NAR Responds to Qualified Residential Mortgage Proposal

March 31, 2011 (Shirley Allen)

The National Association of Realtors (NAR) has weighed in with their response to the “Qualified Residential Mortgage (QRM)” requirements set forth in the risk retention proposal by federal regulators. NAR claims that the high down payment requirement will unnecessarily burden home buyers and significantly impede the economic and housing recovery.

Seven agencies of the federal government jointly released the risk retention proposal mandated in the Dodd-Frank Finance Reform Bill. A QRM is a home loan that would exempt a mortgage lender from a 5 percent retention in each home loan that it originates and is packaged for securitization. If all the loan qualifications meet or exceed the requirements of a QRM, the bank would no longer be required to retain the 5 percent share of the loan and would have no future risk if the borrower should default. One of the requirements for a loan to qualify as a QRM is a 20 percent down payment.

“As the leading advocate for home ownership, NAR supports a reasonable and affordable cash investment requirement coupled with quality credit standards, strong documentation and sound underwriting,” said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “A narrow definition of QRM, with an unnecessarily high down payment requirement, will increase the cost and reduce the availability of mortgage credit, significantly delaying a housing recovery.”

In its press release, NAR says that they believe it was Congress’ intent when passing the Dodd-Frank Finance Reform Bill that a broad QRM exemption from the 5 percent risk retention requirement was to include a wide variety of traditionally safe, well-underwritten products.

NAR is concerned that a narrowly defined QRM will force buyers to seek assistance through government backed entities like the Federal Housing Administration (FHA), which will subsequently require severe tightening of FHA eligibility requirements and higher FHA premiums in order to prevent huge increases in borrowers who would not qualify for a QRM.

Borrowers with less than 20 percent down would still be able to purchase a home, but they could be forced to seek mortgage loans that require higher fees and interest rates. Some industry analysts predict that non-QRM loans would have fees as high as three percentage points above a conforming QRM loan, which could possibly disqualify as many as one-third of all borrowers if implemented today.

“Saving the necessary down payment has always been the principal obstacle to buyers seeking to purchase their first home. Proposals requiring high down payments will only drive more borrowers to FHA, increase costs for borrowers by raising interest rates and fees, and effectively price many eligible borrowers out of the housing market,” said Phipps. “We strongly urge the regulators to consider the negative consequences of setting onerous limits on the availability of credit.”

The Mortgage Bankers Association also responded by stating, “Related to risk retention for residential mortgages and the qualified residential mortgage (QRM) exemption, we do have concerns about the rigid and highly prescriptive nature of the proposed rule. We believe that such a narrow construct of the risk retention exemption would limit mortgage opportunities for qualified borrowers more than it would reduce the number of problem loans. Further, if the QRM were to be enacted as proposed, it could dramatically limit the role of independent mortgage banks and community lenders, who either don’t have the balance sheet capacity to hold loans or the capital to hold in reserve as retained risk, but have long histories of originating safe and well-underwritten mortgages.”

At this time, while Freddie Mac and Fannie Mae are under government conservatorship, they will be exempt from the QRM requirement, as will FHA and VA loans, which altogether currently make up 87 percent of all mortgage loans originated. If implemented today, QRM would only apply to approximately 13 percent of all mortgage loans originated.

Tags: NAR, risk retention proposal, down payment requirement, Dodd-Frank, interest rate, fees, FHA, Freddie Mac, Fannie Mae, VA, mortgage credit, housing recovery, credit standards

Sources:
NAR
LoanRateUpdate
LoanRateUpdate
Saveforhouse (Image)

Foreclosure Shadow Inventory – Excess Inventory Expected to Remain High

March 31, 2011 (Shirley Allen)

CoreLogic released its Shadow Inventory Report for March 2011 which discloses that the current shadow inventory as of January 2011 declined to 1.8 million units, which is down slightly from the 2 million units that existed a year ago. Based on current sales projections however, the amount of units represents a nine months’ supply which is unchanged from a year ago.

