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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 5/10/10

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 4/29/10

Thursday, April 29th, 2010

Today’s News Synopsis:

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

In The News:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Looking Back:

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

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The Norris Group Real Estate News Roundup 2/19/10

Friday, February 19th, 2010

Today’s News Synopsis:

According to the MBA, the delinquency rate for one-to-four unit residential properties decreased to 9.47 percent. President Obama is starting a $1.5 billion housing support program for California, Arizona, Nevada, Florida and Michigan. A homeowner mentality survey from Zillow shows that 20 percent of homeowners believe their homes decreased in value during 2009. The Federal Reserve recently bought $11.3bn in mortgage-backed securities from Freddie Mac, Fannie Mae, and Ginnie Mae.

In The News:

MBA - “Delinquencies, Foreclosure Starts Fall in Latest MBA National Delinquency Survey” (2-19-10)

“The delinquency rate for mortgage loans on one-to-four-unit residential properties fell to a seasonally adjusted rate of 9.47 percent of all loans outstanding as of the end of the fourth quarter of 2009, down 17 basis points from the third quarter of 2009, and up 159 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate increased 50 basis points from 9.94 percent in the third quarter of 2009 to 10.44 percent this quarter.”

CNN - “Housing help for unemployed, underwater borrowers” (2-19-10)

“Under pressure to do more for troubled homeowners, President Obama announced Friday a $1.5 billion program to help borrowers in the five states hit hardest by the housing crisis. The initiative calls for pumping money into state housing agencies in California, Arizona, Nevada, Florida and Michigan to fund programs to prevent foreclosure for people who are unemployed or who owe more than their homes are worth.”

Housing Wire – “Some Homeowners Overly Cynical on Home Property Values: Zillow” (2-19-10)

“According to the quarterly survey, one in five, or 20%, of the 2,200 homeowners surveyed believed their property value increased during 2009. That’s the lowest percentage in seven quarters. In reality, 28% of homes increased in value during the year, according to Zillow’s Fourth Quarter Real Estate Market Reports.”

Housing Wire – “Capital Returns on Commercial Real Estate Reach Record Low: IPD” (2-19-10)

“The report monitors the trends in underlying market value and returns of $76.5bn of assets held by real estate funder managers in the US. Capital returns fell 23.9% in 2009 for a total decline of 33.4% from the peak of real estate values in December 2007. Capitalization rates – or the ratio between the net income from the asset and its original price – sunk another 140 bps over 2009 to 7.1%, the highest level in six years.”

Housing Wire – “Fed MBS Purchases 96% Complete With Another $11bn” (2-19-10)

“The Fed bought a total of $11.3bn in mortgage-backed securities (MBS) – $4.47bn Freddie Mac (FRE: 1.23 +0.82%) MBS, $3.97bn Fannie Mae (FNM: 1.02 0.00%) MBS and $2.85bn Ginnie Mae MBS, according to a summary of purchases. The New York Fed also sold $300m of MBS in the same week, bringing the net purchases to $11bn, the same as last week.”

Housing Wire – “Fannie Mae Approves Four New Mortgage Insurers” (2-19-10)

“Fannie Mae (FNM: 1.02 0.00%) approved four new mortgage insurers for conventional first mortgage loans, according to a letter sent to lenders. With the new approvals, Fannie is ready to accept loans with mortgage insurance from Essent Guranty, MGIC Indemnity Corp., PMI Mortgage Assurance Co. (PMAC) and Republic Mortgage Insurance Company of North Carolina.”

Bloomberg - “Fed Discount-Rate Move Signals End to Emergency Steps” (2-19-10)

“The Federal Reserve Board sent its most explicit signal yet that the emergency supply of liquidity to financial markets is done and the most aggressive monetary policy easing in its 96-year history will eventually reverse. Chairman Ben S. Bernanke and his colleagues at the Board of Governors raised the rate charged to banks for direct loans by a quarter-point to 0.75 percent, effective today. It was the first increase in the discount rate since June 2006.”

