According to the Commerce Department, new home sales decreased by 33 percent in May. The MBA’s weekly survey shows mortgage application decreased by 5.9 percent last week. The Franchise Tax Board announced 80% of the credits for first-time home buyers program in California has been applied for. Borrowers who strategically default will be banned from obtaining new mortgages backed by Fannie Mae for seven years from the date of foreclosure.

In The News:

Associated Press – “New-home sales plunge 33 pct with tax credits gone” (6-23-10)

“Sales of new homes collapsed in May, sinking 33 percent to the lowest level on record as potential buyers stopped shopping for homes once they could no longer receive government tax credits.”

Mortgage Bankers Association - “Mortgage Applications Decrease in Latest MBA Weekly Survey” (6-23-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending June 18, 2010.  The Market Composite Index, a measure of mortgage loan application volume, decreased 5.9 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 6.0 percent compared with the previous week.”

Orange County Register – “Calif.’s first-time buyer tax credit almost gone” (6-23-10)

“Less than eight weeks after California’s home-buyer tax credits became available, nearly 80% of the credits for first-time home buyers has been applied for, the state Franchise Tax Board has announced. Meanwhile, home buyers have applied for more than $36 million of a separate $100 million tax credit program for new home sales, the state reported.”

Los Angeles Times – “California, 4 other states to get more housing aid” (6-23-10)

“The Obama administration has approved five state-designed plans to help homeowners as part of a $1.5 billion effort to assist areas slammed by the U.S. housing bust. Treasury Department officials, who spoke on condition of anonymity because the decisions had not yet been made public, said plans for Arizona, California, Florida, Michigan and Nevada had received approval. The states estimate that the plans are projected to help up to 93,000 homeowners. That’s a small part of the administration’s main existing $75 billion mortgage assistance program, which is widely viewed as a disappointment.”

Bloomberg - “Fannie Mae Will Deny New Loans to Homeowners Who Walk Away” (6-23-10)

“Borrowers who have the means to make mortgage payments and don’t work with lenders to restructure loans will be banned from obtaining new mortgages backed by Fannie Mae for seven years from the date of foreclosure, the company said today in a statement. Washington-based Fannie Mae, along with McLean, Virginia-based rival Freddie Mac, own or guarantee more than half of the $10.7 trillion U.S. mortgage market.”

Bloomberg - “IRS Audits Block 10% of First-Time Homebuyer Credits” (6-23-10)

“About $1.22 billion of the $12.6 billion in tax credits claimed through February were denied or frozen after audits, the report from the Treasury Department’s Inspector General for Tax Administration said. The IRS estimated that about 1.8 million taxpayers sought the benefit, which totals as much as $8,000, from the inception in April 2008.”

Realty Times – “Buyers Should Be Careful About Credit Use Prior to Closing” (6-23-10)

“Buyers and their agents need to be aware that it is a very bad idea for buyers to increase their credit balances or to open new lines of credit shortly before they close escrow on their new home. More specifically, they should avoid such activity during the period of time between loan application and closing. This is because policies under Fannie Mae’s Loan Quality Initiative, effective June 1, 2010, requires lenders to ‘refresh’ a borrower’s credit report just prior to closing.”

Looking Back:

One year ago, existing home sales increased by 2.4 percent in one month. The MBA forecasted $2.034 trillion of originations of mortgages for one- to four-family homes in 2009. U.S. home prices fell 6.8 percent in April from 2008.

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.

436,000 people have dropped out of the mortgage modification program since March 2009. A survey from Grant Thornton LLP shows that 45% of bankers expect economic conditions to improve over the next 6 months. According to CoreLogic, national housing prices increased 2.6% in April 2010 compared to April 2009. Analyst Meredith Whitney believes the U.S. housing market will experience a second recession.

In The News:

Los Angeles Times – “Borrowers face foreclosure after Obama loan assistance program fails to provide help” (6-21-10)

“More than a third of the 1.24 million borrowers who have enrolled in the $75 billion mortgage modification program have dropped out. That’s more than the 27 percent who have managed to have their loan payments reduced to help them keep their homes. Last month alone, 150,000 borrowers left the program — bringing the total to 436,000 who have exited since it began in March 2009.”

Housing Wire – “More Bankers Expect Economic Improvement before 2011: Grant Thornton” (6-21-10)

“The majority of bankers are optimistic about the US economy in coming months, with 45% expecting conditions to improve over the next six months, according to a survey by US audit firm Grant Thornton LLP. It marks a significant improvement over the same survey six months earlier, which found 24% of respondents expected conditions to improve.”

