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The Norris Group Real Estate News Roundup 8/5/11

Friday, August 5th, 2011

Sources:
Homeownership Rate Drops to 13-Year Low
June Pending Home Sales Rise
Mortgage Applications Increase, But Still Low in Latest MBA Weekly Survey
Job growth slows and layoffs rise to 16-month high, reports say
Home prices edge up in June, but fail to meet 2010 levels
Mortgage Rates Drop to Lowest of the Year
Senate steps toward new mortgage servicing standard
Key US markets with “pending” signs of life
House legislation would launch FDIC investigation
RealtyTrac Tool Provides Targeted Lists of Defaults, Auctions, and REOs
Investors charge ahead with another reps and warranties case against BofA
S&P: Trouble Ahead for PMI Mortage Insurance Co.

Today’s News Synopsis:

This week’s video gives the news of the week in the world of real estate and other big events. PMI Mortgage Insurance Co. has suffered severe financial losses and therefore may have to cut back on writing insurance policies.  DS News reported the unemployment rate is now at 9.1%.  Bank of America has reached a settlement with HUD to give loan modifications to 57,000 borrowers whose loans were not handled properly.

In The News:

Bloomberg- “Debt Restructuring Would Spur Growth: Reinhart” (8-5-11)

“A restructuring of U.S. household debt, including debt forgiveness for low-income Americans, would be most effective in speeding economic growth, said Carmen Reinhart, a senior fellow at the Peterson Institute for International Economics in Washington.”

Housing Wire – “HAMP mortgage mods reaching permanent status faster” (8-5-11)

“Homeowners who entered into a Home Affordable Modification Program trial within the last year were transferred into a permanent workout almost two months faster than those who entered the program earlier.”

DS News – “Unemployment Rate Slips to 9.1%” (8-5-11)

“After heading higher for three straight months, the nation’s unemployment rate declined to 9.1 percent in July, down from 9.2 percent in June, according to figures released Friday by the U.S. Department of Labor. The economy added 117,000 jobs last month.”

Inman - “Private mortgage insurers face uncertainty” (8-5-11)

“Cracks are again appearing in the foundations of the private mortgage insurance business, as companies that insure home loans with down payments of less than 20 percent for Fannie Mae and Freddie Mac face rising claims and continue to struggle for market share against government-backed FHA and VA programs.”

Realty Times - “Consumers, real estate pros tap shift to rentals” (8-5-11)

“Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing mortgage rates dropping sharply amid falling bond yields and signs of a weaker than expected economy.”

Los Angeles Times - “Construction employment hits 15-month high in July” (8-5-11)

“Another reason to not declare the end of the world as we know it, yet: Construction employment climbed last month, hitting a 15-month high, according to the Associated General Contractors of America.”

Housing Wire - “Obama administration July housing scorecard sends mixed signals” (8-5-11)

“The nation’s housing market experienced an uptick in home prices this summer, but remains constrained by declines in home values in foreclosures and distressed real estate, the Obama Administration said in its July Housing Scorecard report.”

San Francisco Chronicle - “Is The Housing Bubble Over?” (8-5-11)

“For most parts of the U.S., the housing bubble peaked in 1996 and prices have steadily declined ever since. The amount of decline has varied by city and state, driven by several factors such as job losses, demographics and the magnitude of run-up in prices.”

Realtor Magazine – “S&P: Trouble Ahead for PMI Mortage Insurance Co.” (8-5-11)

“PMI warned that it may have to stop writing insurance policies in 16 states due to the company’s severe financial losses.  On Thursday, Standard & Poor’s downgraded the PMI Group and its subsidiary PMI Mortgage Insurance Co.’s credit and financial strength rating, giving it a negative outlook due to the company’s steep losses in recent months.”

DS News – “BofA to Pursue Loss Mitigation Under HUD Settlement” (8-5-11)

“Bank of America and the Department of Housing and Urban Development (HUD) have reached a settlement regarding 57,000 delinquent government-issued mortgages serviced by the bank.”

Looking Back:

Freddie Mac reported 30-year fixed mortgage rates fell below 4.5%. Home prices increased 8.1% from this time in 2009, according to Clear Capital. Statistics from the Department of Labor showed initial unemployment insurance claims rose 19,000 the previous week.