Inman - “Home-price declines ease in December” (2-19-10)

“National home prices were down 3.7 percent from a year ago in December, a ’significant improvement’ over November’s 5.3 percent decline, according to a home-price index compiled by First American CoreLogic.”

Realty Times – “Clean Homes Show Better–Five Areas To Scrub to Make Yours Sparkle” (2-19-10)

“Tile. When you’re showing your house, hopefully, you’ll get lots of foot traffic. This, however, can lead to very dirty flooring and grout. Yes, you can supply those footies and the sign placed by the door asking buyers to remove their shoes or put the footies on before entering your home, but, the truth is, not all will comply. Still, the tile and the condition of the grout will matter to buyers should they decide to make an offer. There are certainly many products to get the dirt out of those tiny grout lines; one that I’ve had success with is called Heavy Duty Acidic Cleaner for tile.”

Looking Back:

One year ago, the NAR reported that broker activity decreased by 6 percent in the 4th quarter of 2008. Research from the NAHB showed that 62.4 percent of all new and existing homes that were sold in the final quarter of 2008 were affordable to citizens earning the median income. Statistics collected by DQNews displayed that the median home price in the Bay Area dropped to approximately $300,000. California’s legislative branch approved of a plan for tax increases, spending cuts and borrowing to close a $40 billion deficit.

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

Wednesday, February 10th, 2010

Today’s News Synopsis:

The MBA reports that mortgage application volume decreased by 1.2 percent from last week. According to the NAHB, there were approximately 234,000 homes for sale at the end of 2009. Statistics from Zillow show that the national median price was $186,200 in Q409 of 2009. The total number of FHA-insured single-family mortgages in default reached 531,671 in Q409 of 2009.

In The News:

Mortgage Bankers Association – “Purchase Applications Decline in Latest MBA Weekly Survey” (2-10-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending February 5, 2010. The Market Composite Index, a measure of mortgage loan application volume, decreased 1.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 0.6 percent compared with the previous week.”

Wall Street Journal – “Spec Houses Rise as Builders Bet on Buyers Before Tax Credit Ends” (2-10-10)

“Houses typically take between four and six months to build, so the window to start construction is closing quickly. And current inventory is low. At the end of 2009, there were 234,000 homes for sale, the lowest level since April 1971, according to the National Association of Home Builders. It’s difficult to measure the total number of spec homes nationwide. But according to a survey conducted by John Burns Real Estate Consulting, based in Irvine, Calif., home builders have about three finished homes with no buyer per community. That’s up slightly from 2.8 finished homes in November but much lower than the peak of six finished homes in July 2008.”

Mercury News – “Bay Area home prices may drop, real estate firm warns” (2-10-10)

“The median estimated value of all Santa Clara County homes at the end of the fourth quarter was $568,401, up a fraction from $564,360 in the third quarter, Zillow reported. In San Mateo County, prices have already begun to fall. The median estimated value of all homes was $635,264 in the fourth quarter, down 0.68 percent from $639,600 in the third quarter. Home values fell in San Mateo County from September through December, Zillow said, after four months of increases from May through August.”

Housing Wire – “Zillow Warns on Double Dip in House Prices” (2-10-10)

“The Zillow Home Value Index put the national median price at $186,200 in Q409, a 5% decrease from Q408. Compared to Q309, prices declined 0.5% during the last quarter of 2009. The index is a measure of median home values of all single-family residences, condominiums and cooperatives, both on the market and not for sale. Q409 marked the 12th consecutive quarter of year-over-year declines, Zillow said.”

Housing Wire – “Defaults on FHA Mortgages Pass 9 Percent” (2-10-10)

“The default rate in the single-family FHA portfolio reached 9.12% in Q409, climbing from 6.82% in Q408, according to the Federal Housing Administration December monthly report. The total number of FHA-insured single-family mortgages in default reached 531,671 in Q409, a 66% increase from 319,741 in Q408. In that same period, modifications on FHA-backed loans increased 54% to 23,973 in Q409.”