Housing Wire – “SEC Charges Investment Advisor with CDO of Mortgage-Backed Securities Fraud” (6-21-10)

“The Securities and Exchange Commission is charging Thomas Priore, owner and president of ICP Asset Management, with the fraudulent management of investment products tied to the mortgage finance markets. It is alleged that ICP and three affiliated firms misrepresented four multi-million-dollar collateralized debt obligation (CDO) platforms backed by mortgage securities (MBS). The SEC claims the CDOs lost tens of millions of dollars, while Priore collected tens of millions of dollars in advisory fees and undisclosed profits at the expense of their clients and investors.”

Housing Wire – “Total Number of HAMP Permanent Modifications Passes 340,000″ (6-21-10)

“Servicers participating in the Home Affordable Modification Program (HAMP) conducted 340,459 permanent modifications through May 2010 since the program launched in March 2009, up from 299,092 through April, according to the Treasury Department. The Treasury launched HAMP to provide incentives to servicers for the modification of mortgages on the verge of foreclosure. In order to receive a permanent modification, borrowers must make three monthly payments during the trial period and submit all documentation.”

Housing Wire – “Architecture Firms See Business Increase with Demand for Smaller Houses: AIA” (6-21-10)

“AIA conducted a survey of 500 architecture firms that concentrate practices in the residential sector. AIA also found that American homebuyers are showing greater interest in smaller homes and lot sizes. According to the survey, the economic downturn and growing concerns over rising utility costs have created a demand for smaller homes and lot sizes.”

Housing Wire – “CoreLogic Home Price Index Up 2.6% in April” (6-21-10)

“National housing prices increased 2.6% in April 2010 compared to April 2009 in the CoreLogic (CLGX: 18.335 -2.16%) monthly home price index (HPI). It’s the second month in a row that prices have increased from the same month one year ago. The April increase comes after a 2.3% year-over-year increase in March. The HPI was upwardly revised from an original projection of a 1.7% increase for March.”

Bloomberg - “Whitney Says She Sees ‘Double Dip’ in Housing Market” (6-21-10)

“The U.S. housing market will experience a second recession, forcing banks to post additional loan-loss reserves, analyst Meredith Whitney said.”

Orange County Register – “House price per sq. ft. highest in 2 years” (6-21-10)

“The median price per square foot paid to buy an Orange County house hit $296.32 in May, the highest that measure has been since August 2008, figures from MDA DataQuick show. The price per square foot for an existing, single-family home has been on an upsurge after bottoming out in January 2009, increasing from the month before in 10 of the past 13 months.”

Orange County Register – “5 O.C. hot spots for home-price cuts” (6-21-10)

“As of June 1, 29% of homes on the market in Orange County have seen at least one price reduction, according to online home tracker Trulia.com. Nationwide, 22% of listings had at least one price trim, with the average reduction 10% off the original asking price.”

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.

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.

The Employment Development Department reports California unemployment remained at 12.6 percent from March. According to MDA DataQuick, 37,481 new and resale houses and condos were sold statewide last month. Nearly 75 percent of the 1.2 million homeowners who started the loan modification program in March 2009 have dropped out. The Senate voted 59-39 to pass the financial services bill formerly known as S. 3217, the Restoring American Financial Stability Act.

In The News:

Los Angeles Times – “California employers keep adding jobs” (5-21-10)

“California’s unemployment rate remained unchanged from March, at 12.6%, although that’s because more workers – about 68,000 — rejoined the labor force to look for work in April. The Employment Development Department said Friday that the state has added jobs for four straight months, although February’s job figures were revised from a 20,400 job loss to a 2,800 job gain.”

DQNews - “California Statewide April Home Sales” (5-21-10)

“An estimated 37,481 new and resale houses and condos were sold statewide last month. That was up 0.5 percent from 37,295 in March, and down 1.3 percent from 37,967 for April 2009. California sales for the month of April have varied from a low of 27,625 in 1995 to a peak of 71,638 in 2004, while the average is 44,758. MDA DataQuick’s statistics go back to 1988.”

CAR - “C.A.R. calls for swift passage of SB 1178″ (5-20-10)

“The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) is calling on California state senators to vote ‘yes’ and approve SB 1178 (D-Corbett), which will extend anti-deficiency protection for consumers who have refinanced their original mortgage loans and now are facing foreclosure. C.A.R. is the sponsor of the legislation.”

The Press Enterprise – “Loan-modification dropouts rise” (5-20-10)

“The Treasury Department’s report Monday was the latest evidence of problems in the administration’s $75 billion program. While officials insist the program is helping the housing market turn around, critics say it is merely delaying an inevitable surge in foreclosures. More than 299,000 homeowners had received permanent loan modifications as of last month, Treasury said. That’s about 25 percent of the 1.2 million who started the program since its March 2009 launch. They are paying, on average, $516 less each month.”

