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The Norris Group Real Estate News Roundup 4/14/10

Wednesday, April 14th, 2010

Today’s News Synopsis:

The U.S. Treasury reports more than 1.4 million borrowers have been offered trial modifications under HAMP. The MBA’s weekly survey shows that mortgage application volume decreased by 9.6 percent from last week. Banks required over 25 percent more time to foreclose a property in in California last month than in March 2009. According to statistics from the Federal Reserve’s Beige Book, overall economic activity increased in nearly all parts of the country since March.

In The News:

MBA - “MBA’s Story Testifies on Revisions to the Home Affordable Modification Program” (4-14-10)

“According to Treasury, more than 1.4 million borrowers have been offered trial modifications under HAMP.  One million borrowers are in active modifications, of which almost 230,000 represent permanent modifications.  An additional 100,000 permanent modifications are pending borrower acceptance.  And servicers have substantially increased the pace with which permanent modifications are being done.”

MBA - “Mortgage Applications Decrease in Latest MBA Weekly Survey” (4-14-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending April 9, 2010.  The Market Composite Index, a measure of mortgage loan application volume, decreased 9.6 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 9.5 percent compared with the previous week.  This is the third lowest Market Index recorded in the survey since the end of June 2009.”

Inman - “Foreclosure process slows in California” (4-14-10)

“It took banks 27.9 percent longer, or 225 days, to foreclose on a property in California last month than it did in March 2009, and 0.45 percent longer than it did in February, according to data tracked by foreclosure data company ForeclosureRadar.com.”

CNN - “10 foreclosures for every home saved” (4-14-10)

“The Obama administration’s mortgage-modification program is not keeping pace with the deluge of foreclosures hitting the market, a government watchdog found. Only 168,708 homeowners have received long-term mortgage modifications under the president’s plan, as of February, a small fraction of the 6 million borrowers who are more than 60 days behind on their loans, according to the Congressional Oversight Panel’s latest report, released Wednesday.”

Mercury News – “Mortgage market: Government asks for advice on how to improve it” (4-14-10)

“The administration has not drafted any formal proposals to reform the housing finance system. Mortgage finance companies Fannie Mae and Freddie Mac nearly collapsed in September 2008. Propping them up has cost taxpayers about $126 billion so far. Among the questions the Treasury Department is asking are: What level should the federal government play in stabilizing the housing market? What kind of lending standards should be established? How should consumers be protected from abusive practices?”

Housing Wire – “Fed Beige Book Sees Increase in Housing Activity” (4-14-10)

“Overall economic activity increased in nearly all parts of the country, with many districts reporting increased activity in residential housing markets, according to the latest edition of the Federal Reserve’s Beige Book. The St. Louis district was the only one to not report an increase in overall economic activity, indicating a thaw may be in the works since the March edition of the Beige Book showed the toll taken by harsh winter weather.”

Housing Wire – “Donovan: Eliminating GSEs May Threaten Fragile Recovery” (4-14-10)

“Hasty action to quickly change the composition of the GSEs or to eliminate them would further drive down this housing market and cause taxpayer losses to increase”

Housing Wire – “One Year Down the Road, COP Says Success Still Escapes HAMP” (4-14-10)

“The private sector has found less success in modifying mortgages through HAMP than through other in-house strategies. According to testimony by Bank of America (BAC: 19.40 +3.91%) Home Loans president Barbara Desoer to the House Financial Services Committee this week, of BofA’s 14m mortgages, 1.4m are 60 or more days delinquent. All told, BofA completed 560,000 of its own modifications to those borrowers. Similar success escapes government-led initiatives as even though 391,000 borrowers at BofA were offered a HAMP mod, only 33,000 are now permanent through HAMP.”

Bloomberg - “FDIC Plans $1.97 Billion Sale of Loans From 22 Seized Banks” (4-14-10)

“The Federal Deposit Insurance Corp. is seeking bids on a $1.97 billion portfolio of loans from 22 seized banks, pushing the agency’s structured asset sales this year beyond the 2009 total. The sale consists of 1,739 loans mostly tied to commercial real estate, with borrowers late on payments for almost half the portfolio, according to a preliminary announcement obtained by Bloomberg News.”

