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The Norris Group Real Estate News Roundup 6/17/10

Thursday, June 17th, 2010

Today’s News Synopsis:

According to the CBIA, sales in new-home communities of 10 units or more were 32 percent below April 2009. MDA DataQuick reports 8,264 homes closed escrows in the nine-county Bay Area last month.  Statistics from Freddie Mac show the average 30-year frm rate increased to 4.75 percent this week. The number of suspected mortgage fraud activities reported to law enforcement grew 5% during fiscal year 2009.

In The News:

CBIA - “California New-Home Market Down in April, CBIA Announces” (6-17-10)

“The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New-Home Sales and Pricing Report showed that sales in new-home communities of 10 units or more were 32 percent below April 2009. During April, 2,203 new homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 3,218 a year earlier. Sales of single-family homes were down by 34 percent, while sales of townhomes and ‘plexes’ – duplexes, triplexes, etc. – were off by 33 percent and sales of condominiums were 22 percent lower than a year ago.”

DQNews - “Bay Area $500K-Plus Home Sales Jump; Median Price Tops $400K” (6-17-10)

“Sales rose across the Bay Area last month in many mid- to high-end neighborhoods, helping to push the median sale price over $400,000 for the first time in 21 months. But as tax credits, low mortgage rates and an ample supply of homes for sale fueled the $500,000-plus market, sales fell in many affordable inland areas where investors and first-time buyers faced a dwindling inventory of low-cost foreclosures, a real estate information service reported. Last month a total of 8,264 homes closed escrows in the nine-county Bay Area, up 18.0 percent from 7,003 in April and up 11.0 percent from 7,447 in May 2009, according to MDA DataQuick of San Diego.”

Wall Street Journal – “Shadow Problem: Home Price Declines May Land in Cities That Largely Avoided Them” (6-17-10)

“A new report shows that the ‘shadow inventory’ of homes, with delinquent mortgages that have yet to go through the foreclosure process, is growing fastest in areas that have so far avoided the biggest home-price declines, according to a report by ratings agency Standard & Poor’s. Mortgage companies could be forced to reduce their prices on these foreclosued homes as they work through that supply, and as more of those homes sell, that could continue to put pressure on prices. At the top of the list: the New York City area, where at the current rate it would take 103 months to clear the shadow inventory of loans that are more than 90 days delinquent or in foreclosure. That’s nearly 3.5 times the national average.”

San Francisco Chronicle - “Freddie Mac: Mortgage rates up from yearly low” (6-17-10)

“Rates on 30-year fixed mortgages backed off from yearly lows this week, but still remain historically cheap. Mortgage finance company Freddie Mac says the average rate rose to 4.75 percent, up from 4.72 percent last week. The rate hit 4.71 percent in December, the lowest since Freddie Mac began keeping records in 1971.”

Housing Wire – “Suspected Mortgage Fraud Reports to FBI Grew 5% in 2009″ (6-17-10)

“The number of suspected mortgage fraud activities reported to law enforcement grew 5% during fiscal year 2009 to 67,190, according to the latest yearly mortgage fraud report from the Federal Bureau of Investigation (FBI). FBI mortgage fraud pending investigations rose 71% from fiscal year 2008, while Department of Housing and Urban Development – Office of Inspector General (HUD-OIG) pending investigations rose 31% in the same time. Of all pending FBI mortgage fraud investigations during FY 2009, 66% involved dollar losses totaling more than $1m.”

Housing Wire - “55-75% of HAMP Mods Could Re-Default under Fitch Projections” (6-17-10)

“As of May 2010, Fitch noted that roughly 15% of non-agency RMBS loans by balance — including nearly 35% of RMBS subprime loans — received at least one modification. This is up from 10% and 25% respectively in September 2009. Fitch currently expects anywhere from 55% to 75% of modified loans within RMBS to re-default after 12 months.”

Bloomberg - “Mortgage-Fraud Crackdown in U.S. Brings 485 Arrests” (6-17-10)

“Authorities arrested 485 people since March in the largest nationwide mortgage-fraud crackdown of its kind, the U.S. Justice Department said. During the enforcement effort, 1,215 criminal defendants responsible for $2.3 billion in losses faced some type of legal action, the department said. The crackdown, dubbed Operation Stolen Dreams, also included 191 civil cases resulting in the recovery of more than $147 million.”

Inman - “5 real estate opportunities” (6-17-10)

“In 2001, 42 percent of homebuyers were first-timers. That number dropped to 36 percent at the peak of the seller’s market in 2006. Today, first-time buyers represent 47 percent of all buyers, the highest percentage in this century. Opportunity: To take advantage of this trend, actively prospect for listings in first-time-buyer areas. To determine which areas are the best to prospect, watch the sales board in your office or the sales report from your local multiple listing service.”

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

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The Norris Group Real Estate News Roundup 6/14/10

Monday, June 14th, 2010

Today’s News Synopsis:

Christopher Cagan from First American predicts a dip in housing prices in the near future. A study from Harvard University seems to show that high unemployment is fueling the foreclosure crisis. Christopher Thornberg of Beacon Economics believes the recession is currently over, but he expects economic conditions to get worse over the next two years. REIS Inc predicts U.S. apartments may lead a rebound in commercial real estate.

