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The Norris Group Real Estate News Roundup 1/26/11

Wednesday, January 26th, 2011

Today’s News Synopsis:

The MBA reports mortgage application volume fell 12.9% this week. According to the Commerce Department, new home sales dropped 7.6% year over year. $1.5 trillion in commercial debt is set to mature by 2014. A total of 58,020 loan modifications have been canceled, said the Treasury Department.

In The News:

Mortgage Banking Association – “Mortgage Applications Decrease in Latest MBA Weekly Survey” (1-26-11)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 21, 2011. The Market Composite Index, a measure of mortgage loan application volume, decreased 12.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 12.0 percent compared with the previous week.”

Los Angeles Times – “New-home sales increase in December” (1-26-11)

“New-home sales were at a seasonally adjusted annual rate of 329,000 units, a 7.6% drop from December 2009, the Commerce Department said. A total of 321,000 homes were built in 2010, the lowest level in 47 years, according to the Associated Press.”

Housing Wire – “SIGTARP: HAMP’s failure ‘devastating,’ permanent mods flat in December” (1-26-11)

“Mortgage servicers modified 30,030 troubled loans through the Home Affordable Modification Program in December, only a slight uptick from the month before and still underwhelming to the program’s largest watchdog.”

Housing Wire – “FHA terminates more than a dozen HUD mortgage originators and underwriters” (1-26-11)

“The Federal Housing Administration terminated agreements with 15 originators and seven underwriters approved for mortgage insurance from the Department of Housing and Urban Development, according to a recent Federal Register.”

Housing Wire – “Deloitte says the time is now for curing distressed borrowers” (1-26-11)

“Commercial loans in particular, are the big trouble area. There are $1.5 trillion in these debts maturing by 2014, and the means to finance are all but nonexistent. The commercial mortgage-backed securities market is improving, to be sure, but at issuance hitting $11 billion in 2010, down from a peak $230 billion in 2007.”

Bloomberg - “U.S. Foreclosure-Prevention Program Accelerated in December Amid Criticism” (1-26-11)

“Borrowers aided by the Home Affordable Modification Program grew to 579,650 in December, 5.5 percent more than a month earlier. Participation had grown 4.5 percent in November. Troubled borrowers continue to fail out of the program at a faster rate than they join. A total of 58,020 loan modifications have been canceled, a nearly 30 percent increase from the 44,972 reported in November, the Treasury report said.”

Looking Back:

One year ago, CBIA reported that 36,209 building permits were issued in California last year. The 30-year mortgage rate decreased by 0.4 percent in December. DBRS expected loan servicers to allow more principal reductions. According to RealFacts, the average  Orange County apartment rent fell 6.7% during the 4th 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.

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The Norris Group Real Estate News Roundup 1/6/11

Thursday, January 6th, 2011

Today’s News Synopsis:

According to Freddie Mac, rates on 30-year FRMs fell to 4.77% this week. Altos Research reports home prices fell 1.63% in December. Timothy Geithner requested from Congress to increase the national debt limit. The current debt limit is $14.29 trillion, and the nation’s current debt level is just $335 billion short of the limit.

In The News:

Research Institute for Housing America – “A Study of Real Estate Markets in Declining Cities” (1-6-11)

“many places will likely resume growth and fully recover within the next decade or so. This is almost certainly not to be the case for all metropolitan areas. In fact, a number of large metropolitan statistical areas (MSAs) experienced severe recessions during the latter half of the 20th century and prior to the Great Recession and never fully recovered or took many years to do so”

USA Today – “30-year fixed mortgage rate dips to 4.77% average in latest week” (1-6-11)

“Freddie Mac says the average rate on 30-year mortgages dropped to 4.77% from 4.86% the previous week. It hit a 40-year low of 4.17% in November.”

Realty Times – “Consequences of Defaults and Foreclosures” (1-6-11)

“One of the most startling impacts of a foreclosure appears on one’s credit report. Your credit score may plummet by 200 to 300 points. In this economic climate, where credit lending standards are already tightened, you may then find it difficult to do everything from buying a car to renting an apartment. What’s worse is that the notation of foreclosure stays on your report for up to seven years.”

Housing Wire – “Altos: Home prices down 1.63% in December, new listings even lower” (1-6-11)

“Home prices fell 1.63% in December, but new listings are hitting the market well below that, according to analytics firm Altos Research. Prices fell in each of the 27 markets studied by Altos. Prices fell 4.77% in San Francisco — the steepest drop of any area, 3.71% in San Diego”

Housing Wire – “Commercial mortgage modifications become huge trend in just two years” (1-6-11)

“Of all loan modifications in the commercial mortgage industry over the past decade, 96% occurred in the last years, according to Standard & Poor’s. The rating agency said 354 commercial real estate loans with a principal balance $15.6 billion were modified from January through November, up significantly from 216 loans valued at $7.06 billion for all of 2009.”