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The Norris Group Real Estate News Roundup 3/26/10

Friday, March 26th, 2010

Today’s News Synopsis:

The Obama administration announced a new program for homeowners in foreclosure. The Fed bought a total $8.26bn of MBS from Fannie Mae, Freddie Mac, and Ginnie Mae. Freddie Mac reports the 30-year FRM rate increased to 4.99 percent this week.

In The News:

New York Times – “Under Pressure on Foreclosures, White House Pledges Aid” (3-26-10)

“The Obama administration on Friday announced broad new initiatives to help troubled homeowners, potentially refinancing millions of them into fresh government-backed mortgages with lower payments. Another element of the program is meant to temporarily reduce the payments of borrowers who are unemployed. Additionally, the government will encourage lenders to write down the value of loans held by borrowers in modification programs to make their mortgages more affordable.”

Housing Wire - “The Commercial Real Estate Pretend and Extend Strategy Continues” (3-26-10)

“In a speech on the Federal Reserve exit strategy to the House of Representatives Committee on Financial Services, chairman Ben Bernanke noted that the government-led credit provision, the Term Asset-Backed Securities Loan Facility (TALF) is reaching its end this month. The exception to this deadline, however is newly issued commercial mortgage-backed securities (CMBS), and loans backed by newly issued CMBS. These will get an extra three months.”

Housing Wire – “FHA Mortgage Workout Lacks Incentives and Creates Problems: Industry Sources” (3-26-10)

“Under the terms of the voluntary program, lenders will be required to write down at least 10% of the mortgage principal for borrowers who are current on their payments. The program is open to borrowers whose mortgage isn’t currently insured by the FHA. The principal reduction must bring the new FHA loan to value (LTV) to 97.75% and make the new payments account for 31% of the borrower’s monthly income. The program also offers incentives to lenders who offer borrowers with second lien mortgages similar principal reduction and refinance options. The maximum allowed LTV of the combined loans is 115%.”

Housing Wire – “Fed MBS Purchases 99.5% Complete With Another $8bn” (3-26-10)

“The Fed bought a total $8.26bn of MBS this week — $3.6bn of Freddie Mac (FRE: 1.32 +2.33%) MBS, $4.1bn of Fannie Mae (FNM: 1.06 0.00%) MBS and $560m of Ginnie Mae MBS. The Fed also reported $260m of MBS sales in the same week, bringing net purchases to $8bn.”

Bloomberg - “Greenspan Takes Issue With Yellen on Fed’s Role in House Bubble” (3-26-10)

“Alan Greenspan disputed suggestions by his former central bank colleague and current San Francisco Federal Reserve Bank President Janet Yellen that the Fed could have headed off the housing bubble by raising interest rates.”

Bloomberg - “What happens when Fed pulls the plug” (3-26-10)

“In an odd leap, long-term Treasury yields blew up, and Wednesday was the worst single day in nine months. The 10-year Treasury note stopped at 3.88 percent, a level touched for the fifth time since last June, but the violence of this move threatens upward breakout. Meanwhile, mortgages held fairly well, inside the 5.25 percent top that has held since August. The peculiar part: Big sell-offs like this are driven by good economic news, but that’s not what we got. February sales of new and existing homes fell (new ones at the lowest pace since stats began in 1963, 303,000 annualized), and unsold inventory rose.”

Orange County Register – “How to avoid a bad contractor” (3-26-10)

“Unlicensed contractors can underbid their licensed counterparts because they often don’t pay worker’s compensation. That, according to the board, means homeowners could be liable if there is an accident. There are also fewer options for homeowners who get stuck with shoddy work.”

Realty Times – “Mortgage Rates Inch up Following Bond Yields” (3-26-10)

“Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 4.99 percent with an average 0.6 point for the week ending March 25, 2010, up slightly from last week when it averaged 4.96 percent. Last year at this time, the 30-year FRM averaged 4.85 percent.”

Looking Back:

One year ago, the 30-year FRM rate was at 4.85 percent. The number of pulled housing permits decreased by 50 percent from 2008 to 2009. The U.S. economy shrank 6.3 percent during the 4th quarter of 2008.

