Positive News for 2009

More than 750,000 homes received a foreclosure notice in the third quarter of 2008, up 71% from the third quarter of 2007, according to the RealtyTrac U.S. Foreclosure Market Report.

It's clear - with real estate in a downturn in most markets nationwide, the foreclosure marketplace appears to be one of the few growing areas in real estate.

But there are some other success stories out there. Despite recession, one top-ranked originator that closed between 900 and 1,000 mortgages in 2008 doubled his volume in December and foresees an additional 50% higher production this year. In addition, he estimated 70% of his new mortgage loans in December were to borrowers purchasing homes.

I spoke with Rodney Anderson, executive director and senior managing partner of Rodney Anderson Lending Services in Plano, Texas, who handles FHA and VA loans. He said based on the loans he originated in December 2008, new mortgage activity doubled when compared to loan activity from December 2007. For the latter year, he originated 1,100 loans. Mr. Anderson estimates that he closed a little over 300 loans in December of 2007 and around 600 in December of 2008. "And while many see this as a refinance book, it's important to note that a significant portion of those loans, roughly seven out of 10, were going to individuals out there who are buying homes and taking advantage of lower rates."

He told me expects his business to go up 50% or more in 2009 from the final numbers from 2008. In January alone, which he says is normally the worst month of the year, he predicts he will close 150 loans.

"But we will continue to see negative news out there because a lot of people are struggling," Mr. Anderson told me. "The market will see some stability in 2009 if builders get their inventory under control. They could continue to see trouble, though. Earnings for builders in the past quarter were so bad they have to rise up. The first six months will see tougher times but the second half will see some increase in numbers."

Mr. Anderson predicts that if interest rates continue to decline, the country will see an increase in purchases as well as refinance transactions. However, he cautions against any attempt to time the market."

"The proposal that is urging the U.S. Treasury Department to initiate rates as low as 4.5% -- that proposal is designed to impact purchase transactions, not refinances, and there's no guarantee that will come to fruition.

Going forward, more ARM borrowers will get into FHA and conventional loans, but foreclosures will continue to rise, because of rising unemployment numbers, he said. By the end of 2009, he believes there should be stability in values.