Housing Wire – “DebtX November CRE loan volume down to 80.3%” (1-6-11)

“The decline in the value of commercial real estate loans in November was due primarily to an increase in Treasury rates”

Housing Wire – “Geithner urges Congress to increase national debt limit” (1-6-11)

“Geithner wrote a letter to Congress Thursday requesting an increase in the federal debt limit. According to his numbers, the current debt limit set last February is $14.29 trillion. As of the writing of the letter, the outstanding debt subject to the limit standards is $13.95 trillion — just $335 billion shy of the maximum.”

Housing Wire – “Equator’s Vella: Short sales set to swell 25% in 2011″ (1-6-11)

“With one in five borrowers underwater on their home and an estimated 1.5 million foreclosures scheduled for 2011, the opportunity for short sales will be better than ever. Investors usually see a 20% to 30% better execution on a short sale versus an REO sale when it comes to loss severity. With the foreclosure volume, current and pending REO inventories, servicers will be pressed to do more short sales in 2011.”

Housing Wire – “New Fannie interactive Web tool provides foreclosure avoidance options” (1-6-11)

“Fannie Mae’s new WaysHome interactive multimedia tool walks homeowners through options if they are struggling to pay the mortgage — even allowing them to select a character and be a part of an interactive video.”

Looking Back:

One year ago, California Governor Schwarzenegger announced a new home buyer tax credit. The Mortgage Bankers Association reported that mortgage applications had increased by .4 percent from Christmas. The FOMC confirmed plans to buy $1.25 trillion in mortgage-backed-securities from Freddie Mac, Fannie Mae and Ginnie Mae. Eugene Ludwig believed that commercial real estate losses would break historical records in 2010.

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

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The Norris Group Real Estate News Roundup 1/5/11

Wednesday, January 5th, 2011

Today’s News Synopsis:

Altera Real Estate forecasts an increase in interest rates for 2011. Hope Now reports mortgage lenders completed nearly 1.65 million permanent loan modifications in November. President Obama signed the National Credit Union Stabilization Act.

In The News:

Orange County Register – “Realistic sellers eyed as key to stable prices” (1-5-11)

“There’s a ton of pressure on rates to increase. An increasing deficit with the Fed printing money at warp speed, a government unwilling to cut spending, and no leader anywhere in the world willing to come up with a definitive game plan to get us out of this pickle, translates to mounting pressure on interest rates.”

Mortgage Bankers Association – “Mortgage Applications Drop the Week Before Christmas and Increase the Week After in Latest MBA Weekly Surveys” (1-5-11)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the weeks ending December 24, 2010 and December 31, 2010. For the week ending December 24, 2010, the Market Composite Index, a measure of mortgage loan application volume, decreased 3.9 percent on a seasonally adjusted basis from the prior week. For the week ending December 31, 2010, this index increased 2.3 percent on a seasonally adjusted basis.”

Housing Wire – “Hope Now: November mortgage modifications doubled foreclosure sales” (1-5-11)

“Mortgage lenders completed about 1.65 million permanent loan modifications through November vs. 1 million foreclosure sales, according to Hope Now.”

Housing Wire – “CMBS delinquencies hit record high in December” (1-5-11)

“The delinquency rate on commercial mortgage-backed securities reached 9.2% in December, the highest on record, according to analytics firm Trepp.”

Housing Wire – “Treasury relaxes rules to free-up HAFA short sales” (1-5-11)

“The Treasury Department took action in December eliminating some rules it said have held back short sales through the Home Affordable Foreclosure Alternatives program.”

Housing Wire – “Obama signs credit union stabilization act for NCUA to avoid Treasury borrowing” (1-5-11)

“President Obama returned from his vacation to a heavy workload, and on Tuesday signed 35 bills into law (pictured below). One of which is the National Credit Union Stabilization Act.”

Housing Wire - “Trade groups urge Federal Reserve to adjust Reg Z’s rule on appraisal fees” (1-5-11)

“Four appraisal trade associations urged the Federal Reserve Board to require appraisal management companies to disclose their fees to consumers and to reconsider the language and implementation of an interim rule that requires AMCs to pay ‘customary and reasonable’ appraiser fees.”

Orange County Register – “Great Park homebuilder gets financing” (1-5-11)

“FivePoint Communities, a company spun off by Miami-based builder Lennar Corp. to plan and build the Heritage Fields housing and other major projects, reportedly will get $400 million. Those funds will help FivePoint move forward on what is expected to eventually be a master-planned community with 5,000 new residences in Irvine. According to the WSJ, the fresh funds come from Boston-based State Street Bank & Trust Co. plus other investors.”