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The Norris Group Real Estate News Roundup 3/19/10

Friday, March 19th, 2010

Today’s News Synopsis:

According to the Labor Department, 19 cities in California have unemployment rates above 15 percent. CBIA reports the construction employment rate reached 27.1 percent in February. 113 servicers provided 170,000 permanent modifications in February. Statistics from 10 populated U.S. cities show that listing prices decreased by 1.3 percent last month.

In The News:

CNN - “35 cities suffer unemployment above 15%” (3-19-10)

“In fact, there were 35 metropolitan areas with unemployment rates at or above 15% in January. California and Michigan remain the hardest hit, with 19 cities in California showing rates above 15%, according to the Labor Department. Michigan logged the next highest number, with 6.”

CBIA - “Job Losses Continue to Mount in Construction Industry” (3-19-10)

“The construction unemployment rate reached 27.1 percent in February, a 14-year high as another 64,000 workers lost jobs during the month, according to federal employment figures. The large job losses in construction kept the nation as a whole from gaining jobs during the month. Most of the losses came in the nonresidential sector, with 53,500 losses during the month compared to 10,600 residential construction job losses.”

San Francisco Chronicle – “Credit scores can drop after getting loan help” (3-19-10)

“For borrowers who are making their payments on time but are on the verge of default, the Obama administration’s loan modification program can reduce their credit score as much as 100 points. That makes it harder to get a loan and can present a problem when applying for a new job. Housing counselors say it’s unfair, especially because the news often comes as a surprise to homeowners.”

Housing Wire – “FDIC Prepares $653m in RMBS Notes from Failed Bank” (3-19-10)

“The Federal Deposit Insurance Corp. (FDIC) is preparing a $653m structured financing offering, its third such platform, from assets seized from the failed Delaware-based Franklin Bank. The notes, which will carry an FDIC guaranty, are backed by prime residential mortgage-backed securities (RMBS), DebtWire reports. The deal is part of the Structured Sale Guaranteed Notes 2010 platform. It follows the pricing of $1.81bn of notes backed by 103 non-agency RMBS. The RMBS are collateralized by 5,101 mortgages (primarily performing) and some REOs with a total unpaid balance of $1.2trn, according to the pre-sale report.”

Housing Wire – “Fannie Requires Servicers to Offer Alternative for Failed HAMP Modifications” (3-19-10)

“The US Treasury Department launched HAMP in March 2009 to provide incentives to servicers for the modification of loans on the verge of foreclosure. Through February, the 113 servicers provided 170,000 permanent modifications and placed more than 1m borrowers into the three-month trial modification. Though, Treasury officials admit the program is not for everyone.”

Housing Wire – “Moody’s Hikes Expected Losses for Second Lien, Subprime and HELOC RMBS” (3-19-10)

“Moody’s Investors Service revised its loss projections for 2005-2007 second lien, subprime and HELOC-based US residential mortgage backed securities (RMBS). Moody’s now expects cumulative losses to average approximately 25-55% of outstanding balance for non-subprime closed-end second (CES) pools, 70-85% for subprime CES pools and 40-50% for home equity line of credit (HELOC) pools. The revisions represent more than a 50% increase for expected cumulative losses on non-subprime CES, and nearly a 20% relative increase for subprime CES and HELOC pools.”

Housing Wire – “Home Prices Still Falling as Houses Continue to Sit on the Market: Altos” (3-19-10)

“The median home listing price declined 1.3% in the Altos Research 10-city composite, continuing a seven-month-long run of declining list prices in February. And even though the listing time is generally decreasing, for-sale houses still tend to go unsold for the first 100 days. The 10-city home price composite index was $479,781 in February 2010, up from the January 2009 bottom of $470,017, but down 5.75% from last year’s peak of $509,030 in July. All of the 26 markets Altos Research studies experienced a month-over-month listing price decrease, ranging from a the smallest, a 0.2% decline in Miami, to a 4.4% decrease in San Francisco.”

