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The Norris Group Real Estate News Roundup 8/24/10

Tuesday, August 24th, 2010

Today’s News Synopsis:

Existing home sales experienced a dramatic decrease of 27.2 percent in July, according to the NAR. Housing production decreased by 10 percent in June. The CAR reports California home sales decreased 20.8 percent in July. Statistics from the California Employment Development Department show that 7,100 jobs were lost from July 2009.

In The News:

NAR - “July Existing-Home Sales Fall as Expected but Prices Rise” (8-24-10)

“Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million in June, and are 25.5 percent below the 5.14 million-unit level in July 2009.”

CBIA - “California Housing Production Increases in July, CBIA Announces” (8-24-10)

“According to statistics compiled by the Construction Industry Research Board (CIRB), permits were pulled for 4,165 total housing units in July, up 35 percent from the same month a year ago but down 10 percent from June. Permits for single-family homes totaled 1,951, down 9 percent from July 2009 and down 31 percent from the previous month, while multifamily permits totaled 2,214, up 134 percent from a year ago and up 25 percent from May.”

Mortgage Bankers Association – “Wells Fargo Tops U.S. Commercial/Multifamily Servicers in MBA Mid-Year Rankings Report” (8-24-10)

“The Mortgage Bankers Association (MBA) today released its mid-year ranking of commercial and multifamily mortgage servicers as of the end of June 30, 2010. Topping the list of firms is Wells Fargo with $462.8 billion in U.S. master and primary servicing, followed by PNC Real Estate/Midland Loan Services with $307.9 billion, Berkadia Commercial Mortgage with $202.6 billion, Bank of America Merrill Lynch with $133.4 billion and KeyBank Real Estate Capital with $124.7 billion.”

CAR - “July sales and price report” (8-24-10)

“California home sales decreased 20.8 percent in July compared with the same period a year ago, while the median price of an existing home rose 10.4 percent from July 2009, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.”

Housing Wire – “Disappointing Homes Sales Unlikely to Reverse Course” (8-24-10)

“Predictions that home prices may drop into double digits continue to drag down sales. Bill Gross, managing director of the world’s biggest bond fund, PIMCO remarked that the idea of a rebound anytime soon is ‘ludicrous.’ In a meeting at the US Treasury last week, Gross called for combining the government-sponsored entities into one entity that insures the majority of current and future originations.”

Housing Wire – “60% of Delinquent Mortgages Not in Loss Mitigation” (8-24-10)

“According to a study from the State Foreclosure Prevention Working Group (SFPWG), 60% of borrowers with mortgages delinquent by 60 days or more are not being forwarded to the servicer’s loss mitigation department.”

Bloomberg - “Purchases of Existing Homes in U.S. Probably Slumped in July” (8-24-10)

“Sales of U.S. previously owned homes probably plunged in July to the lowest level since March 2009, evidence the market is restrained by foreclosures and limited job growth, economists said before a report today. Purchases dropped 13.4 percent from June to a 4.65 million annual rate, according to the median of 73 forecasts in a Bloomberg News survey. A decline would be the third in a row.”

Orange County Register – “Corona del Mar is O.C.’s ‘coldest’ market” (8-24-10)

“The pricier the town, the harder it is to sell a home there right now, the latest O.C. home inventory report from Steve Thomas at Altera Real Estate shows. Corona del Mar, for example, was Orange County’s ‘coldest’ market in the past 30 days. In theory, it would take 11 1/2 months to sell all the homes on the market there at the current sales pace, the highest ‘market time’ for any O.C. community in the 30 days ending on Aug. 19. Other ‘cold’ markets likewise tend to be home to some of O.C.’s most expensive housing.”

Orange County Register – “Real estate, building jobs down 5% in July” (8-24-10)

“Indeed, construction suffered the largest year-over-year decline among every employment category, the state Employment Development Department reported. Construction jobs fell by 7,100 positions from July 2009, down nearly 10%. Construction jobs totaled 65,700 in July, state figures show.”

Orange County Register – “Broker: No tsunami of repo’d homes to hit market” (8-24-10)

“This shadow inventory has to be worked through, but is not going to occur as a tsunami of distressed properties to hit the market all at once. Instead, we are going to witness slow increases and drops over the next few years. This slow absorption will not pull down values like it did at the beginning of this downturn and it will keep a lid on any substantial appreciation. Once employment improves, the pathway to an eventual healthy and stable recovery will occur.”