Mark Fleming, chief economist for CoreLogic commented, “While the trend of the shadow inventory is improving somewhat, the current level and distressed months’ supply remain very high. The short-term weakness in prices and longer-term weakness in the drivers that affect the housing market imply that excess supply will remain high for an extended period of time.”

CoreLogic’s research suggests that although a portion of the shadow inventory would be excellent candidates for loan modifications and short sales, it would in all likelihood only be a small share of the total inventory.

The report states that of the current 1.8 million units in the shadow inventory, 870,000 units are seriously delinquent, 445,000 units are in some stage of foreclosure, and 470,000 units are already in REO.

CoreLogic predicts that nearly 2 million current negative equity loans that are more than 50 percent upside-down will eventually become part of the shadow supply in the near future.

The states with the most months’ supply of distressed properties where the ratio of 90 days or more of delinquent properties to the number of home sales are highest are New Jersey, Illinois, and Maryland. Corelogic says the driving force behind these states high ratio's is a combination of higher than average 90+ day delinquencies and lower sales activity.

The states with the lowest ratio of distressed months’ supply are North Dakota, Alaska and Wyoming, all of which the report points out, were states where the boom/bust did not occur.

For the first time in its Shadow Inventory Report, CoreLogic looked into how loan modifications and short sales could reduce shadow inventory levels. The researchers concluded loan modifications and short sales could potentially reduce the shadow inventory supply by one-half by utilizing account optimal treatment methods, based on net present value calculations as well as expected severity and re-default rates. However, they also felt that low borrower response rates to lender outreach and high modification re-default rates made that possibility unlikely.

CoreLogic is a leading provider of consumer, financial and property information, analytics and services to business and government. To read the full report, click here.

Tags: CoreLogic, shadow inventory, sales projections, distressed supply, excess supply, negative equity loans, delinquent properties, loan modifications, short sales

Sources:
CoreLogic
Siliconhomebroker (Image)

LendingTree Weekly Mortgage Rate Pulse: Mortgage Rates Back Up Slightly

March 31, 2011 (Shirley Allen)

According to the data collected on March 29, 2010, for LendingTree’s Weekly Mortgage Rate Pulse, average home loan rates offered by network lenders was 5.06 percent (5.27% APR) for 30-year fixed mortgages, which is up from 5.02 percent the previous week, 4.23 percent (4.56% APR) for 15-year fixed mortgages, which is up from 4.15 percent the previous week, and 3.70 percent (3.79% APR) for 5/1 adjustable rate mortgages (ARM), which was up from 3.63 percent the previous week.

The lowest mortgage rates offered on the same day by lenders on the LendingTree network was 4.75 percent (4.95% APR) for a 30-year fixed mortgage, which is up from 4.50 quoted the week before, 3.75 percent (3.99% APR) for a 15-year fixed mortgage, which is the same rate quoted as the previous week, and 3.125 percent (3.31% APR) for a 5/1 ARM, which was up from 3.00 percent quoted the week before.

"The definition of a qualified residential mortgage (QRM) announced yesterday is likely to make borrowing both more difficult and more expensive for consumers," said Cameron Findlay, LendingTree Chief Economist. "The proposed rule would mandate a 20 percent down payment; a standard that is sure to be a barrier given that in 2010 only 30% percent of first-time home buyers put down more than 10 percent. Rates are expected to move higher due to the forced injection of private label back into the market. All in all it adds up to a more challenging environment for borrowers in the coming year."

The LendingTree Weekly Mortgage Rate Pulse is a snapshot of the lowest and average home loan rates available within the LendingTree network of lenders and is compiled every Wednesday from data that is gathered from the previous day to reflect the most up to date information on current mortgage rates.