Mortgage Bankers Association – “MBA Reacts to Passage of Financial Regulatory Reform” (5-21-10)

“MBA has long supported a more efficient regulatory regime for the financial services industry, and passage of the bill is another important milestone.   However, the bill, as we view it, still has flaws that will negatively impact borrowers and the real estate markets. The next step will be to reconcile the differences between the House bill and the Senate bill.  While there are a couple of ways this could happen, MBA believes the American people would be best served by Congress convening a formal conference committee. Of particular importance to us is ensuring that the final language on risk retention does not discourage prudent, responsible lending.  If not, we risk doing long-term damage to our single-family, multifamily and commercial real estate markets.”

Associated Press – “Fitch finds Calif. at both extremes in mortgages” (5-12-10)

“California has the best-performing U.S. region in mortgage performance as well as some of the worst, according to a study by Fitch Ratings. Results of the ratings agency’s study of all securitized non-agency California mortgage loans were released Wednesday. Among the findings, it said the Bay Area region of San Francisco, San Mateo and Redwood City has a 60-day mortgage delinquency rate of just 4 percent. That was No. 1 among the 382 metropolitan statistical areas tracked by Fitch.”

National Underwriter – “S. 3217 Becomes H.R. 4173, Passes In Senate” (5-21-10)

“Members of the Senate have voted 59-39 to pass the financial services bill formerly known as S. 3217, the Restoring American Financial Stability Act. The bill, now known as H.R. 4173, the Wall Street Reform and Consumer Protection Act — the same name and bill number given to the financial services bill that the House passed in December 2009 — needed to attract a majority of the votes cast to pass.”

Housing Wire – “Treasury Reduces TARP Cost by $11.4bn” (5-21-10)

“The Treasury Department cut the projected cost of the Troubled Asset Relief Program (TARP) by $11.4bn to a total of $105.4bn. Congress authorized TARP under the Emergency Economic Stabilization Act of 2008 to provide some stability to the ailing financial industry. Last August, the Obama Administration estimated the cost of TARP to be $341bn. The Making Home Affordable (MHA) program, which includes the Home Affordable Modification Program (HAMP) and the Home Affordable Foreclosure Alternatives (HAFA) program operates under TARP. In March 2010, the Treasury told Congress the cost of HAMP would be $22bn compared to the $75bn initially planned.”

Housing Wire – “Increase in Architectural Billings Sets Stage for Increased Construction” (5-21-10)

“The American Institute of Architects (AIA) reported that its April Architectural Billings Index (ABI) rating increased 5.2% to 48.5, up from 46.1 in March. While the results means more firms saw billings decrease than increase, the rate of firms that saw decreases lessened in April.”

Housing Wire – “Shadow Inventory Could Reach 5.5m by 2011: Report” (5-21-10)

“There are 2.5m households going through the foreclosure process right now and the number of homes with at least one missed mortgage payment sits at 5.4m, according to Capital Economics. And even though the economic recovery is gaining momentum, more households are still falling behind on their mortgage. By the end of 2011, an additional 3m homes will be in the foreclosure process, making the shadow inventory of potential REO properties at 5.5m. Some of these homes will inevitably avoid a foreclosure. But for many, the foreclosure process may be the only option and, eventually, those homes will get sold in the REO process.”

Housing Wire – “Special Servicers Take On $82bn in CMBS Loans through Q110: Fitch” (5-21-10)

“The amount of loans in commercial mortgage-backed securities (CMBS) in need of special servicing totaled $81.7bn in Q110, up from $74bn at the end of 2009, according to Fitch Ratings. Special servicers have unique processes in place for unusual loans, usually ones on the verge of default. According to Fitch, these companies are still adding staff to meet the increasing demand. The analytics firm, Trepp, found the delinquency rate in CMBS reached 8% in April – a new record.”

Looking Back:

One year ago, Bay Area home sales posted a year-over-year gain for the eighth consecutive months. Freddie Mac reported the average rate for a 30-year loan fell to 4.82 percent. MDA DataQuick reported 2.5% of Orange County home purchases financed in April had variable-rate mortgages of some sort. Forty percent of potential homeowners said they would expect to pay at least 50 percent less for a foreclosed home.

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.

Time - “New Homebuyer Credits Aim to Replace Expired Federal Program” (5-6-10)

“The Federal Government’s $8,000 homebuyer tax credit program may now be over, but at least two real estate brokerage firms and the state of California are aiming to fill the void. Coldwell Banker Real Estate LLC launched its national ‘Buyer Bonus’ program this week, whereby homebuyers will be offered a 3% credit on the home’s purchase price — up to a maximum of $8,000 — at the time of closing.”