Looking Back:

One year ago, 45,079 new and resale houses and condos were sold statewide in one month. Home sales in the Bay Area hit a 4 year high. The Federal Reserve accepted $2.3 billion in investor requests for financing to purchase legacy commercial mortgage-backed securities.

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 170 podcasts in our free investor radio archive.

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The Norris Group Real Estate News Roundup 8/9/10

Monday, August 9th, 2010

Today’s News Synopsis:

The percentage of American single-family homes with mortgages in negative equity decreased by 1.8% from the first to second quarter.  Freddie Mac is requesting $1.8 billion in federal aid after a $6 billion loss in the second quarter. Freddie Mac’s single-family inventory rose by 84.2% and its multifamily inventory doubled from last year. PIMCO fears the U.S. may be entering a period of deflation, and JPMorgan Chase expressed concerns that our financial system may crash in 2015.

In The News:

MSNBC - “Fewer U.S. homeowners have ‘underwater mortgages’” (8-9-10)

“The percentage of American single-family homes with mortgages in negative equity fell to 21.5 percent in the second quarter from 23.3 percent in the first quarter and 23 percent a year ago, according to the Zillow Real Estate Market Reports.”

Los Angeles Times – “Freddie Mac requests $1.8 billion in aid after loss” (8-9-10)

“Government-controlled mortgage buyer Freddie Mac is asking for $1.8 billion in additional federal aid after posting a larger loss in the second quarter. Freddie Mac said Monday it lost $6 billion, or $1.85 per share, in the April-to-June period. That takes into account $1.3 billion in dividends paid to the Treasury Department. It compares with a loss of $840 million, or 26 cents a share, in the second quarter a year ago.”

Housing Wire – “Flooded with Housing Inventory, Freddie REO Sales Surge Despite Foreclosure Alternatives” (8-9-10)

“Year-over-year, Freddie’s single-family portfolio increased 84.2% and the multifamily portfolio doubled. Monday morning’s quarterly results reveal a 655% increase in forbearance agreements, where distressed homeowners simply get more time to begin paying back the mortgage. These forbearance agreements numbered 21,673 at the end of the first half of 2010, up from 2,869 at the end of the first half of 2009.”

Housing Wire - “The Scope: JP Morgan Estimates Nearly 9m Mortgages Eligible for New FHA Refinancing” (8-9-10)

“There is $870bn worth of underwater mortgages that could be eligible for the new Federal Housing Administration (FHA) short refinance program announced last week, according to JPMorgan. Additionally, there could be as many as 8.9m loans eligible for the program, worth an aggregate balance of $2.3trn, which includes underwater borrowers and mortgages eligible for the Home Affordable Modification Program (HAMP).”

Housing Wire – “Zillow Sees 3.6% Dip in US Home Prices as More Underwater Mortgages Come up for Air” (8-9-10)

“For the 14th consecutive quarter, national US home values declined 3.2% year-over-year during Q210, according to a quarterly market report produced by real estate listing website Zillow. The average sales price for residential properties was $182,500 during the quarter, down 0.6% from the Q110 price of $183,700. In Q210, 21.5% of mortgage properties were in negative equity positions, compared with 23.3% in Q110.”

Housing Wire – “PIMCO: US On Verge of Turning Japanese?” (8-9-10)

“The US may be nearing a long period of limited growth with the risk of deflation that would bring the nation’s economy very close to that of Japan during the 1990s, according to investment-management firm PIMCO.”

Housing Wire – “Monday Morning Cup of Coffee” (8-9-10)

“Federal Reserve chairman Ben Bernanke said there are options to re-shape US housing finance that don’t involve government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. ‘There are a variety of organizational forms that might replace Fannie Mae and Freddie Mac that could likely provide mortgage credit without the systemic risks associated with these institutions in the past,’ Bernanke said in a July 23 letter to Ohio Democrat Rep. Marcy Kaptur, according to reports by multiple media reports.”

Bloomberg - “Crash of 2015 Won’t Wait for Regulators to Rein in Wall Street” (8-9-10)

“The financial system experiences a crisis ‘every five to seven years,’ JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon told the Financial Crisis Inquiry Commission in January. By that measure, the next crash could come by 2015 — years before new banking reforms are in place. Many of the measures ordered by Congress and global regulators, aimed at cushioning the financial system in future crises, are years away from being implemented. The Basel Committee on Banking Supervision plans to give the world’s banks until 2018 to comply with limits on how much they can borrow.”

