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

Wednesday, March 3rd, 2010

Today’s News Synopsis:

Bruce Norris estimated that lenders may lose up to $2.1 to 3.8 trillion before all the bad loans are taken off their books. According to the MBA, mortgage application volume increased from last week. The FHFA reports that Orange County home values increased by 6.38 percent in 2009. Last year, nearly 1,400 lawsuits were filed against lenders by homeowners in foreclosure.

In The News:

Press Enterprise – “Loan losses from home foreclosures could more than double” (3-3-10)

“Lenders who already have realized $1.5 trillion in losses due to home foreclosures could see their losses mount to an estimated $2.1 trillion to $3.8 trillion before all the bad loans are wiped off their books, a Riverside real estate expert told a gathering over the weekend. Bruce Norris, a real estate analyst, investor and principal of the Riverside-based Norris Group, told more than 400 real estate brokers and investors meeting in Costa Mesa Saturday that he had compiled these figures from data and estimates he obtained from ForeclosureRadar.com, Bloomberg Financial, Goldman Sachs, the International Monetary Fund, RGE Monitor and T2Partners.”

Mortgage Bankers Association – “Mortgage Refinance Applications Increase in Latest MBA Weekly Survey” (3-3-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending February 26, 2010.  The Market Composite Index, a measure of mortgage loan application volume, increased 14.6 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 15.5 percent compared with the previous week.”

Orange County Register – “O.C.: Hottest U.S. housing market?” (3-3-10)

“Orange County home values — by one FHFA index that derives values from purchase records — rose 6.38% in 2009. That’s tops among the 25 major U.S. markets tracked by this methodology. Yes, O.C. is No. 1! We’re followed by Denver (+5.48%); Houston (+3.71%); and Pittsburgh (+3.26%).”

Sign On San Diego – “Hefty tax bill may hit those who lost home” (3-3-10)

“With less than six weeks before taxes are due, an estimated 16,000 former homeowners statewide will owe $15 million in extra income taxes this year and $29 million through 2012.”

Mercury News – “Increasing numbers of Californians are suing lenders to avoid foreclosures” (3-3-10)

“In the last five years, the number of foreclosure lawsuits filed in federal court in California has ballooned — like an exploding adjustable-rate mortgage — from only 29 statewide in 2005 to nearly 1,400 last year.”

Housing Wire – “Winter Weather Slows Residential Real Estate Growth: Beige Book” (3-3-10)

“In the January Beige Book, all but two Fed districts reported increased activity or improved conditions, with Philadelphia and Richmond seeing mixed results. Residential real estate markets remained weak or softened further in the New York, Atlanta, and Chicago districts and there was little change in the San Francisco district, the Federal Reserve Board said.”

Orange County Register – “Why loan mods & short sales take so long” (3-3-10)

“Hard to collect all necessary documents from borrower/owner. This may be because the banks never seem to receive the documents until they’ve been faxed in 5 or 6 times. It may be because it takes the borrower/owner or agent some time to respond to requests for documents.”

Inman - “90% of agents down on HAMP” (3-3-10)

“A mere 10 percent of real estate agents think the Obama administration’s Home Affordable Modification Program (HAMP) is reducing foreclosures in their market, according to a survey released Wednesday by real estate media and marketing provider Homes and Land. The company’s Market Pulse Survey Report asked more than 100,000 real estate agents nationwide to participate in a 10-question survey to gauge the state of housing in local markets. Nearly 5,800 agents responded; 51 percent had been a Realtor for more than 10 years. The company conducted the survey in February.”

Looking Back:

One year ago, Citigroup developed a plan which allowed unemployed homeowners to decrease their monthly payment to a minimum of $500. The NAR reported that home sales decreased by 7.7 percent within a month’s time. Bernanke claimed that the federal government needed to increase its fiscal involvement in the banking system. The government launched its $1 trillion TALF program.

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The Norris Group Real Estate News Roundup 3/1/10

Monday, March 1st, 2010

Today’s News Synopsis:

California officials may be implementing new builder fees. Home sales generated $934 million from last year. Fannie mae lost 15.9 billion dollars during quarter 4 of 2009. Warren Buffet predicts the residential real estate market will begin to recover in 2011.

In The news:

Sacramento Bee – “Back-seat Driver: Sacramento proposes new-building fees for road projects” (3-1-10)

“Sacramento city officials today will propose a fee on new buildings – including up to $6,250 per single-family house – to help pay for $710 million in transportation projects over the next two decades.”

Orange County Register – “Best Jan. for real estate agents in 3 years” (3-1-10)

“Home sales generated $934 million, up 20.9% from January 2009, when sales generated $717 million. The lowest amount of revenue was generated in January 2008, when home sales totaled $670 million.”