Housing Wire – “Feds Outline Mortgage Securities Exit Strategy” (2-10-10)

“And according to Federal Reserve chairman Ben Bernanke, a series of policy wind-down methods are being tested. The Fed may first drain excess reserves built up over many months through extraordinary asset-purchase programs, and then begin to raise interest rates. Or the Fed could pursue both options simultaneous to facilitate a quicker exit. Ultimately, economic developments will determine the exit process.”

Housing Wire – “Freddie Mac Will Buy Out 120-Day Delinquent Mortgages” (2-10-10)

“Government-sponsored mortgage securitizer Freddie Mac (FRE: 1.24 +3.33%) said today it will buy ’substantially all’ mortgages delinquent by at least 120 days from the company’s related fixed-rate and adjustable-rate mortgage (FRM and ARM) Participation Certificate (PC) securities. Freddie said the loan purchases will show up in the PC factor report published after March 4, 2010. The corresponding principal payments on affected PCs will pass through to FRM and ARM PC holders on March 15 and April 15, respectively.”

Housing Wire – “Option ARMs Don’t Measure Up in HAMP: BofA” (2-10-10)

“Of all mortgage collateral sectors, pay-option adjustable-rate mortgages (ARMs) are the least modifiable under a federally-subsidized modification program, according to research Monday by Bank of America Merrill Lynch (BofAML). Researchers found that, in general, collateral with higher delinquencies see higher modification rates. But despite the wave of option ARMs set to recast monthly payments over the next several years, these types of loan fall in ‘the least modifiable sector’ under the Home Affordable Modification Program (HAMP) because of their failure to measure up to eligibility requirements and net present value (NPV) test requirements.”

Orange County Register – “Expect more price cuts on high end homes” (2-10-10)

“Data from 2009 MLS sales for Laguna Beach show that last year started out extremely slow. February 2009 recorded a record low of only 6 residential properties sold for the entire month. By contrast, buying activity picked up enough by year end that December was the highest single month of sales since May 2006.”

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The Norris Group Real Estate News Roundup 1/20/10

Wednesday, January 20th, 2010

Today’s News Synopsis:

The MBA’s Market Composite Index shows that loan application volume increased by 9.1 percent. Policy changes for FHA will consequently cause borrowers to pay more on their FHA-insured mortgages. HUD reports that housing starts declined 4% in December. Regional housing inflation rose 0.2% in Southern California.

In The News:

Mortgage Bankers Association – “Refinance Applications Increase as Mortgage Rates Fall in Latest MBA Weekly Survey” (1-20-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 15, 2010. The Market Composite Index, a measure of mortgage loan application volume, increased 9.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 10.4 percent compared with the previous week and decreased 52.3 percent compared with the same week one year earlier.”

Mortgage Bankers Association – “MBA Comments on Changes to FHA Credit Policy” (1-20-10)

“Borrowers may have to pay a little more for their FHA-insured mortgages or certain borrowers will have to put more money down for their home, but these changes are necessary given the stress that the housing downturn has put on the FHA program.”

Housing Wire – “Commercial Real Estate Investor Demand to Grow in 2010″ (1-20-10)

“The start of 2010 is showing signs of growing investor demand in US commercial real estate, and potentially in related secondary markets, despite the lagging performance of underlying collateral. The pick-up is also predicted to be mirrored in similar markets in Europe and Asia; areas expected to see comparatively better performance. In a report from the rating agency Moody’s, analysts project some pick-up in commercial real estate (CRE) demand after Q409, which would help markets after little movement for much of the year.”