NAR - “Survey Shows Realtors® Persevere in Market Transition, Optimistic About Future” (5-6-10)

“With the real estate market improving, three-quarters of Realtors® are very certain they will remain active in the market for two more years, according to the 2010 National Association of Realtors® Member Profile. Only 8 percent were uncertain about their future. The study’s results are representative of the nation’s 1.1 million Realtors®, who account for 60 percent of the 1.85 million active real estate licensees in the U.S. The typical NAR member has 10 years of experience, and many have increased their training, Web presence and use of social media over the past year. More than half use social networking sites, up from 35 percent in 2009.”

CBIA - “Shopping for Your Home Loan” (5-6-10)

“Buying a home is an important financial decision that should be considered carefully. This booklet will help you become familiar with the various stages of the home-buying process, including deciding whether you are ready to buy a home, and providing factors to consider in determining how much you can afford to spend. You will learn about the sales agreement, how to use a Good Faith Estimate to shop for the best loan for you, required settlement services to close your loan, and the HUD-1 Settlement Statement that you will receive at closing.”

Housing Wire – “House Prices Up 5.1 Percent in April Amid Slower REO Growth” (5-6-10)

“Home prices in April gained 5.1% from last year, while REO levels across the country slowed their climb, according to the real estate data provider Clear Capital. The firm measures home prices on a rolling three-month period. On that timescale, prices dropped another 5% in April after a 3.9% decrease in March. But the 5.1% gain from last year matched the yearly gain shown in March.”

Housing Wire - “Henry Paulson Says Flawed System, Weak Regulation Caused Financial Crisis” (5-6-10)

“Former Treasury Department secretary Henry Paulson told the Financial Crisis Inquiry Commission (FCIC) today that the US mortgage finance system — and in particular the government-sponsored enterprises (GSEs) — ran under an ‘inherently flawed’ structure and outdated regulation that failed to keep up with a changing market.”

Housing Wire – “Mortgage Rates Hit Six-Week Low at 5 Percent” (5-6-10)

“The Freddie Mac weekly survey put the average rate for a 30-year fixed-rate mortgage at 5% with an average 0.7 point origination point for the week ending May 6, down from last week’s average of 5.06%. A year ago, the 30-year FRM averaged 4.84%.”

Bloomberg - “Soured Mortgages Fall for First Time in Four Years” (5-6-10)

“The amount of soured U.S. housing debt backing the securities that roiled the global financial system declined last month for the first time in at least almost four years, according to Amherst Securities Group LP. Mortgages at least 60 days delinquent in so-called non- agency bonds without government-backed guarantees, or “re- performing” after reaching that status, fell 0.3 percent to $608.6 billion, according to a report e-mailed yesterday by the Austin, Texas-based securities firm.”

Bloomberg - “Prudential Is Happy to Lend on Commercial Real Estate” (5-6-10)

“Prudential Financial Inc., the U.S. life insurer that predicted a rebound in commercial real estate in December, said the prospect of increased property values makes mortgage originations an attractive business.”

Orange County Register – “State warns of ’short sale’ scams” (5-6-10)

“The state Department of Real Estate is warning troubled homeowners seeking a ’short sale’ — a deal where the lender agrees to accept less than what is owed at closing — that they are suspectible to unscrupulous ‘helpers’ who may improper demand fees; give misguided advice or take the property away at an unfair price.”

The MBA reports mortgage loan application volume increased by 4 percent from last week. Treasury Department secretary Timothy Geithner is supporting a tax on the liabilities of banks. Laurie Goodman, an analyst at Amherst Securities Group LP, claims that second mortgages are threatening the housing market.

In The News:

Mortgage Bankers Association – “Purchase Applications Continue to Increase, Refinance Activity Declines in Latest MBA Weekly Survey” (5-5-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending April 30, 2010.  The Market Composite Index, a measure of mortgage loan application volume, increased 4.0 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 5.1 percent compared with the previous week.”

Associated Press – “Pulte pares 1Q loss and now expects profit in 2010″ (5-5-10)

“PulteGroup Inc., the nation’s largest homebuilder, said Wednesday it slashed its loss in the first quarter and forecast it would be profitable this year. That would mark a major turning point for the builder, which has posted a loss now for 14 consecutive quarters as the worst housing downturn in decades unfolded.”

Housing Wire - “As Geithner Pushes Bank Tax, Outsourcers Look to Ease the Pressure” (5-5-10)

“In a speech today in front of the Senate Finance Committee, Treasury Department secretary Timothy Geithner renewed the push for the Financial Crisis Responsibility Fee, a tax on the liabilities of banks, proposed by the administration in January. The announcement comes at a time when bank wealth managers are becoming increasingly pressured by regulatory reform, according to a poll conducted by SEI, a third-party portfolio servicer.”