See how your state compares below by comparing mortgage data including a snapshot of the lowest 30-year fixed rates offered by lenders on the LendingTree network, average loan-to-value ratio and percentage of consumers with negative equity:

STATE-BY-STATE MORTGAGE DATA 3/29/11 *Updated Quarterly
STATE	LOWEST MORTGAGE RATE	LOAN-TO-VALUE RATIO*	% WITH NEGATIVE EQUITY*
US Average	4.75% (4.99% APR)	70.2%	35.0%
STATE	LOWEST MORTGAGE RATE	67.0%	28.9%
Alabama	4.63% (4.77% APR)	66.3%	17.3%
Alaska	4.75% (4.95% APR)	94.6%	39.4%
Arizona	4.63% (4.74% APR)	72.6%	43.9%
Arkansas	4.50% (4.62% APR)	70.6%	34.8%
California	4.63% (4.74% APR)	71.9%	22.2%
Colorado	4.75% (4.89% APR)	59.5%	43.3%
Connecticut	4.63% (4.74% APR)	67.6%	50.3%
Delaware	4.50% (4.61% APR) ­	58.3%	25.5%
District of Columbia	4.63% (4.86% APR)	90.8%	41.1%
Florida	4.63% (4.77% APR)	80.9%	25.8%
Georgia	4.63% (4.77% APR)	54.2%	25.4%
Hawaii	4.75% (4.95% APR)	73.4%	29.8%
Idaho	4.75% (4.89% APR)	72.4%	31.7%
Illinois	4.75% (4.88% APR)	69.4%	28.5%
Indiana	4.63% (4.81% APR)	66.7%	42.9%
Iowa	4.75% (4.95% APR)	70.5%	31.8%
Kansas	4.75% (4.95% APR)	67.6%	53.1%
Kentucky	4.63% (4.77% APR)	78.5%	75.5%
Louisiana	4.75% (4.95% APR)	58.6%	30.1%
Maine	4.63% (4.74% APR)	70.4%	25.6%
Maryland	4.63% (4.72% APR)	60.7%	46.0%
Massachusetts	4.75% (4.87% APR)	84.3%	32.2%
Michigan	4.63% (4.74% APR)	65.6%	22.2%
Minnesota	4.75% (4.88% APR)	78.4%	30.1%
Mississippi	4.75% (4.95% APR)	71.6%	31.0%
Missouri	4.63% (4.77% APR)	60.2%	33.4%
Montana	4.75% (4.95% APR)	72.3%	46.5%
Nebraska	4.75% (4.95% APR)	118.0%	55.3%
Nevada	4.75% (4.95% APR)	69.8%	25.2%
New Hampshire	4.75% (4.87% APR)	62.2%	29.0%
New Jersey	4.63% (4.72% APR)	66.4%	45.8%
New Mexico	4.75% (4.89% APR)	50.1%	42.1%
New York	4.75% (4.86% APR)	71.2%	33.2%
North Carolina	4.75% (4.95% APR)	60.1%	37.7%
North Dakota	4.75% (4.95% APR)	75.4%	27.0%
Ohio	4.63% (4.74% APR)	71.0%	52.4%
Oklahoma	4.63% (4.74% APR)	69.6%	19.6%
Oregon	4.75% (4.92% APR)	62.5%	75.7%
Pennsylvania	4.63% (4.72% APR)	62.6%	36.6%
Rhode Island	4.75% (4.95% APR)	71.0%	29.0%
South Carolina	4.75% (4.89% APR)	N/A	N/A
South Dakota	4.63% (4.74% APR)	71.2%	30.7%
Tennessee	4.63% (4.77% APR)	68.8%	30.6%
Texas	4.63% (4.74% APR)	73.7%	22.2%
Utah	4.75% (5.00% APR)	N/A	N/A
Vermont	4.75% (4.95% APR)	71.7%	25.0%
Virginia	4.63% (4.86% APR)	67.9%	21.4%
Washington	4.75% (4.91% APR)	67.0%	68.0%
West Virginia	4.75% (4.95% APR)	68.3%	35.6%
Wisconsin	4.75% (4.95% APR)	64.2%	23.0%

Home loan rates above are reflective of actual rates offered to borrowers by lenders on the LendingTree network. Lowest rates shown reflect the payment of one discount point. Rates will vary based on the borrower's loan details and credit profile.