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 7/13/11

Wednesday, July 13th, 2011

Today’s News Synopsis:

Bloomberg reported a 5.1% decrease in mortgage applications last week.  A big story in the news is Ben Bernanke of the Federal Reserved just announced that the central bank is ready to do what it needs to do should the economy come to a still, even if it means purchasing extra government bonds.  In other news, Prospect Mortgage LLC and federal housing regulators have reached an agreement to settle a lawsuit involving false business deals.

In The News:

Bloomberg - “Fed Ready With Stimulus If Needed: Bernanke” (7-13-11)

“Federal Reserve Chairman Ben S. Bernanke told Congress the central bank is prepared to take additional action, including buying more government bonds, if the economy appears to be in danger of stalling.”

DS News – “PMI Weighs Economic and Market Impacts on Home Price Trajectories” (7-13-11)

“Home prices have gotten a little bit of a boost in recent months thanks to a seasonal uptick in market activity. Most analysts, however, expect further declines to characterize the later part of the year and possibly extend into next year, largely because of the huge supply of foreclosures on the market.”

Bloomberg – “U.S. Mortgage Applications Fell 5.1% Last Week on Refinancing” (7-13-11)

“Mortgage applications in the U.S. dropped for a fourth straight week, led by a decline in refinancing even as borrowing costs dropped.”

Realty Times - “Mortgage Rates: Lingering Low Mortgage Rates Remain a Great Deal” (7-13-11)

“Although mortgage rates have remained steady for several weeks, economic stress here in the U.S. and abroad in Europe is putting enough pressure on investors who are seeking safety and driving MBS prices higher.”

Housing Wire - “Rally on subprime CDS prices ends with Maiden Lane suspension” (7-13-11)

“The suspension of Maiden Lane II auctions by the Federal Reserve at the end of June dampened the outlook for prices of U.S. subprime credit default swap prices, Fitch Solutions said Wednesday.”

Mortgage Bankers Association - “MBA Sends Recommendations to Federal Agencies on Risk Retention Guidelines from Commercial and Multifamily Mortgage Finance Perspective” (7-13-11)

“On Monday, July 11, 2011, the Mortgage Bankers Association (MBA) sent the attached letter to federal regulators outlining MBA’s views and recommendations from the commercial and multifamily mortgage finance perspective in response to the proposed risk retention rule under Section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.”

RisMedia - “DIY Real Estate Solutions Strengthens Property Management Platform with Point2 Listing Synidcation” (7-13-11)

“Point2, a leading provider of real estate marketing and listing syndication solutions recently announced that Cleveland-based DIY Real Estate Solutions, also a Yardi brand, has integrated listing syndication as part of its property management software solution offering to its clients

Housing Wire - “MBA advocates an end to premium capture cash reserve account on CRE deals” (7-13-11)

“A proposed rule that requires financial institutions to retain a 5% stake in the credit risk of securitized loan products should be revamped to ensure liquidity is not constrained in the commercial/multifamily sector, the Mortgage Bankers Association said in a letter to regulators this week.”

Inman - “HUD: Lender paid kickbacks to real estate brokers, agents” (7-13-11)

“Prospect Mortgage LLC has agreed to pay $3.1 million to settle allegations by federal housing regulators that the company entered into sham affiliated business arrangements in order to pay kickbacks to real estate brokers, agents, banks, mortgage servicers and others who referred business to it.”

RisMedia - “A Closer Look at Home Pricing Forecasts, Local Markets Vary Widely” (7-13-11)

“Economic consulting firm Clear Capital reported prices nationally have decreased by 3.2 percent in the first six months of 2011 and are forecast to drop another 2.4 percent in the second half of 2011.”

Looking Back:

MDA DataQuick reported 23,871 homes were sold in Southern California the previous month. Statistics from CoreLogic showed that prices in May 2010 grew 0.9% from the previous month. According to Foreclosure Radar, lenders canceled nearly 22,000 California foreclosure sales in June of 2010. A comparative analysis from Credit Suisse showed that the cost of owning a home was cheaper than renting in multiple areas.