Housing Wire – “Congress Told HAMP Will Cost $53bn Less than Expected” (3-19-10)

“The US Treasury Department initially planned to spend $75bn on the Home Affordable Modification Program (HAMP), but in a recent report to Congress, the Congressional Budget Office (CBO) projected the Treasury will spend a total $22bn on the program. This figure represents total expenditures from day one of HAMP until the program expires in 2012.”

Bloomberg - “Yale Cuts Hedge Funds to Hold More Private Equity, Real Assets” (3-19-10)

“Yale University, whose endowment is the top performer in the U.S., is cutting its target allocations in hedge funds to allow for bigger stakes in private equity and real estate, the asset classes that hurt the fund last year. Yale boosted the fund’s private equity target to 26 percent from 21 percent and its real assets allocation, which includes real estate and commodities, to 37 percent from 29 percent, at its June 2009 investment committee meeting, according to a report released yesterday. The report said Yale, in New Haven, Connecticut, anticipated capital gains in those asset classes.”

Looking Back:

One year ago, 5,032 new and resale houses and condos closed escrow in the Bay Area within a month. The interest rate for 30-year FRMs dropped to 4.98 percent. The FHA reported an increase in loan defaults.

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The Norris Group Real Estate News Roundup 3/1/10

Monday, March 1st, 2010

Today’s News Synopsis:

California officials may be implementing new builder fees. Home sales generated $934 million from last year. Fannie mae lost 15.9 billion dollars during quarter 4 of 2009. Warren Buffet predicts the residential real estate market will begin to recover in 2011.

In The news:

Sacramento Bee – “Back-seat Driver: Sacramento proposes new-building fees for road projects” (3-1-10)

“Sacramento city officials today will propose a fee on new buildings – including up to $6,250 per single-family house – to help pay for $710 million in transportation projects over the next two decades.”

Orange County Register – “Best Jan. for real estate agents in 3 years” (3-1-10)

“Home sales generated $934 million, up 20.9% from January 2009, when sales generated $717 million. The lowest amount of revenue was generated in January 2008, when home sales totaled $670 million.”

Wall Street Journal – “Bid to Curb Mortgage Tax Break Falters” (3-1-10)

“President Barack Obama’s latest budget proposal, released in February, includes a provision that would shrink deductions for mortgage interest, real-estate taxes, charitable contributions and other items for married couples with annual incomes of more than $250,000, or individual filers earning more than $200,000. Under the proposal, such taxpayers would save 28 cents of tax liability for every $1 of mortgage interest or other eligible expenses, down from 35 cents now.”

Housing Wire – “A Dark Day for the Mortgage Industry” (3-1-10)

“the MBA, along with committee input from Fannie Mae, Freddie Mac (read: government) and others, are now pushing the U.S. Treasury to extend taxpayer-funded forbearances to unemployed owner-occupants. I say “taxpayer-funded” for a reason, as you’ll see. Under the MBA proposal, unemployed borrowers would be asked to make nominal payments equal to 31% of whatever their remaining income is – which for many millions of Americans without savings would be 31% of their unemployment benefits, not nearly enough to cover their usual mortgage. In exchange for whatever they can afford, borrowers would receive forbearances for up to 9 months – with the servicer continuing to advance full principal and interest to investors the entire time.”

Housing Wire – “Fannie Seeks $15bn of Aid After Quarterly Loss” (3-1-10)

“Government-sponsored entity (GSE) Fannie Mae (FNM: 0.99 0.00%) on Friday reported a $15.2bn net loss for Q409, narrowed slightly from a $18.9bn net loss in the previous quarter. The quarterly loss resulted in a net worth deficit of $15.3bn as of Dec. 31, 2009, according to the earnings statement”

Bloomberg - “Buffett Says U.S. Housing Will Recover by Next Year” (3-1-10)

“Billionaire Warren Buffett said the U.S. residential real estate slump will end by about 2011, predicting that’s how long it will take demand for homes to catch up with the supply. ”

Bloomberg - “General Growth Aims for Oct. 5 Exit Plan Confirmation” (3-1-10)

“General Growth Properties Inc., bankrupt owner of more than 200 U.S. malls from Boston to Los Angeles, aims to confirm a reorganization plan by Oct. 5, after taking 60 days to consider proposals that compete with one from Brookfield Asset Management Inc.”