More information is available here:

Tags: lendingtree, mortgage rates, mortgage loans, average home rates, 30 year fixed, 15 year fixed, 5/1 arm, adjustable rate mortgage, fixed mortgage, freddie mac, lenders

Sources:
LendingTree.com
PRNewswire

Mortgage Applications Decline Entering Home Buying Season

March 30, 2011 (Chris Moore)

The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending March 25, 2011. The Market Composite Index, a measure of mortgage loan application volume, decreased 7.5 percent on a seasonally adjusted basis from last week.

On an unadjusted basis, the Index decreased 7.2 percent compared with the previous week. The four week moving average for the seasonally adjusted Market Index is up 2.0 percent.

The seasonally adjusted Purchase Index decreased 1.7 percent from one week earlier. The four week moving average is up 2.1 percent for the seasonally adjusted Purchase Index. The unadjusted Purchase Index decreased 1.5 percent compared with the previous week and was 21.9 percent lower than the same week one year ago.

The Refinance Index decreased 10.1 percent from the previous week. The four week moving average is up 2.0 percent.

"Treasury and mortgage rates increased towards the end of last week, as global markets calmed following the recent crises in Japan and the Middle East. Refinance volume predictably fell in response to these rate increases. As rates climb back to 5 percent, fewer homeowners have both the incentive and the ability to refinance," said Michael Fratantoni, MBA's Vice President of Research and Economics. "Purchase volume remained roughly flat as we enter what is typically the peak homebuying season."

The refinance share of mortgage activity decreased to 66.3 percent of total applications from 66.4 last week.

The adjustable-rate mortgage (ARM) share of activity decreased to 5.7 percent from 5.9 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages increased to 4.92 percent from 4.80 percent last week, with points decreasing to 0.83 from 0.96 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 4.16 from 4.02 percent last week, with points increasing to 0.99 from 0.90 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

Tags: MBA, home purchase applications, mortgage rates, fixed rate mortgage, adjustable rate mortgage, refinance, interest rate

Sources:
Mortgage Bankers Association
Registowertalk.net (Image)

Mortgage Bankers Association Responds to Risk Retention Proposal

March 30, 2011 (Brian Michael)

Shortly after the release of the proposed risk retention proposal by the various federal agencies, the Mortgage Bankers Association (MBA) released a statement expressing their concerns about the proposal. Although pleased with some of the proposals, calling proposed rules for commercial real estate financing as “workable,” the MBA expressed concerns about the new rules proposed for Qualified Residential Mortgages (QRM).

The response was authored by John A. Courson, President and CEO of the Mortgage Bankers Association. His response to the proposed QRM rules was:

"Related to risk retention for residential mortgages and the qualified residential mortgage (QRM) exemption, we do have concerns about the rigid and highly prescriptive nature of the proposed rule. We believe that such a narrow construct of the risk retention exemption would limit mortgage opportunities for qualified borrowers more than it would reduce the number of problem loans. Further, if the QRM were to be enacted as proposed, it could dramatically limit the role of independent mortgage banks and community lenders, who either don't have the balance sheet capacity to hold loans or the capital to hold in reserve as retained risk, but have long histories of originating safe and well-underwritten mortgages.”

"While factors like downpayment, debt to income (DTI) ratio and past payment history can be accurate predictors of loan performance, we do not believe that each ought to be considered independently.”

"Rather, the rule should allow for consideration of a borrowers entire credit profile before determining whether risk retention is necessary on a given loan. For example, we believe that a lower downpayment loan could be less risky if a borrower has a strong history of making payments on time and if the borrower's debt to income ratio is on the lower end of the scale. The rule should provide more flexibility in this regard.”

"While we believe that the exemption for loans sold to Fannie Mae and Freddie Mac while they remain in conservatorship will help provide liquidity during the current period of market instability, we do note that such an exemption does little to shrink the government's footprint in the housing finance system and could slow the return of the private secondary mortgage market.”

You can read the full response on the Mortgage Bankers Associations website.