In The News:

Orange County Register – “‘Double dip’ decline seen for housing” (6-13-10)

“In the short to near term, I expect a double dip.  This is the logical aftermath of the sugar shot from the Federal first time buyer tax credit.  It borrowed buyers from the future, and we are now going into that future.  Also we are not too far from the end of the traditional SoCal buying season.  I have already seen asking prices reduced 5% or so in May from April.”

Wall Street Journal – “Trading Down: Can It Still Bankroll Your Retirement?” (6-13-10)

“Trading down to a smaller home is a retirement-planning staple. According to an April study by the Society of Actuaries, 20% of not-yet retirees say they plan to downsize after the last child leaves the nest.”

Los Angeles Times - “Home shortages could develop as recovery unfolds” (6-13-10)

“A housing deficiency isn’t a sure thing, but the potential is certainly there, says David Crowe, chief economist at the National Assn. of Home Builders, who paints a rather ominous scenario in which house and apartment builders won’t be able to keep up with the demand. Wherever the new households come from — adult children moving out for the first time or leaving the nest a second or third time after returning to Mom and Dad’s to weather the economic storm, roommates uncoupling and going their separate ways or young couples starting families — most of them are typically renters. Therefore, the multifamily sector is apt to feel the pinch first, if only because it takes so much longer to build apartments than houses.”

Bloomberg - “U.S. Housing Market Recovery Dependent on Jobs Growth, Harvard Report Says” (6-14-10)

“Job growth will be the key factor in whether the U.S. real estate market can extend a recovery after the end of the federal homebuyer tax credit, according to a Harvard University study. High unemployment is fueling the foreclosure crisis and discouraging the household formation that drives property demand, according to the State of the Nation’s Housing report issued today by Harvard’s Joint Center for Housing Studies.”

Housing Wire – “Monday Morning Cup of Coffee” (6-14-10)

“The Federal Bureau of Investigation (FBI) is preparing a nationwide crackdown on mortgage fraud, with arrests expected to count in the hundreds, beginning as early as this week, the Financial Times reported.”

Housing Wire – “Negative GDP Growth in Q3? Really?” (6-14-10)

“Thornberg essentially noted in his speech that while the recession is over, for now, we’re not there yet in terms of a sustainable economic recovery. He exhorted attendees to enjoy 2010, as he expects the year to be a relatively good one compared to what we may see in 2011 and 2012.”

Housing Wire – “Subprime Mortgage Performance Improving as Delinquencies Drop” (6-14-10)

“The performance of historical subprime mortgages is improving according to two separate reports from Moody’s Investors Service and the Royal Bank of Scotland (RBS). And the rate of homeowners behind on their subprime mortgage is lower across all levels of days past due, albeit at different speeds.”

Housing Wire – “Fiserv Sees Buyer ‘Optimism’ Behind Home Price Increases” (6-14-10)

“Home prices trended up in more than 40% of metropolitan areas (155 of 384 markets) in Q409, including markets in California, Ohio, Michigan and Washington DC, according to analysis of price trends by financial data services provider Fiserv. On average, home prices were down 2.5% in Q409 from the year-ago quarter, which Fiserv noted could be due to continued high unemployment levels, rising interest rates and a high volume of distressed property in markets like Florida, Arizona and Nevada. The data studied for the quarterly report is based on the Fiserv Case-Shiller Indexes.”

Bloomberg - “Equity Residential May Start California Project Within a Year” (6-14-10)

“Equity Residential, the largest publicly traded U.S. apartment landlord, may start building a new development in California within the next year, Chief Executive Officer David Neithercut said. U.S. apartments may lead a rebound in commercial real estate as the economy adds jobs, property research firm Reis Inc. said in May. Vacancies probably will peak at 8.2 percent in 2010 and start to decline in 2011.”

Orange County Register – “Portola Hills homes quickest to sell” (6-14-10)

“The ‘hardest’ O.C. town to find a home to buy in terms of ‘market time’ (supply of homes for sale vs. new purchase deals inked in past month) is Portola Hills at 1.3 months to theoretically sell all for-sale homes at the current buying pace. Or, looking at it another way: quickest to sell. A year ago, this town was at 0.6 months.”

Orange County Register – “Home demand off 20% without tax break” (6-14-10)

“March and April’s surge due to the housing credit robbed May and June of normal activity. There is nothing cyclical about the recent swings in demand, but it is making its way back to normal. It should be back on track by July. Demand, the number of new pending sales over the prior month, decreased by 136 in the past two weeks and now totals 3,167. That is after a 603 home drop two weeks ago. For the first time since March 2008, demand is less than the prior year with 485 fewer pending sales.”

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

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The Norris Group Real Estate News Roundup 6/7/10

Monday, June 7th, 2010

Today’s News Synopsis:

The chief economist of the NAR predicts the housing recession will bottom this summer. Doug Duncan, the chief economist for Fannie Mae, believes housing demand will not balance with new household formation and housing starts until 2013. According to Fitch Ratings, subprime RMBS delinquencies fell to 44.8% in May. Terradatum Inc reports home and condominium sales increased by 50 percent from last year.