Housing Wire – “Senate Begins Considering Financial Reform Legislation” (5-5-10)

“The US Senate today resumes consideration of S 3217, the Restoring American Financial Stability Act. Senators could begin voting on the bill’s 55 amendments this week. At the same time, a separate bill that looks to regulate the over-the-counter (OTC) derivatives market could potentially be wrapped into the larger financial reform legislation, with one credit rating agency concerned that certain additions to potential amendment, if passed, may sap the market of players.”

Bloomberg - “Mortgage Bond Spreads at Widest in Five Months: Credit Markets” (5-5-10)

“Yields on Fannie Mae and Freddie Mac mortgage securities that guide U.S. home-loan rates climbed to the highest in five months relative to Treasuries as Europe’s worsening government finances lead investors to shun all but the safest assets.”

Bloomberg - “U.S. Lets Second Loans Threaten Housing, Goodman Says” (5-5-10)

“The U.S. government and the nation’s largest banks are still allowing second mortgages to jeopardize the housing market, according to Laurie Goodman, an analyst at Amherst Securities Group LP.”

Inman - “5 must-knows about hiring a home stager” (5-5-10)

“There’s no clear-cut career path to becoming a stager. Most, but not all, stagers have had some kind of professional training specific to staging.”

Inman - “Top 10 residential lenders: Quicken Loans, BB&T join the list” (5-5-10)

“Retail lenders Quicken Loans Inc. and BB&T Corp. elbowed their way onto a list of Top 10 residential lenders maintained by MortgageDaily.com for the first quarter, bumping MetLife Inc. and Flagstar Bank.”

Looking Back:

The median price of a home in March 2009 was $253,000. Bernanke predicted that the recession would end in the second half of 2009. Economists predicted that the Orange County and Los Angeles regions would lose 300,000 jobs in 2009.

The S&P Index shows home prices increased in February. Speculators believe the Federal Reserve will keep interest rates at the current low. The LexisNexis Mortgage Asset Research Institute reports that fraud increased by 7 percent last year. According to the FHFA, the average interest rate for a 30-year fixed-rate mortgage (FRM) of $417,000 or less was 5.09% this month.

In The News:

Business Week – “Home price index shows 1st annual gain in 3 years” (4-27-10)

“Home prices in February posted their first annual increase since the end of 2006, pumped up by a temporary tax credits for homebuyers. The Standard & Poor’s/Case-Shiller home price index released Tuesday eked out a 0.6 percent gain, half the increase analysts had expected. And on a more cautionary note, 11 of the 20 cities tracked by the index showed declines from February last year.”

The Press Enterprise – “Fed expected to keep rates at record lows” (4-27-10)

“Confidence is growing that the economic rebound will strengthen. And to make sure it does, the Federal Reserve is considered certain to hold interest rates at record lows when it meets this week. ”

San Francisco Chronicle – “Mortgage fraud incidents rise 7 pct last year” (4-27-10)

“Incidents of residential mortgage fraud increased last year, a sign that scammers are still targeting the industry despite more diligent efforts to find and report such activity. The number of mortgage fraud reports among loans made in 2009 grew 7 percent, a smaller increase than the 26 percent jump seen the previous year, according to a study released Monday by the LexisNexis Mortgage Asset Research Institute.”

Housing Wire – “State HFAs Submit Proposals to Spend $1.5bn Hardest Hit Fund” (4-27-10)

“Three of the five state Housing Finance Agencies (HFAs) receiving $1.5bn from the Treasury Department through the Hardest Hit Fund released proposals on how they would spend the money. In March, the Treasury cleared the HFAs of states where house prices dropped 20% from the peak to submit proposals to use the funds from the Troubled Asset Relief Program (TARP).”

Housing Wire – “FHFA Sees Interest Rates Dip, Hover Around 5% in March” (4-27-10)

“The average interest rate for a 30-year fixed-rate mortgage (FRM) of $417,000 or less was 5.09%, down from 5.13% one month ago. The average rate for a 15-year FRM of $417,000 or less was 4.57%, down from 4.65%. The FHFA measured interest rates on loans that closed between March 25 and 31. Since the rate is typically determined 30 to 45 days prior to closing, the report depicts market conditions prevailing in mid- to late-February, the FHFA said.”

Housing Wire – “Fannie Extends REO Discount Deadline” (4-27-10)

“Fannie Mae (FNM: 1.21 -3.20%) extended its seller assistance incentive on all of its HomePath properties this week. In February, Fannie began providing a 3.5% discount to buyers of its REO properties listed as part of its HomePath division. The discount can be used for closing cost assistance or the buyer’s choice of appliances.”

Housing Wire – “Goldman’s Tourre Denies Misleading Investors in Subprime RMBS CDO” (4-27-10)

“An executive at embattled Goldman Sachs (GS: 153.04 +0.66%) denied before a Senate panel today that he misled investors in a synthetic collateralized debt obligation (CDO) tied to the performance of subprime residential mortgage-backed securities (RMBS). The Securities and Exchange Commission (SEC) is charging investment bank Goldman and the executive director of its structured products group trading, Fabrice Tourre, for allegedly making misleading statements about the CDO transaction, ABACUS 2007-AC1.”