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

Friday, February 26th, 2010

Today’s News Synopsis:

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

In The News:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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The Norris Group Real Estate News Roundup 2/25/10

Thursday, February 25th, 2010

Today’s News Synopsis:

A CAR survey shows that 67 percent of home sellers chose to sell because of their inability to pay mortgage debt. The FHFA reports that U.S. home prices decreased by 1.2 percent in the fourth quarter. A survey shows that agents and brokers are growing increasingly pessimistic of the future of real estate. According to FHFA, the rate for 30-year FRMs increased to 5.1 percent in January.

In The News:

San Francisco Chronicle – “Newsom plan would defer up-front developer fees” (2-25-10)

“The mayor’s administration says the package of legislation, tentatively set to go before the Board of Supervisors’ land use committee March 15, would cut up-front costs for developers, making it easier to get financing in this recession. Newsom said his proposals would speed up start times on four specific projects by as much as two years, including the second tower in the One Rincon Hill development. Work on the four projects could start in two months, he said.”

CAR - “C.A.R. releases ’2009-2010 Survey of California Home Sellers’” (2-25-10)

“Changes in family and employment status as well as adjustments to monthly mortgage obligations played significant roles in California’s homeowners’ decisions to sell their homes in 2009, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) ’2009-2010 Survey of California Home Sellers.’ According to the report, 67 percent of all sellers in California did so as a result of difficulties related to meeting their mortgage obligation.”

Bloomberg - “Home Prices Decline 1.2%, Smallest Drop in Two Years” (2-25-10)

“U.S. home prices fell 1.2 percent in the fourth quarter from a year earlier, the smallest loss in two years, as a federal tax credit for homebuyers boosted demand. Prices were down 0.1 percent from the third quarter, the Federal Housing Finance Agency said today in a report. The year- over-year drop was the smallest since a 1.1 percent decline in 2007’s fourth quarter, the Washington-based agency said.”

Inman - “Agents, brokers less rosy on future” (2-25-10)

“Short-term views for the next three to six months deteriorated 2.89 percent, to 5.71, while long-term views for the next 12 to 18 months fell 4.1 percent to 6.32. The survey pointed to expected interest rate hikes, the poor jobs market, and the imminent April 30 deadline (for a home sale to be under contract) for the federal homebuyer tax credit program as participants’ major concerns.”

Housing Wire – “FHFA Mortgage Rate Tracker Posts Increase in January” (2-25-10)

“The average interest rate on conventional 30-year, fixed-rate mortgage (FRM) with a principal of $417,000 or less was 5.1% in January, an increase from 5.05% in December, the FHFA said. The average interest rate on 15-year FRM of $417,000 or less stayed at 4.54% in January.”

Housing Wire – “Delinquent CMBS Triples as Spreads Stabilize” (2-25-10)

“Realpoint reviewed more than $797bn in CMBS pools for the January report. The firm calculated a 5.76% delinquency rate for the pools reviewed, up from 5.22% in December. The rate jumped by more than four times the rate in January 2009, when 1.2% of the reviewed loans fell delinquent. June 2007 held the lowest delinquency rate recorded by Realpoint, at 0.2%.”

Housing Wire – “Bankers Propose Mortgage Forebearance for Unemployed” (2-25-10)

“The program would give incentives to investors and servicers (through Treasury’s TARP) that place unemployed borrowers in a forbearance plan for up to 90 days — a period that can be renewed twice based on borrower’s financial circumstances. This plan would put a borrower in forbearance for up to nine months, at which time (or earlier, at re-employment status) eligibility for a HAMP trial can be determined.”

Bloomberg - “General Growth Is Biggest Real Estate Fight Since Equity Office” (2-25-10)

“The battle for General Growth Properties Inc., owner of more than 200 U.S. malls from Boston to Los Angeles, is turning into the biggest real estate fight since sale of Sam Zell’s Equity Office Properties Trust. Westfield Group, a Sydney-based property investor with stakes in 55 U.S. retail centers, signed an agreement letting it assess General Growth’s finances, a person familiar with the pact said yesterday. That may put Westfield in position to vie for the bankrupt company’s assets as part of a contest already embroiling Simon Property Group Inc. and Brookfield Asset Management Inc.”