In The News:

Orange County Register – “Zillow: No housing bottom yet” (6-6-10)

“‘The housing recession is not over. Housing prices will continue to fall,’  Zillow Chief Economist Stan Humphries said at the National Association of Real Estate Editors conference in Austin, Texas. By Humphries’ estimate, home prices won’t bottom out until this summer. But don’t expect a quick rebound in home prices once that bottom is reached, he added.”

Orange County Register – “Mid-county homebuying tumbles 12%” (6-6-10)

“DataQuick identified 756 homes selling in Orange County’s north-inland ZIP codes in this most recent period, +13% from a year ago. Median selling price? $457,500 in these 23 ZIPs. This most recent median price change was +8.2% vs. a year ago. Mid-county ZIPs — median selling price $349,500 – had 805 sales, -12% from a year ago. In these 24 ZIPs, the freshets median price change was +11.8% vs. a year ago.”

Orange County Register – “43% of Talega home deals are distressed” (6-5-10)

“The newest ‘market time’ of San Clemente’s Talega community – Thomas’ math that tracks theoretical time it would take to sell all listed homes at the pace of new escrows opened — is 2.41 months. That is -13.2% (or roughly 11 days) in a year. Over two years, it’s -50% or 73 days.”

Inman - “A real estate recovery in 2013″ (6-7-10)

“housing demand may not see a normal balance with new household formation and housing starts until 2013, said Doug Duncan, chief economist for secondary mortgage giant Fannie Mae.”

Housing Wire – “Distressed Commercial Properties to Rise Fastest in US and Ireland, Finds RICS” (6-7-10)

“However, its Q110 Global Distressed Property Monitor finds that the pace is likely to pick up in 70% of surveyed countries, with the US and Ireland leading the way. The monitor asked 466 surveyor offices worldwide about trends in property investments. A distressed property is defined as that which is under a foreclosure order, or advertised for sale. The survey clarifies that such properties are usually sold for under-market value.”

Housing Wire – “Subprime Delinquencies Drop Again as CDS Prices Return to 2008 Levels” (6-7-10)

“Subprime RMBS delinquencies fell to 44.8% in May, from 45.2% in April. The rate is still up from 28.3% the same time last year. Fitch found in a separate survey that prices of US subprime credit default swaps (CDs) grew 7.6% from last month and are now at levels last seen in December 2008.”

Bloomberg - “Tech Lifts S.F. Prices as Ocean View Gets 26 Bids” (6-7-10)

“Sales of houses and condominiums in San Francisco jumped 50 percent in the first quarter from a year earlier and the median price rose 5.4 percent to $685,000, according to a multiple listings analysis by Terradatum Inc. House values will gain 7 percent this year, the biggest annual increase since a 9 percent advance in 2005, Rosen Consulting Group forecast last month.”

Orange County Register – “Local builders enjoying a revival” (6-7-10)

“Buyers signed contracts to purchase 523 new homes in Orange County during this year’s winter quarter. That’s the highest number of sales contracts for any quarter since the spring of 2008. Sales contracts saw the highest quarterly percentage gain in records dating back to 2007. New home contracts declined on a year-over-year basis in 10 of the past 13 quarters. They only increases were: Spring 2007, up 5.7 percent; fall 2009, up 6.2 percent; winter 2010, up 56.1 percent.”

Realty Times – “Real Estate Outlook: Positive Trends” (6-7-10)

“Last week’s pending home sales report from the National Association of Realtors illustrates the trend: Pending contracts jumped for the third straight month — up by six percent in April — and now stand 22 percent higher than the year before. Every region but one — the South — racked up sizable gains in transactions heading for settlement. Contracts in the Northeast were up by nearly 30 percent for the month. In the West, they rose nearly eight percent, and in the Midwest the gain was about four percent.”

Looking Back:

One year ago, Freddie Mac predicted sales of new and existing homes might increase to an annual pace of 5.1 million. The number of Orange County property owners who disputed their taxes increased 23% from 2008 to 2009.

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 5/24/10

Monday, May 24th, 2010

Today’s News Synopsis:

According to the NAR, Existing home sales increased 7.6 percent to a seasonally adjusted annual rate of 5.77 million units in April. The CIRB reports permits were pulled for 3,314 total housing units in April. Statistics from CAR show California home sales decreased 8.1 percent in April. The Federal Reserve doesn’t intend to sell any of its assets until after it begins raising interest rates.

In The News:

NAR - “Existing-Home Sales Continue to Improve in April” (5-24-10)

“Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 7.6 percent to a seasonally adjusted annual rate of 5.77 million units in April from an upwardly revised 5.36 million in March, and are 22.8 percent higher than the 4.70 million-unit pace in April 2009. Monthly sales rose 7.0 percent in March.”

CBIA - “California Housing Starts Dip in April, CBIA Announces” (5-24-10)

“According to statistics compiled by the Construction Industry Research Board (CIRB), permits were pulled for 3,314 total housing units in April, down 6 percent from the same month a year ago and down 9 percent from March. Permits for single-family homes totaled 2,252, down 6 percent from April 2009 and down 5 percent from the previous month, while multifamily permits totaled 1,062, down 7 percent from a year ago and down 16 percent from March.”

CAR - “April 2010 sales and price report” (5-24-10)

“Home sales decreased 8.1 percent in April in California compared with the same period a year ago, while the median price of an existing home rose 21 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.”