Orange County Register – “Real estate loss hammers Calif. pensions” (8-9-10)

“The $200 billion California Public Employees’ Retirement System (CalPERS) earned 11.4 percent return in the year ended June 30 — despite losing 37.1% on its real estate bets through March 31. The $130 billion California State Teachers’ Retirement System (CalSTRS) was up 12.3 percent in the same year after losing 12.4% on its property holdings.”

Orange County Register – “Unsold homes up 57% this year” (8-9-10)

“The number of homes for sale on the Orange County housing market has mushroomed to 11,414 in the 30 days ending last Thursday. That’s up 57% since ‘inventory’ began a steady rise at the start of the year, according to the latest report by Altera’s Steven Thomas.”

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 6/28/10

Monday, June 28th, 2010

Today’s News Synopsis:

Statistics from the Federal Reserve show the median borrower who ’strategically’ defaults doesn’t walk away from the mortgage until the amount owed exceeds the value of the home by 62%. McGraw-Hill Construction reports new construction starts increased 3% in April. According to CoreLogic, more than 11 million borrowers currently owe more on their mortgage than it is worth. Experian statistics show that 19 percent of all defaults in 2009 were strategic.

In The News:

Press Enterprise – “Crash opens market for luxury apartments” (6-26-10)

“While homebuilders are aiming at a more frugal consumer by cutting frills, some apartment developments in San Bernardino and Riverside counties are going upscale with features like granite countertops and hardwood floors and rents comparable to a home mortgage. The Lewis Group of Cos., an Upland-based developer of master-planned communities and apartments, figures that partly because many people have been burned by the housing crash, there is demand from prospective tenants moving out of houses who want and can afford a house-like apartment experience.”

Chicago Tribune – “Moral bankruptcy?” (6-27-10)

“Some have struggled unsuccessfully to keep their homes, and others have just walked away. Phillips decided he wanted revenge and was willing to ruin his credit record for it. When a short sale didn’t work out as planned, the 32-year-old Chicagoan opted for Chapter 7 bankruptcy liquidation, a move that will leave Phillips with little except for the scant possessions in his one-bedroom condo. It also will leave his lender, Chase, with little except for, eventually, a condo that has lost value. Meanwhile, Phillips continues to live there, mortgage-free.”

Los Angeles Times – “Undone by their dreams” (6-26-10)

“In the last four years, according to the San Bernardino County assessor’s office, 373 of the 941 single-family homes in Mission Crest — nearly 40% — have been foreclosed on. Thirty-five have gone through foreclosure more than once. Properties that once sold for nearly $400,000 are worth less than $200,000.”

Mercury News – “Santa Clara County assessor adds Web tools to help homeowners” (6-28-10)

“More than 100,000 residents will be given access to a special website — tracking home sales by neighborhood — where they can see precisely why the assessor’s office decided to assign a particular home its worth.”

Wall Street Journal – “How Far Underwater Do Borrowers Sink Before Walking Away?” (6-28-10)

“At what point do borrowers who owe more than their homes are worth decide to stop paying the mortgage? A new study from economists at the Federal Reserve Board aims to answer that question. The research found that the median borrower who ’strategically’ defaults doesn’t walk away from the mortgage until the amount owed exceeds the value of the home by 62%.”

Housing Wire – “Monday Morning Cup of Coffee” (6-28-10)

“The House Financial Services Committee issued a statement Sunday urging ‘bold action’ on the Dodd-Frank bill, the reconciled financial reform bill agreed to by a Congressional committee last week and named after Sen Christopher Dodd (D-CT) and Rep Barney Frank (D-MA). The final bill now travels to separate House and Senate votes and then, upon passage by Congress, to a Presidential signature into law.”

Housing Wire – “Surge in Nonresidential Building Boosts May Construction Starts” (6-28-10)

“New construction starts increased 3% from April to May, according to a monthly survey by McGraw-Hill Construction. The seasonally adjusted annual rate of total construction starts was $406.3bn in May, up 3% from $392,988bn in April. For the first five months of 2010, the unadjusted value of total construction starts was $162bn, down 2% from $165bn during the same period of 2009.”

Housing Wire – “The Slippery Slope of Short Sales” (6-28-10)

“More than 11 million borrowers currently owe more on their mortgage than it is worth, according to CoreLogic (CLGX: 18.11 +0.28%)—and this group of borrowers would love nothing more than to replace their current underwater mortgage with whatever the accepted ’short sale price’ is deemed to be. I don’t know that such a response on the part of borrowers could be deemed irrational, either. Many will ask themselves why they have a mortgage at a higher amount, especially if the bank is willing to sell the house to another buyer for less money.”