Wall Street Journal – “Bid to Curb Mortgage Tax Break Falters” (3-1-10)

“President Barack Obama’s latest budget proposal, released in February, includes a provision that would shrink deductions for mortgage interest, real-estate taxes, charitable contributions and other items for married couples with annual incomes of more than $250,000, or individual filers earning more than $200,000. Under the proposal, such taxpayers would save 28 cents of tax liability for every $1 of mortgage interest or other eligible expenses, down from 35 cents now.”

Housing Wire – “A Dark Day for the Mortgage Industry” (3-1-10)

“the MBA, along with committee input from Fannie Mae, Freddie Mac (read: government) and others, are now pushing the U.S. Treasury to extend taxpayer-funded forbearances to unemployed owner-occupants. I say “taxpayer-funded” for a reason, as you’ll see. Under the MBA proposal, unemployed borrowers would be asked to make nominal payments equal to 31% of whatever their remaining income is – which for many millions of Americans without savings would be 31% of their unemployment benefits, not nearly enough to cover their usual mortgage. In exchange for whatever they can afford, borrowers would receive forbearances for up to 9 months – with the servicer continuing to advance full principal and interest to investors the entire time.”

Housing Wire – “Fannie Seeks $15bn of Aid After Quarterly Loss” (3-1-10)

“Government-sponsored entity (GSE) Fannie Mae (FNM: 0.99 0.00%) on Friday reported a $15.2bn net loss for Q409, narrowed slightly from a $18.9bn net loss in the previous quarter. The quarterly loss resulted in a net worth deficit of $15.3bn as of Dec. 31, 2009, according to the earnings statement”

Bloomberg - “Buffett Says U.S. Housing Will Recover by Next Year” (3-1-10)

“Billionaire Warren Buffett said the U.S. residential real estate slump will end by about 2011, predicting that’s how long it will take demand for homes to catch up with the supply. ”

Bloomberg - “General Growth Aims for Oct. 5 Exit Plan Confirmation” (3-1-10)

“General Growth Properties Inc., bankrupt owner of more than 200 U.S. malls from Boston to Los Angeles, aims to confirm a reorganization plan by Oct. 5, after taking 60 days to consider proposals that compete with one from Brookfield Asset Management Inc.”

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The Norris Group Real Estate News Roundup 2/12/10

Friday, February 12th, 2010

Today’s News Synopsis:

California Senator Roy Ashburn has proposed new legislation to extend the home buying tax credit. According to CAR, 64 percent of households can afford to buy an entry-level home in California. The Federal Reserve reports that the total U.S. equity increased by nearly $1 trillion from the recession’s nadir in the first quarter of 2009. Statistics from NAR show that existing home sales increased by 13.9% in Q4 of 2009.

In The News:

Recordnet.com – “More tax credits may be on the horizon” (2-12-10)

“A second round of tax credits may become available to 20,000 California home buyers before summer arrives. State Sen. Roy Ashburn, R-Bakersfield, has introduced legislation that would provide $200 million worth of $10,000 tax credits to buyers of both new and resale homes.”

CAR - “Fourth quarter housing affordability” (2-12-10)

“The percentage of households that could afford to buy an entry-level home in California remained at 64 percent in the fourth quarter of 2009, compared with 61 percent (revised) for the same period a year ago, according to a report released today by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).”

Los Angeles Times – “30-year fixed mortgages dip below 5% again” (2-12-10)

“Average interest rates for traditional 30-year fixed mortgages have fallen below 5% again, Freddie Mac said Thursday. The giant mortgage buyer’s weekly survey, conducted Monday through Wednesday, pegs the average rate nationally at 4.97%, with 0.7% of the loan balance on average paid in upfront charges, or points.”

Washington Post – “Good real estate news: Home equity is rising again” (2-12-10)

“According to the Fed’s most recent “flow of funds” survey, homeowners’ net equity grew by nearly $1 trillion from the recession’s nadir in the first quarter of 2009 through the third quarter. From June 30 to Sept. 30, net equity rose by $418 billion.”

Housing Wire – “Existing Sales Volume Narrows Home Price Declines” (2-12-10)

“Existing-home sales, including single-family and condo, jumped 13.9% to a seasonally adjusted annual rate of 6.03m in the Q409 from 5.29m in the Q309, and are 27.2% above the 4.74m-unit level in the Q408, NAR reported, adding distressed properties accounted for 32% of Q409 transactions, down from 37% a year ago. The improvement comes after sales plummeted in December to close out the year.”