Wall Street Journal – “Mortgage Rates Decline” (5-24-10)

“The housing industry had been bracing for months for a period of rising mortgage rates, triggered by the end of the Federal Reserve’s $1.25 trillion mortgage-securities purchase program. Conventional wisdom held that mortgage rates would rise as the Fed pulled back from propping up the market. Instead, many in the industry now say rates could drift as low as 4.5% this summer from 4.86% now, instead of rising to 6% as some economists projected, making for significantly lower payments for Americans buying homes or refinancing their mortgages.”

Bloomberg - “Fed Won’t Sell Mortgage-Backed Assets Until it Raises Rates” (5-24-10)

“The Federal Reserve doesn’t intend to sell any of its assets, including more than $1.1 trillion in mortgage-backed securities, until after it begins raising interest rates, the central bank said in a report to Congress.”

Housing Wire – “FDIC Sells $233m of Commercial Mortgage-Backed Notes” (5-24-10)

“The Federal Deposit Insurance Corp. (FDIC) sold $233m in notes backed by performing and non-performing commercial real estate loans from 22 financial institutions under receivership. The underlying mortgages bear an aggregate unpaid principal balance of $1bn.”

Bloomberg - “FHA Home-Financing Volume Sign of ‘Very Sick System’” (5-24-10)

“The FHA, which backs loans with down payments as low as 3.5 percent, insured $52.5 billion of home-purchase mortgages in the first quarter, compared with $46 billion of purchases of the debt by Fannie Mae and Freddie Mac, according to data compiled by Washington-based Potomac Partners. The FHA and Fannie Mae and Freddie Mac, which regulators seized in 2008, have been financing more than 90 percent of U.S. home lending after a retreat by banks and the collapse of the market for mortgage bonds without government-backed guarantees.”

Bloomberg - “Defaults on Apartment-Building Loans Set Record for U.S. Banks” (5-24-10)

“Defaults on apartment-building mortgages held by U.S. banks climbed to a record 4.6 percent in the first quarter, almost twice the year-earlier level, as more borrowers failed to repay debt approved near the market peak, said Real Capital Analytics Inc. in a report. Defaults on so-called multifamily mortgages rose from 4.4 percent in the fourth quarter and from 2.4 percent during the same period in 2009, the New York-based real estate research firm said today. Commercial-mortgage defaults also rose in the first quarter for loans against office, retail, hotel and industrial properties, Real Capital said.”

Bloomberg - “U.S. Subprime Hunt Targets Goldman, May Skip Cassano: Timeline” (5-24-10)

“Federal prosecutors don’t plan to bring charges against former American International Group Inc. executive Joseph Cassano after a two-year probe of the insurer’s collapse, according to a person familiar with the investigation. Justice Department investigators found there is insufficient evidence to charge Cassano, the former head of AIG’s Financial Products division, the person said.”

Inman - “3 fatal flaws of real estate negotiation” (5-24-10)

“Agents have a wealth of places both online and offline to find strategies that work. Agent blogging sites are rich with great suggestions, many of which are from the best agents in the business. Nevertheless, many of these strategies still use manipulation or one-upmanship. The result is that these old approaches often undermine the agent’s success.”

My Desert – “Short sales on the rise” (5-23-10)

“Real estate experts say they’re seeing spurts of multiple bids and cash buys on homes priced below $250,000 by investors with deep pockets, buyers from other states or residents with equity in their home, a move-up mentality or frazzled nerves from a volatile stock market.”

Washington Post – “Anger at the root of mortgage default problem, study finds” (5-22-10)

“Now White has published a paper based on the personal accounts of 356 strategic defaulters and homeowners on the verge of doing the same. His finding: People who intentionally default on their loans are not as economically rational or calculating in their decision-making as widely thought. In fact, he said, their decisions to pull the plug ‘may not turn out to be economically rational.’ But they walk anyway, in large part because they are at the end of their emotional rope. They have transitioned from feelings of anxiety and hopelessness to outright anger at their lenders, the government and a financial system they consider unfair.”

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 5/10/10

Monday, May 10th, 2010

Today’s News Synopsis:

Fannie Mae is asking for $8.4 billion in government aid. According to Fitch Ratings, Serious delinquencies among US Alt-A residential mortgage-backed securities (RMBS) declined in April. First American CoreLogic reports that underwater mortgages and borrowers with less than 5% home equity accounted for 28% of all residential properties. Statistics from Zillow show more than a fifth of U.S. mortgage holders owed more than their homes were worth in the first quarter.

Looking Back:

Mortgage Bankers Association – “Study: Americans Will Be Permanently Impacted by Recent Recession” (5-10-10)

“The historically slow recovery of the economy and lack of substantial job growth could cause negative, lasting effects on the current young generation and force many retirement age individuals to remain in the workforce, according to a study released today by the Mortgage Bankers Association (MBA). The impact of a higher unemployment rate for Americans aged 16 – 24 could have a lasting effect on lifetime earnings and attitudes toward risk and social policies. In addition, those nearing retirement are delaying retirement and reentering the labor force in an effort to rebuild some of the retirement wealth that was wiped out by the recession.”

San Francisco Chronicle – “Fannie Mae seeks $8.4B in aid after 1Q loss” (5-10-10)

“Fannie Mae has again asked taxpayers for more money — this time $8.4 billion — after reporting another steep loss for the first quarter. The taxpayer bill for rescuing Fannie and its sibling Freddie Mac has grown to $145 billion — and the final tally could be much higher.”

