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California Real Estate Headline Roundup

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The Norris Group Real Estate News Roundup 4/5/11

Tuesday, April 5th, 2011

Today’s News Synopsis:

Two Wall Street firms claim housing prices will continue to fall through the present quarter. REIS reports the national office vacancy rate fell to 17.5% in the first quarter. A Harris Poll shows 22% of U.S. homeowners are having difficulty making their mortgage payments. A new RealtyTrac feature allows users checking home listings to see how much equity each property has.

In The News:

NAHB - “Home Builders Applaud Congressional Passage of 1099 Repeal” (4-5-11)

“The Senate today approved legislation supported by the National Association of Home Builders (NAHB) to repeal a burdensome tax paperwork requirement that could cost small businesses thousands of dollars each year. The bill now goes to President Obama for his approval.”

Orange County Register – “59% of H.B. homes pending sale are distressed” (4-5-11)

“59% of homes in escrow are short sales, in foreclosure or bank owned. 42% of homes sold in March were distressed.”

Housing Wire – “Democrats’ homeownership assistance bills face fiscal resistance” (4-5-11)

“Senate Bill 690 and H.R. 1238 — would create a new executive position under the Treasury Department to advocate for homeowners and free up remaining TARP funds to help distressed homeowners with legal assistance.”

Housing Wire – “KBW says eight GSE reform bills barely dent mortgage market” (4-5-11)

“the proposed legislation addresses oversight issues, which means little structural change will manifest because of them, according to a report released by KBW Tuesday.”

CNBC - “No Spring Break in Housing: Prices Likely to Keep Falling” (4-4-11)

“Housing prices will not get a Spring bounce and will actually fall during the industry’s historically best season as buyers continue to wait for that elusive ‘housing bottom,’ according to surveys and analysis by two top Wall Street firms.”

Wall Street Journal – “Lenders Near Pacts With Regulators in Foreclosure Probe” (4-4-11)

“Fourteen U.S. lenders are on the verge of agreements with federal bank regulators to overhaul their handling of foreclosures and treatment of delinquent borrowers in response to allegations of abuses that emerged last fall.”

Bloomberg - “KB Home Reports Wider First-Quarter Loss as Revenue and Orders Plunged” (4-5-11)

“KB Home (KBH), the Los Angeles-based homebuilder that targets first-time buyers, fell the most in four months in New York trading after reporting a bigger-than- expected loss as orders plunged.”

Bloomberg - “Office Market in U.S. Begins Recovery as Vacancy Rate Declines” (4-5-11)

“The national vacancy rate fell to 17.5 percent in the first quarter from 17.6 percent in the previous three months, Reis Inc. said in a report today. The drop was the first since July through September of 2007.”

Orange County Register – “U.S.: World’s 7th worst housing market” (4-5-11)

“The United States had the 7th worst housing market in the world in the fourth quarter, according to year-to-year price changes tracked by the Knight Frank Global House Price Index.”

Orange County Register – “32 million people struggling to pay mortgage” (4-5-11)

“A new Harris Poll shows that 22% of U.S. homeowners with mortgages — 32 million people — are having a tough time making payments, including 7% — 11 million folks — who say they’re experiencing ‘a great deal of difficulty’.”

Orange County Register – “Irvine housing speeds up 17%” (4-5-11)

“Irvine’s housing market has 85 days worth of inventory of residences to sell vs. 96 days countywide. That’s according to the latest inventory math of Orange County broker Steve Thomas.”

Housing Wire – “New RealtyTrac feature lists property equity” (4-5-11)

“RealtyTrac unveiled a new feature on its website Tuesday that enables users going through the home listings to see how much equity each property has.”

Housing Wire – “Wells Fargo-Wachovia settles CDO claim with SEC for $11 million” (4-5-11)

“A Securities and Exchange Commission investigation into Wachovia Capital Markets’ sale of two collateralized debt obligations supported by residential mortgage-backed securities resulted in Wells Fargo Securities agreeing to pay $11 million in fines and penalties this week.”