Bloomberg - “‘Tourists’ May Leave Real Estate as Rates Rise, Sternlicht Says” (4-27-10)

“If interest rates head higher, ‘you will see a pause that will take a lot of capital out,’ he said. Corporate bonds may benefit, according to Sternlicht. A rebound in the real estate market is being hampered by weak demand and commercial-mortgage-backed financing that declined 95 percent last year from its record level in 2007. Vacancies in the first quarter rose to the highest level since at least 2000 at the nation’s biggest malls, and climbed to a 16-year peak at office buildings, research firm Reis Inc. said earlier this month. “

A scammer in Orange County was recently caught renting out houses which he did not own. The Business Forecasting Center predicts California unemployment will stay above 12 percent for the remainder of 2010. According to the MBA, mortgage loan application volume increased to 13.6 percent from last week. Trulia reports that 20 percent of homes in the U.S. received a deduction in asking asking price from April 2009 to April 2010.

In The News:

MSN - “Forecast: Recession over, but recovery slow” (4-21-10)

“The Great Recession may be over, but the great recovery will likely take several years in Northern California, according to a report released Wednesday. California’s jobless rate – already at a modern-day record – will remain above 12 percent for the remainder of the year, and double-digit territory through 2011. The jobless rate should dip below 10 percent in 2012, according to the Business Forecasting Center at the University of the Pacific.”

Mortgage Bankers Association – “Mortgage Applications Increase in Latest MBA Weekly Survey” (4-21-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending April 16, 2010.  The Market Composite Index, a measure of mortgage loan application volume, increased 13.6 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 13.9 percent compared with the previous week.”

Wall Street Journal – “Land Prices Jump as Home Builders Move In” (4-21-10)

“Nationally, finished-lot prices, which saw low-single digit increases in the first quarter, are up nearly 20% from the trough, largely considered early 2009, according to a land survey released this week by housing-research firm Zelman & Associates. Lot prices in Phoenix and Southern California’s Inland Empire have soared more than 60%. Sacramento, Orlando and Los Angeles are up between 30% and 40%.”

Housing Wire – “Trulia Sees 26% Decline in Number of Listings with Price Reductions” (4-21-10)

“The rate of house listings where the seller made at least one reduction in asking price declined 26% in April 2010 compared to the same month one year ago, according to research by Trulia.com. Trulia said 20% of asking prices for current home listings were reduced at least once, compared to 27% of asking prices in April 2009. Las Vegas experienced a 54% decrease in listings with at least one price reduction, from 28% in April 2009 to 13% in April 2010. San Diego experienced a similar decrease at 52%. San Francisco and New York both experienced a 45% year-over-year decline and Los Angeles experienced a 40% drop.”

Housing Wire – “CMBS Defaults to Pass 11% by 2011: Fitch” (4-21-10)

“Commercial mortgage loan defaults look likely to rise through the end of the year, with another 4.4% likely in 2010 and the overall default rate expected to pass 11% among securities rated by Fitch Ratings, the credit-rating agency said today. New CMBS defaults increased more than five-fold last year, totaling 1,464 loans worth $17.75bn, Fitch said.”

Housing Wire – “Freddie Urges 12-Month Forbearance in Flood Areas” (4-21-10)

“Government-sponsored enterprise (GSE) Freddie Mac (FRE: 1.48 -0.67%) said today it is extending mortgage relief to borrowers whose houses were affected by recent floods in Massachusetts, New Jersey, Rhode Island and West Virginia. Freddie is giving its servicers discretion to reduce or suspend mortgage payments for up to 12 months for borrowers with Freddie-owned mortgages, although each case must be individually assessed to determine the appropriate alternative.”

Bloomberg - “Mortgage Servicer Profits May Threaten Obama Housing Programs” (4-21-10)

“Mortgage servicers may have to take a pay cut to participate in President Barack Obama’s programs to modify home loans and advance the sale of properties in default. Starting this month, the Treasury Department is paying companies that collect mortgage payments and examine pleas for assistance a $1,500 stipend for approving the sale of homes for less than the loan balance, known as a short sale. The servicers also get $1,000 for each completion under the government’s year- old mortgage modification program, and additional stipends over three years if borrowers stay current on their payments.”

Orange County Register – “Anaheim businessman collects rent on vacant homes he does not own” (4-21-10)

“California’s foreclosure crisis has spawned an unusual operation by a bankrupt Orange County businessman who takes control of vacant homes and rents them out, according to police, property records and neighbors. From an office at an Anaheim massage clinic, Blair Hanloh has recorded deeds on at least 12 vacant houses in Southern California that he does not own. Property records show no evidence that the owners deeded interest to him—and five owners interviewed by The Orange County Register said that they had not.”