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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191-TNG Radio – Mike Novak-Smith 9-11-10

Monday, September 13th, 2010

Mike-Novak-Smith

Mike Novak-Smith

REO Agent


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September 17th, 2010, The Norris Group returns with its award winning event I Survived Real Estate 2010. The Norris Group has assembled an incredible line up of industry experts to discuss the state of REO from the inside. Topics will include regulatory intervention and aftermath, bulk buying, myths and facts, and opportunities emerging for real estate professionals. 100 percent of the proceeds support the Orange County affiliate of Susan G. Komen for the Cure. This event would not be possible without generous help from the following platinum partners: Foreclosure Radar and Sean O’Toole, the San Diego Creative Real Estate Investors Association and Bill Tan, Investors Workshops and Shawn Watkins and Angel Bronsgeest, Invest Club for Women and Iris Veneracion and Bobby Alexander, Claudia Buys Houses, The Business Press, Frye Wiles, MVT Productions, and White House Catering.

This week Bruce is joined by Mike Novak-Smith. Mike has been a household name in the REO business since the 90s. He has gained national recognition for his work in the REO industry.

The first REO Mike ever closed was in January of 1991. RT Resolution Trust Corporation was the first REO client he ever had. That company took care of the failed savings and loans assets from the 80s. He thought using that company was a good idea because he sensed a changed in the market at that time. Resolution Trust called and offered him listings that no one else was interested in, and Mike believed he could handle them.

Mike reads a lot and he pays attention to the market. He viewed REOs as a way to survive every month. He knew that if he got 2.5 percent of the deals on the market, then he could make the house and car payment. Once he started doing it, he liked it, because it was more like a business than chasing deals. The audition for the business was hard, but once you have experience, its much less stressful.

There are a few surprises for agents wanting to get into the REO business. First, you have to do a lot of work. Second, you have to put out a lot of money to get properties sold. Third, you get treated rather harshly, because the people you work with are busy and they don’t have time to sugar coat their messages to you. A lot of people can’t wait to be an REO agent, until they become one. You have to be a superior skill level to do REO work in comparison to retail work. It is a very competitive business. If you make a mistake, there are 100 people who want your place.

In the 90s, the peak years for Mike were from 96 to 98. Mike had been in the business for a few years prior to 91 doing retail jobs. All the way through January, 2004, he had a lot of REO deals. From 04 to 05, he did not have any REO deals.

In 2003, Mike closed 110 REO deals. When the REO deals started drying up, Mike was one of the last people his clients were using. When the REO deals came back in 2005, he had 3 REOs within the first month.

Most of the people that Mike knew from the 90s have moved onto bigger things. If they did well during that time period, then they probably moved up to corporate positions.

In the 90s, much of Mike’s inventory consisted of new 4 bedroom, 3 bath houses. Mike gets a lot of new homes as well. He even gets homes that haven’t finished construction.

Currently, Mike’s business is somewhat unpredictable. He might have a several week period where he gets a large number of REO deals, but then the following week he will get zero. This could be a function of the trustee sales changing their bid prices.

The people REO brokers work with do not entirely know the policies of their employees. You hear a lot of rumors, but the only people who really know, are the ones working at the top of the business. Mike occasionally receives calls from corporate leaders in which they ask for his opinion on certain policy changes. Mike does not believe that anyone has complete control over policy changes, because the government makes frequent policy changes as well.

At the peak of this cycle, Mike had over 900 files, and maybe 600 active files in the MLS. Currently, properties spend months in preparation before being listed. Once they are listed, they usually sell fairly quickly.

Properties now require a bit of time before they become vacant. Occupants understand now that they can get money to move out. The magic number for convincing an occupant to move out tends to be between $2,000 to $4,000. Some of these occupants have severe financial problems, but for many of them, its just a game.

The length of time it takes for a property to become an REO after delinquency is 15-18 months. When the property actually goes into foreclosure, the renting tenants are often surprised. Mike advises renters to get their rental property from a broker who manages rentals. Don’t try to just rent a house off of CraigsList. Quite frequently, people will begin renting a house and end up in foreclosure two months later. Bruce was once personally asked by his own potential tenants if he had a loan on the rental house and if it was current. These renters had obviously had this experience in the past.