Looking Back:

One year ago, pending home sales decreased by 16 percent from October to November. The Mortgage Bankers Association believed that the third quarter of 2009 likely marked the end of the recession, but expected to see continuous trouble in the real estate market. Lockhart predicted there would be another spike in foreclosure activity. Realtors warned that buying REO properties can be risky for business.

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

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The Norris Group Real Estate News Roundup 1/4/11

Tuesday, January 4th, 2011

Today’s News Synopsis:

Nearly 5% of Freddie Mac’s single-family mortgages are seriously delinquent. The FOMC chose to keep the federal funds target rate between 0 to 0.25%. Office buildings added 2.5 million square feet of occupied space in the 4th quarter, according to REIS. The U.S. Bureau of Labor Statistics reports jobless rates rose in 49% of all U.S. metro areas.

In The News:

Yahoo - “10 resourceful real estate tips for 2011″ (1-4-11)

“If your home has been on the market far too long, there’s a good chance you’re not facing market realities. The value of your home isn’t what the tax assessor says it is, or the sum on that two-year-old appraisal you have filed away. It’s not what a similar-size home that sold across town. It’s what a buyer is willing to pay today.”

Housing Wire – “Freddie Mac’s seven facts about the foreclosure process” (1-4-11)

“Freddie owns or guarantees 12.4 million single-family mortgages, and roughly 500,000 are seriously delinquent, roughly 10% of all serious delinquencies in the industry. However, Freddie reported $13.5 billion in homes that were already repossessed through foreclosure, adding $6.8 billion in the third quarter.”

Housing Wire – “FOMC minutes show little motivation to change QE2, ZIRP” (1-4-11)

“At its Dec. 14 meeting, the FOMC chose to keep the federal funds target rate at next to nothing – 0% to 0.25% — as it has for two full years now, and maintained plans to reinvest principal payments from its securities holdings into about $75 billion of long-term Treasury securities each month through the end of the second quarter.”

Housing Wire - “BofA pact represents 44% of total Fannie repurchase claims” (1-4-11)

“Fannie Mae said the agreement reached with Bank of America regarding repurchase requests on mortgages sold to the GSE by Countrywide Financial Corp. addresses about 44% of the $7.7 billion in repurchase claims the company had outstanding with all of its seller servicers as of Sept. 30.”

Housing Wire – “Amherst finds mortgage market underestimates looming defaults” (1-3-11)

“Mortgage-backed securities analysts at the fixed income dealer took a look at $1.3 trillion in outstanding nonagency mortgages from a year ago to see how they’re doing as of November 2010. They found that the $485 billion of nonperforming loans, those more than 60 days delinquent, dropped to $414 billion through either modification or liquidation.”

Bloomberg - “U.S. Office Market Has First Gain in Occupied Space Since 2007, Reis Says” (1-4-11)

“Office buildings added 2.5 million square feet (232,000 square meters) of occupied space in the fourth quarter, compared with a loss of 14 million square feet a year earlier, Reis said in its report. It was the first rise in net absorption since the fourth quarter of 2007.”

Bloomberg - “Wall Street Banks Preparing $4 Billion of Commercial Mortgage-Bond Sales” (1-4-11)

“Deutsche Bank and UBS are teaming up to issue as much as $2.5 billion in commercial mortgage-backed securities linked to loans on office buildings, shopping malls and hotels in what would be the largest offering of its kind since the market froze in June 2008, according to a person familiar with the deal. JPMorgan plans to sell $1.5 billion in similar debt, a person familiar with that sale said.”

Inman - “Broker launches first-time-buyer education site” (1-4-11)

“A Portland, Ore.-based real estate broker has launched a national homebuyer education website. FearlessHomebuyer.com walks first-time homebuyers through the real estate transaction process, from deciding whether or not to buy, to obtaining financing, to estimating fix-up costs.”

Inman - “Jobless rates rise in 49% of U.S. metros” (1-4-11)

“Metropolitan areas in California continue to register the highest unemployment rates in the nation, according to the latest figures released today from the U.S. Bureau of Labor Statistics. Of the 13 metros with unemployment rates above 15 percent in November, 11 were in California.”

Looking Back:

One year ago, forty percent of national home sales were foreclosures or short sales. Economists and real estate experts were complaining that Obama’s $75 billion foreclosure prevention program had damaged the market. The CIRB reported that builder permits for single-family houses fell 3.5 percent. According to The Institute for Supply Management, most companies showed an increased rate of expansion in December 09.