Housing Wire – “Alt-A RMBS Delinquencies Post First Decline in 4 Years” (5-10-10)

“Serious delinquencies among US Alt-A residential mortgage-backed securities (RMBS) declined in April for the first time in four years, according to the latest data from Fitch Ratings. Subprime RMBS delinquencies fell in the second straight month, and prime RMBS delinquencies rose slightly.”

Housing Wire – “Underwater Mortgages Stabilized in First Quarter: CoreLogic” (5-10-10)

“The number of borrowers with negative equity declined slightly in Q110, but underwater mortgages and borrowers with less than 5% home equity accounted for 28% of all residential properties, according to the latest data from CoreLogic. More than 11.2m, about 24% of all residential properties with mortgages were in negative equity at the end of Q110. That’s down slightly from 11.3m, or 24%, Q409. The state with the highest rate of negative equity mortgages continues to be Nevada, where 70% of all properties are underwater, followed by Arizona (51%), Florida (48%), Michigan (39%) and California (34%).”

Housing Wire – “Monday Morning Cup of Coffee” (5-10-10)

“Regulators closed four banks, bringing the running 2010 total to 68 failed banks so far. The closures, located in Arizona, California, Florida and Minnesota, are expected to cost the Federal Deposit Insurance Corp. (FDIC) Deposit Insurance Fund (DIF) a total $213.7m. Last week, regulators shut down seven banks at a cost of more than $7.33bn.”

Bloomberg - “Cemex, Vulcan Call Turn in Construction as Sales Rise” (5-10-10)

“A four-year slump in construction may be nearing an end, with the biggest U.S. building-material makers reporting higher monthly sales that have yet to spread industrywide. Cemex SAB, the largest U.S. cement producer, and Vulcan Materials Co., the top gravel supplier, just reported monthly volume increases for March and April, their first since 2006. The results exceeded estimates and may lead the Portland Cement Association, a trade organization that represents U.S. and Canadian companies, to increase its growth forecast this year, said Ed Sullivan, its chief economist.”

Bloomberg - “Fed Hinting on Mortgage-Bond Sales Brings Bernanke Tightening” (5-10-10)

“Words may speak louder than actions for Federal Reserve Chairman Ben S. Bernanke when the time comes to outline plans to raise interest rates and shrink the central bank’s balance sheet. Altering a pledge to keep short-term borrowing costs low or articulating plans to begin selling the $1.1 trillion in mortgage-backed securities it now holds will amount to a tightening of monetary policy because the announcements will send bond yields higher, raising borrowing costs, said Mitch Stapley, chief fixed-income officer at Fifth Third Asset Management in Grand Rapids, Michigan.”

Bloomberg - “Mortgage Holders Owing More Than Homes Are Worth Rise to 23%” (5-10-10)

“More than a fifth of U.S. mortgage holders owed more than their homes were worth in the first quarter as repossessions climbed to a record, according to Zillow.com. Twenty-three percent of owners of mortgaged homes were underwater during the period, up from 21 percent in the previous three months, the Seattle-based property data provider said today in a report. More than one in 1,000 homes were repossessed by lenders in March, the highest rate in Zillow data dating back to 2000.”

Looking Back:

One year ago,Campbell Communications reported only 23 percent of short sale transactions were being completed. Obama proposed making the Federal Reserve serve as a finance supercop.

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The Norris Group Real Estate News Roundup 4/7/10

Wednesday, April 7th, 2010

Today’s News Synopsis:

According to the MBA, 1.2 million households were lost from 2005 to 2008. Greenspan defended the fed’s lack of oversight in the subprime market claiming that consumer protection was a high priority at the time. A Fannie Mae survey shows 61 percent of homeowners and renters say the economy is on the wrong track. Fitch reports subprime RMBS delinquencies fell to 46.3% in March.

In The News:

Mortgage Bankers Association – “Wells Fargo Was Top U.S. Commercial/Multifamily Originator in 2009 According to MBA” (4-7-10)

“Wells Fargo Bank was the top commercial/multifamily originator in 2009, according to a set of listings released by the Mortgage Bankers Association (MBA). Other originators in the top 10 include PNC Real Estate; Deutsche Bank Commercial Real Estate; CBRE Capital Markets, Inc.; HFF L.P.; Prudential Mortgage Capital Company; Meridian Capital Group; MetLife; Northmarq Capital LLC and Capmark Financial Group Inc.”

Mortgage Bankers Association – “MBA: An Estimated 1.2 Million Households Were Lost During Recession” (4-7-10)

“1.2 million households were lost from 2005 to 2008, despite the population increase of 3.4 million in the study area, as Americans experienced one of the deepest recessions in decades, according to a study released today by the Mortgage Bankers Association (MBA). This decline in households is likely what contributed significantly to the excess supply of apartments and single family homes on the market.”

Mortgage Bankers Association – “Mortgage Refinance Applications Decrease in Latest MBA Weekly Survey” (4-7-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending April 2, 2010.  The Market Composite Index, a measure of mortgage loan application volume, decreased 11.0 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 10.5 percent compared with the previous week.”