Most asset managers now communicate through proprietary websites. Offers come in electronically through email. There is not a lot of verbal communication, and fax machines aren’t being used either.

Asset managers have the power to take offers when the asking price is normal, but when an offer is unusual, then the offer must be taken to the next level.

When Mike gets a listing, he often gets the property directly from the lender, but there are also many properties that are outsourced to other companies. Some lenders have received too many REOs for their own labor force, so they have to outsource their work. Outsourcers typically use the same system as the lender.

Mike gets paid back 99 percent of the time if he follows the lenders standards. You cannot do all the work yourself. You must have staff to take on the work load of an REO agent. As an REO broker, you wear many hats, and accountant is one of them.

In 2007, lenders were openly admitting that they would list their properties with the highest broker opinion. Bruce believed that was the perfect system to fail. Lenders have now become more willing to listen to reasonable BPOs, and they often ask for multiple price opinions. Many BPOs today are being performed by inexperienced brokers who will do the work for cheap. Mike thinks this is unwise. When BPOs are done by experienced brokers, the price opinions usually come out fairly similar.

Short sales are becoming more popular right now. Mike closed a couple short sales last year, and he is doing more right now.  He does not prefer short sale deals, because those deals can often take more time than they are worth. Bruce is confounded by the length of time required to do a short sale. Short sales should not take six months to finish. The last short sale Mike finished took six weeks to close. Many short sales involve PMI companies, loan investors, servicers, and possibly an HOA law suit. You have to get all the people involved in the deal to take a loss, and that negotiation takes some time.

There is no compensation for an REO broker until he finishes the short sale. Someone getting into the short sale business could be six months away from a check for every deal they work with. If the broker cannot get someone to help with the paper work, then that short sale is not worth the time.

Mike sees REO levels increasing in 2011. These REOs will come from failed loan modifications and state programs. Short sales will probably increase as well. In the 90s, short sales were very popular, but loan servicers and investors eventually realized that it was easier just to foreclose, because then they could control the process.

Right now, if an inexperience broker attempts to perform a short sale, they often take up to six months to get the deal done. When this happens, the loan servicer will choose to have an REO.

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.

Thank you for being a Gold Sponsor for I Survived Real Estate 2010: Adrenaline Athletics, Benton Investment Group, Community RE-Invest Group, Delmae Properties, Elite Auctions, Entrust California, Everlast Photography, Inland Empire Investors Forum, Keystone CPA, Landwood Title, Las Brisas Escrow, Leivas Financial Services, Mike Cantu, North San Diego Real Estate Investors Association, Northern California Real Estate Investors Association, Personal Real Estate Investor Magazine, Realty 411 Magazine, San Jose Real Estate Investor Association, Rick and LeeAnne Rossiter, San Jose Real Estate Investor Association, Starz Photography, Summit Solutions, Tony Alvarez, Wealth Point, and Westin South Coast Plaza.

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The Norris Group Real Estate News Roundup 5/4/10

Tuesday, May 4th, 2010

Today’s News Synopsis:

According to the NAR, pending home sales increased by 5.3 percent in February. Statistics from PMI indicate the home price reduction risk is significantly decreasing across most U.S. regions. The percentage of loans 30+ days delinquent, in foreclosure or real estate owned (REO) status increased to 8.02 percent in March. McGraw-Hill reports the residential sector is up 35% in the first three months of 2010 compared to the same time one year ago.

In The News:

NAR - “Pending Home Sales on an Upswing” (5-4-10)

“The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in March, rose 5.3 percent to 102.9 from 97.7 in February, and is 21.1 percent above March 2009 when it was 85.0; this follows an 8.3 percent increase in February. The data reflects contracts and not closings, which usually occur with a lag time of one or two months.”

Wall Street Journal – “Lending Standards Stay Tight at Banks in U.S.” (5-4-10)

“Most U.S. banks kept credit tight in the first three months of the year, and some tightened lending terms further, according to the Federal Reserve’s latest senior loan officer survey. Some categories showed improvement after years of lending cutbacks. Banks reported easing terms on commercial and industrial loans to large and medium-size firms. While the easing took place only at large banks, it marked the first time since 2006 that banks reported easing standards in two quarters in a row.”