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

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The Norris Group Real Estate Holiday News Roundup

Monday, January 3rd, 2011

In The News:

Housing Wire – “Principal Real Estate Investors optimistic for economic recovery in 2011″ (12-29-10)

“Principal Real Estate Investors expects the Republican gains in Congress, stabilizing commercial real estate values, stronger corporate earnings, higher personal savings rates and the dynamics related to quantitative easing by the Federal Reserve will fuel economic growth in 2011.”

Housing Wire – “Foreclosures jump 31% in third quarter: OCC” (12-29-10)

“Large banks and thrifts foreclosed on 382,000 homes in the third quarter, a 31.2% spike from the previous quarter, according to the Office of the Comptroller of the Currency. Foreclosures increased 3.7% from a year ago, and more are coming. There are 1.2 million homes in the foreclosure process as of the end of the third quarter, up 4.5% from the previous quarter and an increase of 10.1% from a year ago.”

Housing Wire – “Jobless claims fall by 34,000 to lowest point since July 2008″ (12-29-10)

“The Labor Department said the seasonally adjusted figure of actual initial claims for the week ended Dec. 25 fell by 34,000 from the previous week’s 422,000 that was revised upward by a few thousand.”

Housing Wire – “2010 average rate for 30-year mortgage lowest since 1955: Freddie Mac” (12-30-10)

“the average rate for a 30-year, fixed mortgage rose to 4.86% for the week ending Thursday, up from 4.81% a week earlier. A year ago, the average rate was 5.14%.”

Housing Wire – “OTS pins some higher REO volume on mortgage servicers” (12-30-10)

“The Office of Thrift Supervision updated its guidelines alerting examiners to the possibility that a higher level of repossessed homes could stem from poor servicer performance as much as lax underwriting standards.”

Housing Wire – “S&P revises shadow inventory timeline upward, again” (12-30-10)

“In the last three months, an estimated liquidation timeline covering the nation’s backlog of distressed real estate actually increased, according to Standard & Poor’s. The ratings agency now estimates it will take 44 months — up 10% percent from an estimate made just three months ago and 25% annualized — to clear the so-called shadow inventory of homes in distress or foreclosure, but not yet on the resale market.”

Housing Wire – “Senate removes extended tax exemptions for REIT investments” (12-28-10)

“Lawmakers removed larger exemptions for real estate investment trust stock purchases in a bill signed by President Obama Tuesday. The House of Representatives version of the Foreign Investment in Real Property Tax Act would have extended the tax exemption for REIT stock sold from 5% to 10% ownership interest.”

Housing Wire – “Freddie Mac delinquency rate up slightly in November, Fannie rate drops” (12-28-10)

“Freddie Mac said the rate of single-family home loans more than 90-days delinquent inched up to 3.85% last month from 3.82% in October. The government-sponsored enterprise said the multifamily delinquency rate for November fell to 0.39% from 0.44% a month earlier.”

Housing Wire - “LPS: Nearly 2.2 million mortgages are more than 90 days delinquent” (12-28-10)

“Nearly 2.2 million loans are 90 days or more delinquent but not yet in foreclosure, according to LPS, a Jacksonville, Fla.-based mortgage technology and analytics firm.”

Housing Wire - “Lenders initiate 500,000 short sales through Equator in one year” (12-28-10)

“Lenders initiated more than 500,000 short sales on Equator’s automated platform in one year of operation, the technology provider said Tuesday.”

Housing Wire – “Backlog on failed HAMP trials grows 22% since July” (12-28-10)

“The largest servicers participating in the Home Affordable Modification Program have not taken action on 266,136 delinquent mortgages that have either been canceled out of loan modification trials or never qualified for one as of October. This backlog has increased 22% since the 218,246 reported in July.”

Housing Wire – “Consumer advocates claim new Fed rule encourages reverse mortgage predators” (12-28-10)

“The Fed filed the rule with the Federal Register on Sept. 24. The rule was designed to actually give consumers more disclosures on reverse mortgage paperwork, using simple language to highlight the basic features and risks. But the organizations, which include the Center for Responsible Lending, and the National Consumer Law Center, among others, say that the rule goes beyond the Fed’s authority and undermines the still-forming Consumer Financial Protection Bureau.”

Housing Wire – “Housing price declines increase strategic default risk” (12-28-10)

“Home prices are expected to drop another 20% before hitting bottom, according to economists at A. Gary Shilling & Co., raising the risk that 40% of borrowers will walk away from their home in a strategic default.”