Los Angeles Times – “Greenspan defends Fed’s handling of subprime mortgage market” (4-7-10)

“While admitting some mistakes, Former Federal Reserve Chairman Alan Greenspan on Wednesday defended the central bank’s much-criticized oversight of the subprime mortgage market, arguing that consumer protection was an important priority and that it did not make sense to outlaw all such loans. Greenspan also warned the federal commission examining the origins of the financial crisis that government regulators couldn’t prevent crises, arguing that ‘fallible human regulators’ had a ‘woeful record’ of predicting the next market pitfalls. The best prevention would come from increasing federal requirements on financial institutions to hold more capital and collateral to carry them through crises.”

Inman - “Survey: Homeownership to get tougher” (4-7-10)

“About 61 percent of homeowners and renters say the economy is on the wrong track, according to the results of a housing survey conducted for Fannie Mae, and about 60 percent of respondents said it is more difficult for them to secure a home loan than for their parents’ generation. An earlier survey, conducted in December 2003, found that 43 percent of respondents believed that the economy was on the wrong track at that time, and 49 percent said it was more difficult to secure a loan at that time than it was in their parents’ generation.”

Housing Wire – “Goldman Sachs Denies Betting Against Clients on RMBS Investments” (4-7-10)

“Subprime RMBS performance ended its four-year free fall this month, and Goldman Sachs (GS: 176.36 +2.00%) is denying it made billions betting against those investments and its clients. In 2009, Goldman generated a net revenue of $45.17bn, up from the $22.2bn gain in 2008 and back to the $45.9bn level in 2007, according to is 2009 annual report. The gains came even as Goldman repaid the $10bn bailout from the Troubled Asset Relief Program (TARP) Capital Purchase Program in June 2009.”

Housing Wire – “Former Lender Tells Congressional Committee: Lax Underwriting Fueled Subprime Mortgage Crisis” (4-7-10)

“As he testified today to the Financial Crisis Inquiry Commission (FCIC), the fragmented subprime mortgage market began loosening underwriting standards to such an extent that eventually a letter from a borrower’s mother sufficed as proof of rental history. Lax underwriting and ineffective risk management led to the current mortgage crisis, he said. He noted that, if a lender offers a high-risk product and profit margins continue to drop, one of two things must happen: The lender either increases interest rates or tightens underwriting guidelines to compensate for the reduced margin and subsequent risk.”

Housing Wire – “Subprime RMBS Delinquencies Fall for First Time in Four Years: Fitch” (4-7-10)

“According to the credit rating agency Fitch, subprime RMBS delinquencies fell to 46.3% in March from 46.9% in February, the first decline in nearly four years. However, it did stay above the 39.8% level of a year ago. Subprime delinquencies rose for 44 straight months from its 6.2% low-point in June 2006. Vincent Barberio, managing director at Fitch, warned against calling an end to the woes.”

Bloomberg - “Trulia Adds Rental Listings Following Drop in U.S. Home Values” (4-7-10)

“Trulia Inc., the San Francisco-based provider of home-sales information, said it will begin listing U.S. apartment rentals as high unemployment and a rise in foreclosures lead many people to lease rather than buy. Trulia today will add more than 1 million rentals to its Web site alongside the 3.5 million homes for sale already listed, the company said in a statement. Users will be able to compare the costs of renting and buying, as well as rate neighborhoods on parking, cleanliness, public transportation and safety, Trulia said.”

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

Friday, March 19th, 2010

Today’s News Synopsis:

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

In The News:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Looking Back:

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

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The Norris Group Real Estate News Roundup 3/15/10

Monday, March 15th, 2010

Today’s News Synopsis:

Builder confidence decreased by over 10 percent since the beginning of March. Sacramento home sales decreased by 26 percent from last year. According to LPS, the U.S. mortgage delinquency rate is currently at 10.25%. California contributed $2.6trn to the total $5.7trn of US housing wealth lost since the peak of 2006.

In The News:

NAHB - “Foreclosures Weigh on Builder Confidence in March” (3-15-10)

“Builder confidence in the market for newly built, single-family homes fell back two points to 15 in March as poor weather conditions and distressed property sales posed increasing challenges to both builders and buyers, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.”

Sacramento Bee – “A typical slow February for Sacramento home sales” (3-15-10)

“The Sacramento Association of Realtors reports this morning that home sales continue in their sluggish winter pattern, with 1,156 homes closing escrow during February in Sacramento County and the City of West Sacramento. February sales of existing homes were essentially flat from January, and down 26 percent from Feb. 2009, SAR reported. The median price of $179,900 was up from $170,000 in January and up 7.7 percent from Feb. 2009.”

Wall Street Journal – “Mortgage Fraud Declines but Remains Virulent” (3-15-10)

“First American CoreLogic, a real estate information supplier, compiles an index of the rate of fraud on home mortgages. A version of the index that excludes subprime loans peaked in 2007 at about 112 (on a scale that equates the early-2005 level to 100). It has since dropped to 84.”

Housing Wire – “Housing Recovery is Spelled R-E-O” (3-15-10)

“According to data from Lender Processing Services (LPS: 40.02 -1.43%), a whopping 7.4m loans are now non-current, compared to just 4.1m on average between January and June of 2008.”