Inman - “Risk wanes for real estate price declines” (5-4-10)

“The risk of home-price declines decreased in 93 percent of the 384 markets tracked at the end of last year by analysts with PMI Mortgage Insurance Co., although half still showed an elevated or high risk of depreciation.”

Housing Wire – “Commercial Mortgage Delinquency Soars to Historic High” (5-4-10)

“The percentage of loans 30+ days delinquent, in foreclosure or real estate owned (REO) status jumped 41 basis points (bps) to an overall 8.02%, from 7.61% in March. The share of loans considered ‘seriously delinquent’ — 60+ days delinquent, in foreclosure or REO status climbed 48bps to its own record-high of 7.14%.”

Housing Wire – “Residential Construction Starts Up 6% in March: McGraw-Hill” (5-4-10)

“New construction starts in March were level from February, as an increases in both residential and commercial building were offset by a decrease in non-building construction, according to the latest McGraw Hill Construction monthly report. New construction starts in March were at a seasonally adjusted annual rate of $435.6bn in March. Through the first three months of 2010, total construction on an unadjusted basis was reported at $91.9bn, up 2% compared to the same period one year ago. The residential sector is up 35% in the first three months of 2010 compared to the same time one year ago, but the nonresidential building sector dropped 13%.”

Orange County Register - “O.C. getting Top 10 rent cuts” (5-4-10)

“6.4% of Orange County apartments were vacant vs. 6% a year earlier. 8% of units in the major markets were empty.”

Realty Times – “First-Time Home Buyer Tax Credit Extended For Armed Service Members” (5-4-10)

“The expiration date of the $8,000 first-time home buyer may have already passed for most, but there are some potential homebuyers who can still take advantage of this great opportunity. For those who are qualified service members, you have an extra year to cash in on the credit. Your new deadline is April 30, 2011.”

Looking Back:

One year ago, pending home sales 3.2 percent within a month. A report from S&P showed that the recession was coming to an end. Jeffrey Mezger of KB Homes claimed that Southern California home prices were bottoming.

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The Norris Group Real Estate News Roundup 2/4/10

Thursday, February 4th, 2010

Today’s News Synopsis:

Marcus & Millichap annual apartment report places San Diego in second place for stability and possible growth in 2010. Statistics from MDA DataQuick show that 18,621 California homes sold for over 1 million dollars last year. Freddie Mac reports that the rate for 30-year fixed rate mortgages increased to 5.01 percent. PMI predicts that home values are near to reaching the bottom.

In The News:

Sign on San Diego - “Apartment activity is on upswing” (2-4-10)

“San Diego County’s apartment market ranks second nationally after Washington, D.C., in its outlook for stability and possible growth in 2010, according to Marcus & Millichap’s annual apartment report covering 44 metro areas. Two other reports came to the same conclusion: San Diego’s rental market is on the way up.”

DQNews - “Million-dollar home sales plummet in Golden State” (2-4-10)

“A total of 18,621 Golden State homes sold for a million dollars or more last year. That was down 23.8 percent from 24,436 in 2008. In 2007 it was 42,506; in 2006 it was 50,010; and in 2005 it peaked at 54,773. Last year was the lowest sales count since 2002, when 15,703 were sold, according to San Diego-based MDA DataQuick.”

Bloomberg - “Mortgage Rates on 30-Year U.S. Loans Rise to 5.01%” (2-4-10)

“The rate for 30-year fixed U.S. home loans rose to 5.01 percent for the week ended today from 4.98 percent, mortgage finance company Freddie Mac said in a statement. The average 15- year rate was 4.40 percent, according to the McLean, Virginia- based company.”

Housing Wire – “GMAC Loses $5bn on Mounting Mortage Woes” (2-4-10)

“GMAC Financial Services (GOM: 19.8199 -0.85%) posted an expected Q409 net loss of $5bn, as losses related to legacy assets in the company’s mortgage operations continue to mount. The Q409 loss compares to net income of $7.5bn in Q409 and net loss of $747m in Q309. For all of 2009, GMAC reported a net loss of $10.3bn, compared to net income of $1.9bn in 2008.”