Bloomberg - “Obama May Prohibit Home-Loan Foreclosures Without HAMP Review” (2-25-10)

“The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.”

Looking Back:

One year ago, existing home sales decreased by 5.3 percent. The MBA announced that mortgage loan application volume had decreased by 15 percent from the previous quarter. The Obama administration implemented a stress test of 19 banks. Bernanke claimed to be confident of the federal reserve’s ability to prevent inflation.

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

Friday, February 19th, 2010

Today’s News Synopsis:

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

In The News:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Looking Back:

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

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The Norris Group Real Estate News Roundup 1/25/10

Monday, January 25th, 2010

Today’s News Synopsis:

According to the NAR, existing home sales decreased by 16.7 percent in December. The HVCC repeal bill, named HR 1728, has passed in the House of Representatvies and is waiting approval from Congress. The FDIC took over 5 more failed banks last week. FTN Financial reports that declining home values have had little effect on the nation’s economic recovery.

In The News:

NAR - “December Existing-Home Sales Down but Prices Rise; 2009 Sales Up” (1-25-10)

“Existing-home sales – including single-family, townhomes, condominiums and co-ops – fell 16.7 percent to a seasonally adjusted annual rate1 of 5.45 million units in December from 6.54 million in November, but remain 15.0 percent above the 4.74 million-unit level in December 2008.”

Washington Post – “Stakes are high as government plans exit from mortgage markets” (1-25-10)

“Over the past year, these programs have enabled prospective home buyers to get cheap loans, helping those buying and selling property as well as those eager to refinance existing mortgages. If the end of the initiative drives up interest rates, say from 5 percent to 5.5 percent, homeowners could be deterred from refinancing, industry officials say. A sharper increase in rates could make homes too expensive for many buyers, forcing them from the market and causing the recent pickup in home sales to stall.”

Inman - “Bailout’s impact on deficit debated” (1-25-10)

“The cost of subsidizing the operations of Fannie Mae and Freddie Mac should be accounted for in the federal budget as if they were federal agencies, the Congressional Budget Office argues in a new report — an accounting change that would add nearly $400 billion to the growing national deficit. The Obama administration has argued that only cash the Treasury Department pumps directly into Fannie and Freddie — about $95.6 billion since the mortgage guarantors were placed into conservatorship in September 2008 — should be included as budget expenditures.”

Housing Wire - “FHA Cracks Down on 4 Mortgage Lenders” (1-25-10)

“The lenders losing approval are: Strategic Mortgage Corporation, ProMortgage, Americare Investment Group, which does business as Premier Capital Lending and TopDot Mortgage. The MRB suspended FHA approval on Home Mortgage Inc. (HMI) for six months. In addition to losing its FHA approval, TopDot faces action from the Government National Mortgage Association, or Ginnie Mae.”

Housing Wire – “Home Valuation Code of Conduct is Better for Business, AMCs Say” (1-25-10)

“A trade group for the appraisal management company (AMC) industry warned that if proposed legislation repealing the Home Valuation Code of Conduct (HVCC) is passed, it may lead to the same damaging business practices that puts undue pressure put on property appraisers. The specific legislation that catches the ire of the Title/Appraisal Vendor Management Association (TAVMA) is HR 1728 which passed the House of Representatives and is awaiting Senate approval. The financial reform bill includes a provision to repeal the HVCC.”

Housing Wire – “FDIC May Securitize Assets of Failed Banks” (1-25-10)

“There is a large supply of failed bank assets on-hand, with the latest round of five failures on Friday leaving the FDIC with at least $20.1m in total assets for later disposition. The FDIC is said to be diversifying its options for offloading failed banks when no buyer can be found.”

Housing Wire – “Foreclosure and Price Decline is not Fatal to Recovery, Says FTN Financial” (1-25-10)

“Declines in house prices mixed with increases in foreclosures are not showing a hugely negative knock-on impact for the nation’s overall economic recovery, according to a weekly report by FTN Financial, a portfolio manager and analytics provider for the investment and banking industry.”