Looking Back:

Pending home sales increased by 8.2 percent from January to February. A new rule will require all new lender applicants for FHA programs to possess a minimum net worth of $1 million. According to LPS, the average loan in foreclosure is 401 days delinquent.  A proposed bill, House Resolution 4935, will prohibit mortgage servicers from holding another mortgage on a property that also secures the serviced mortgage.

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 8/31/10

Tuesday, August 31st, 2010

Today’s News Synopsis:

According to Capital Economics, business investment rose 17% during the second quarter. Multiple forecasters suspect the housing market and the economy are in a double dip. Zillow reports that 18.2% of all O.C. homes sold for a loss. The Case-Shiller 20-city home price index shows prices increased 1% from May to June.

In The News:

Housing Wire – “Dallas Fed says fiscal stimulus is a quick fix, not a permanent solution” (8-30-10)

“The fiscal stimulus plan, formally known as the American Recovery and Reinvestment Act, signed into law by President Obama in February 2009 has succeeded in everything it planned to do, in theory. It designated the majority of funding toward the people who need it the most and at the most crucial time they need it. But Jason Saving, senior economist at the Federal Reserve Bank of Dallas, doubts the plan is showing the anticipated results in practice.”

Housing Wire – “Restricted credit for small businesses driving delinquencies up” (8-30-10)

“According to Capital Economics’ U.S. Quarterly Outlook, business investment in Q210 rose 17%. However, Moody’s Analytics reported last week that commercial mortgage-backed security delinquencies spiked since after Sept. 2008, passing 23% by March 2010.”

Housing Wire – “Home values drop 0.2% from a year ago: Freddie Mac” (8-30-10)

“Home values in the U.S. fell 0.2% in the second quarter of 2010 from the same quarter last year, according to the Freddie Mac Conventional Mortgage Home Price Index (CMHPI).”

Orange County Register – “1-in-5 O.C. homes selling at a loss” (8-30-10)

“While 18.2% of all homes sold for a loss, that’s down about 2.5% from the same period a year earlier. Zillow spokeswoman Jill Simmons said that losing deals in O.C. peaked at 25% in February 2009, the month after median home prices hit bottom.”

Orange County Register – “Apartment occupancy up in first half of year” (8-30-10)

“A survey of large apartment managers indicated that U.S. apartment occupancy has recovered steadily throughout the first half of 2010, following more than two years of decreasing occupancy.”

Orange County Register – “Realtors report increase in house supply” (8-30-10)

“Steve Thomas of Altera Real Estate reported that the supply of unsold homes on the Orange County market increased to 11,650, up from 7,300 in January. Still, at 7.2 months, O.C.’s July inventory is below a countywide average of eight months dating back to the early 1990s.”

Associated Press - “Home prices rise in 17 cities in June” (8-31-10)

“The Standard & Poor’s/Case-Shiller 20-city home price index released Tuesday posted a 1 percent increase in June from May and was up 4.2 percent from a year ago. Home prices nationally were up 4.8 percent in the second quarter compared with the first quarter. That was largely because buyers could take advantage of government tax credits of up to $8,000.”

Inman - “Appraisers publish homebuying guide” (8-31-10)

“A new homebuying guide offers consumers advice on timing their purchase, selecting a real estate agent, and choosing the best home on the market from the ‘uniquely unbiased perspective’ of a real estate appraiser, according to its publisher, the Appraisal Institute. Because appraisers are not paid by sales commissions, ‘they have the unbiased perspective needed to help homebuyers weigh their options carefully, make logical decisions and effectively navigate the sales negotiation and mortgage application processes,’ the Appraisal Institute said in announcing the publication of the 190-page book.”

Housing Wire – “FDIC bank ‘problem list’ hits highest point since 1993″ (8-31-10)

“The number of banks on the Federal Deposit Insurance Corporation’s (FDIC) ‘Problem List’ rose to 829, the highest level since March 1993, according to second-quarter earnings released today. The 829 figure is up from 775 problem banks in Q110 and accompanies a total of 45 failed FDIC insured banks for the second quarter.”

