The Norris Group Blog

Today’s News Synopsis:

The NAR’s Pending Home Sales Index shows that sales increased by 6.4 percent in August. Research from Deutsche Bank Securities shows that 26 percent of borrowers owe more than their home is worth. A $250,000, four-bedroom, 1700 square feet, three-bathroom house in Los Angeles made the nation’s list of most searched for homes. A survey shows that realtors are in favor of expanding the $8,000 dollar tax credit. Regulation Z changes are now in effect. FHA first-time borrowers may see hike in down payment requirements according to new legislation introduced.  Realtors are also interested in expanding first-time tax credit to repeat buyers. Does that mean investors? One could only be so hopeful.

In The News:

NAR - “Record Streak Continues for Pending Home Sales” (10-1-09)

“The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in August, rose 6.4 percent to 103.8 from a reading of 97.6 in July, and is 12.4 percent above August 2008 when it was 92.4. The index is at the highest level since March 2007 when it was 104.5.”

Bloomberg - “Leaving Affordable Mortgage May Become Winning Gambit” (10-1-09)

“In the U.S., 26 percent of borrowers owe more than their home is worth, said Karen Weaver, global head of securitization research for New York-based Deutsche Bank Securities. In parts of California, Florida and Nevada, it’s as high as 75 percent.”

Inman - “30-year fixed rate below 5% again” (10-1-09)

“Rates on 30-year fixed-rate mortgages for borrowers with good credit fell below 5 percent this week for the first time since May, Freddie Mac said in releasing the results of its Primary Mortgage Market Survey.”

Inman - “Lenders want one set of rules” (10-1-09)

“A draft bill floated by Rep. Barney Frank, D-Mass., would create an agency along the lines of the proposal put forward by the Obama administration in June, while attempting to address some lending-industry concerns. Unlike the Obama administration’s proposal, for example, Frank’s bill would not give the agency the power to require that lenders offer ‘plain vanilla’ mortgages.”

Orange County Register – “Property tax revenues flat nationwide” (10-1-09)

“The Census Bureau’s quarterly count of state and local government collections nationwide of taxes shows property-related taxes (that on land and structures) as well as personal propert levies) for the second quarter at $81.86 billion — the largest slice tracked by Census — and flat vs. a year ago.”

Realty Times – “Title, Escrow Services Necessary” (10-1-09)

“Title companies are hired, in part, to issue title insurance protection for home buyers and lenders. Lenders require the service to protect them against loss resulting from claims by others against your new home. The title company investigates the title to make sure it is clear of any encumbrances, such as liens or judgments, forgeries or fraud and any other title anomalies and then issues a policy to protect you from any claims that turn up later. Because title searches are conducted each time the home changes hands or, perhaps, during a refinancing, the searches rarely turn up title claims, but you have to pay for the search.”

Los Angeles Times – “Long Beach property joins the list of most-searched-for U.S. homes online” (10-1-09)

“Priced at $250,000, the four-bedroom, three-bathroom house with 1,768 square feet on 0.15 acres (6,650 square feet) continues to make the list.”

Housing Wire – “Regulation Z Changes Are Here” (10-1-09)

“The Federal Reserve’s new Regulation Z statutes went into effect Thursday, after more than a year of preparations by the mortgage industry. Regulation Z is a truth in lending regulation meant to protect consumers who buy higher-priced mortgages — those loans with annual percentage rates (APR) above the average prime offer rate for a comparable transaction by at least 1.5 percentage points for first mortgages or 3.5 percentage points for second mortgages.”

Housing Wire – “GSE REO Portfolio Near 100,000″ (10-1-09)

“Freddie’s portfolio is nearly 35,000 properties, while Fannie’s is closing in on double that figure at nearly 64,000. While the rate of growth in the two portfolios has declined, Freddie acknowledges it expects to experience further losses from REO properties.”

Housing Wire – “Realtors Favor Expansion of Tax Credit to Repeat Buyers” (10-1-09)

“Realtors indicated in a recent survey the first-time homebuyer tax credit up to $8,000 has had a significant impact on spurring consumer interest in getting into the housing market. Some even called for an expansion of the program past its current expiration date and to homeowners that do not yet qualify.”

Bloomberg - “FHA Borrowers May Need Bigger Down Payments in Bill” (10-1-09)

“Legislation introduced in the U.S. House of Representatives would require higher down payments from borrowers seeking federally backed loans as lawmakers try to prop up the Federal Housing Administration’s insurance fund.”

The Atlantic – “OCC Report Shows Mortgage Modification Trend And Woes” (10-1-09)

“As the chart below shows, in the first quarter of 2009 principal reduction was only used 3.1% of the time. In the second quarter, however, that percentage increased to 10%. That’s a pretty drastic increase, with one-in-ten modifications now reducing principal.”

Looking Back:

One year ago, FHA was given $300 billion dollars for a new foreclosure prevention program. The MBA’s weekly survey showed that mortgage applications had decreased by 28.4 percent from the prior year. Warren Buffett invested $3 billion dollars into General Electric. Foreclosures tripled in Los Angles during the third quarter.