Housing Wire - “Pace of Mortgage Delinquency Slowing: LPS” (3-15-10)

“The total loan delinquency rate of US mortgages is 10.25% as of January 2010 — a 2% increase from December 2009 and a 22.1% increase from January 2009, according to mortgage performance data and analytics provider Lender Processing Services (LPS: 40.02 -1.43%). Another 3.3% of foreclosure inventory brings the total non-current rate to 13.5% in January.”

Housing Wire – “In California, a Unique State of Mortgage Borrower Behavior” (3-15-10)

“The state contributed $2.6trn to the total $5.7trn of US housing wealth lost since the peak of the housing market in Q2 2006, according to US asset-backed securities research this week from Deutsche Bank.”

Bloomberg - “Housing Real-Estate Recovery Signaled as Fed Unwinds” (3-15-10)

“The U.S. housing market is poised to withstand the removal of government and Federal Reserve stimulus programs and rebound later in the year, contributing to annual economic growth for the first time since 2006. Increases in jobs, credit and affordable homes will help offset the end of the Fed’s purchases of mortgage-backed securities this month and the expiration of a federal homebuyer tax credit in April. Sales will rise about 6 percent this year, and housing will account for 0.25 percentage point of the 3.6 percent growth, according to forecasts by Dean Maki, chief U.S. economist for Barclays Capital in New York.”

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The Norris Group Real Estate News Roundup 12/04/09

Friday, December 4th, 2009

Today’s News Synopsis:

The unemployment rate declined to 10 percent during November. As of September, less than 0.3 percent of all trial modifications have become permanent. The FDIC announced plans that may require some lenders to make principal reductions on mortgages, rather than forbearing payment and reducing interest rates.

In The News:

Wall Street Journal – “Unemployment Rate Falls to 10%” (12-4-09)

“U.S. job losses in November posted the smallest drop since the start of the recession and the unemployment rate unexpectedly declined, a sign the labor market is finally healing as the economy recovers.”

Time - “Why the Loan-Modification Program Isn’t Working” (12-4-09)

“The problem the Administration is out to tackle is related to the structure of the Home Affordable Modification Program (HAMP). The first three months of a mortgage rewrite are something of a probation period— and very few homeowners are making it out of that trial. More than 650,000 borrowers have been placed in trial modifications, but as of September, fewer than 2,000 had become permanent.”

Housing Wire – “Moody’s Links Option ARM, Subprime Performance” (12-4-09)

“More than $200bn of outstanding pay-option adjustable-rate mortgages (ARMs) originated and securitized from ‘04-’07, according to market commentary by Moody’s Investors Service this week. This sector shows ‘dismal’ performance, with more than 40% of borrowers 60 or more days past due on payments. And many of these loans have yet to experience a recast event, when initial minimum monthly payments jump as much as 60%, according to sources interviewed by HousingWire for an upcoming issue.”

Housing Wire – “Forget Forbearance; FDIC Eyes Principal Forgiveness” (12-4-09)

“Institutions that acquire failed banks taken over by the Federal Deposit Insurance Corp. (FDIC) may soon be required to cut principal off mortgages instead of simply forbearing a portion until a later day or lowering interest rates, according to comments and FDIC official made to Bloomberg this week. The principal forgiveness might apply to as much as $45bn of mortgages from failed banks. Regulators so far in 2009 shut down 124 banks, costing the FDIC’s insurance fund billions of dollars and putting billions more in assets up for acquisition.”

Housing Wire – “Foreclosure Activity Outpaces Mods in October: Hope Now” (12-4-09)

“The mortgage servicing industry completed 271,563 total loan workouts in October, according to Hope Now, the private sector alliance of mortgage servicers, investors, insurers and non-profit counselors. Workouts included 198,373 repayment plans and 73,190 modifications. At the same time, the industry completed 94,450 foreclosure sales and initiated another 222,107 foreclosure starts.”

Press Enterprise - “Low interest rates are no panacea for region’s housing” (12-4-09)

“Inland experts say a shortage of inventory is suppressing sales of existing homes. Also, the high cost of land that home builders acquired makes it impossible for most of them to construct houses that can sell cheaply enough to compete with the foreclosure-ridden resale market.”

Mercury News – “Now’s really the time to buy a home, many say” (12-4-09)

“Mortgage rates are hovering at historic lows, home prices are just starting to edge up from total collapse, and the government is offering tax breaks to first-time and move-up buyers. It all adds up to this: In the real estate agent’s overworked phrase, there may never be a better time to buy a house. And this might not last for long, brokers and real estate agents say, especially since mortgage rates are probably headed up.”

Inman - “Buyer discounts continue slide” (12-4-09)

“For the ninth month this year, buyer discounts — the price paid compared to the last listing price of homes — shrank in October to a median of 2.7 percent, according to Zillow’s Real Estate Market Reports. That’s down from 2.9 percent in September and 4.6 percent in January.”

Bloomberg - “Banks Take Losses on Short Sales as Foreclosures Soar” (12-4-09)

“Banks are beginning to go along with short sales in increasing numbers, three years into a U.S. housing slump that pushed the economy into a recession and cut resale values by 30 percent from the peak in July 2006. Short sales almost tripled to 40,000 in the first six months of 2009 from the same period a year earlier. Yet for each short sale, there were 25 foreclosures started or completed in the first half of this year, according to data from the Office of Thrift Supervision and the Office of the Comptroller of the Currency. ”

Looking Back

One year ago, a little over 42,293 new and resale houses and condos were sold for the year. Orange County was listed as the 9th riskiest home lending market. Bernanke estimated that as many as 20 percent of all homeowners owed more on their homes than their homes were worth.

