The Norris Group Real Estate News Roundup 7/20/10

Today’s News Synopsis:

The MBA reports independent mortgage bankers and subsidiaries made an average profit of $606 on each loan they originated in the first quarter of 2010. Statistics from the Commerce Department show housing starts fell 5% from May. FHA may soon require borrowers to have at least a 580 FICO score to buy a home with a minimum 3.5 percent down payment. First and second mortgage default rates declined to 3.3% and 2.4%, according to Experian.

In The News:

Mortgage Bankers AssociationMBA Study Shows Mortgage Banker Production Profits Dropped in First Quarter of 2010″ (7-20-10)

Independent mortgage bankers and subsidiaries made an average profit of $606 on each loan they originated in the first quarter of 2010, down from $890 per loan in the fourth quarter of 2009 and $1,088 in the first quarter of 2009, according to the Mortgage Bankers Association (MBA)’s 1st Quarter 2010 Mortgage Bankers Production Survey released today”

CNN New home construction drops, but outlook brightens” (7-20-10)

“New home construction fell to an 8-month low in June, but there were indications of increased activity in coming months, the government said Tuesday. Housing starts fell 5% from May to a seasonally adjusted annual rate of 549,000 last month, the Commerce Department said. That was the lowest rate since October 2009.”

Inman “FHA raising FICO floor, reducing seller concessions” (7-20-10)

“FHA borrowers will soon need a 580 FICO score in order purchase a home with the minimum 3.5 percent downpayment, and won’t qualify for the program at all if they have a score below 500. Federal housing officials are moving closer to implementing several policy changes announced in January that will also reduce the maximum allowable seller concession on FHA-backed loans from 6 percent to 3 percent and tighten underwriting standards for manually underwritten loans.”

Housing Wire“First Mortgage Default Rate Plunges 40% from 2009: S&P” (7-20-10)

“First mortgages led an overall decline in credit defaults in June, according to the Standard & Poor’s/Experian indices today. First and second mortgage default rates declined to 3.3% and 2.4%, respectively in June, based on information from Experian’s consumer credit database. First mortgage default rates slipped 5% from May and 45.2% from a year earlier, while second mortgage default rates were down 0.03% from May and 44.54% from a year ago.”

Orange County Register – “O.C. rent cuts triple U.S. declines” (7-20-10)

“For the second quarter, the average Orange County rent that apartment complex owners were ‘asking’ for was $1,506 — and that rent was falling at a 2% annual rate. That’s a drop roughly triple the national rate of decline of 0.7%. Orange County renters are enjoying rent declines that are tied for the 8th largest among 82 U.S. markets tracked. Bigger drops? Las Vegas, 4.2%; L.A., 2.9%; Phoenix, 2.8%; Westchester, N.Y., 2.6%; Oakland, 2.2%; Fairfield, Conn., and San Francisco, 2.1%. We note that Orange County and L.A. near the top of top rent cuts explains how Consumer Price Index data shows the biggest SoCal rent decline by this math since 1940.”

Orange County Register“South Coast 2nd quarter home sales up 16%” (7-20-10)

“For Q2 (April – June) – DataQuick’s freshest stats — South Coast homebuying patterns showed: 574 homes were bought in the region in the period – +16% vs. a year ago. Sales counts in all Orange County beach towns ran +22% vs. a year ago.”

Looking Back:

One year ago, The Real Estate Roundtable estimated that about $400 billion a year in commercial loans would need to be refinanced over the next decade. A TARP investigator claimed the government bailout totaled $23.7 trillion. Default levels increased to 2,500 per month.

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