Housing Wire – “Housing Starts Drop, Permits Up in December” (1-20-10)

“After jumping up 8.9% one month earlier, housing starts declined 4% to a seasonally adjusted annual rate of 557,000 in December, according to the Department of Housing and Urban Development (HUD) and the Commerce Department’s Census Bureau.”

Housing Wire - “BofA Posts $5.2bn Loss in Q409 After TARP Repayment” (1-20-10)

“In the same quarter of 2008, BofA posted a net less of $2.4bn, or $0.48 per diluted share. Excluding the $4bn TARP repayment, BofA had a net loss of $194m in Q409, which narrowed from the $1.8bn loss from a year earlier. For all of 2009, BofA reported a net income of $6.3bn, an improvement from $4bn in 2008.”

Housing Wire – “Morgan Stanley Posts $413m Q409 Profit as Real Estate Gains” (1-20-10)

“Firm-wide results for the full year reflected $1.9bn of net losses on real estate investments ‘amidst the ongoing industry-wide decline in this market,’ Morgan Stanley said in the earnings statement.”

Housing Wire – “Wells Fargo Posts Record $12.3bn Annual Net Income” (1-20-10)

“Wells Fargo said mortgage originations and servicing revenue was $3.4bn in the quarter, and its total mortgage banking noninterest income accounted for 15% of the company’s consolidated Q409 revenue. The bank had $1.2bn in income from mortgage origination and sales activities on $94bn of residential mortgage originations and $144bn of applications.”

Bloomberg - “‘Tranche Warfare’ Erupts as Property Owners Slide Into Default” (1-20-10)

“Infighting among lenders with different classes of debt, called tranches, is on the rise in the hotel industry and throughout the $3.5 trillion market for commercial real estate loans after property prices fell more than 40 percent from their peak in 2007. Commercial mortgage defaults more than doubled to 3.4 percent in last year’s third quarter from a year earlier.”

Bloomberg - “Property Bonds Beat Corporates as Simon Sells: Credit Markets” (1-20-10)

“Real estate borrowers are leading the rally in U.S. corporate bonds as investors add to bets property companies will weather an increase in commercial mortgage defaults. Bonds sold by real-estate investment trusts, shopping-mall owners and office landlords have gained 3.27 percent this month, exceeding 3.18 percent for all of the fourth quarter, and BBB rated commercial mortgage bonds returned 3.59 percent, according to Bank of America Merrill Lynch indexes. The gains are the biggest among investment-grade issuers, which returned 1.65 percent so far in 2010, the indexes show.”

Orange County Register – “SoCal housing inflation lowest in 32+ years” (1-20-10)

“Overall regional housing inflation rose 0.2% for the year, lowest since they started this data series in 1977. Household energy costs fell 8.8% last year, biggest drop in the series that dates to 1977.”

Orange County Register – “408 south coast homes in default on loans” (1-20-10)

“There are hundreds of homes in Dana Point, Laguna Beach and San Clemente that are in default on their mortgages and in danger of being foreclosed. According to Trulia.com, a total of 408 homes in these south coastal communities have received a notice of default from their bank, which typically follows one or often a series of missed mortgage payments and a late notice.”

Inman - “Zillow, Trulia slip in Hitwise ratings” (1-20-10)

“Realtor.com remained the dominant Web site in the real estate category, with 6.79 percent market share. Rounding out the top 10 Web sites were Yahoo! Real Estate (3.8 percent), Zillow (3.5 percent), ZipRealty (2.91 percent), eBay’s Rent.com (2.57 percent), Service Magic (2.27 percent), Trulia.com (2.16 percent), Homes.com (1.99 percent), MSN Real Estate (1.78 percent) and Apartments.com (1.32 percent).”

Inman - “Google, RPR and the future” (1-20-10)

“Marty Frame, president of NAR’s Realtors Property Resource, which seeks to create a national database of property information and a new property-valuation system for Realtors to access, discusses RPR plans with Dale Ross, RPR CEO.”