NAR - “Pending Home Sales Continue Recovery, Gradual Improvement Seen in 2011″ (12-28-10)

“The Pending Home Sales Index,* a forward-looking indicator, rose 3.5 percent to 92.2 based on contracts signed in November from a downwardly revised 89.1 in October. The index is 5.0 percent below a reading of 97.0 in November 2009. The data reflects contracts and not closings, which normally occur with a lag time of one or two months”

Orange County Register – “O.C. home sales taking 58% longer” (12-28-10)

“It would take 4.64 months for buyers to gobble up all homes for sale at the current pace vs. 2.93 months a year ago — that’s a 58% increase in theoretical selling time in 2010. Homes listed for under a million bucks have a market time of 4.14 months vs. 2.37 months a year ago — that’s a 74% increase in selling time.”

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The Norris Group Real Estate News Roundup 12/07/10

Tuesday, December 7th, 2010

Today’s News Synopsis:

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

In The News:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Looking Back:

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

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor event calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 200 podcasts in our free investor radio archive.

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The Norris Group Real Estate News Roundup 11/29/10

Monday, November 29th, 2010

Today’s News Synopsis:

The serious delinquency rate on Fannie Mae’s single-family mortgages decreased to 4.56% in September. The average loan in foreclosure has been in foreclosure for 492 days. Fannie Mae and Freddie Mac are encouraging real estate agents to continue selling foreclosures. According to Real Capital, the commercial mortgage default rate fell to 4.36 percent.

In The News:

NAR - “Commercial Real Estate Markets Stabilizing, See Slight Improvement in 2011″ (11-29-10)

“The outlook for the office and industrial markets has moderated with modestly declining vacancy rates expected as 2011 progresses, while the retail sector should hold fairly steady. Still, high vacancy rates imply falling rents”

Wall Street Journal – “Bidding Wars Are Back in Some Markets” (11-28-10)

“Research a neighborhood’s inventory. In a real buyer’s market, houses sit on the market for more than six months before selling. To find out how long is typical in a given neighborhood, compare the number of active listings to those under contract — if there’s a glut of houses on the market, there will be far more of the former than the latter.”

Wall Street Journal – “What Happened to the Government’s Short Sales Program?” (11-29-10)

“HAFA works like this: Servicers are supposed to consider short sales for borrowers who aren’t able to receive a HAMP modification. Because some 700,000 HAMP applicants have been ejected from that program, there’s a potentially large pool of borrowers who might be evaluated for HAFA.”

Housing Wire – “Limited MBS supply on tap for 2011, JPMorgan says” (11-29-10)

“In the firm’s securitized products outlook for next year, analysts expect supply of agency, fixed-rate MBS to rise to about $195 billion with nontraditional sources such as liquidations of delinquent loans providing most of the increase. Analysts forecast just $20 billion in MBS supply from new homes sales and cash-out refinancing next year, and modest tightening in mortgages vs. swaps is also expected.”

Housing Wire – “Fannie Mae serious delinquency rate drops annually for first time since 2007″ (11-29-10)

“The serious delinquency rate on single-family mortgages held by Fannie Mae was 4.56% in September, a 16 basis point drop from September 2009 and the first yearly decline since April 2007. In April 2007, the serious delinquency rate was at 0.62%, down 2 bps from April 2006.”

Housing Wire – “Fannie and Freddie give green light to resume sales of foreclosures” (11-29-10)

“Fannie Mae and Freddie Mac gave real estate agents the green light to resume selling foreclosed homes, after suspending the process as the robo-signing debacle unfolded the past two months.”

Housing Wire – “A loan in foreclosure: 492 days — and growing” (11-29-10)

“The average age of a loan in foreclosure hit 492 days in October, and appears as if it will only loom ever-longer in the months ahead.”

Bloomberg - “Defaults on U.S. Commercial Mortgages Held by Banks Rose in Third Quarter” (11-29-10)

“About $604.1 million of loans on office buildings, malls, hotels and other commercial properties went into default in the three months ended Sept. 30, pushing the default rate to 4.36 percent of outstanding loan balances, from 3.41 percent a year earlier and 4.27 percent at midyear, the New York-based real estate research firm said. The record default rate was 4.55 percent in 1992, according to Real Capital. ”

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor event calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 200 podcasts in our free investor radio archive.

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202-TNG Radio – R.K. Arnold 11-27-10

Wednesday, November 24th, 2010

R.K. Arnold

President and CEO of MERS


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This week Bruce is joined by R.K. Arnold. Arnold serves as the president of MERS. He joined MERS at its inception in 1996, and served as senior vice president and general counsel until his promotion to president in 1998. He is a member of the MERS board of directors. His team has built MERS into the central electronic registry for the mortgage finance industry.