Bloomberg - “Fannie Mortgage-Bond Spreads Unchanged After Widening Four Days” (1-25-10)

“Yields on Fannie Mae and Freddie Mac mortgage securities were unchanged relative to government notes after widening for four days. The difference between yields on Washington-based Fannie Mae’s current-coupon 30-year fixed-rate mortgage bonds and 10- year Treasuries remained at about 0.75 percentage point, after climbing as high as 0.77 percentage point, according to data compiled by Bloomberg. The spread has grown since reaching 0.66 percentage point on Jan. 6, the tightest in more than 17 years.”

Orange County Register – “South coast distressed homes slip, slide” (1-25-10)

“Two weeks ago, Dana Point’s percentage of short sales and foreclosures was 23.3%, which has risen to 24.7% this week, according to a biweekly report by Steven Thomas of Altera Real Estate. San Clemente also saw an increase in distressed properties. Two weeks ago, 30.8 percent of the city’s active home stock was distressed. Now, 32.8% of homes for sale are distressed.”

Orange County Register - “Smallest apartments get biggest rent cuts” (1-25-10)

“The biggest percentage cuts were made in rents for ‘junior one-bedroom’ units — essentially a small one-bedroom or a studio apartment with an alcove or space that can be used as a bedroom. The average rent for those units fell 11.4% to $1,172 a month. Studio apartments, one-bedroom and two-bedroom units had the next biggest percentage cuts, with reductions of just over 7%.”

Looking Back:

One year ago, California’s unemployment rate increased to 9.3 percent. Proposition 13 prevented California from raising property taxes for the budget crisis. Mortgage rates increased by 0.5 percent within a week and a half. The Federal Reserve was expected to keep its rates at a record low.

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The Norris Group Real Estate News Roundup 1/4/09

Monday, January 4th, 2010

Today’s News Synopsis:

Forty percent of national home sales in 2009 were foreclosures or short sales. Economists and real estate experts are complaining that Obama’s $75 billion foreclosure prevention program has damaged the market. The CIRB reports 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.

In The News:

San Francisco Chronicle – “Foreclosures weigh on home appraisals” (1-4-09)

“Roughly 40 percent of all home sales this year were foreclosures or short sales, meaning the property sold for less than the mortgage. In some markets, like Las Vegas and Phoenix, they’ve hit more than 50 percent.”

New York Times – “U.S. Loan Effort Is Seen as Adding to Housing Woes” (1-4-09)

“The Obama administration’s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good.”

Market Watch – “Low rates didn’t cause bubble, Bernanke says” (1-3-09)

“it was lax supervision of toxic mortgages by the Fed and other bank regulators — along with excessive flows of capital around the globe — that inflated the bubble, setting up the world economy for what may have been the worst economic crisis in modern history, Bernanke said.”

Bloomberg - “GMAC Said to Discuss U.S. Aid Package of $3 Billion or More” (1-4-09)

“GMAC Inc., the home and auto lender that counts the U.S. government as the largest stakeholder, is discussing with the Obama administration a third bailout of $3 billion to $4 billion, said a person familiar with the matter.”

Bloomberg - “Companies in U.S. Expand at Fastest Pace Since 2006″ (1-4-09)

“Companies in the U.S. expanded in December at the fastest pace in almost four years, signaling the economic recovery is gaining speed heading into 2010. The Institute for Supply Management-Chicago Inc. said today its barometer rose to 60, exceeding the most optimistic estimate of economists surveyed by Bloomberg News and the highest level since January 2006. The gauge, in which readings greater than 50 signal expansion, showed companies boosted production and employment as orders climbed.”

Orange County Register – “Did housing’s troubles double?” (1-4-09)

“Well, things don’t look so harsh when your spyglass is 10 years long and short-run bumps and bruises are smoothed out. The median selling price for all residences in Orange County in the Zeros was $431,000, roughly double the pricing of the 1990s.”

Orange County Register – “O.C. builders near worst year since WW II” (1-4-09)

“Through November, local building permits for single-family homes filed by developers fell 3.5% from what had been the slowest year since World War II, the Construction Industry Research Board reports.”