Looking Back:

One year ago, congress voted to use the second half of the $700 billion TARP bailout. FHA was offering 3.5%-down mortgages to qualified buyers. Nouriel Roubini predicted that the U.S. financial crisis may reach $3.6 trillion. Dataquick reported that foreclosures made up just 6 percent of resales in August 2007.

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The Norris Group Real Estate News Roundup 12/15/09

Tuesday, December 15th, 2009

Today’s News Synopsis:

According to MDA DataQuick, home sales decreased by 13.3 percent in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange County. The Federal Reserve plans to leave interest rates at the current record low. Research from Trulia and RealtyTrac shows that 43% of U.S. adults will consider buying foreclosed property. A survey from JBREC shows that 57 percent of home builders expect to receive more revenue in 2010 than 2009.

In The News:

DQNews - “Southland home sales and prices up” (12-15-09)

“A total of 19,181 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 13.3 percent from October’s 22,132, and up 14.7 percent from 16,720 for November 2008, according to MDA DataQuick of San Diego.”

San Francisco Chronicle – “Fed is expected to leave rates at record low” (12-15-09)

“The Federal Reserve is expected to leave interest rates at a record low this week. The big question is whether Chairman Ben Bernanke and his colleagues will hint about when they will reverse course and start boosting rates.”

Wall Street Journal – “Remaking Fannie and Freddie: Six Mistakes to Avoid” (12-15-09)

“While economic theory suggests that duopolies can be highly competitive, there are strong disagreements on whether this applies to Freddie Mac and Fannie Mae.…While additional GSEs would undoubtedly enhance competition, it is important to recognize the trade-off between concerns over excess profits and market liquidity.”

Inman - “Zillow rolls out rental search” (12-15-09)

“One in four people who plan to move in the next three years say they intend to look at both for-sale and rental properties, Rascoff said, citing a poll by Harris Interactive.”

Housing Wire – “Fewer Buyers Consider Foreclosures: RealtyTrac, Trulia” (12-15-09)

“Fewer homebuyers are likely to consider purchasing a foreclosed property in the future, according to a survey conducted by the online real estate companies Trulia.com and RealtyTrac. Conducted in early November, 43% of US adults indicate they are at least somewhat likely to consider purchasing a foreclosed home, a drop from 55% in the same survey conducted in May.”

Housing Wire – “After ‘09 Housing Bottom, Builders Optimistic for ‘10″ (12-15-09)

“While Fitch maintains a negative outlook for US homebuilding in 2010, the John Burns Real Estate Consulting (JBREC) monthly builder survey showed optimism among 264 home building industry executives from public and private companies. The belief that builders will have increased community count, better orders and slightly higher prices has 57% of respondents planning for more revenue in 2010 than in 2009.”

Bloomberg - “Mortgage Originations to Fall 16% in 2010 as Stimulus Ends” (12-15-09)

“Mortgage originations probably will decline 16 percent next year as the homebuyer tax credit expires and the Federal Reserve winds down purchases of mortgage-backed bonds, according to a report by Keefe, Bruyette & Woods Inc.”

Looking Back:

One year ago, the NAHB reported that builder confidence was at an all time low. Zillow estimated that home price reductions would add up to a total of $2 trillion in losses. Research from HomeDex showed that the median price per square foot decreased to $196.

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

Wednesday, December 9th, 2009

Today’s News Synopsis:

Gov. Schwarzenegger signed a bill which ensures that consumers may choose their own real estate service provider when purchasing a foreclosure. According to Zillow, Bay Area properties have lost 3 percent of their value during the first 11 months of 2009. 18 percent of FHA loans are either delinquent or in foreclosure. Statistics from Freddie Mac show that national home prices increased by .9 percent during the second quarter of this year.