Housing Wire – “More borrowers refinance to shorter FRMs with higher monthly payments: CoreLogic” (8-31-10)

“An increasing number people are choosing to pay off their mortgage loans in a shorter time period, according to data provided by CoreLogic. The data shows at 26% of all loans, or 252,600 loans, were refinanced to a 15-year fixed-rate mortgage (FRM), up from 18.5% in 2009 and 16.3% in 2008. In 2007, only 9.4% of loans were refinanced to a 15-year FRM.”

Housing Wire – “Consumer confidence rises in August, but conditions weaken” (8-31-10)

“An improved short-term outlook boosted consumer confidence for the first time in two months in August but the average American’s take on current economic conditions continued to weaken during the month, according to the private research firm The Conference Board. The board’s consumer confidence index for August was 53.5, topping the consensus analysts’ estimate of 50.5, according to Thomson Reuters, and up from a revised July figure of 51.”

Bloomberg – “Home Prices Probably Cooled, U.S. Consumer Sentiment Languished” (8-31-10)

“‘The housing market is in the midst of a double dip, with sales declining and prices likely to,’ said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia.”

Realty Times – “Real Estate Outlook: Mixed Figures” (8-31-10)

“Affordability is another key area where things have been slowly improving with little attention. The Wells Fargo-National Association of Home Builders ‘housing opportunity index’ — which looks at home prices, mortgage rates and what median-income families can afford to buy — is at a near record high point. Thanks to 30-year mortgage rates in the mid-four percent range, 72 .3 percent of median-income American families can now afford to buy the median-priced house. Historically that number has stayed in the low 60 percent range, and sometimes slipped below 50 percent.”

Realty Times – “American Savings” (8-31-10)

“Nowadays, the average American has 3.5 open credit cards, with an average household carrying credit card debt equaling $15,788 (Federal Reserve). And on that they pay an average of nearly 15 percent interest!”

Realty Times – “When Should an HOA Be Able to Restrict an Owner’s Right to Rent Out His Unit” (8-31-10)

“Is it fair for an HOA (Homeowner Association) to prohibit or restrict a unit owner from renting out his property? Should there be a law about this? In California, these issues are currently being argued in both the legislature and the courts. In some other states the issues may already be settled; in others the debate is no doubt going on.”

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 8/24/10

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 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 12/29/09

Tuesday, December 29th, 2009

Today’s News Synopsis:

The S&P/Case-Schiller index shows that home prices increased in 20 major U.S. cities in October. A Bloomberg study shows that broker commissions decreased by 6.2 percent from last year. Steve Thomas of Altera Real Estate reports that Orange County home sales take half as much time in comparison to last year. O.C. distressed property sales decreased by 53 percent from last year.

In The News:

Bloomberg - “Home Prices in 20 U.S. Cities Rose for Fifth Month” (12-29-09)

“Home prices in 20 U.S. cities rose in October for a fifth consecutive month, putting the housing market and economy farther along the path to recovery. The S&P/Case-Shiller home-price index increased 0.4 percent from the prior month on a seasonally adjusted basis, after a 0.2 percent rise in September, the group said today in New York. The gauge was down 7.3 percent from October 2008, the smallest year- over-year decline since October 2007. The median forecast of economists surveyed by Bloomberg News anticipated a 7.2 percent drop.”

Bloomberg - “Housing Recovery Fails to Bolster Broker Commissions” (12-29-09)

“A surge in home purchases by first- time U.S. buyers is doing little to help real estate agents and brokers who close the deals. Commissions in 2009 fell to the lowest level in seven years, driven down by sales of low-priced homes to first-time buyers using the federal tax credit. Commissions through November dropped 6.2 percent from a year earlier to $40.6 billion, according to Bloomberg calculations based on the average commission rates from Real Trends Inc. and on home price and sales data from the National Association of Realtors.”

