 71% said they will adopt online mortgage application technology sometime in the future, while 14% said they would not. The remaining 15% responded they were unsure.”

Bloomberg - “U.S. Commercial Property Sales Trail Six-Year Average” (7-7-10)

“U.S. commercial real estate sales in the first half totaled about a quarter of the average of the previous six years as owners kept properties off the market, impeding investors with record funds for purchases. Buyers and sellers completed $34.2 billion of deals through June, or 26 percent of the average first-half dollar volume since 2004, according to preliminary figures from Real Capital Analytics. The total was about 12 percent of the 2007 peak, when $277.7 billion of properties changed hands in the same period, data from the New York-based real estate research firm show.”

Realty Times – “Short Sale Tactics May Bring on Legal Liabilities For Agents” (7-7-10)

“Real estate agents know that short sales are likely to be time-consuming and frustrating. What many don’t know is that short sales carry high risks of legal liability for agents. One area of short sales that is fraught with liability is in the use of negotiators. In California, short sale negotiators must possess a real estate license and are subject to a variety of regulations. Moreover, a negotiator’s agency relation to the principals is frequently unclear and undisclosed. Undisclosed dual agency is a particular problem.”

Orange County Register – “O.C. builders hit by tax break’s demise” (7-7-10)

“The total number of O.C. sales contracts — the start of escrow for new home purchases — tumbled to 191, down from 218 in April, according to Costa Mesa-based Hanley Wood Market Intelligence, which tracks new home sales. May’s total was up a mere 3.8% from year-ago levels. By comparison, O.C. contracts had been up 39.7% in April. April 30 was the deadline to open escrow on a home purchase to qualify for the federal tax credit.”

Orange County Register – “Calif. has 4th largest foreclosure discount” (7-7-10)

“The company ranked of 44 states and Washington D.C. (other states don’t have enough data for valid analysis, according to Realtytrac) for the gap between pricing for homes sold somewhere in the foreclosure process vs. those that were not anywhere in foreclosure. As for fat foreclosure discounts, Ohio led the nation at 39.5%, followed by Kentucky at 35.2% and Illinois at 35.1%. The average sales price of properties nationwide that sold while in some stage of foreclosure in the first quarter was 26 percent below the average sales price of properties not in the foreclosure process.”

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.

According to Lender Processing Services, the national mortgage delinquency rate increased to 9.2% in May. Reis reports national office vacancies increased by 0.1 percent in the second quarter to 17.4 percent. The former CEO of Irvine Co. believes the housing and commercial real estate market will be rocky for the next year or two due to the volume of underwater loans. The former secretary of labor under President Clinton, Robert Reich, believes the U.S. economy will have a very slow recovery, and may experience a double dip.

In The News:

Yahoo - “Mortgage rates scream buy, but who is listening?” (7-3-10)

“Under normal circumstances, 4.58 percent would be irresistible. A decade ago, if you’d told David Christensen, owner of Mountain Lake Mortgage in Lakeside, Mont., that rates would drop this low, he wouldn’t have believed you. And if rates did somehow fall this far, he never thought he would lack for customers, as he does now. Yet both have come true. Christensen argues that mortgage lending standards have tightened so much since the financial crisis that many people with decent but not-stellar credit can’t qualify. Lenders are demanding stronger credit scores and higher down payments or home equity.”

Robert Reich – “Slouching Toward a Double Dip or a Lousy Recovery at Best” (7-3-10)

“In June the nation added fewer jobs than necessary merely to keep up with population growth (private hiring rose by 83,000 after adding only 33,000 jobs in May). The typical workweek declined. Average earnings dropped. Home sales are down. Retail sales are down. Factory orders in May suffered their biggest tumble since March of last year. ”

Housing Wire – “National Mortgage Delinquency Rate Swells to 9.2% in May: LPS” (7-6-10)

“The national mortgage delinquency rate grew to 9.2% in May, up 2.3% from a month earlier and 7.9% from a year earlier, according to the latest report from mortgage performance data and analytics provider Lender Processing Services (LPS: 31.41 -0.16%).”

