Today’s News Synopsis:
RealtyTrac’s Rick Sharga believes that approximately 450,000 to 500,000 repossessed properties have not yet been placed on the market. Default notices in California have decreased by 10.3 percent from the previous quarter and have increased by 18.5 percent from last year. The Commerce Department reports that housing and apartment construction increased by .5 percent from last month.
In The News:
RealtyTrac – “The Case of the Missing REO Inventory” (10-20-09)
“With foreclosure activity breaking records nearly every month, where are all the REOs? It’s a fair question. In normal market situations, a bank will repossess a home and usually process it through to a listing agent to put on the MLS within 30 days. In a relatively short period of time, virtually every marketable REO property finds itself listed for sale on the local MLS. Today, that’s simply not the case; it’s likely that between 450,000 and 500,000 properties repossessed over the past year are still not on the market. And with buyers hungry for housing bargains, and agents and brokers champing at the bit ready to sell the properties, it begs for a reasonable answer.”
Broker Universe – “FHA Changes May Make HVCC and AMCs Easier to Swallow” (10-20-09)
“However, Mr. Stern believes appraisal management companies are hiring appraisers based on price – appraisers who have little knowledge of local market conditions. ‘I don’t think it’s fair that AMCs are hiring the cheapest appraisers,’ he said. Lenders One, the National Association of Realtors and appraiser groups are hoping new appraisal policies recently adopted by the Federal Housing Administration will correct some of the problems associated with HVCC and AMCs.”
DQNews – “California Mortgage Defaults Trend Down Again” (10-20-09)
“A total of 111,689 default notices were sent out during the July-through-September period. That was down 10.3 percent from 124,562 for the prior quarter, and up 18.5 percent from 94,240 in third quarter 2008, according to San Diego-based MDA DataQuick”
Cleveland – “Feds to probe ‘walkaways’ by some mortgage lenders” (10-20-09)
” Federal investigators will scrutinize the practice of lenders or mortgage companies walking away from homes they have foreclosed on. The U.S. Government Accountability Office plans to delve into these so-called bank walkaways – something some consider an alarming trend in the foreclosure crisis”
Wall Street Journal – “Home-Buyer Credit Is Focus of Inquiry” (10-20-09)
“The Internal Revenue Service is examining more than 100,000 suspicious claims for the first-time home-buyer tax break, another sign of potential trouble for the soon-to-expire program. The measure, adopted in February as part of the economic-stimulus bill, gives first-time buyers an $8,000 tax credit in an effort to boost sales and stimulate the moribund housing market. The program is set to end Nov. 30, but housing-industry leaders are lobbying Congress to extend it.”
Washington Post – “Small firms, home buyers to get a boost” (10-20-09)
“Under the program, the Treasury, along with mortgage financiers Fannie Mae and Freddie Mac, will buy the bonds used by housing finance agencies to fund mortgages, which can carry an interest rate that is a percentage point lower than loans made by private lenders. Called HFAs, these agencies have been strapped during the financial crisis because investors have been unwilling to buy their debt. The federal government is now attempting to play the role of the investors.”
Los Angeles Times – “Fewer home-building permits signal weakness ahead” (10-20-09)
“At the same time, the Commerce Department said Tuesday that construction of new homes and apartments rose 0.5 percent last month to a seasonally adjusted annual rate of 590,000 units. That was a weaker showing than the 610,000 economists had expected.”
NAR – “Housing Tax Credit Working, So Keep Momentum Going, NAR Urges Congress” (10-20-09)
“‘The data on the present home buyer tax credit show that the credit has had its intended impact—sales have jumped in recent months to a projected 5.1 million for the year and housing inventory has been trimmed, thus stabilizing home prices noticeably,’ Phipps said. He also pointed out that each home sale generates approximately $63,000 in additional economic activity, providing a tremendous economic boost to the national economy”
Mortgage Bankers Association – “MBA Testifies on State of Housing Market” (10-20-09)
“Whenever I am asked when the housing market will recover, I explain that the economy and the housing market are inextricably linked. The number of people receiving paychecks will drive the demand for houses and apartments and the recovery will begin when unemployment stops rising. Since September 2008, we have lost 5.8 million jobs in the US, more than five times the number the previous year.”
Housing Wire – “Fitch Projects More RMBS Re-Defaults as HAMP Disappoints” (10-20-09)
“Servicers of residential mortgage-backed securities (RMBS) continue to increase loss mitigation resolutions, including a significant push in the number of loan modifications, according to a report from Fitch Ratings. As of September 2009, roughly 10% of all RMBS loans and 25% of all subprime loans received at least one modification. A year ago, servicers modified only 3% of all loans, and 7% of subprime loans, according to the report.”
Housing Wire – “Servicers Prefer Foreclosure, Says NCLC” (10-20-09)
“Mortgage servicers have found it cheaper to foreclose on homeowners than offer loan modifications, according to a new report from the National Consumer Law Center. The report points out servicers in charge of modifying distressed loans are separate from the lenders, who have packaged the loans and sold them in pieces or pools to other banks and investors.”
Housing Wire – “HUD Notes Alleged FHA Violations at Lend America” (10-20-09)
“The 12 alleged violations the HUD board said Ideal Mortgage Bankers made against FHA range from submitting false certifications and failing to document the borrower’s income and creditworthiness, to approving loans that did not meet the FHA’s minimum credit requirements and closing a loan with an excessive mortgage broker fee paid to an approved FHA loan correspondent.”
Orange County Register – “Investors grab bigger share of auctioned foreclosures” (10-20-09)
“Investors bought 278, or 39%, of the 718 houses and condos sold at auctions, known as trustee’s sales, in Orange County last month, reports ForeclosureRadar.com.”
California Real Estate Investing News is a post from: The Norris Group