Inman - “Approach 2010 with curiosity, not dread” (12-29-09)

“Given the immense global economic expansion under way and the shortage of the commodity, its price ought to go up. Then again, given cost of production at $600 an ounce and doubled price, nobody knows at what point balance will appear. If you want an inflation indicator, watch inflation. Currency values are relative to each other, not absolute, and are effect, not cause. In the old days you could assume that a weak currency brought inflation, or that you got some benefit from having a strong currency. Today, China has no inflation problem and tries like hell to keep its currency cheap. Watch economies themselves.”

Inman - “3 steps to a better marketing strategy” (12-29-09)

“Cummings points out that more wealth is created during recessions than at any other time. Recessions do end. While you can’t control when your market will shift, you can control your reaction to the market.”

Realty Times – “Washington Report: Estate Taxes” (12-29-09)

“If the Senate fails to pass a bill preserving current estate tax rates, as the House did before heading home for the holidays, the estate tax will totally disappear January first. While that might sound like outstandingly good news for people who want to pass along real estate to children or grandchildren tax-free, there’s a major complication here. If the estate tax disappears in 2010 because the Senate couldn’t get its act together in 2009, the disappearance will only be temporary, for one year. Then, under a legislative deal worked out nearly a decade ago, the estate tax will suddenly spring back to life in 2011 with higher tax rates and lower exclusions.”

Orange County Register – “Home-selling time sliced by half in 2009″ (12-29-09)

“The latest O.C. home inventory report from Steve Thomas at Altera Real Estate in Aliso Viejo — the last one for 2009 — tells you that the typical home officially on the market today takes half the time to sell than it did a year ago!”

Orange County Register - “Distressed homes for sale cut 53% in a year” (12-29-09)

“the number of O.C. distressed properties (homes listed by agents in the MLS system as foreclosures or short sales) was 2,537 last week — down 53% in a year.”

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The Norris Group Real Estate News Roundup 11/30/09

Monday, November 30th, 2009

Today’s News Synopsis:

Edward Pinto expects 20 percent of FHA’s mortgage loans to default. The Federal Reserve bought $16 billion worth of mortgage-backed securities last week. According to Michael Barr, Over 650,000 mortgage modifications are currently being processed, and over 375,000 borrowers will receive permanent modifications by the end of this year. A survey from Barclay’s shows that as a U.S. citizen’s net worth increases so does the proportion of their wealth invested in real estate.

In The News:

CNBC - “Fannie Mae to Tighten Lending Standards” (11-26-09)

“Fannie Mae plans to raise minimum credit score requirements next month and limit the amount of overall debt that borrowers can carry relative to their incomes”

The Daily Reckoning – “Federal Housing Administration Encourages More Bad Mortgage Loans” (11-26-09)

“An astounding 20 percent of the Federal Housing Administration’s $725 billion portfolio of mortgage loans will go into default as the result of the agency’s recent campaign to subsidize first-time homebuyers with little cash and weak credit. That prediction comes from an industry insider who has seen it all happen before: former chief credit officer of Fannie Mae, Edward Pinto, who recently testified before a House committee on the gathering storm of FHA mortgage defaults.”

Orange County Register – “Banks forced to buy back more loans” (11-26-09)

“Banks had to buy back $7.1 billion in defaulted single-family loans in the third quarter to reimburse mortgage investors, up from $1.9 billion in the previous quarter. Federal Deposit Insurance Corp. Call Report information shows that most of the buyback demands fell on JPMorgan Chase and Bank of America. Chase repurchased $2.7 billion in defaulted loans and BoA repurchased $2.3 billion to satisfy investor demands.”

Finance My Money – “FDIC too broke to Takeover Banks? No Bank Failure Friday on Black Friday. Can 5,300 Employees Deal with $5.3 Trillion in Deposits?” (11-30-09)

“The Federal Deposit Insurance Corporation (FDIC) was hammered this week when a third quarter report demonstrated that the FDIC was running in the red to the sum of $8.2 billion. This is troubling since the FDIC protects deposits in member banks up to $250,000 and funds covered by the deposit insurance fund (DIF) are over $5.3 trillion, this amount is over one-third of our nationwide GDP. The FDIC as of Q1 of 2009 has 5,381 employees.”