In The News:

Managing REO – “Buyer’s Choice Act Signed Into Law” (12-10-09)

“Gov. Arnold Schwarzenegger has signed an assembly bill into law that protects consumers by ensuring that they have the right to choose their own real estate service providers when purchasing foreclosed properties. Also known as the Buyer’s Choice Act, the law prohibits sellers of REO properties from requiring the buyer to use a particular title company, escrow settlement or other real estate service provider. The Escrow Institute of California says this ‘unethical, anti-competitive practice’ drives up costs for homebuyers and takes business away from locally owned companies.”

San Francisco Chronicle – “Decline in home values levels off” (12-9-09)

“Homes in the nine-county Bay Area lost $38.1 billion in value in the first 11 months of this year, a 3 percent drop, according to real estate site Zillow.com. Gargantuan though that sounds, it’s a pittance compared with the $233.1 billion in home values wiped out in 2008, which was a 15.7 percent plunge from the previous year.”

Los Angeles Times – “Geithner: bailout program extended to October” (12-9-09)

“Money from the $700 billion taxpayer-funded bailout program has helped rescue big Wall Street firms, auto companies and others. That’s angered many Americans, who feel the government hasn’t provided them with relief from high unemployment and rising home foreclosures. Geithner said the Troubled Asset Relief Program that Congress passed in October 2008, will be extended until Oct. 3, 2010. He has the authority to extend the TARP simply by notifying lawmakers.”

Inman - “Home prices rise 0.9% in Q3″ (12-9-09)

“Home prices rose for the second quarter this year, according to Freddie Mac’s quarterly national Conventional Home Price Index (CMHPI) Purchase-Only Series released Tuesday, adding evidence the nation’s housing market is warming up. The government mortgage entity’s home-price-growth index rose 0.9 percent in the third quarter, following an upwardly revised 2 percent pickup in the second quarter. The increases of the past two quarters made up for about two-fifths of the declines registered during the final quarter of 2008 and the first quarter of 2009. U.S. home-sale prices were down 3.9 percent year-over-year.”

San Francisco Chronicle – “Condo rules could shut out buyers, hit builders” (12-9-09)

“The tighter lending standards are designed to protect the financial health of the FHA. Roughly 18 percent of loans insured by the FHA are either delinquent or in foreclosure and the agency’s financial cushion has dipped below the federal minimum. But the move is a blow to condo buyers because the FHA has become a key source of mortgage financing. The agency insures roughly one in four new loans today because buyers need only have a 3.5 percent down payment.”

Housing Wire – “‘Toxic Titles’ Worth Less than Cost of Foreclosure: Fed’s Duke” (12-9-09)

“‘In the most devastated neighborhoods, some lenders do not even complete the foreclosure process or record the outcome of foreclosure sales because the cost of foreclosing exceeds the value of the property,’ Duke said. These ‘toxic titles,’ she added, have placed a large number of properties in legal limbo. High rates of abandonment pushed many cities such as Flint, Mich. and Cleveland to pursue plans to ‘right size’ by demolishing vacant properties and create land banks, Duke said.”

Housing Wire – “Deutsche Sees New Year’s Surge of Fannie, Freddie Buyouts” (12-9-09)

“The pace of buyouts in delinquent loans in Fannie Mae (FNM: 0.92 0.00%) and Freddie Mac (FRE: 1.11 0.00%) mortgage-backed securities portfolios (MBS) is set to boom in 2010 as new accountancy rules come into effect, changing the nature of securitization.”

Mortgage Bankers Association – “Mortgage Applications Increase in Latest MBA Weekly Survey” (12-9-09)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending December 4, 2009. The Market Composite Index, a measure of mortgage loan application volume, increased 8.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 54.0 percent compared with the previous week, which was a shortened week due to the Thanksgiving holiday.”

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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 11/9/09

Monday, November 9th, 2009

Today’s News Synopsis:

A survey of 1,500 registered voters shows that most citizens are still pessimistic towards California’s financial future. Default notices doubled in Los Altos, Greenbrae and Alamo from 2008 to 2009. Zillow reports that the number of under water mortgages decreased in the U.S. decreased by 2 percent in the third quarter.