Housing Wire – “Home Values Likely Reaching Bottom: PMI” (2-4-10)

“The risk of home prices dropping even lower in the next two years is stabilizing in most Metropolitan Statistical Areas (MSAs), according to the PMI Mortgage Insurance Risk Index. The decline in the risk of house values falling further may indicate a bottoming out of the market.”

Housing Wire – “FHFA Home Index Updates Help Smooth Price Volatility” (2-4-10)

“According to the FHFA, the updates to their purchase-only house price index (HPI) since Q404 show a tendency to dampen house price volatility. Indeed, the last monthly HPI from the agency showed national prices rose 0.7% on a seasonally adjusted basis from October to November. That was after October’s previously reported 0.6% increase was adjusted to 0.4%.”

Housing Wire – “Home Prices Hit First Annual Gain Since 2006: Clear Capital” (2-4-10)

“Home prices in January increased 2.3%, marking the first year-over-year increase in more than three years, according to the Home Data Index (HDI) from Clear Capital, the real estate data provider. In all, prices gained 1.8% on the rolling-quarterly scale into January.”

Inman - “Feds to restrict foreclosure rescue firms” (2-4-10)

“Federal regulators say they intend to follow the lead of many states in banning for-profit companies from collecting advance fees from homeowners in exchange for promises to help them obtain loan modifications or avoid foreclosure. A rule proposed today by the Federal Trade Commission would bar for-profit companies that work with lenders and servicers on behalf of homeowners to modify loans or avoid foreclosure from collecting payment until after such services are provided, and impose other restrictions on their practices.”

Looking Back:

One year ago, the MBA reported that the mortgage application volume was significantly increasing. Pulte Homes, a large U.S. building company, reported 9 months of consistent profit loss. The HOPE lending program had only refinanced 25 loans since it began in October.

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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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The Norris Group Real Estate News Roundup 10/21/09

Wednesday, October 21st, 2009

Today’s News Synopsis:

The MBA reports that mortgage applications decreased by 13.7 percent on a seasonally adjusted basis from one weak earlier. According to Altos Research, asking prices increased by 1.5 percent in Los Angeles. The Federal Reserve believes that commercial real estate will not begin to recover for at least 9 more months. Lehman has announced that it intends to begin funding home loans again.

In The News:

Los Angeles Times – “Feared flood of foreclosures in California may be averted” (10-21-09)

“Signs are emerging that a much-feared escalation of California home foreclosures may not happen, as banks respond to government pressure and scale back their repossessions of troubled properties. Statewide, the number of homes taken back by lenders dropped sharply in the three months ended Sept. 30, falling 37% over the same period a year earlier, when foreclosures were at an all-time high.”

Wall Street Journal – “Housing Starts Post Anemic Rise” (10-21-09)

” Housing starts increased 0.5% in September to a 590,000 seasonally adjusted annual rate, the latest piece of data to show the housing market is slowly stabilizing with help from low prices and government tax credits. Separately, the Labor Department reported wholesale prices for finished goods fell 0.6% in September, while the ‘core’ measure that excludes volatile food and energy prices fell 0.1%, a sign that despite the tepid economic recovery, producers still have little leeway to raise prices.”

Mortgage Bankers Association – “Mortgage Applications Decrease in Latest MBA Weekly Survey” (10-21-09)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending October 16, 2009. This week’s results include an adjustment to account for the Columbus Day holiday. The Market Composite Index, a measure of mortgage loan application volume, decreased 13.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 22.4 percent compared with the previous week.”

Housing Wire – “Mortgage Revenue Boosts US Bancorp Q309 Earnings” (10-21-09)

“The bank experienced a $215m increase in mortgage banking revenue compared to Q308 that it credited to loan production volume of $14.8bn and loan applications totaling $15.5bn. Residential mortgage lending increased 1.8% from Q209 to Q309.”

Housing Wire – “Home Prices Tick Down 0.5% in September, Says Altos” (10-21-09)

“Of the 26 markets Altos Research examines, asking prices increased in only five, including Los Angeles, which experienced a 1.5% increase, the largest of the 26 markets. Phoenix had the largest monthly decrease of 3.7%.”