San Francisco Chronicle – “Gov’t increases pressure on mortgage industry” (11-30-09)

“The Treasury Department said Monday it will withhold payments from mortgage companies that aren’t doing enough to make the changes permanent. Officials will monitor the largest of the 71 participating mortgage companies via daily progress reports. The goal is to increase the rate at which troubled home loans are converted into new loans with lower monthly payments. At the end of October, more than 650,000 borrowers, or 20 percent of those eligible, had signed up for trials lasting up to five months.”

Inman – “Non-investors get Fannie REOs first” (11-27-09)

“Fannie Mae has launched a new program that’s intended to give public entities and buyers looking for a home to live in, rather a property to flip, a first crack at homes Fannie has foreclosed on. Under Fannie Mae’s ‘First Look’ initiative, only offers from buyers who intend to be owner occupants and buyers using public funds will be considered during the first 15 days a property is on the market. Offers from investors will be considered only after the first 15 days have passed.”

Housing Wire – “Fed Continues Slower Agency MBS Purchases” (11-30-09)

“The Federal Reserve continued its slower mortgage bond purchases, buying up $16bn of mortgage-backed securities (MBS) from government-sponsored entities in the week ending November 25. The Fed’s purchases shifted more toward Freddie Mac (FRE: 1.03 -6.36%), with $6.5bn of Freddie MBS purchased this week, from $5.9bn last week. The Fed bought $6bn from Fannie Mae (FNM: 0.88 -6.38%), compared with $4.55bn last week. The Fed also bought $3.5bn from Ginnie Mae this week, according to details released by the New York Fed.”

Housing Wire – “FHA Proposes Lenders Maintain $2.5m Net Worth” (11-30-09)

“Federal Housing Administration (FHA)-approved lenders could be required to hold increased net worth, meet stronger approval criteria and be held responsible for the actions of the mortgage brokers they do business with, if a recently proposed FHA rule is enacted. The rule is designed to reduce risks to the single-family insurance fund, which finances the FHA guarantees of mortgages in case of default. The FHA reported to Congress recently the insurance fund dipped below the Congressional-mandated 2% capital reserve threshold.”

Housing Wire – “375,000 HAMP Trials to Go Permanent, Treasury Says” (11-30-09)

“Under HAMP, the Treasury allocates capped incentives to participating servicers for the modification of loans on the verge of foreclosure. According to the latest report, more than 650,000 trials modifications are underway. Saxon Mortgage Services leads all servicers by providing trials to 44% of its eligible portfolio, according to the report. More than 375,000 borrowers are on track for a permanent modification by the end of the year, according to Michael Barr, assistant secretary for financial institutions at the Treasury.”

Bloomberg – “Wealthy Investors Plan to Buy More Real Estate, Barclays Says” (11-30-09)

“Twice as many people plan to raise their investment in commercial and residential property as intend to reduce it, the Barclays Wealth unit said in an e-mailed statement today. The richer the individual, the greater the proportion of wealth is placed in real estate, the survey found.”

Orange County Register – “Irvine home listings drop along with temps” (11-30-09)

“As of last Wednesday, there were 461 active homes for sale in Irvine, with an expected market time of 2.06 months, according to a biweekly report done by Steven Thomas of Altera Real Estate. That’s a benchmark tracking how many months it theoretically takes to sell all the inventory in the local MLS for-sale listings at the current pace of pending deals being made.”

Looking Back:

One year ago, the CIRB reported that the value of non-residential building in 2008 had reached a total of $1.3 billion. Evan Gentry of G8 Capital predicted that Orange County would need another five years before real estate began to appreciate again. New home sales decreased by 18 percent in the West during October of 2008.