Housing Wire – “Citi Pilots New Foreclosure Alternative Across 6 States” (2-12-10)

“CitiMortgage, the servicing arm of Citigroup (C: 3.18 -0.93%), will pilot a new Foreclosure Alternatives Program that allows distressed borrowers to stay in their homes an additional six months in exchange for the deed.”

Housing Wire – “Commercial Real Estate Woes Will Cost Banks $300bn: COP” (2-12-10)

“Financial institutions could face $300bn in losses related to commercial real estate in 2011 and beyond, putting smaller banks at the most risk, according to a report from the Congressional Oversight Panel (COP). Congress established COP in October 2008 to oversee the spending of the $700bn from the Troubled Asset Relief Program (TARP). Between 2010 and 2014, the Panel found that $1.4trn in commercial real estate will mature, and almost half are currently underwater.”

Bloomberg - “AIG Decides to Keep Unprofitable Mortgage Insurer” (2-12-10)

“American International Group Inc., the insurer divesting assets to repay a government bailout, opted to keep its money-losing U.S. mortgage guarantor after selling Canadian and Israeli subsidiaries of the unit.”

Bloomberg - “Fannie, Freddie Spreads Narrowest in 17 Years: Credit Markets” (2-12-10)

“Traders are driving relative yields on Fannie Mae and Freddie Mac mortgage bonds that most influence the interest rates consumers pay to the lowest in 17 years, speculating cash the companies use to buy delinquent loans will be recycled back into the securities. The difference between yields on Fannie Mae’s current- coupon 30-year securities, which trade closest to face value, and 10-year Treasuries narrowed 0.01 percentage point today to 0.66 percentage point as of 11:10 a.m. in New York, matching the lowest since 1992, according to data compiled by Bloomberg.”

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The Norris Group Real Estate News Roundup 2/8/10

Monday, February 8th, 2010

Today’s News Synopsis:

The U.S. Treasury Department reported 66,465 permanent loan modifications over 8 months. Delinquencies on prime jumbo loans increased to 10 percent in January. According to Altera Real Estate, distressed property sales increased in Dana Point and Laguna Beach. Unemployment in the U.S. construction industry increased to 24.7 percent in January.

In The News:

California Builder – “2010 Economic Forecast: The Bear Turns Bullish” (2-8-10)

“In April of 2009, we reversed our tune and called for a ‘W,’ which would be an improvement in the market until the tax credit expired. However, with the federal tax credit extended through June for all buyers, and affordability far better than we imagined at the time, the risk of a second leg down has been significantly reduced.”

Housing Wire – “House Committee Investigates HAMP ‘Effectiveness’” (2-8-10)

“The US Treasury Department launched HAMP in March 2009 to allocate capped incentives to borrowers for the modification of loans on the verge of foreclosure. After eight months in the program, the Treasury reported 66,465 permanent loan modifications in December, up from 31,382 permanent modifications in November.”

Housing Wire – “Fitch Says Prime Jumbo RMBS Near 10% Delinquent” (2-8-10)

“The performance of US prime jumbo loan performance within residential mortgage-backed securities (RMBS) slipped again in January as serious delinquencies (60+ days past due) rose for the 32nd consecutive month and edged closer to 10%, according to the latest market commentary from Fitch Ratings.”

Housing Wire – “Monday Morning Cup of Coffee” (2-8-10)

“The editorial argues the $111bn in mortgage losses covered by the Treasury Department was justifiable as an emergency measure to keep the housing market from collapsing entirely. But with continued losses projected in 2011 and 2012, covering the GSEs in perpetuity would cost more than $1.6trn, on top of the national debt of $12.3trn.”

Housing Wire – “BofA Lends $758bn in 2009″ (2-8-10)

“Bank of America (BAC: 14.48 -3.47%) said it extended more than $758bn in credit in 2009, including nearly $180bn in Q409. BofA originated $87bn in first mortgages to fund purchase or refinance loans for more than 400,000 borrowers in Q409. That total includes $23bn in mortgages made to 151,000 low- and moderate-income borrowers. For the year, BofA originated $378bn in first mortgages for more than 1.7m customers, including $87bn in mortgages to more than 561,000 low- and moderate-income borrowers. In Q409, BofA originated $3bn in home equity and reverse mortgage loans, bringing the total for 2009 to $13bn.”

Orange County Register – “South coast: short sales, foreclosures up” (2-8-10)

“Most of our south coast cities went against the grain and reflected the opposite of the countywide trend by seeing an increase in distressed properties for sale. Two weeks ago, Dana Point’s percentage of short sales and foreclosures was 24.7%, which has risen just slightly to 24.8%, according to a biweekly report by Steven Thomas of Altera Real Estate. Laguna Beach also saw a slight increase in distressed properties. The percentage of short sales and foreclosures rose from 9% two weeks ago to 9.3%.”