Housing Wire – “G20 Applauds Dodd-Frank Bill in Pushing its own Global Financial Reform” (6-28-10)

“The meeting of G20 nations concluded this weekend in Toronto with communiqués reflecting a strong support for the US financial reform, called the Dodd-Frank bill. Indeed, information released from the summit show a mix of ambitious plans for growth, mixed with further calls to reduce spending, especially among countries with higher debt burdens.”

Housing Wire – “Experian Finds 19% of Mortgage Defaults in Q209 are Strategic” (6-28-10)

“Of all mortgage delinquencies in the second quarter of 2009 (Q209), nearly one in five — or 19% — were considered strategic defaults, according to the latest study of default trends by information services firm Experian.”

Bloomberg - “Commercial Mortgages Fail to Pay as Lending Increases” (6-28-10)

“Between 50 percent and 60 percent of loans on skyscrapers, hotels, shopping malls and apartment complexes failed to refinance within a few months of their maturity date this year, Bank of America Merrill Lynch analysts said in a report. That compares with 15 percent to 20 percent in 2008, according to the analysts led by Roger Lehman in New York. About $11 billion in loans, or one-third of the 2010 total, had hit their expected maturity dates through late May.”

Bloomberg - “Fannie Mae, Freddie Mac Should ‘Unwind’ Portfolios, Pimco Says” (6-28-10)

“Fannie Mae and Freddie Mac, the housing-finance companies supported by U.S. taxpayers, should take advantage of demand for government-backed mortgage debt and sell their holdings, according to Pacific Investment Management Co. ‘Since the government’s going to want to unwind them at some point anyway, why not do it at the best levels ever?’ Scott Simon, the mortgage-bond head at Newport Beach, California-based Pimco, manager of the world’s biggest fixed- income fund, said in a telephone interview.”

Inman - “Top 10 states for pending tax credit closings” (6-28-10)

“NAR estimates as many as 180,000 homebuyers who were under contract by April 30 may miss the June 30 closing deadline. To prod lawmakers into find a way to extend the deadline, NAR released a breakdown of how many home purchases are affected in each state.”

Looking Back:

One year ago, Freddie Mac estimated that sales of new and existing homes might increase to an annual pace of 5.1 million in the 3rd quarter. Real Capital Analytics forecasted that $16 billion of office transactions would be completed by the end of 2009. The number of Orange County property owners disputing their taxes jumped 23% near last year’s deadline.

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 11/4/09

Wednesday, November 4th, 2009

Today’s News Synopsis:

The MBA’s weekly mortgage survey shows that loan application volume increased by 8.2 percent, on a seasonally adjusted bases, from last week. The FHA expects 24 percent of all loans insured in 2007 to default. The Federal Reserve’s FOMC announced that it will not buy the full $200 billion debt amount that it had previously planned to take. BarCap reports that the 30-plus day delinquency rate increased to 5.5 percent in October.

In The News:

Orange County Register – “Are we headed for the same real estate winter doldrums?” (11-4-09)

“Historically, over a 30 year trend, 70% of all Orange County homes sell in the first seven months of the year. Seasonality is the term used by real estate experts. Typically, most buyers are active in the spring and summer markets. Once Labor Day comes, they tend to focus on the holidays. Activity drops off each month. December is the slowest month.”

Mortgage Bankers Association – “Mortgage Refinance Applications Increase in Latest MBA Weekly Survey” (11-4-09)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending October 30, 2009. The Market Composite Index, a measure of mortgage loan application volume, increased 8.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 7.9 percent compared with the previous week.”

Wall Street Journal – “FHA Digging Out After Loans Sour “ (11-4-09)

“Although the FHA has tightened credit standards, many of the 2007 and early 2008 mortgages are going bad. The agency expects defaults on 24% of all loans insured in 2007, and 20% of those backed in 2008.”

Housing Wire – “In This Corner: QuestSoft President and Founder Leonard Ryan” (11-4-09)

“Mortgage Disclosure Improvement Act (MDIA) is causing issues because most loan software products keep track of only the latest disclosure dates due to the complexity of the calculations. S.A.F.E. Act is causing the most internal personnel problems due to education and registration requirements that differ from state to state. Higher Priced Mortgage Loans (HPML) with the Home Mortgage Disclosure Act (HMDA) changes as of October 1 are becoming an out and out nightmare without automation because every time an Annual Percentage Rate (APR) changes or the note rate adjusts, the loan must be completely recalculated and possibly re-underwritten.”