According to First American CoreLogic, distressed home sales in Orange County are selling 34 percent under the typical market place. Altos Research reports a 0.5 percent in the national median home price. A modification becomes permanent through HAMP after the borrower makes all three monthly payments during the trial period. Fiserv estimates that home prices will not return to the past peak levels until 2025.

In The News:

My Desert – “Valley’s Housing Market Warming” (4-12-10)

“The median sales price of new and single-family homes rose 11 percent to about $200,000, about $20,000 higher than in February 2009. Home sales also rose 9.4 percent compared to the same period last year. Real estate sales have been outpacing sales from the previous year every month since October. Sales volume rose 31 percent in November, 29 percent in December, and 22.2 percent in January.”

Orange County Register – “Distressed home discounts at 6-month high” (4-12-10)

“Orange County homebuyers got a 34% price discount when they chose a distressed property vs. overall market prices in January, according to First American CoreLogic. That’s the biggest discount in six months.”

Wall Street Journal – “Second Mortgages Vex Borrowers” (4-12-10)

“Banks are coming under increasing political pressure to write off or at least write down second-lien and other junior mortgages as a way to help borrowers keep their homes or extract themselves from heavy debt. As the Wells Fargo suit shows, however, banks often are reluctant to give up on loans when they see a chance of recovering all or part of their money. This issue will be the focus of a hearing Tuesday by the House Financial Services Committee in Washington. Panel members are due to quiz executives from Wells Fargo, Bank of America Corp., Citigroup Inc. and J.P. Morgan Chase & Co. about their junior-lien mortgage policies.”

Bloomberg - “Bank Profits Dimmed by Prospect of Home-Equity Losses” (4-12-10)

“Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. may have to set aside an additional $30 billion to cover possible losses on home-equity loans, an amount almost equal to analysts’ estimates of profit at the three banks this year. The cost of these reserves was calculated by CreditSights Inc., a New York-based research firm whose prediction almost four years ago proved prescient after banks reported unprecedented mortgage-related writedowns. Recognizing the home- equity loan losses is unfinished business from the housing bubble, CreditSights said in a March 29 report.”

Housing Wire – “So, Where Will Housing Double Dip?” (4-12-10)

“Put in more plain terms, a state with a 1% foreclosure rate and an 11% delinquency rate should be expected to feel the impact of distressed properties moving through the pipeline far more than a state with a 5% foreclosure rate and a 5% delinquency rate, for example. The reasoning is simple: distressed property sales (short sales or REOs) are a drag on retail home prices. In markets that have seen comparatively less foreclosures relative to the volume of delinquencies stuck in the pipeline, the impact of those delinquencies will be felt proportionately more strongly as they are finally dealt with.”

Housing Wire – “Altos Sees House Price Decline Decelerate in March” (4-12-10)

“The median house listing price declined 0.5% in the Altos Research 10-city composite in March, improved from February’s 1.3% decline in an indication the pace of decline may be decelerating. March, the eighth consecutive month of decline, brings the Q110 price decline to 1.8%. But weekly price changes have shown a modest upward trend in the past seven weeks, which means a uptick in house prices could arrive in the coming months, Altos said.”

Housing Wire – “BofA Completes 33,000 Permanent HAMP Mods” (4-12-10)

“Bank of America (BAC: 18.66 +0.38%) completed almost 32,900 permanent mortgage modifications through the Home Affordable Modification Program (HAMP) through March, up from 20,666 in February. The Treasury Department launched HAMP in March 2009 to provide incentives to servicers for the modification of loans on the verge of foreclosure. When Treasury first reported permanent modifications in November 2009, BofA reported 98 permanent modifications. A modification becomes permanent through HAMP after the borrower makes all three monthly payments during the trial period.”

Housing Wire – “Despite HAMP, Mortgage Delinquency Grows 21% over 2009: LPS” (4-12-10)

“The number of mortgages delinquent at the end of February 2010 is 21.3% higher than the same time last year despite government-led modification efforts, according to the latest monthly report from Lender Processing Services (LPS: 37.61 +0.94%).”

Housing Wire – “Peak House Prices Will Return to Sand States after 2025: Fiserv” (4-12-10)

“Housing markets that experienced the greatest inflation in house prices — including certain metro areas in sand states California, Florida, Arizona and Nevada — will not see a return of peak-level home prices before 2025, according to financial services technology provider Fiserv.”