Orange County Register – “1-in-4 U.S. construction workers jobless” (2-8-10)

“The U.S. construction industry’s unemployment rate hit 24.7% in January as another 75,000 American construction workers lost their jobs.”

Realty Times – “Developing Referral Relationships” (2-8-10)

“The primary objective of your first contact, like the objective of any other first sales call to a new prospect, is to book an appointment. The first appointment might take the form of an exploratory session aimed at determining the wants, needs, and desires of the lead, or it might be an appointment to conduct a buyer consultation or listing presentation. The secondary objective of your first contact is to open the door, establish trust and respect, demonstrate your knowledge, and establish your position as a reliable resource.”

Looking Back:

One year ago, the MBA ranked Wachovia as the leading national commercial and multifamily loan servicer. Geithner promised that lenders receiving financial rescue would be required to offer mortgage modifications. A total of 70 banks were shut down within the first month of 2009.

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The Norris Group Real Estate News Roundup 1/29/10

Friday, January 29th, 2010

Today’s News Synopsis:

Foresight Analytics estimates that between 2010 and 2014, $770bn in commercial loans will be on properties in negative equity. According to the Commerce Department, the U.S. economy expanded in the 4th quarter at a six year record pace. RealtyTrac forecasts that foreclosures probably will reach 3 million this year. Henry Paulson claimed that Russia encouraged China to force a bailout of the largest U.S. mortgage-finance companies.

In The News:

Housing Wire – “DoJ Mortgage Probes May Overextend Authority: K&L Gates” (1-29-10)

“The Department of Justice (DoJ) initiative to beef up investigations of discriminatory mortgage lending and servicing practices will result in more numerous and forceful reviews of mortgage lenders and servicers, including investigations that appear to merge fair lending and consumer protection principles, according to an analysis of the proposal written by global law firm K&L Gates. The firm also warns that the DoJ may be over-extending departmental authority in doing so.”

Housing Wire – “Tougher Times Coming for Commercial Real Estate” (1-29-10)

“Between 2010 and 2014, $770bn in commercial loans will be on properties in negative equity, and may need to be written down, according to a study by Foresight Analytics, a real estate research firm. The report is likely to only add to the woes surrounding the current commercial real estate (CRE) sector.”

Housing Wire – “Fed MBS Purchases 93% Complete with Another $12bn” (1-29-10)

“The Federal Reserve Bank of New York in the week ending January 27th continued to buy mortgage assets from government-sponsored entities as the program winds-down to a close by the end of the quarter. The Fed bought a total of $12.5bn in mortgage-backed securities (MBS) – $5.1bn Freddie Mac (FRE: 1.1799 -0.01%) MBS, $4.7bn Fannie Mae (FNM: 0.9868 -1.32%) MBS and $2.7bn Ginnie Mae MBS, according to a summary of purchases. The New York Fed also sold $500m of MBS in the same week, bringing the net purchases to $12bn, the same as last week.”

Bloomberg - “U.S. Economy: Growth Jumps 5.7%, Fastest Pace in Six Years” (1-29-10)

“The U.S. economy expanded in the fourth quarter at the fastest pace in six years as factories cranked up assembly lines, indicating the recovery may be strong enough to be weaned from government support. The 5.7 percent increase in gross domestic product reported by the Commerce Department in Washington today exceeded the 4.8 percent median forecast of economists surveyed by Bloomberg News. Separate reports showed consumer sentiment and a barometer of business activity rose more than forecast in January.”

Bloomberg - “Obama Housing Rescue Threatened by Foreclosures, Unemployment” (1-29-10)

“Foreclosures probably will reach 3 million this year, surpassing the record of 2.82 million in 2009, according to Irvine, California-based RealtyTrac Inc. That would more than offset an estimated 448,000-unit rise in home sales, based on the average forecast of the National Association of Realtors, the Mortgage Bankers Association and Fannie Mae.”

Bloomberg - “Paulson Says Russia Urged China to Dump Fannie, Freddie Bonds” (1-29-10)

“Russia urged China to dump its Fannie Mae and Freddie Mac bonds in 2008 in a bid to force a bailout of the largest U.S. mortgage-finance companies, former Treasury Secretary Henry Paulson said.”

Orange County Register – “Will buyers rush to cash in on tax credit?” (1-29-10)

“the spring and summer buying seasons are about to kick in. The tax credit deadline will likely add to the sales volume, but it’s critical to remember that ‘first timer’ and ’second home’ contracts must not only be signed by April 30 – escrows must close by June 30! Short sale property escrows have a very hard time closing within 60 days right now.”