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The Norris Group Real Estate News Roundup 10/6/09

Tuesday, October 6th, 2009

Today’s News Synopsis:

Reis Inc. reports that the U.S. apartment vacancy rate rose to 7.8 percent from the previous season. The US Treasury Department increased the cap of HAMP by $4.7 billion after previously cutting the cap down. Hayman Advisors LP recently bought mortgage bonds worth 50 percent of their assets. According to statistics from Altera Real Estate, the average home in Laguna Beach will currently take 11.03 months to sell.

In The News:

Wall Street Journal – “Apartment Glut Expands” (10-6-09)

“The U.S. vacancy rate reached 7.8%, a 23-year high, according to Reis Inc., a New York real-estate research firm that tracks vacancies and rents in the top 79 U.S. markets. The rate is expected to climb further in the fall and winter, when rental demand is weaker, pushing vacancies to the highest levels since Reis began its count in 1980.”

Housing Wire – “CA State Bar Files Petitions on Alleged Modification Fraud” (10-6-09)

“The State Bar of California filed petitions against two attorneys that would render them involuntarily inactive during investigations into their involvement in alleged loan modification fraud. In September, the State Bar identified 16 attorneys that allegedly took fees for the promise of getting a loan modified and then failed to perform the modifications, notify the client or return the fees, according to a release.”

Housing Wire – “Treasury Grants Another $4.7bn to HAMP Servicers” (10-6-09)

“The US Treasury Department made another round of adjustments the total capped incentives to servicers participating in the Home Affordable Modification Program (HAMP). Treasury granted a total $4.7bn of incentive funds from the previously downwardly adjusted cap amount. The recent adjustments, made in late September, bring the total capped amount to to $27bn, according to the Troubled Asset Relief Program’s (TARP) latest transaction report. The latest round of adjustments comes after several adjustments in June and July, which took a total $1.13bn in cuts off the original amount allotted.”

Housing Wire – “Bill Raises Required Down Payment to 5% for FHA Loans” (10-6-09)

“A bill introduced in Congress Monday would increase the minimum down payment for Federal Housing Administration (FHA)-insured mortgages from 3.5% to 5%. The FHA Taxpayer Protection Act of 2009 — HR 3706 — would also prohibit financing initial service charges, appraisals, inspections, or other fees or closing costs with any part of an FHA mortgage.”

Bloomberg - “Bass Buys Mortgages, Metals on Hyperinflation Fear” (10-6-09)

“Kyle Bass, the hedge-fund manager who made $500 million in 2007 betting against subprime securities, is buying shorter-term debt and precious metals, anticipating hyperinflation will lead to higher interest rates. Funds advised by Hayman Advisors LP bought mortgage bonds equal to about 50 percent of assets, Bass wrote in a letter to investors Oct. 2. The Dallas-based investment firm added corporate debt, primarily high-yield loans and bonds, equal to approximately 25 percent of assets. ”

Bloomberg - “California Hotel Foreclosures Triple in Travel Slump” (10-6-09)

“Hotel foreclosures in California more than tripled in the first nine months of this year as business travelers and vacationers cut spending. Foreclosures including the 400-room St. Regis Monarch Beach resort in Dana Point climbed to 47 in January through September from 15 a year earlier. Properties in default more than quadrupled to 259, Irvine, California-based Atlas Hospitality Group said in a statement. Atlas specializes in selling hotels. The survey didn’t include states other than California. ”

Bloomberg - “U.S. Economy on Mend, Housing Poised for Rebound, LaVorgna Says” (10-6-09)

“The U.S. economy is on the mend and housing is poised for a rebound, said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York. ”

Orange County Register – “How many Irvine homes sold in September?” (10-6-09)

“Gunther tracked 170 home resales that closed escrow, or a rate of 5.67 sales per day; that’s similar to the 175 sales in July. The median sales price for September was $539,488, down from $585,000 in August. There were 225 leases signed during the month of September, and monthly rents averaged $1.54 per square foot.”