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The Norris Group Real Estate News Roundup 12/21/09

Monday, December 21st, 2009

Today’s News Synopsis:

PMI Insurance Group predicts that 2010 will produce a moderate increase in economic production. According to John Burns Real Estate Consulting, real estate investor activity now exceeds 2005 levels. Moody’s reports that commercial real estate values have decreased by 36 percent from last year. A total of 140 banks have been seized this year.

In The News:

Tennessean - “Glut of shadow properties could hurt housing prices” (12-20-09)

“A supply of 1.7 million homes headed for sale because of foreclosure or delinquency looms over the U.S. housing market, which could dampen progress toward recovery should the Obama administration fail in its efforts to aid struggling homeowners, researchers said.”

Dr. Housing Bubble – “Southern California and the MLS Myth: Why the MLS does not Provide an Accurate Picture of Housing Inventory. Shadow Inventory, Foreclosures, and Fantasy Housing Numbers.” (12-20-09)

“In Southern California last month 20 percent of all buyers went with all cash. Each MLS is geared to local markets but again many argue that the MLS forces membership into the real estate circles.”

San Francisco Chronicle – “Commercial real estate on shaky foundation” (12-20-09)

“while most commercial real estate experts agree that in 2010 there will more loan defaults, scores more bank closures and limited construction lending, many observers do not believe that commercial mortgage defaults will derail the recovery.”

Housing Wire – “Mortgage Insurer Expects Housing Growth in 2010″ (12-21-09)

“PMI Mortgage Insurance Co., of PMI Group (PMI: 2.00 0.00%), does not expect an additional downturn in the US economy in the New Year, and even projects a ‘moderate’ pace of growth in 2010.”

Housing Wire – “Monday Morning Cup of Coffee” (12-21-09)

“According to John Burns Real Estate Consulting, existing home sales volumes are off 30% from the peak and have returned to 1998 levels. Perhaps even more worrying, the research states that existing sales volumes are driven by government initiatives, such as the expanded tax credit, aggressive FHA lending, Freddie and Fannie bailout, and Fed mortgage rate intervention. Additionally, investor activity now exceeds 2005 levels as a percent of total activity.”

Bloomberg - “U.S. Commercial Property Falls to Lowest in 7 Years” (12-21-09)

“Commercial property values in the U.S. declined in October to the lowest level in more than seven years as unemployment reduced demand for apartments, offices and retail space. The Moody’s/REAL Commercial Property Price Indices fell 1.5 percent in October from September to the lowest since August 2002. Prices were down 36 percent from a year ago and are 44 percent below the peak in October 2007, Moody’s Investors Service Inc. said in a statement. ”

DSNews - “Seven New Closures Push 2009 Failures to 140″ (12-21-09)

“The nation’s economic crisis has certainly left its mark on the banking sector this year. These latest institutional seizures push the failed bank tally for 2009 to 140 – an exorbitant increase compared to 25 in 2008, only three in 2007, and none in 2006 and 2005.”

Housing Wire – “More Servicers Bring HAMP List to 99″ (12-21-09)

“The US Treasury Department added 11 new servicers to the Home Affordable Modification Program (HAMP), pushing the total number of participants to 99, according to the latest Troubled Asset Relief Program (TARP) transaction report. Under HAMP, the Treasury allocates capped incentives to servicers for the modification of loans on the verge of foreclosure. Currently, the 99 servicers could receive a potential $27.4bn in capped incentives, but the Treasury plans to spend $50bn on the program.”

Inman - “Short sales show steady growth” (12-21-09)

“National bank and thrift servicers completed 22 percent more short sales during the quarter ending Sept. 30 than during the previous three months, and 127 percent more than the same quarter a year ago, federal bank regulators said today.”

Looking Back:

One year ago, California real estate sales decreased by 24 percent within one month. Governor Schwarzenegger rejected an $18 billion proposal for California expense cuts and tax increases. Barney Frank announced plans to release $350 billion from the bank-rescue package. The Federal Reserve bought $308.5 billion in commercial paper and lent $631.8 billion under eight credit programs.

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