Realty Times – “Aging Buyers Want Easy, Comfortable Homes with First-Floor Master Bedroom” (1-29-10)

“The Baby Boomer generation makes up about 28 percent of the population and has some interesting statistics. According to BabyBoomerMagazine.com, this group has greater wealth than any other, controls 70 percent of the total net worth of American households, and accounts for 40 percent of total consumer demand.”

In The News:

One year ago, the CBIA announced that 65,380 building permits were issued from 2008 to 2009. The Commerce Department reported that sales of single-family homes decreased by 14.7 percent. The House of Representatives approved a $819-billion stimulus package. Freddie Mac reported that the 30-year fixed mortgage dipped to 5.10 percent.

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The Norris Group Real Estate News Roundup 1/28/10

Thursday, January 28th, 2010

Today’s News Synopsis:

According to Freddie Mac, the 30-year fixed-rate mortgage fell by 0.01 percent from last week. Research from RealtyTrac shows that California and Florida account for 17 of the nation’s 20 worst housing markets. The Federal Reserve declared that the U.S. economy is now in recovery.

In The News:

Housing Wire – “Freddie Mac Mortgage Refinance Purchases Swell 41%” (1-28-10)

“The volume of refinance loans bought by mortgage giant Freddie Mac (FRE: 1.1799 -2.49%) continued to grow in December, swelling 41% from the previous month to $27.3bn.”

Housing Wire – “Capstead Writes Off $40m in Commercial Real Estate Liability” (1-28-10)

“According to analysts at Barclays Capital the worst performing commercial property sector is hotels. Last quarter, they note hotels saw a 177bp increase, to 11.4%, in the 30+ day delinquency rate, led by the $200m Renaissance Mayflower Hotel, located near the White House, and $130m Trinity Hotel Portfolio, a hotel investment consortium, both of which were transferred to a special servicer, likely for an orderly liquidation.”

Housing Wire – “Freddie Rates Dip, Say Below 5%” (1-28-10)

“Freddie Mac’s (FRE: 1.17 -3.31%) weekly survey put the average rate for a 30-year fixed-rate mortgage (FRM) at 4.98% with an average 0.6-origination point for the week ending January 28. That’s a slight dip from last week, when Freddie said the rate was 4.99%. A year ago, the average 30-year FRM rate was 5.10%.”

Bloomberg – “Lenders Pursue Mortgage Payoffs Long After Homeowners Default” (1-28-10)

“Amid a crisis that stripped $6.4 trillion, or 28 percent, from the value of U.S. residential real estate since the 2006 peak, lenders are exercising their rights to pursue unpaid mortgage balances. To get their money, they can seize wages, tap bank accounts and put liens on other assets held by debtors.”

Bloomberg – “Lennar Rallies as Homebuilders Diverge on Profits” (1-28-10)

“Lennar Corp. and KB Home this month reported their first quarterly profits since 2007 because of special tax refunds designed to help homebuilders struggling with declines in sales.”

Bloomberg – “Las Vegas, California Cities Top Foreclosure List in 2009″ (1-28-10)

“Las Vegas homeowners had the highest U.S. foreclosure rate last year, and California and Florida cities accounted for 17 of the nation’s 20 worst markets as unemployment extended the housing recession.”

Bloomberg – “Fed Lays Ground for End to Stimulus With Recovery Declaration” (1-28-10)

“The Federal Reserve panel in charge of interest rates declared for the first time the U.S. economy is in ‘recovery’ and took several steps to prepare investors for the removal of aggressive monetary stimulus.”

Orange County Register - “Irvine home tops most-viewed list” (1-28-10)

“The folks at Realtor.com compiled a list of the top 10 most popular homes for sale in Orange County from their Web site (reflecting last week).”

Realty Times – “Homebuyer Tax Credit Boosts Economy” (1-28-10)

“The vast majority of current homeowners say they would spend the expanded version of the homebuyer tax credit on repaying existing debts, home improvements, savings and investments and household expenses, according to a Coldwell Banker survey of 1,000 homeowners.”

Looking Back:

One year ago, the MBA reported that mortgage application volume decreased by 38 percent in one week. Zillow.com estimated that 14 percent of homeowners were underwater. The Federal Reserve chose to keep the interest rate at zero.

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The Norris Group Real Estate News Roundup 1/8/10

Friday, January 8th, 2010

Today’s News Synopsis:

Economists are criticizing Gov. Schwarzenegger’s $10,000 homebuyer tax credt and claiming it to be a waste of money. According to Amherst Securities Group, default and prepayment rates on mortgage-backed-securities remained consistent from October through November. Colony Capital Acquisitions bought 1,200 commercial mortgages from the FDIC. Multiple appraisal institutions filed complaints to the Department of the Interior regarding the absence of a qualified Chief Appraiser.