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The Norris Group Real Estate News Roundup 11/25/09

Wednesday, November 25th, 2009

Today’s New Synopsis:

The MBA’s survey shows that mortgage applications decreased by 4.5 on a seasonally adjusted basis from last week. Freddie Mac’s survey shows that the 30-year FRM decreased by 0.7 points from the previous week. Standard & Poor’s, Moody’s, and Fitch are being sued for inflating ratings.

In The News:

Mortgage Bankers Association - “Mortgage Applications Decrease in Latest MBA Weekly Survey” (11-25-09)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending November 20, 2009.  The Market Composite Index, a measure of mortgage loan application volume, decreased 4.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5.8 percent compared with the previous week.”

Housing Wire – “30-Year Fixed Mortgage Rates at Historic Lows” (11-25-09)

“Freddie Mac’s (FRE: 1.12 -0.88%) weekly survey put the 30-year FRM at 4.78% with a 0.7 point, down from last week when it was 4.83% and one year ago when it was 5.97%. This week’s rate ties the record for lowest ever in the weekly survey’s history, which was previously reached twice in April this year.”

Housing Wire – “Fannie’s MBS Issuance Slides 31% in October” (11-25-09)

“Fannie’s gross mortgage portfolio declined at an annualized rate of 27.8% and stood at $771.4m at the end of the month, according to the monthly summary”

DSNews - “Rating Agencies Face Lawsuit for Allegedly Misleading MBS Investors” (11-24-09)

“Cordray is suing Standard & Poor’s, Moody’s, and Fitch for allegedly providing inflated ratings of mortgage-backed securities (MBS) in exchange for lucrative fees from the securities issuers the agencies say they were objectively evaluating. The lawsuit was filed Friday in a U. S. District Court on behalf of five Ohio public employee retirement and pension funds. Cordray says the case is not intended to take on the status of a class-action lawsuit.”

DSNews - “Bank of America Helps 100,000 Homeowners Avoid Foreclosure” (11-24-09)

“In an effort to help borrowers with Countrywide subprime and option-ARM mortgages avoid foreclosure, Bank of America created its National Homeownership Retention Program (NHRP), providing mortgage relief to 100,000 eligible homeowners in just 10 months. In the third quarter alone, more than 31,000 customers received assistant through the NHRP, according to the bank’s quarterly progress report.”

Bloomberg - “Sales of New Homes in U.S. Rise to Highest Since 2008″ (11-25-09)

“Purchases of new homes in the U.S. rebounded more than anticipated in October as buyers rushed to take advantage of a government tax credit before it expired. Sales rose 6.2 percent to an annual pace of 430,000, the highest level since September 2008, the Commerce Department said today in Washington. The median sales price fell 0.5 percent and the number of unsold homes reached a four-decade low. ”

Bloomberg - “Fed Officials Watch Asset Prices for Signs of ‘Excessive Risk’” (11-25-09)

“Federal Reserve policy makers said for the first time that their decision to cut interest rates to zero may be fueling undue financial-market speculation even as they called the dollar’s decline ‘orderly.’ The Federal Open Market Committee said its policy of keeping rates low might cause ‘excessive risk-taking’ or an ‘unanchoring of inflation expectations,’ according to minutes of its Nov. 3-4 meeting released yesterday.”

Bloomberg - “First American Flips Real Estate Stocks to Beat Fund Rivals” (11-25-09)

“John Wenker and Jay Rosenberg, managers of First American Real Estate Fund, buy and sell stocks more often than their peers, a strategy that helped them outperform 98 percent of rivals in the past decade. The $1.1 billion fund’s turnover ratio, a measure of how often its holdings are traded, is 150 percent, according to data from Morningstar Inc. That compares with an average of 104 percent for all real estate funds. ”

Realty Times – “Internet Stealth Auctions Protect Brand, Generate New Homes Sales” (11-25-09)

“Brown needed to sell his five models. He hired an internet marketing company to help him, then challenged them to design a program around a ‘call to action.’ The company, SaleAMP, suggested the developer give new home buyers what resale real estate thrives on: the opportunity to make an offer- but to do it quietly, fast and with internet marketing thrust at full throttle.”

Realty Times – “Short Sale Sellers Need To Guard Against ‘Double Whammy’ By Bank and I.R.S.” (11-25-09)

“Bad enough that a short sale involves the loss of one’s home with no equity to show for it, and a credit negative that may last for years; it also has the potential to produce two very bad after-effects. One is that the lender, or the lender’s assignee, may continue to pursue the beleaguered seller for the remainder of the debt. The other is that the I.R.S. may come knocking on the seller’s door, seeking tax on the amount of debt that was unpaid. ”

Looking Back:

One year ago, a survey from AARP showed that 25 percent of baby boomers desired to move from their current home. The MBA reported that 32.9 percent of all mortgage applications were government-insured. Total home sales in 2008 increased by 17 percent from 2007.

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