Arnold just met with the Senate Banking Committee on housing. The members of that committee are very busy people, and they probably did not have time to read his testimony prior to the meeting. However, Arnold had been on capital prior to the meeting, to brief the staff of the committee. Arnold does not perceive the current housing problem to be very complicated, but he doesn’t think the committee understood it as well as he hoped.

Currently, there are over 31 million active loans in the MERS system. 66 million loans have been registered through MERS since its inception. Bruce doesn’t think that the MERS problem sneaked up on the system. MERS started in 1997, and it must have been developed because it offered a valuable service. When MERS first started, it had a flow of about 50 loans per day. That number eventually reached 36,000 loans per day.

When MERS began to grow and take on the business of major lenders, it had to go through the filters of certain legal departments.

MERS operates a nationwide database in which members can keep track of loans being serviced. To make this system accurate, MERS is labeled in the land records as the mortgagee. This means that all the legal mail involving the property is sent to MERS. You can think of it as being a trustee of a trust. MERS then turns the mail into an electronic form through high speed scanners. These scanners are then used to email the documents to the companies involved.

MERS also keeps track of who owns a loan. That part of MERS has been open to the public for 18 months now. If someone wants to negotiate a loan modification, a private individual can access MERS and discover who the last owner of the note is. That part of the MERS system is not as standardized as the servicing part. You may discover that a note is held by a trustee, or that it is in a numbered trust. Those are one in the same, except that in one way it is reflected in the name of the trust, and in the other, it is reflected in the name of the trustee. There is an additional person involved in this process known as a custodian. If someone wants to know where the note is being physically held, it is probably with the custodian. So this can become very complicated. On the other hand, the servicing is very straight forward and accurate. When a servicer changes, the old servicer does not want to receive mail anymore, because they will not be paid for it, and the new servicer will want to get that mail.

Recently, a large servicer named Taylor, Bean & Whitaker went out of business. Once the FDIC found the successor to that company, that information could be changed on the MERS system, and the mail will go to the new servicer instantly. In the past, that mail may have never gotten to the right location. MERS is a big benefit to homeowners, financial institutions and regulators.

Part of the concern relating to MERS is that there are two worlds in which things are recorded. It would be similar to having ownership records kept at the county recorders and at a company similar to MERS.

Right now, MERS has no competitors. Part of the reason why MERS has no competitor is because it would not be very useful to have competitors for this service.

When MERS is tracking who services a loan, and when the loan is sold, the system is different from what most people are accustomed to. MERS is in the land records as the common agent for all 3,000 of it’s members. On the mortgage, MERS is labeled as the mortgagee, and there is an 18 digit number with a telephone number. Using that number along with your personal identification, you can log into MERS and discover who the current servicer is. There are no assignments; MERS is always the mortgagee. Before MERS, those assignments frequently had mistakes. Some assignments were recorded in the wrong number, and sometime there was no assignment at all with no intent to record them. This was not a problem with the county recorder, it was the problem with the industry. The industry’s attempt to solve that was to put one company on the land records on behalf of all of them. MERS is the mortgagee, not the servicer. If you look at a mortgage on the MERS system, you can find a clause stating, “MERS is the mortgagee as nominee for the lender and the lender’s successor.” MERS keeps track of where a note is as well as who is servicing the note.

Title companies are involved in all foreclosure processes. Foreclosures are performed by law firms. When the mortgage is recorded in the land records, there is a legal paragraph stating that MERS can foreclose. Less than 10% of mortgages are foreclosed in MERS name. MERS has more strict rules regarding foreclosure than many states. If a loan is to be foreclosed in MERS’ name, the promissory note must be presented in the foreclosure. A last note affidavit will not provide an exception to this rule. If they do not wish to present the note, then they must sign it away from MERS. At that point, it would leave the MERS system, and there would be an assignment recorded in the county land records verifying that they are signing it to themselves.

The raw legal title is reflected in the land records. That title makes sure that no one can prime that in the land records. There is a conveyance of real property in the public land records.

Some attorneys have convinced their clients that they will win the right to a free and clear house. Arnold has not seen this happen yet.

The vast majority of all people who are currently being foreclosed on have not made their payments. People seem to have forgotten that there are rights attached to being a lender.

If MERS was declared to have improperly dealt with title issues, Bruce wonders what the consequences would be. Surely that problem cannot exist. Arnold does not believe there is any question that we have secure loans. The lender and the borrower signed a mortgage or a deed of trust. The money was lent as one transaction. The deed of trust was recorded in the land records. Arnold thinks people are panicking over the idea that robo-signers are signing documents without reading them, but that doesn’t have anything to do with the security of the property.