In The News:

Sacramento Bee – “Home Front: Some economists not buying proposed homebuyer tax credit” (1-8-10)

“Gov. Arnold Schwarzenegger’s proposed new $10,000 homebuyer tax credit is thrilling the real estate universe, but don’t think it’s a done deal. Opponents, who include economists and advocacy groups, are weighing in. Their point: it’s a poor use of money in a state that’s whacking community college budgets and health programs for poor kids”

Washington Post – “FDIC considers plan to penalize banks whose pay practices encourage risky moves” (1-8-10)

“The Federal Deposit Insurance Corp. is considering financial penalties for banks whose pay practices encourage reckless behavior, potentially opening a new front in the federal government’s effort to reshape the way bankers are paid, according to people familiar with the matter. Officials at the FDIC and other federal agencies are concerned that some banks reward executives for increasing revenues and profits in the short term even if those executives also are increasing the company’s risk of losses in the long term.”

Housing Wire – “Settling the Chinese Drywall Fight” (1-8-10)

“Homeowners and builders are facing difficulties seeking recourse from manufacturers of a toxic drywall that’s been alleged to emit sulfur fumes, causing damage to heating, ventilation and air conditioning (HVAC) components and health problems ranging from watery eyes to respiratory issues. The problem? It’s difficult for plaintiffs to serve foreign manufacturers in US courts. In this case, the problem with the manufacturers of Chinese drywall is exactly what you’d expect: the manufacturers are in China.”

Housing Wire – “Redefault Rates ‘Tragic’, Says Amherst” (1-8-10)

“According to Amherst Securities Group, default and prepayment rates on non-agency, private-label mortgage-backed securities (MBS) were constant in November. However, re-performance rates, where payments return to less than two months delinquent, were down and re-default rates ‘tragic’ in November, according to market commentary provided by the firm.”

Housing Wire – “Carlton Selling $307M Distressed Asset Portfolio” (1-8-10)

“Carlton Advisory Services is selling a portfolio of non-performing loans and real estate owned (REO) assets worth a combined $307m. The portfolio includes office, industrial, retail, multi-family, assisted-living facility, and self-storage assets located across 24 states. The New York-based firm said its services were retained by the commercial mortgage-backed securitization (CMBS) trusts that currently hold the assets.”

Housing Wire – “FDIC Sells Equity Stake in $1bn Portfolio of Distressed CRE Loans” (1-8-10)

“Colony Capital Acquisitions won the bidding process on a sale of equity interest in 1,200 commercial mortgages the Federal Deposit Insurance Corp. (FDIC) seized from depository institutions that failed within the past 18 months. FDIC created a limited liability company, called a multibank structured transaction, to hold commercial real estate assets from 22 failed bank receiverships. As winner of the bidding process, Los Angeles-based Colony Capital purchases a 40% ownership interest in the company.”

Housing Wire – “Call for Chief Appraiser Gains Momentum” (1-8-10)

“A handful of appraiser organizations joined together Thursday to send a letter to the US Department of the Interior, urging the hire of a chief appraiser. The groups – the Appraisal Institute, the American Society of Appraisers, the American Society of Farm Managers and Rural Appraisers and the National Association of Independent Fee Appraisers – noted a December report (download here) from the Interior Department’s Inspector General directs the filling of such a position, which has not been filled by qualified executive in almost three years.”

Housing Wire – “Fed’s MBS Purchases Slow and Spreads Hold, For Now” (1-8-10)

“The Federal Reserve Bank of New York bought $12bn of mortgage-backed securities (MBS) from mortgage giants Freddie Mac (FRE: 1.45 -3.33%), Fannie Mae (FNM: 1.15 -2.54%) and Ginnie Mae in the week ending January 8.”

Bloomberg - “Fed Won’t Raise Until After Jobless Rate Peaks, Crescenzi Says” (1-8-10)

“The Federal Reserve won’t raise its target rate for overnight loans between banks until many months after unemployment peaks, according to Pacific Investment Management Co.’s Tony Crescenzi.”

Bloomberg - “U.S. Office Vacancies Climb to 15-Year High on Employment Cuts” (1-8-10)

“Office vacancies in the U.S. surged to a 15-year high in the fourth quarter and rents fell the most on record as the deepest recession in more than half a century slashed demand for commercial space, according to Reis Inc. The vacancy rate climbed to 17 percent from 14.5 percent a year earlier, the New York-based research company said. Effective rents, the amount tenants actually pay landlords, dropped 8.9 percent, the biggest year-over-year decline since Reis began tracking the data in 1980.”