Housing Wire – “Little Chance of CRE Recovery Until 2H10: Beige Book” (10-21-09)

“While residential real estate and manufacturing sectors of the economy are reporting positive improvements, commercial real estate remains one of the weakest sectors. According to the Federal Reserve Beige Book, any evidence of a recovery in the sector is unlikely for at least nine more months”

Housing Wire – “Mortgage Insurer OKs 93% of HARP Requests” (10-21-09)

“PMI Mortgage Insurance Co. approved 93% of its requests for a mortgage workout through the Home Affordable Refinance Program (HARP). HARP allows nearly 5m homeowners with loans owned or guaranteed by Fannie Mae (FNM: 1.23 +9.82%) or Freddie Mac (FRE: 1.39 +12.10%) the opportunity to refinance into more affordable monthly payments.”

Housing Wire – “Morgan Stanley Posts Profit on Strong Investment Banking” (10-21-09)

“Morgan Stanley (MS: 34.08 +4.80%) posted a net $757m profit, or $0.38 per share, in Q309 — its first quarterly profit in a year — as a 74% increase in investment banking profit neutralized $400m in real estate-related losses.”

Housing Wire – “KeyCorp Loses Net $438m, Raises Loan Loss Allowance” (10-21-09)

“KeyCorp (KEY: 6.28 -3.98%), parent company of Key Bank, recorded a net loss of $438m in Q309, compared to a $48m loss in Q308, as the bank increased its provision for loan losses, write-downs of certain real estate related investments, higher costs associated with other real estate owned (REO) assets, and the write-off of certain intangible assets.”

Housing Wire – “UFA Calls Foreclosure Drop in 2010″ (10-21-09)

“After a 30% climb over the last four years, foreclosures will decline in 2010, according to research from University Financial Associates (UFA), a risk management firm based in Ann Arbor, Mich”

Bloomberg – “Lehman Said to Return to U.S. Mortgages Through Unit” (10-21-09)

“Lehman Brothers Holdings Inc., the investment bank brought down by the U.S. mortgage crash after 158 years, is set to return to funding home loans through its Aurora Loan Services unit, people familiar with the matter said.”

Bloomberg – “Bank of America Sells First Republic to Buyout Group” (10-21-09)

“Bank of America Corp., which is raising capital after getting $45 billion in U.S. rescue funds, agreed to sell First Republic Bank to a group led by private- equity-firms General Atlantic LLC and Colony Capital LLC.”

Orange County Register – “Brightwater builder skips more loan payments” (10-21-09)

“California Coastal Communities, the homebuilder that’s developing 356 homes overlooking the Bolsa Chica wetlands, announced that it has missed $759,000 in loan payments due this month, an event that could trigger bankruptcy unless its lenders restructure its debt. It’s the second time this month that the Irvine-based homebuilder said it has missed loan payments. The firm behind the Brightwater development announced three weeks ago that it skipped a $1.7 million debt payment due at the end of September.”

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71-TNG Radio – Nancy West 6-7-08

Friday, June 6th, 2008

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Nancy West

Marketing and Outreach Specialist, Housing and Urban Development (HUD)

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Bruce Norris is joined by marketing and outreach specialist for HUD, Nancy West. Bruce and Nancy discuss when HUD was created, the FHA program and its primary goals, how home ownership levels and foreclosure levels are related, hud.gov compared to fha.gov, the FHA Secure program that allows borrows who have fallen delinquent to come into an FHA program if the delinquency was caused by reset, what happens if the consumer owes more than the house is worth, when FHA secure is due to expire, the three option for delinquent consumers, renegotiations and modifications, loan forgiveness, how well the program is going, where money comes from when an FHA loan is funded, loan correspondents when working with FHA, how FHA differs from Fannie Mae and Freddie Mac, how FHA differs from PMI, the enacted Stimulus Act, FHA and manual underwriting, how FHA views a consumer’s willingness to pay obligations, FHA as a more common sense approach to lending, FHA requirements and standards for property, the process to become an approved FHA appraiser, gift programs for down payment allowable for FHA, single family for FHA includes up to four units and manufactured loans, loan limits in FHA, how often loan amounts are revisited, current loan limits and the Stimulus Act, how limits will go back to original limits on December 31, 2008, loan limits set by Congress, Section 8 rental program, foreclosing on FHA loans and when FHA steps in to protect a lender’s loss, if there’s a situation when the lender would be forced to take a loss, if fraud has been a problem with FHA, where the money come from when a claim is made, if FHA is expecting a huge number of foreclosures, the issue of the consumer being a victim in the mortgage mess, how long the FHA Secure process takes, loans available through FHA including fixed rate, adjustable, energy efficient, rehabilitation program (203K), and the streamlined rehabilitation program, why the 203K loan is not available to investors, why the program was available to investors in the 90s, how can investors get involved to get that reversed, do most buyers obtain fixed rate loans, and fha.gov.