In The News:

Los Angeles Times – “California’s best years have passed, voters say” (11-8-09)

“In a survey of 1,500 registered voters, 80% say the state is on the wrong track. Respondents express little confidence in state politicians and candidates, even as support for Obama remains high.”

San Francisco Chronicle – “Default notices rising in upper echelon ZIPs” (11-8-09)

“In upscale communities such as Los Altos, Greenbrae and Alamo, where median prices top $1 million, about twice as many households received default notices from January to September as in the same period in 2008, according to recorders’ office data compiled by MDA DataQuick, a San Diego real estate research firm.”

Yahoo - “Why the new $6,500 homebuyer tax credit is wrong” (11-9-09)

“Congress and President Obama keep throwing money at the housing industry, hoping its revival will also revive the economy. The industry itself pines for the halcyon days of McMansions on every block and home prices that never fall. The latest example of this government largess: the extension and expansion of a tax credit for home buyers – $8,000 for first-time buyers and $6,500 for those living in homes at least five years – in a bill signed by the president Friday.”

DSNews - “Five More Community Banks Shuttered” (11-9-09)

“On Friday evening, the FDIC stepped in to help shut down San Francisco-based United Commercial Bank (UCB), the largest institution to be closed last week, whose failure is expected to cost the agency and estimated $1.4 billion. Last year, the Treasury gave $299 million in Troubled Asset Relief Program (TARP) funds to UCB’s holding company.”

Housing Wire – “Amherst Sees $476Bn of Non-Agency MBS Non-Performing” (11-9-09)

“The count of non-performing and re-performing loans within non-agency or private-label mortgage-backed securities (MBS) slipped 0.48% to 2.36m in October, from 2.37m in September, according to Amherst Securities Group. The firm now sees $965.4bn of private-label MBS in performing status the end of October, $476.5bn of MBS non-performing and $115.6bn of MBS re-performing.”

Housing Wire – “More Lenders Raise Prime Mortgage Standards: Fed” (11-9-09)

“The portion of lenders that increased standards for prime residential mortgages and revolving home equity lines of credit increased slightly this quarter, according to the Federal Reserve’s October 2009 Senior Loan Officer Opinion Survey on Bank Lending Practices.”

Housing Wire – “BofA Lends $96bn of First Mortgages in Q309″ (11-9-09)

“During the quarter, BofA originated $96bn in first mortgages for nearly 450,000 borrowers purchase homes or refinance mortgages. During the first nine months of the year, the bank said its originated $292bn in first mortgages for more than 1.3m borrowers.”

Housing Wire – “Treasury Denies Fannie’s Request to Transfer Housing Tax Credits” (11-9-09)

“After posting a $19.8bn quarterly net loss, Fannie asked its conservator, the Federal Housing Finance Agency (FHFA), to submit the request on its behalf. FHFA also requested on Fannie’s behalf another $15bn draw on the Senior Preferred Stock Purchase Agreement with the Treasury, to cover Fannie’s net worth deficit as of September 30.”

Bloomberg - “Fewer U.S. Homeowners Owe More Than Properties Are Worth” (11-9-09)

“The number of U.S. homeowners who owe more than their properties are worth fell in the third quarter as values stabilized and some homes were lost to foreclosure, Zillow.com said. About 21 percent of owners of mortgaged homes were underwater, down from 23 percent in the second quarter, the Seattle-based real estate data provider said today in a report. ”

Inman - “RPR madness! NAR unleashes national property database with Cyberhomes” (11-9-09)

“The NAR has taken over certain technology assets of Cyberhomes from LPS (formerly known as FNRES) in order to bring its RPR (Realtors Property Resource) project, as well as its consumer-facing play, HouseLogic, to market. To do this, they have created Realtors Property Resource LLC — a wholly owned subsidiary of the NAR.”

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