The Federal Housing Finance Agency, who acts as regulator for Fannie Mae and Freddie Mac, is suing 17 banks in an attempt to recover billions of dollars worth of money lost due to mismanagement of the money by the bank.  However, in another story, FBR Capital Markets said the plan will not work and that it will only risk the banks losing more capital.  Bloomberg reported that retailers are planning to open more stores in response to the lower rents.

In The News:

Inman - “Government seeks redress for Fannie, Freddie subprime losses” (9-6-11)

“In a move that some analysts fear could lead to further tightening in residential mortgage lending, Fannie Mae and Freddie Mac’s regulator has sued 17 banks to recover billions in losses on “private label” mortgage-backed securities the mortgage giant purchased during the housing boom.”

Housing Wire - “Big banks could tighten lending following FHFA lawsuit: FBR Capital” (9-6-11)

“The decision of the Federal Housing Finance Agency to sue major banks under representation and warranties clauses prompted Paul Miller with FBR Capital Markets to criticize the plan, saying it will likely further drain capital from the banking system.”

DS News – “Mortgage Industry Layoffs May Reverse By Year-End” (9-6-11)

“After the mortgage industry lost more than 2,000 jobs in the first half of 2011, things may pick up throughout the end of the year, according to the recently released Second-Quarter 2011 Mortgage Employment Index by MortgageDaily.com.”

Bloomberg – “Lower Rents Driving U.S. Retailers to Open More Stores, CB Richard Says” (9-6-11)

“More than half of U.S. retail chains plan to open more stores because of lower rents, a report by CB Richard Ellis Group Inc. (CBG) found.”

Realty Times - “Lenders are Looking More at the Condition of the Property” (9-6-11)

“It is pretty well known these days that mortgage applicants are liable to undergo scrutiny more thorough than just about anyone in the business can remember. I don’t know about the rest of the country, but in our neck of the woods (Orange County, California) we are also seeing the emergence of a parallel trend. Not only are borrowers getting a more thorough examination, but also the properties themselves are being scrutinized as never before.”

San Francisco Chronicle - “Mortgage rate drop produces refinancing wave” (9-6-11)

“Mortgage rates near historic lows have sparked a refinancing boom that has  lenders struggling to handle the surge.”

Los Angeles Times - “Study finds 41% of samll businesses plan to hire in next 6 months” (9-6-11)

“About 41% of small businesses plan to hire in the next six months, more than the 38% that don’t plan to add jobs, according to a study released Tuesday by Pepperdine University.”

O.C. Register - “Low-end sellers take biggest price cuts” (9-6-11)

“A slightly different view of the Orange County housing market from HousingTracker.net shows low-end sellers taking the larger local price cuts for the first time in two years.”

Housing Wire - “Regulatory reforms suspected of dragging down economic growth” (9-6-11)

“Regulatory reforms stemming from the 2008 financial crisis will add to the headwinds of an already weak global economy, according to the Institute of International Finance.”

Inman – “MLS fees challenged as antitrust, RESPA violations” (9-6-11)

“Georgia’s  second-largest multiple listing service has been hit with a lawsuit alleging  that the unusual method it employs to collect dues from member brokers amounts  to an illegal kickback and price-fixing scheme.”

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.

Freddie Mac claims the average rate for 30-year fixed-rate mortgages was 5.06 percent this week. Zillow estimates that home inventory will increase in the near future. The California Housing Finance Agency is proposing a plan to spend $699.6m from the Hardest Hit Fund. According to Morgan Stanley, about 12 percent of all mortgage defaults in February.

In The News:

Sign On San Diego – “Mortgage rates stay above 5 pct” (4-29-10)

“The mortgage financier Freddie Mac said Thursday that the average rate for 30-year fixed-rate mortgages was 5.06 percent this week, down a tick from 5.07 percent last week. A year ago, Freddie Mac says 30-year fixed rate mortgages averaged 4.84 percent.”

Inman - “Watch for inventory rise despite tax credit’s sales boost” (4-29-10)

“Although the most recent numbers out for home sales — both new and existing — showed a surge, inventory may yet continue to rise past the summer, according to an analysis by property search and valuation site Zillow.”

Housing Wire – “California Releases $699m Hardest Hit Fund Proposal” (4-29-10)

“The California Housing Finance Agency (CalHFA) is the latest to release its proposal sent to the Treasury Department, laying out a plan to spend $699.6m from the Hardest Hit Fund. In March, the Treasury cleared HFAs of five states where house prices dropped 20% from the peak to submit proposals to use the funds from the Troubled Asset Relief Program (TARP). Florida, Michigan and Arizona were the first to release their proposals, while Nevada has still not released its plan to spend $102.8m from the fund.”

Bloomberg - “‘Strategic’ Mortgage Defaults Jump to 12% of Total” (4-29-10)

“Decisions by U.S. homeowners to walk away from mortgages they can afford account for an increasing share of defaults, according to Morgan Stanley. About 12 percent of all mortgage defaults in February were ‘strategic,’ up from 4 percent in mid-2007, New York-based Morgan Stanley analysts led by Vishwanath Tirupattur wrote in a report today. Borrowers are more likely to stop paying their mortgages the higher their credit scores and the larger their loans, the analysts said.”

Inman - “5 ways to give Gen X, Gen Y what they want” (4-29-10)

“Today’s buyers and sellers are stalking agents online for as much as 18 months before they will feel comfortable enough to do business with an agent. The question is: Once potential clients find you, how can you keep them engaged long enough that they will do business with you, especially when you don’t know who they are?”