Nancy West has been in mortgage lending industry since 1977, and has worked in a variety of positions within the industry from branch manager, small business owner, account executive, and mortgage loan underwriter. Nancy underwrote mortgage loans for major U.S. lenders; both government insured and non-government backed. Nancy holds two degrees; Real Estate, and in Education. Nancy is also a licensed California Real Estate Broker.

Nancy joined the U.S. Department of Housing and Urban Development in 2004 in the Processing and Underwriting Division. In 2006, Nancy accepted one of four nationwide Marketing and Outreach Specialist’s Positions for the Department. Nancy currently works out of the Santa Ana Homeownership Center, which services the eight western United States. Nancy travels throughout the Santa Ana Homeownership Center’s jurisdiction, providing presentations and information on FHA and FHA programs to consumer groups, industry partners, external agencies, as well as providing internal staff with up-to-date information on industry changes and practices.

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66-TNG Radio – Pete Pannes 5-3-08

Friday, May 2nd, 2008

 

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Pete Pannes

Senior Vice President, Field Sales and National Accounts, PMI Mortgage Insurance

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Bruce Norris is joined this week by Senior Vice President, Field Sales and National Accounts of PMI Mortgage Insurance Co., Pete Pannes. Bruce and Pete discuss the basic business of PMI, when a borrower in a transaction pays for PMI, the range in cost, when PMI is required on a loan, if sellers can pay for the cost of PMI, competitors in mortgage insurance, what would happen if a mortgage insurer went out of business and its effect on the lenders, current stresses on mortgage insurers, how the industry is structured to handle issues in the market, how insurance changes the amount a consumer can borrow, if PMI is only for first trust deeds, if PMI has gotten more popular in recent years, if property value increases reduce insurance costs, at what point PMI is cancelled, what happens if prices go backwards, can PMI be reinstated if loan to value shifts, what price range of loans PMI covers, variances in PMI by state, if PMI can be used for purchases and refinances, how the market got away from paying PMI with 80% first and 20% second, if more traditional underwriting is taking place and if it includes PMI, how PMI was ignored because of run up of appreciation in previous years, reemergence of FHA and how it compares to PMI, how the consumer benefits from PMI, how lenders benefit from PMI, if PMI makes loan more liquid on Wall Street, how PMI assists bank if foreclosure takes place, what is covered in the policy and for how much, the borrower in foreclosure and recourse against borrowers in default, how do consumers prove they are in a 20% equity position, if late payments or rapid market declines can cause the bank to change its policies, do mortgage seconds or home equity line of credit change the PMI situation going forward, will PMI be required for longer amounts of time, pmigroup.com.

Pete Pannes is Senior Vice President, Field Sales and National Accounts, for PMI Mortgage Insurance Co., responsible for ensuring operational excellence with PMI customers nationwide.

Pannes has more than 18 years combined experience in the mortgage and mortgage insurance industry. He joined PMI in 1990 as an Account Representative and was promoted to Account Executive in 1992. He was a key part of the PMI management team that in 1994 formed CMG Mortgage Insurance Company (CMG MI), PMI’s joint venture with CUNA Mutual serving the growing credit union market. Pannes held several positions at CMG MI from 1994 to 2001, when he joined CUNA Mutual as Senior Vice President and General Manager of CMG MI. In 2004 he rejoined PMI as Vice President of National Sales-Division Manager, responsible for the management of all field sales and select national accounts for the Eastern U.S.

Pannes holds a Bachelor of Science degree in Business Administration from Arizona State University.

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