Orange County Register – “New sign of weakness in O.C. high-end housing” (10-6-09)

“The Balboa Island Price Index, or the BIPI, is the brainchild of Girling Real Estate Investment Group. Broker David Girling said the inland lots on Balboa Island lend themselves particularly well to measuring real estate price changes because of the uniformity of lot sizes. Nearly 1,100 of the island’s 1,498 parcels are 30 feet by 85 feet. Yet, Balboa’s 2,550-square-foot lots still remain pricey — with an average price of $1.4 million this past quarter (and that’s the lowest in 5 1/2 years).”

Orange County Register – “Homes selling a bit slower in south coast cities” (10-6-09)

“Laguna Beach’s expected market time has increased to 11.03 months from 10.32 months, according to a biweekly report by Steven Thomas of Altera Real Estate. This makes Laguna the third slowest housing market in the county – behind Corona Del Mar with an 11.53-month market time and Newport Beach with an 11.05-month market time.”

Wall Street Journal – “U.S. Data Show High Mortgage-Denial Rate for Blacks” (10-6-09)

“A Federal Reserve report on home mortgage data showed that blacks and Hispanic whites were far more likely than non-Hispanic whites to be denied last year in applying to refinance. The annual report is based on data collected from more than 8,000 mortgage lenders nationwide under the Home Mortgage Disclosure Act of 1975, known as HMDA.”

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The Norris Group Real Estate News Roundup 10/5/09

Monday, October 5th, 2009

Today’s News Synopsis:

First American CoreLogic expects about 10 percent of all U.S. mortgages to adjust within the next few years. FHA plans to reduce the maximum lending amount that seniors can receive for reverse mortgages. Consumers are claiming that Wells Fargo is guilty of cutting their credit lines for no apparent reason. Whitehouse spokesman Robert Gibbs has confirmed that president Obama is in favor of extending the first time home buyer tax credit.

In The News:

Chron - “New round of foreclosures looms in U.S.” (10-5-09)

“About 10 percent of all mortgages in this country are scheduled to adjust in the next few years, with the numbers peaking in mid- to late 2011, according to First American CoreLogic. Those loans are worth about $1 trillion, and nearly 20 percent of the borrowers who have them are already seriously behind on their monthly payments.”

San Francisco Chronicle – “Declining home values squeeze reverse mortgages” (10-5-09)

“In a letter to reverse mortgage lenders Sept. 23, FHA Commissioner David Stevens said his agency must reduce the maximum amounts seniors can receive on reverse mortgages because of a $798 million estimated deficit in the program in the coming fiscal year.”

Calculated Risk – “The Impact of the Declining Homeownership Rate” (10-5-09)

“Since about 2/3s of all households are owner occupied, an increase of 1.25 million households per year would imply an increase in homes owned of about 800K+ per year. If an additional 500K per year moved to homeownership – as indicated by the increase in the homeownership rate from 1995 to 2005 – then the U.S. would have needed 1.3 million additional owner occupied homes per year.”

Los Angeles Times – “Too many palatial homes, too few princely buyers” (10-5-09)

“Spec mansions are now amassed in some areas like rising floodwater behind a dam. A search of homes for sale built since 2007 and priced above $3 million shows 39 such properties in Newport Beach and Newport Coast, 27 in Laguna Beach, 19 in Manhattan Beach, 18 in Irvine and 11 on the Palos Verdes Peninsula.”

San Francisco Chronicle – “Wells Fargo cutting customers’ lines of credit” (10-4-09)

“This is not the first time I’ve heard from readers saying banks have cut off their credit for no apparent good reason, and sometimes without warning. Officers at the Wells Fargo branch in question said they could not comment. A corporate spokesman would not confirm that the bank had sent out letters last week, except to say the reader’s e-mail ‘isn’t accurate about the purported quantity of letters suggested.’”

Inman - “Obama backs extension of tax credit” (10-5-09)

“White House spokesman Robert Gibbs today confirmed that President Obama supports an extension of the first-time homebuyer tax credit, along with prolonging jobless benefits and health care subsidies for unemployed workers.”