Inman - “Economy: Bad is the new good” (1-8-10)

“A renewed, two-group consensus drove the jump: The economy is in a solid recovery, or even if it isn’t, immense Treasury borrowing will force rates higher. Both groups agree that the Fed should stop its assistance, either because the economy no longer needs it, or because even if the economy does need help, to continue assistance would produce inflation. I think this consensus is mistaken. There is no meaningful recovery under way, and the Fed has already pulled up short. More data like today’s will add to policymaking tension, force the administration’s hand, and soon have the Fed back to buying mortgages, Treasurys or both.”

Inman - “Confidence slips among agents, brokers” (1-8-10)

“Confidence among real estate agents and brokers dipped in December after a heady rise in November, according to a monthly survey conducted by real estate tech company Point2 Technologies.”

Looking Back:

One year ago, Fannie Mae and Freddie Mac decided to halt all foreclosure sales and evictions until January 9, 2009.  A panel of economists predicted that home sales would not increase, despite the Federal Reserve’s attempts to lower interest rates.  Consumer borrower dropped by $7.8 billion last November.

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The Norris Group Real Estate News Roundup 1/6/10

Wednesday, January 6th, 2010

Today’s News Synopsis:

California Governor Schwarzenegger announced a new home buyer tax credit. The Mortgage Bankers Association reports that mortgage applications have increased by .4 percent since Christmas. The FOMC confirmed plans to buy $1.25 trillion in mortgage-backed-securities from Freddie Mac, Fannie Mae and Ginnie Mae. Eugene Ludwig believes that commercial real estate losses will break historical records in 2010.

In The News:

CBIA - “Homebuilders Applaud Governor Schwarzenegger for Prioritizing Jobs, Economic Recovery and Housing in State of the State Address” (1-6-10)

“Enacting a new homebuyer tax credit and streamlining the building process would definitely help continue that positive momentum and help our economy recover more quickly.”

Mortgage Bankers Association - “Mortgage Applications Drop the Week of Christmas and Remain Flat the Week After in Latest MBA Weekly Surveys” (1-6-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the weeks ending December 25, 2009 and January 1, 2010. For the week ending December 25, 2009, the Market Composite Index, a measure of mortgage loan application volume, decreased 22.8 percent on a seasonally adjusted basis from the prior week. For the week ending January 1, 2010, this index  increased 0.5 percent on a seasonally adjusted basis.  Both weeks’ results include an adjustment to account for the Christmas and New Year’s Day holidays. On an unadjusted basis, the Index decreased 46.9 percent the week before Christmas and increased 0.4 percent the week after.”

Housing Wire - “FOMC Eyes Extending Scope of MBS Purchases” (1-6-10)

“The Federal Open Market Committee, in its mid-December meeting, considered extending and expanding its initiatives to buy assets from mortgage agencies Fannie Mae (FNM: 1.10 -4.35%), Freddie Mac (FRE: 1.38 -3.50%) and Ginnie Mae. The FOMC also confirmed plans to buy $1.25trn of agency mortgage-backed securities (MBS) and $175bn of agency debt by the end of Q110, according to minutes released Wednesday.”

Housing Wire – “FHA Proposal Will Stifle Competition, Claims NAMB” (1-6-10)

“The National Association of Mortgage Brokers (NAMB) criticized a Department of Housing and Urban Development (HUD) proposal that would change how brokers and lenders operate in the Federal Housing Administration (FHA) loan program. The association contends HUD’s actions will adversely affect competition in the FHA loan market and have far-reaching economic impacts on lenders and correspondents both.”

Housing Wire – “Dodd to Leave Senate, Banking Committee Chair” (1-6-10)

“Senate Banking Committee chairman Christopher Dodd (D-Conn) on Wednesday said he will leave his post in Congress when his term expires and not seek reelection.”

Bloomberg - “Commercial Property Is Biggest Risk, U.S. Bank Examiners Find” (1-6-10)

“‘Losses from commercial real estate will be quite high by historic standards,’ said Eugene Ludwig, former Comptroller of the Currency who is now chairman of Promontory Financial Group, a Washington-based consulting firm to financial institutions.”

Bloomberg - “Regional Mall Vacancies in U.S. Rise to Record on Unemployment” (1-6-10)

“Vacancies at the largest U.S. shopping centers reached a record 8.8 percent in the fourth quarter as unemployment rose and consumers spent less, Reis Inc. said. Vacancies at smaller neighborhood and community centers increased to 10.6 percent, the highest level since 1991, from 8.9 percent a year earlier, New York-based Reis, a real estate research company, said today in a statement.”

