Today’s News Synopsis:
According to the NAR, existing home sales decreased by 16.7 percent in December. The HVCC repeal bill, named HR 1728, has passed in the House of Representatvies and is waiting approval from Congress. The FDIC took over 5 more failed banks last week. FTN Financial reports that declining home values have had little effect on the nation’s economic recovery.
In The News:
NAR – “December Existing-Home Sales Down but Prices Rise; 2009 Sales Up” (1-25-10)
“Existing-home sales – including single-family, townhomes, condominiums and co-ops – fell 16.7 percent to a seasonally adjusted annual rate1 of 5.45 million units in December from 6.54 million in November, but remain 15.0 percent above the 4.74 million-unit level in December 2008.”
Washington Post – “Stakes are high as government plans exit from mortgage markets” (1-25-10)
“Over the past year, these programs have enabled prospective home buyers to get cheap loans, helping those buying and selling property as well as those eager to refinance existing mortgages. If the end of the initiative drives up interest rates, say from 5 percent to 5.5 percent, homeowners could be deterred from refinancing, industry officials say. A sharper increase in rates could make homes too expensive for many buyers, forcing them from the market and causing the recent pickup in home sales to stall.”
Inman – “Bailout’s impact on deficit debated” (1-25-10)
“The cost of subsidizing the operations of Fannie Mae and Freddie Mac should be accounted for in the federal budget as if they were federal agencies, the Congressional Budget Office argues in a new report — an accounting change that would add nearly $400 billion to the growing national deficit. The Obama administration has argued that only cash the Treasury Department pumps directly into Fannie and Freddie — about $95.6 billion since the mortgage guarantors were placed into conservatorship in September 2008 — should be included as budget expenditures.”
Housing Wire – “FHA Cracks Down on 4 Mortgage Lenders” (1-25-10)
“The lenders losing approval are: Strategic Mortgage Corporation, ProMortgage, Americare Investment Group, which does business as Premier Capital Lending and TopDot Mortgage. The MRB suspended FHA approval on Home Mortgage Inc. (HMI) for six months. In addition to losing its FHA approval, TopDot faces action from the Government National Mortgage Association, or Ginnie Mae.”
Housing Wire – “Home Valuation Code of Conduct is Better for Business, AMCs Say” (1-25-10)
“A trade group for the appraisal management company (AMC) industry warned that if proposed legislation repealing the Home Valuation Code of Conduct (HVCC) is passed, it may lead to the same damaging business practices that puts undue pressure put on property appraisers. The specific legislation that catches the ire of the Title/Appraisal Vendor Management Association (TAVMA) is HR 1728 which passed the House of Representatives and is awaiting Senate approval. The financial reform bill includes a provision to repeal the HVCC.”
Housing Wire – “FDIC May Securitize Assets of Failed Banks” (1-25-10)
“There is a large supply of failed bank assets on-hand, with the latest round of five failures on Friday leaving the FDIC with at least $20.1m in total assets for later disposition. The FDIC is said to be diversifying its options for offloading failed banks when no buyer can be found.”
Housing Wire – “Foreclosure and Price Decline is not Fatal to Recovery, Says FTN Financial” (1-25-10)
“Declines in house prices mixed with increases in foreclosures are not showing a hugely negative knock-on impact for the nation’s overall economic recovery, according to a weekly report by FTN Financial, a portfolio manager and analytics provider for the investment and banking industry.”
Bloomberg – “Fannie Mortgage-Bond Spreads Unchanged After Widening Four Days” (1-25-10)
“Yields on Fannie Mae and Freddie Mac mortgage securities were unchanged relative to government notes after widening for four days. The difference between yields on Washington-based Fannie Mae’s current-coupon 30-year fixed-rate mortgage bonds and 10- year Treasuries remained at about 0.75 percentage point, after climbing as high as 0.77 percentage point, according to data compiled by Bloomberg. The spread has grown since reaching 0.66 percentage point on Jan. 6, the tightest in more than 17 years.”
Orange County Register – “South coast distressed homes slip, slide” (1-25-10)
“Two weeks ago, Dana Point’s percentage of short sales and foreclosures was 23.3%, which has risen to 24.7% this week, according to a biweekly report by Steven Thomas of Altera Real Estate. San Clemente also saw an increase in distressed properties. Two weeks ago, 30.8 percent of the city’s active home stock was distressed. Now, 32.8% of homes for sale are distressed.”
Orange County Register – “Smallest apartments get biggest rent cuts” (1-25-10)
“The biggest percentage cuts were made in rents for ‘junior one-bedroom’ units — essentially a small one-bedroom or a studio apartment with an alcove or space that can be used as a bedroom. The average rent for those units fell 11.4% to $1,172 a month. Studio apartments, one-bedroom and two-bedroom units had the next biggest percentage cuts, with reductions of just over 7%.”
Looking Back:
One year ago, California’s unemployment rate increased to 9.3 percent. Proposition 13 prevented California from raising property taxes for the budget crisis. Mortgage rates increased by 0.5 percent within a week and a half. The Federal Reserve was expected to keep its rates at a record low.
California Real Estate Investing News is a post from: The Norris Group