Housing Wire – “Fed Won’t Purchase Full $200bn Agency Debt, FOMC Says” (11-4-09)

“The Federal Reserve’s Federal Open Market Committee (FOMC) said it won’t purchase as much agency debt as it previously announced. The $175bn of agency debt purchases is less than the previously announced $200bn, but the FOMC said the amount ‘is consistent with the recent path of purchases and reflects the limited availability of agency debt.’”

Housing Wire – “CMBS Delinquencies Swell to 5.5% in October, says BarCap” (11-4-09)

“The 30-plus day delinquency rate jumped 41bps to 5.5% in October as current loans deteriorated and transferred to special servicers. For the past three months, delinquencies have grown an average of 34bps, and BarCap analysts expect the pace to increase through 2009 and into 2010.”

Housing Wire – “Pulte’s Closings Slip in Q309, Despite Merger” (11-4-09)

“Pulte Homes (PHM: 9.55 +3.47%) lost $361.4m, or $1.15 per share, in Q309, compared to $280.4m, or $1.11 per share, in Q308. Results were impacted by $86.7m in charges and transaction costs associated with Pulte’s merger with Centex Corporation, and $163.8m in inventory impairments and other land-related charges.”

Housing Wire – “GMAC’s Mortgage Unit Loses $747M in Q309″ (11-4-09)

“The Q309 loss was due primarily to legacy assets in GMAC’s mortgage operations. The unit experienced a pre-tax loss from continuing operations of $747m during the quarter. The loss is an improvement from Q308’s $1.9bn pre-tax loss from continuing operations”

Bloomberg - “Senate May Pass Homebuyer Tax Credit Extension Today” (11-4-09)

“The U.S. Senate may approve as early as today a $45 billion plan to expand a tax credit for first- time homebuyers, extend jobless benefits and provide tax refunds to money-losing companies.”

Bloomberg - “U.S. Home Price Slump to Last to Mid-2010, Pimco Says” (11-4-09)

“The slump in U.S. housing prices is unlikely to end before the middle of next year, and statistics portraying rising values are misleading, according to Pacific Investment Management Co. An S&P/Case-Shiller index for 20 metropolitan areas showed values rising 4.8 percent in the four months through August after a record 33 percent drop from its July 2006 peak. Such statistics are being distorted by U.S. efforts to reduce foreclosures, which are temporarily limiting sales of seized homes, said Scott Simon, Pimco’s mortgage-bond chief.”

Inman - “ZipRealty narrows losses” (11-4-09)

“ZipRealty Inc. edged closer to profitability during the third quarter, as transactions grew 30.6 percent and revenue by 12.8 percent from a year ago, the company said.”

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54-TNG Radio – Mark Kiesel 2-9-08

Friday, February 8th, 2008

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Mark Kiesel

Executive Vice President of PIMCO

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This week Bruce Norris is joined by Executive Vice President of PIMCO, Mark Kiesel. PIMCO is one of the largest specialty fixed income managers in the world, with $746.3 billion in assets under management and more than 900 employees in offices globally. Bruce and Mark talk about the strategies of PIMCO going forward into 2008, how PIMCO is more defensive on certain products in 2008, bonds compared to stocks, why bonds instead of stocks, muni bonds, what happens when cities go bankrupt, corporate bonds markets in 2007 and its growth, how bonds fair in recessions, PIMCO’s position on mortgages and housing, PIMCO’s position on housing price drops, AAA ratings and subprime, credit cycles compared to the economy, emerging market stocks, good areas for investment, what happens when ratings are lowered from AAA, how lenders will have to adjust, three major obstacles that could end our positive business cycle, the root of real estate price declines, housing inventory nation wide, rate resets in 2008-2009, increases in real estate vacancy, the shell-shocked consumer, corporate profits in 2008, hiring and unemployment, how it won’t be as bad as 2000-2001, and whether consumers have real wealth or just more stuff.

Mr. Kiesel is an Executive Vice President, generalist portfolio manager, and a senior member of PIMCO’s investment strategy and portfolio management group. He also heads the investment-grade corporate desk and manages corporate portfolios for the firm. Previously, Mr. Kiesel served as PIMCO’s head of equity derivatives and as a senior credit analyst. Mr. Kiesel joined PIMCO in 1996, previously having been associated with the sales and trading divisions of Merrill Lynch and JP Morgan. He has twelve years of investment experience and holds a bachelor’s degree in economics from the University of Michigan and an MBA in finance, economics and international business from the University of Chicago Graduate School of Business.

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