Bloomberg - “Profit Upgrades Clash With El-Erian’s Fading Recovery” (7-6-10)

“Analysts are raising earnings estimates for U.S. companies at the fastest rate since at least 2004 just as stocks post the biggest losses in 16 months on concern that the economy will sink back into a recession. Profit for Standard & Poor’s 500 Index companies will jump 34 percent in 2010, compared with a projected gain of 27 percent on March 29, according to more than 8,000 estimates compiled by Bloomberg. The revision, the most during any quarter in at least six years, came as lower-than-forecast home sales, manufacturing and private-sector job growth sent the benchmark gauge for American equities down 16 percent since April 23.”

Bloomberg - “Office Vacancy Rate in U.S. Climbs to 17-Year High, Reis Says” (7-6-10)

“Office vacancies in the U.S. rose to the highest level since 1993 in the second quarter as the sluggish economic recovery damps demand from corporate tenants, Reis Inc. said in a report. The vacancy rate climbed to 17.4 percent from 16 percent a year earlier and 17.3 percent in the first quarter, the New York-based research company said today in a statement. Effective rents, the amount tenants actually pay landlords, fell 5.7 percent from a year earlier and 0.9 percent from the previous three months, according to Reis.”

Bloomberg - “Property Bonds Slump Most Since ’09 on Slowdown: Credit Markets” (7-6-10)

“Bonds sold by real-estate companies are performing the worst compared with the rest of the market since March 2009 on concern the slowing economic recovery will cause more defaults. Yield premiums of bonds sold by real-estate investment trusts, shopping-mall owners and office landlords widened 9 basis points, or 0.09 percentage point, more than those on other debt in June, and continued to rise this month, according to Bank of America Merrill Lynch indexes.”

Orange County Register – “Adjustable mortgages back in fashion?” (7-6-10)

“DataQuick reports that 10% of Orange County home buyers who financed their home purchases in May used some sort of adjustable mortgage — the highest level of variable-loan use since August 2008. The bottom for adjustable-loan use was April and May of 2009, when just 2.4% of financed deals had variable financing.”

Orange County Register – “Real estate outlook ‘rocky’ for 2 years” (7-6-10)

“The former CEO and vice chairman of the Irvine Co. says that the outlook for housing and commercial real estate will be rocky for the next year or two because of the volume of underwater loans.”

Housing Wire – “CMBS Delinquency Rate Triples From a Year Ago, Passes 7%: Realpoint” (7-6-10)

“Delinquencies in commercial mortgage-backed securities (CMBS) in the US reached 7.2% in May from 6.9% in April, and more than triple the rate a year ago, according to the analytics firm Realpoint. Realpoint tracks delinquency data on nearly $800bn of CMBS pools for the monthly reports. In May, the total delinquent unpaid balance for these loans reached $57.3bn, a $2.9bn increase from the previous month.”

Looking Back:

One year ago, a study of 3.5 million mortgages nationwide found that in June loan servicers held 32,000 foreclosure sales. Vacancy rates for rental properties increased to 5.3% in the first quarter of 2009.

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

Nancy West Marketing and Outreach Specialist, Housing and Urban Development (HUD) (Full Bio)

This week Bruce is joined by Nancy West. Nancy is a marketing and outreach specialist for the Department of Housing and Urban Development. She has been working in the mortgage industry since 1977. Nancy joined HUD in 2004, and in 2006 she accepted one of four nationwide marketing and outreach specialist positions.

Non-profit organizations have a special access to a specific list of REO properties. To be considered a non-profit organization, you must be a 501C3 classified company under the IRS. All the requirements for meeting this classification are listed at www.HUD.gov

There is also a special list of REO properties for police officers, firefighters, paramedics and school teacher. These people have the opportunity to buy a HUD REO for 50 percent of the sale value. They are required to occupy the property for 3 years. After those first 3 years, their home value is officially decreased by 50 percent. The difficulty with this program is that these people are restricted to buying in revitalization areas. Right now, there are not many revitalization areas.

Cities and Counties individually determine what they want to do with NSP money. Some cities are acquiring REOs, rehabbing them and reselling them, and others are acquiring REOs and turning them into rental opportunities.

The FBI released a report on Friday about the amount of fraud they are seeing. California, Nevada, Florida, New York and Michigan are experiencing the highest fraud rates, and those states are also experiencing the largest number of foreclosures. Nancy is not sure if these foreclosures are primarily due to consumers, loan officers or realtors. She believes that fraud was committed by many groups, and that no specific group is significantly more responsible than the other.