Bloomberg - “U.S. Office, Shopping Center Construction Spending May Fall 13%” (1-6-10)

“Construction spending on hotels, office buildings and retail centers may fall 13 percent this year, the second straight annual decline amid a drop in property prices, the American Institute of Architects said. ”

Bloomberg - “Mortgage-Bond Spreads Narrow to Lowest in More Than 17 Years” (1-6-10)

“Yields on Fannie Mae and Freddie Mac mortgage securities fell to the lowest relative to Treasuries in more than 17 years, narrowing further on news Federal Reserve officials last month reiterated they may favor expanding their program to purchase $1.25 trillion of home-loan debt. ”

Looking Back:

One year ago, the NAR reported that the pending home sales index decreased by 4 percent from October to November. President Obama promised a tax break for business that would cover 5 years of expenses. Gary Watts forecasted that home prices below $500,000 would strengthen in 2009. Grubb & Ellis Co. anticipated that apartment rentals would increase during 2009.

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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 12/23/09

Wednesday, December 23rd, 2009

Today’s News Synopsis:

Homebuilders pulled 46 percent fewer permits from November of last year. According to the Mortgage Bankers Association, mortgage application volume decreased by 10.7 percent from last week. Freddie Mac purchased 13 percent fewer mortgage purchases from the previous month. Equifax reports that HELOC originations fell 36 percent from one year ago.

In The News:

CBIA - “Housing Production Posts Decrease in November, CBIA Announces” (12-13-09)

“According to statistics compiled by the Construction Industry Research Board (CIRB), homebuilders pulled permits for 2,540 total housing units in November, down 12 percent from October, and down 46 percent from November 2008. Permits for single-family homes totaled 1,710, down 20 percent from the previous month, but up 18 percent from the same period last year, while multifamily permits totaled 830, up 9 percent from October but down 74 percent from a year ago.”

Mortgage Bankers Association – “Mortgage Applications Decrease in Latest MBA Weekly Survey” (12-23-09)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending December 18, 2009.  The Market Composite Index, a measure of mortgage loan application volume decreased 10.7 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 10.9 percent compared with the previous week.”

Housing Wire – “BofA Sues MGIC Over Unpaid Insurance Claims” (12-23-09)

“Bank of America’s (BAC: 15.18 -0.98%) Countrywide Home Loans unit sued Mortgage Guaranty Investment Corp. (MTG: 5.7798 -9.12%) over allegations the Wisconsin-based mortgage insurer denied millions of valid claims.”

Housing Wire – “Freddie Buys 7% More Refi Mortgages in November” (12-23-09)

“Mortgage giant Freddie Mac (FRE: 1.3295 -1.52%) reported $27.9bn in mortgage purchases and issuances in November, a 13% drop from $32.1bn in October, according to a monthly summary of the agency’s portfolio.”

Housing Wire – “HUD Delays New FHA Appraiser Guidelines” (12-23-09)

“According to an FHA memo obtained by HousingWire, the January 1, 2010 implementation of Mortgagee Letter (ML) 2009-28 (download here) won’t take affect until February 15, 2010. The new FHA regulations are similar to those implemented by the government-sponsored enterprises (GSEs) to ensure appraiser independence with the Home Valuation Code of Conduct (HVCC).”

Housing Wire – “Equifax: HELOC Origination Down 36%” (12-23-09)

“Origination of new home equity lines of credit (HELOC) accounts is down 36% from year-ago levels, Equifax (EFX: 31.28 -0.26%) said. There were 75,600 HELOC accounts originated in September 2009, down from 117,800 in September 2008, according to the Atlanta-based credit bureau’s most recent monthly credit trend report, derived from Equifax’s nearly 200m US consumer credit files.”

Bloomberg - “U.S. Economy: Spending and Incomes Climb, New-Home Sales Drop” (12-23-09)

“American consumers’ spending and incomes climbed in November, indicating the biggest part of the economy is poised to strengthen as the labor market recovers. Purchases rose 0.5 percent as households took advantage of discounts on autos and electronics, figures from the Commerce Department showed today in Washington. The gain was smaller than anticipated as unseasonably warm weather depressed utility use. Another report showed new-home sales unexpectedly fell as potential buyers were discouraged by the scheduled expiration of a tax credit. The tax break was later extended.”

Bloomberg - “General Growth Has Deals to Restructure $11.6 Billion of Debt” (12-23-09)

“General Growth Properties Inc., the second-largest U.S. mall owner, has won approval from creditors and a federal court to restructure loans totaling $11.6 billion, according to a lawyer.”

Looking Back:

One year ago, existing home sales fell 8.6 percent from October to November. Mortgage default filings against homeowners decreased for the first time in 3 years. Moorlach predicted that 10 municipal bankruptcies would occur in 2009. The U.S. economy shrank by 0.5 percent from the previous month.

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