Wall Street Journal – “AIG, Goldman Unwind Soured Trades” (4-12-10)

” The derivatives unit of American International Group Inc. has unwound most of its soured mortgage trades with Goldman Sachs Group Inc. still left after the insurer was bailed out by the U.S. government in 2008, according to people familiar with the matter. The move by AIG Financial Products to terminate credit-default swaps insuring about $3 billion of mortgage-asset pools arranged by Goldman caused AIG to realize a $1.5 billion to $2 billion loss last year, the people said.”

Bloomberg - “Pimco Says Investors to Hold Down U.S. Mortgage Rates” (4-12-10)

“Investor demand for mortgage-backed securities will keep U.S. home-loan rates down after the Federal Reserve ended its purchases of the debt, said Pacific Investment Management Co., manager of the world’s biggest bond fund. The Fed’s unprecedented program to buy $1.25 trillion of the securities that guide home-loan costs stopped U.S. housing prices from falling, Scott Simon, who is in charge of investing in the notes at Pimco, wrote on the company’s Web site.”

According to the Standar & Poor Index, national home prices decreased by 0.7 percent from last year. Fannie Mae and Freddie Mac estimate that mortgage rates will rise less than a quarter of a percentage point in the next three months. Interest rates on conventional 30-year FRMs increased to 5.13% in February. The US Treasury Department will allocate $600 million to HFA for foreclosure prevention programs in California, Florida, Arizona, Michigan and Nevada.

In The News:

Google - “Home prices post smallest annual decline in 3 yrs” (3-30-10)

“Home prices showed the smallest annual decline in almost three years in January, indicating there are surprising areas of strength in the housing market. The Standard & Poor’s/Case-Shiller 20-city home price index fell just 0.7 percent from last year on a seasonally adjusted basis. The index reading of 146.32 was almost in line with analysts expectations, according to a survey by Thomson Reuters.”

Bloomberg - “Cheap Mortgages May Last as Investors Replace Fed” (3-30-10)

“The Federal Reserve’s completion this week of its program to buy $1.25 trillion in mortgage bonds probably won’t mean significantly higher U.S. home loan rates as investors return to the market, replacing the Fed. Fixed mortgage rates likely will rise less than a quarter of a percentage point in the next three months, the smallest increase for the second quarter since a drop in 2005, according to estimates by Fannie Mae and Freddie Mac. The gain would add about $30 to the monthly payment for a $250,000 mortgage.”

Housing Wire – “FHFA Sees Mortgage Rates Level with February 2009″ (3-30-10)

“Conventional mortgage rates continued to rise in February, according to the Federal Housing Finance Agency’s (FHFA) monthly rate report (download here). The average interest rate entered on a conventional 30-year fixed-rate mortgage (FRM) of $417,000 or less ticked up 3 basis points (bps) in February to 5.13%, from 5.1% in January.”

Housing Wire – “Treasury Releases Additional $600m to Five New State Housing Finance Agencies” (3-30-10)

“The US Treasury Department will expand the Hardest Hit Fund for state Housing Finance Agencies (HFAs) by allocating $600m to five additional states. The Treasury launched the initial $1.5bn through the fund to prevent foreclosures and stabilize local housing markets where prices have dropped at least 20% from their peak. California, Florida, Arizona, Michigan and Nevada are each working on plans to fund principal-forgiveness, unemployment and second-lien reduction programs.”

Orange County Register – “Builder raises new O.C. home prices” (3-20-10)

“According to DataQuick’s latest stats, month ended March 8, builders sold in Orange County 101 homes, up 26% in a year as median selling price rose 6% to $523,500. Builder prices for local new homes are 39% below their February ‘05 top.”

Realty Times – “Mortgage Rates Rise Ahead of Fed MBS Exit, 30-yr to 4.875″ (3-20-10)

“FreeRateUpdate.com research shows 30-yr fixed mortgages are available today at 4.875 percent to well-qualified consumers paying a standard .07 to 1 point origination. Today’s rate is slightly higher (+0.125) than what’s been obtainable for most of March. It’s not just the 30-yr fixed rate that’s up, as a result of a decline in mortgage-backed securities prices late last week, conventional mortgage rates are up on almost every program.15-yr fixed mortgages, previously available at 4.125 with standard origination, are available today at 4.25. 5/1 adjustable rate mortgages, previously available at 3.625, are now at 3.75.”\

Realty Times – “Weekend Do-it-Yourself Projects” (3-20-10)

“Spring is here at last, and like many other homeowners you may be looking for simple do-it-yourself projects to spruce up your home or to increase its value. Keep reading to get ideas on a few weekend updates and upgrades that are sure to be worth your while.”

Looking Back:

One year ago, analysts predicted a 10 percent drop in O.C. office rent rates. An FHA spokesman claimed that 7.5 percent of HFA loans were seriously delinquent. In February of 2009, nearly 250,000 homeowners received either mortgage modifications or repayment plans from their lenders.