Housing Wire – “FHA is Replacing Securitization in Mortgage Financing” (10-5-09)

“The collapse of the private securitization market in 2007 and retrenchment by the private mortgage insurers led to a huge funding gap in mortgage finance, especially in the higher loan-to-value (LTV) sector. That gap that is quickly being filled by Federal Housing Administration (FHA)-insured loans, according to a panel of regulators and enforcers speaking at the CRA & Fair Lending Colloquium, hosted by Wolters Kluwer Financial Services and now underway in New Orleans.”

Wall Street Journal – “A Return to Real Estate” (10-5-09)

“Individuals looking to dip their toes into real-estate securities should consider buying a mutual fund that invests both in the U.S. and abroad, says Dave Yeske, a financial planner in San Francisco. When buying risky assets like real estate, it’s best to spread your bets across companies and countries, he says.”

National Mortgage News – “Panel May Look at New FHA Net Worth Requirements” (10-5-09)

“One topic a panel titled ‘The Recent Evolution of Independent Mortgage Bankers’ may end up covering is the Federal Housing Administration’s plan for a $1 million net-worth lender requirement. Net worth may be a ‘significant’ problem for the smaller nondepository, said Tim Stern, co-founder and president of Lenders One, St. Louis, in a phone interview. He said his cooperative group, which helps mortgage bankers collectively achieve scale, also requires at least $1 million in net worth.”

Housing Wire – “IBM to Purchase Wilshire Credit from BofA” (10-5-09)

“Global IT services giant IBM (IBM: 119.75 +0.61%) is in the process of acquiring mortgage servicer Wilshire Credit Corp. from Bank of America (BAC: 16.96 +3.79%), numerous sources with knowledge of the transaction confirmed to Housing Wire over the weekend.”

Bloomberg – “General Growth Proposes $11.6 Million Bonus Pool” (10-5-09)

“General Growth Properties Inc., the second-largest shopping mall owner in the U.S., asked for court permission to pay as much as $11.6 million in incentive bonuses to 12 executives including Chief Executive Officer Adam Metz and Chief Operating Officer Thomas Nolan.”

Bloomberg - “Mortgage-Bond Prices Double From March Lows in Rally” (10-5-09)

“Typical prices for the most-senior prime-jumbo securities rose 2 cents on the dollar last week to 84 cents, according to Barclays Capital data. Similar bonds backed by Alt-A loans with a few years of fixed rates increased 2 cents to 60 cents. The jumbo bonds are up from about 75 cents three months earlier, while the Alt-A bonds have climbed from 47 cents.”

Bloomberg - “Treasury Says Three More Money Managers Receive PPIP Funding” (10-5-09)

“The U.S. Treasury Department said AllianceBernstein Holding LP, BlackRock Inc. and Wellington Management Co. have raised a combined $1.94 billion for their funds participating in the U.S. effort to buy toxic assets from banks. By getting that money from private investors, the three firms qualify for federal funds under the Public Private Investment Program. The U.S. will match the funds each money manager raised, and provide debt financing that will give them a combined purchasing power of $7.74 billion.”

Orange County Register – “Brightwater developer misses $1.7 million payment” (10-5-09)

“The troubled builder of the Brightwater development by the Bolsa Chica wetlands announced today that it skipped a $1.7 million debt payment that was due this week but is working with the lender to restructure its loans.”

Orange County Register – “Foreclosures total 4% of houses for sale” (10-5-09)

“Steve Thomas at Altera Real Estate in Aliso Viejo reports that the number of O.C. distressed properties (homes listed by agents as foreclosures or short sales) was 2,346 last week, -38 vs. two weeks earlier or a -1.6% change.”

Looking Back:

The Hope for Homeowners program gave permission to FHA to guarantee $300 billion dollars worth of 30 year, fixed rate home loans. Countrywide Financial Corp. settled fraud complaints in 11 states by cutting interest rates and borrowers’ owed amounts. The Federal Reserve boosted its auctions of cash to banks up to $900 billion.

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