Inman - “Figuring out new RESPA rules: lenders report delays, confusion” (4-29-10)

“Many lenders haven’t yet fully implemented technology to comply with new rules that took effect this year under the Real Estate Settlement Procedures Act (RESPA), and most are taking longer to provide disclosures when borrowers submit loan applications, according to a survey by Equifax. The Equifax survey of 105 lenders who use its employment and income verification service found 79 percent are taking longer to take an application and provide disclosures to borrowers since the RESPA rule change went into effect Jan. 1. About 72 percent of lenders said borrowers were confused about the multiple disclosure documents they receive.”

Realty Times – “30-yr Fixed Mortgages Available at 4.875%, Rates Stable” (4-29-10)

“FreeRateUpdate.com research of wholesale lenders’ rate sheets shows conventional 30-yr fixed mortgages available today at 4.875% to well-qualified consumers paying a standard origination fee of .07 to 1 point. 15-year fixed mortgages remain available at 4.25, and the 5/1 ARM is available at 3.625%.”

Realty Times – “Real Estate Outlook: Signs of Recovery” (4-29-10)

“Fannie Mae’s economics department issued its forecast for the balance of the year last week – and the tone was moderately optimistic. Fannie projects national economic growth – as measured by the gross domestic product or GDP – to gain about 3.1 percent this year. That won’t be enough to make a major dent in the jobless rate, said the economists, but it should reflect a slow but steady improvement in key employment sectors, including manufacturing.”

Looking Back:

The U.S. Treasury Department made plans to spend $50 billion to pay off mortgage investors and reduce monthly payments for millions of borrowers. A CNN poll showed that Americans were becoming significantly more optimistic about the future of the economy. California regulators authorized 600 brokers to negotiate loan modifications. Gross domestic product dropped to a 6.1 percent rate in the first quarter of 2009.

The NAR reports that existing-home sales increased by 10.1 percent in October. Statistics show that California workers, who earn the national median income, can afford 59.1 percent of the new and existing homes during the 3rd quarter. According to the MBA, multifamily lenders provided $88 billion in new financing for apartment buildings with 5 or more units during 2008.

In The News:

NAR - “Existing-Home Sales Record Another Big Gain, Inventories Continue to Shrink” (11-23-09)

“Existing-home sales – including single-family, townhomes, condominiums and co-ops – surged 10.1 percent to a seasonally adjusted annual rate¹ of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, and are 23.5 percent above the 4.94 million-unit level in October 2008. Sales activity is at the highest pace since February 2007 when it hit 6.55 million.”

CBIA - “California Housing Affordability Continues to Decrease, CBIA Announces” (11-23-09)

“On a statewide basis, the HOI found that a family earning the median-income could have afforded 59.1 percent of the new and existing homes that were sold during the third quarter, down from 62.7 percent in the second quarter.”

Mortgage Bankers Association – “MBA Reports Multifamily Lending 40 Percent Lower in 2008 Than 2007; Market Remained Broad and Diverse” (11-23-09)

“In 2008, 2,877 different multifamily lenders provided a total of more than $88 billion in new financing for apartment buildings with five or more units, according to an annual report from the Mortgage Bankers Association (MBA). The 2008 dollar volume represents a 40 percent decline from 2007 levels.”

Bloomberg - “Commercial Property Prices to Fall Up to 55%” (11-23-09)

“Commercial real estate prices may fall as much as 55 percent from October 2007’s peak and the recovery will be slow amid rising unemployment and tepid consumer spending, Moody’s Investors Service said.”

Inman - “Front-loaded loans: bad for borrowers?” (11-23-09)

“A necessary consequence of full amortization with equal monthly payments is that the composition of the payment between interest and principal changes over time. In the early years, the payment is mostly interest; in the later years, it is mostly principal. At 6 percent, it does indeed take 21 years to pay down the balance of the $100,000 loan to $50,000. This is the factual foundation of the front-end-loading argument.”

Orange County Register – “Weakest home market in O.C.? Garden Grove” (11-23-09)

“How’d Garden Grove 92844 do so poorly? It ranked 82nd of 83 for pricing; 67th for sales; and 69th in terms of foreclosures frequency in the community. In the previous quarter, this ZIP ranked 56 of 83 overall.”

Orange County Register – “Will ‘good faith’ be bad for borrowers?” (11-23-09)

“Another purpose of the GFE2010 is to ‘bring clarity’ to the market ‘through a simpler and better understanding of their costs.’ To do this HUD took the previous 1 page Good Faith Estimate that clearly delineates all charges and tailored perfectly into the HUD/RESPA required Truth In Lending disclosure (which discloses APR) and created a three page form that does not delineate any fees, lumps charges for non-related services together, separates out services required by the loan process from those the borrower can select and has no relation to the Truth In Lending disclosure or the Good Faith Estimate required under Reg Z by the Fed.”

Realty Times – “Washington Report: Congress Pressures FHA” (11-23-09)

“Congressman Spencer Bachus of Alabama said FHA’s declining capital reserves, estimated by independent auditors as barely one quarter of the congressionally-mandated minimum, raises the possibility that FHA could come hat in hand to Congress seeking a bailout. ”

Realty Times – “The Cost of the Home Buyer Tax Credit” (11-23-09)

“If the stats hold true, and that is about half of all buyers are first-timers, then there were 2.25 million buyers that qualified (assuming they didn’t go beyond the income limits – which many did). But for simplicity, we’ll say they all qualified. Simple math puts the tax credits at $18 billion for 2009 that doesn’t have to be paid back. For all the money that’s being floated out there to stimulate the economy, this is probably the best plan in play.”

Looking Back:

Wells Fargo made plans to cut 80 percent of all of its wholesale mortgage jobs. Citigroup’s year losses had reached $20 billion, and the company cut 52,000 jobs. A study showed that borrowers who attended home ownership education programs were 20 times less likely to foreclose.