Lenders have acknowledged that there are some flaws in the process, and that those flaws can be changed. Lawyers are hoping that foreclosures can’t be corrected, which would prevent foreclosures from occurring. If those problems couldn’t be fixed, Bruce and Arnold believe bad things would happen to lending. Lenders will not loan money without having security. Fortunately, Arnold doesn’t see any way to get around the land records.

MERS strongly believes that the note should be produced at the time of foreclosure. MERS does not make any money on a foreclosure, and the decision to foreclose is made by the servicer. Arnold is disappointed that there has been sloppiness in the process, but people are working to fix that problem.

MERS website can be found at www.mersinc.org A copy of Arnold’s testimony can be found there.

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

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The Norris Group Real Estate News Roundup 11/19/10

Monday, November 22nd, 2010

Resources:
Delinquencies and Loans in Foreclosure Decrease
Southland Home Sales Fall, Prices Flat
CoreLogic: Mortgage fraud up 20% from 2009
Freddie Mac survey shows mortgage rates at highest level since August
Freddie Mac survey shows mortgage rates at highest level since August
Home Buying Gets Tougher as Lenders Restrict FHA Loans
FHA Reserves Fall to Lowest on Record as Agency Boosts Capital
MERS to testify it forecloses only by mortgage servicer request
http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.LiveStream&Hearing_id=df8cb685-c1bf-4eea-941d-cf9d5173873a
Problems in Mortgage Servicing From Modification to Foreclosure
MERS CEO Defends Technology to Senate Committee
The Consequences of Mortgage Irregularities for Financial Stability… in Plain English
CAI Survey: Associations Hit Hard by Housing, Economic Slump
FTC Issues Final Rule to Protect Struggling Homeowners from Mortgage Relief Scams
Fiserv expects another big drop in home prices next year
S&P predicts more home price declines through 2011

Today’s News Synopsis:

October home sales fell 9.8%, according to RE/MAX. The Federal Trade Commission released a new rule banning companies from accepting fees on mortgage mods before a homeowner’s loan servicer deems the services rendered acceptable. The Federal Housing Finance Administration announced that loan limits on jumbo conforming loans will stay the same for the first nine months of 2011. The Treasury reports borrowers aided by HAMP increased to nearly 520,000 last month.

In The News:

Inman - “Median housing value fell 5.8% in 2009″ (11-19-10)

“Median housing value fell 5.8 percent in 2009, to $185,200 from $196,700 in 2008, the U.S. Census Bureau reported, according to data obtained from the American Community Survey (ACS).”

Housing Wire – “Fed chairman disappointed in slow economic recovery” (11-19-10)

“Disappointingly slow. That’s Federal Reserve Chairman Ben Bernanke’s latest assessment of the economic recovery in the U.S. But, he does believe the central bank’s policy changes are helping.”

Housing Wire – “Tightening mortgage tax code limits housing recovery: John Burns” (11-19-10)

“John Burns Real Estate Consulting said in a report Friday that government intervention is hurting the housing market, and the firm is growing more concerned that lawmakers will reduce the cap on mortgage interest rates that qualify for tax deductions ‘significantly.’”

Housing Wire – “Credit Suisse lists mortgage servicers with highest Ginnie Mae delinquencies” (11-19-10)

“Ally Financial’s (GJM: 22.39 +0.40%) GMAC Mortgage holds the highest serious delinquency rate of Ginnie Mae-backed mortgages for any servicer, according to a report from investment bank Credit Suisse.”

Housing Wire – “New FTC rule aimed at mortgage-relief scams” (11-19-10)

“The Federal Trade Commission unveiled a new rule that bans companies from accepting fees for mortgage modifications before a homeowner’s bank or loan servicer deems the services rendered acceptable.”

Housing Wire – “Failed HAMP mod short sales increase through September” (11-19-10)

“Top mortgage servicers have completed 91,827 short sales or deeds-in-lieu of foreclosure on canceled trial or declined modifications through the Home Affordable Modification Program as of September, up 27% from the previous month, according to data from the Treasury Department.”

Bloomberg - “U.S. Homeowners Drop Out of Foreclosure Program Amid Record Defaults” (11-19-10)

“Borrowers aided by the Home Affordable Modification Program grew to nearly 520,000 in October, up 23,750 from a month earlier, the Treasury said in its monthly report. The increase was less than five percent. A total of 36,300 borrowers have dropped out of the plan for failing to make their payments, an increase of 24 percent from a month earlier.”

Housing Wire – “RE/MAX: October home sales slide as seasonal slowdown hits market” (11-19-10)

“October home sales slid 9.8% from September and 30.2% compared to the year-ago period as seasonal slowdowns and the expired homebuyer’s tax credit took their toll, according to the RE/MAX National Housing Report released Friday.”