Loan modification programs are now open to be qualified for. To qualify for loan modification, people are now trying to commit fraud on their modification application. The problem with this strategy is that if they make their financial statement look too poor, they may not qualify for a modification. Bruce knows someone who was recently denied a loan modification due to the fact that they had the ability to make their payments, and then chose to strategically default.

The mission of HUD is to provide a decent, safe, and sanitary home, and a suitable living environment for every American. When Bruce read this, he realized that the word “ownership” was not included in HUD’s mission statement. This made him feel that HUD is now broadening their scope to include the chance that the number of renters may increase in the future. Nancy claims that HUD and FHA has not changed their mission statement. HUD’s mission is to strengthen and provide homeownership and rental properties to the under-served, first time buyers, minorities and elderly. HUD does this in a variety of ways, including Section 8 housing vouchers. FHA wants to specifically promote homeownership to those same people. FHA offers home retention opportunities through the reverse mortgage program. The mission has not changed, it has simply refocused.

HUD has a few programs that most people are not aware of. Individuals who rent in Section 8 single-family dwellings are typically very successful. Many of them eventually leave the program and become home owners. Also, FHA has the Disaster Relief Mortgage Program which many people are not aware of. This program allows people to obtain a mortgage with no down payment if their home was destroyed in a natural disaster. As soon as a disaster area is declared, FHA issues a notice to lenders that a moratorium has been placed on foreclosure action. Also, HUD sends staff to assist homeowners in disaster areas.

If a consumer wants to qualify for a Section 8 rental subsidy, they must apply at their local housing authority. The housing authority will go over the qualifications with them, and see what properties are available.

Right now, the government has helped make the housing industry more fluid. When the problem first developed, lenders were still interested in lending, not collecting. They did not have the correct staff to deal with the problem. Many people who could not get a modification 3 months ago can get it now. This is because of new programs through Making Homes Affordable program and TARP programs.

FHA has always had a modification program. FHA requires lenders to provide loss mitigation help when borrowers fall 30 days delinquent. FHA also has a forbearance option and a partial claim. HAMP is also a tool that FHA can use. FHA can perform short sales with incentives, and deeds in lieu of foreclosure. There is currently no time benefit for people who take the deed-in-lieu path rather than foreclosure. However, their credit score will not be affected in the same way.

Individuals who simply cannot afford a mortgage will not be eligible for a loan modification. For example, some borrowers would require an 80 percent reduction in their loan balance to be able to afford the mortgage. This is not possible.

Non-owner occupants are currently not eligible for loan modification.

TARP’s funds are currently being used for modifications, not HUD’s. HUD is not currently able to make loans to solve lender problems. However, this kind of loan may be considered in the future.

There was once a program which allowed lenders to get 90 percent of the value of a property from a HUD loan to keep a homeowner in their property. That was either the Hope for Homeowners Program or the FHA Secure Program. When this program first developed, lenders were too optimistic about how many of the deals they would be able to fix with it. It took a lot of time before they realized that this program would not be as successful as they had hoped.

TARP funds can be used to modify principle loan balances, but FHA does not have a program for this yet.

There are some 100 dollar down payment programs for HUD REOs. These programs cannot be used in all areas. Currently all areas have a 100 dollar down payment program for owner occupants. If someone is acquiring a property using FHA financing, they have to pay for the difference between the list price and what they bid, and then another $100. The highest offer will not always win on a HUD property. What ultimately determines whether or not you will win a HUD bid is whether or not your offer will net the most profit.

HUD once had a program for veterans which included no down payment, but when the Housing and Economic Recovery Act was passed in 2008, veterans were required to put down 3.5 percent.

HUD is also in the development business. There are HUD projects that win awards. The mission of Secretary Donovan is to build these residences in an environmentally friendly way.

A new HUD plan has been formulated for 2015 which will make HUD less bureaucratic and more fluid. This will allow them to pay more attention to people in charge of departments. The first goal is to stem the foreclosure crisis. HUD needs to meet the need for quality, affordable rental homes. HUD wants to utilize housing as a platform for improving the quality of life. Home ownership is still a good opportunity. Housing provides wealth in the future by building equity. HUD wants to build inclusive and sustainable communities free of discrimination.

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..