Housing Wire – “Jumbo loan limits remain the same in 2011″ (11-19-10)

“The loan limits on jumbo conforming loans will remain unchanged for the first nine months of 2011 the Federal Housing Finance Administration said Friday. The agency recently enacted a congressional continuing resolution to maintain the limits.”

Housing Wire - “Failed HAMP mod short sales increase through September” (11-19-10)

“Top mortgage servicers have completed 91,827 short sales or deeds-in-lieu of foreclosure on canceled trial or declined modifications through the Home Affordable Modification Program as of September, up 27% from the previous month, according to data from the Treasury Department.”

Looking Back:

One year ago, an amendment was passed allowing federal regulators to dismantle financial firms considered to be “too big to fail”.  According to PMI Group, new home sales had decreased by 3.6 percent. The NAHB estimated that families earning the national median income could afford 70.1 percent of the new and existing homes sold in Q3 of 2009. First American CoreLogic reported that home prices declined by 9.8 percent in September from the previous year.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor event calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 200 podcasts in our free investor radio archive.

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The Norris Group Real Estate News Roundup 11/18/10

Thursday, November 18th, 2010

Today’s News Synopsis:

Delinquencies on residential properties dropped 9.13% in the third quarter, according to the MBA. MDA DataQuick’s monthly statistics releases shows that 6,122 new and resale houses and condos closed escrow in the Bay Area. The CBIA reports California housing affordability increased 1.7% in the 3rd quarter. Jobless claims increased by 2,000, said the Labor Department.

In The News:

Mortgage Bankers Association – “Delinquencies and Loans in Foreclosure Decrease, but Foreclosure Starts Rise in Latest MBA National Delinquency Survey” (11-18-10)

“The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 9.13 percent of all loans outstanding as of the end of the third quarter of 2010, a decrease of 72 basis points from the second quarter of 2010, and a decrease of 51 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate decreased one basis point to 9.39 percent this quarter from 9.40 percent last quarter.”

DQNews - “Bay Area Home Sales Fall Sharply; Median Price Dips Below Last Year” (11-18-10)

“A total of 6,122 new and resale houses and condos closed escrow in the nine-county Bay Area last month, down 3.3 percent from 6,334 in September and down 22.8 percent from 7,933 in October 2009, according to MDA DataQuick of San Diego.”

CBIA - “California Housing Affordability Increases Slightly in Third Quarter, CBIA Announces” (11-18-10)

“California housing affordability increased slightly in the third quarter of 2010 with all of the state’s 28 metropolitan areas included in the report showing increases in affordability, the California Building Industry Association said today. On a statewide basis, the HOI found that a family earning the median income could have afforded 61.1 percent of the new and existing homes that were sold during the third quarter, up from 58.4 percent in the second quarter.”

Housing Wire – “MERS to testify it forecloses only by mortgage servicer request” (11-17-10)

“In written testimony for the House Financial Services Committee, R.K. Arnold, CEO of MERS Corp, will state that the electronic mortgage registry system only begins a foreclosure when instructed by the mortgage servicer and receives no financial compensation when it does so.”

Housing Wire – “Weekly jobless claims up 2,000 to 439,000″ (11-18-10)

“The Labor Department said the seasonally adjusted figure of actual initial claims for the week ended Nov. 13 increased by 2,000 from the previous week’s figure of 437,000, which was revised upward a few thousand.”

Housing Wire – “Bank of America monthly modifications increase 51% in October” (11-18-10)

“Bank of America (BAC: 11.70 +0.69%) completed nearly 25,000 mortgage modifications in October, up 51% from the 16,500 done the month before.”

Housing Wire – “Freddie Mac survey shows mortgage rates at highest level since August” (11-18-10)

“Freddie Mac said its Primary Mortgage Market Survey showed the average 30-year, fixed-rate mortgage rose to 4.39% this week from 4.17% a week earlier. The average rate for the conventional 30-year loan was 4.83% a year ago.”

Housing Wire – “FHA’s Stevens: Mortgage servicers are falling short of HUD expectations” (11-18-10)

“Federal Housing Administration Commissioner David Stevens said early indications of a review into mortgage servicer operations has shown they are not meeting the loss mitigation needs of the Department of Housing and Urban Development.”

Looking Back:

One year ago, the MBA’s weekly survey showed that mortgage application volume decreased 2.5 percent on a seasonally adjusted basis. According to the Commerce Department, housing starts fell 8.5 percent in the West. Jones Lang LaSalle Inc. and Grubb & Ellis Co. believed that U.S. office vacancies would reach 20 percent.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor event calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 200 podcasts in our free investor radio archive.

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