Tags: MBA, risk retention, QRM, residential mortgages, mortgage banks, down payments, debt-to-income, payment history, borrowers, credit profiles

Source:
Mortgagexplain.com (Image)

House Votes to Terminate HAMP

March 30, 2011 (Chris Moore)

The House of Representatives voted to terminate the Obama Administration’s flagship anti-foreclosure program, the Home Affordable Modification Program (HAMP), by a vote of 252-170. HR 839 had been pushed through by House Republicans who have criticized the program as wasteful and under-performing.

Under HAMP, more loan modifications have failed than have been successful. Out of 1,466,500 temporary modifications, more than 792,500 have failed, a failing rate of 54 percent. The program was originally intended to help 7 to 8 million homeowners (although later downsized to 3 to 4 million). The program has reached just over 600,000 permanent loan modifications.

HAMP was the last of four anti-foreclosure programs that were recently terminated in the House. However, the Senate is unlikely to even take up the bills and they would meet a certain veto if any of them made it to the President’s desk.

Rep. Patrick McHenry, R-N.C., the sponsor of the bill, criticized the program because of reports that those who enter the program end up being harmed more because they use up savings and damage credit ratings during months of waiting, and then are rejected for permanent reduced loans, at which time they are required to pay all back payments and fees which subsequently leads to foreclosure.

Democrats chastised Republicans for ending the program without offering an alternative with Rep. Keith Ellison, D-Minn. stating, "Rather than try to get the program right we abandon all those people who are underwater.”

Fifty Democrats wrote a letter to Treasury Secretary Tim Geithner on Monday urging him to act as quickly as possible to overhaul the program.

Republicans noted that the program had used less than $1 billion out of $30 billion that had been made available through TARP.

As the bill now moves to the Senate, Sen. Jim DeMint (R-SC) who is one of four Republican Senators that have introduced a similar bill in the Senate, has previously stated, “My office has heard from numerous South Carolina families who went to HAMP for help, but after months of false promises and mountains of paperwork they were left in worse financial shape. HAMP is just the latest failure of President Obama’s big government experiments. HAMP has not even reached ten percent of its intended goal of helping seven million American homeowners modify their loans, but it has succeeded in pushing hundreds of thousands of other Americans closer to foreclosure and personal bankruptcy.”

Tags: Republicans, Democrats, HAMP, mortgage programs, failures, loan modifications, government assistance programs, HR 839

Sources:
Darian News
LoanRateUpdate
Ifoodtv (Image)

Risk Retention Proposal Released

March 30, 2011 (Chris Moore)

Seven agencies of the federal government jointly released the risk retention proposal mandated in the Dodd-Frank Refinance Reform Bill. The 233 page report defines “Qualified Residential Mortgages (QRM)” and provides additional guidance on requirements for commercial real estate and automobile loans.

A QRM is a home loan that would exempt a mortgage lender from a 5 percent retention in each home loan that it originates and is packaged for securitization. If all the loan qualifications meet or exceed the requirements of a QRM, the bank would no longer be required to retain the 5 percent share of the loan and would have no future risk if the borrower should default.

Here’s a brief summary from the report that details what qualifies as a QRM:

- A QRM must be secured by a first lien mortgage only, cannot exceed 30 years and must be a one-to-four family property.
- The proposed rule prohibits the use of a junior lien in conjunction with a QRM to purchase home.
- A mortgage loan could qualify as a QRM only if the borrower was not currently 30 or more days past due, in whole or in part, on any debt obligation, and the borrower had not been 60 or more days past due, in whole or in part, on any debt obligation within the preceding 24 months. Further, a borrower must not have, within the preceding 36 months, been a debtor in a bankruptcy proceeding, had property repossessed or foreclosed upon, engaged in a short sale or deed-in-lieu of foreclosure, or been subject to a Federal or State judgment for collection of any unpaid debt.
- The proposed rules would prohibit QRMs from having, among other features, payment terms that allow interest-only payments or negative amortization. Borrowers would be prohibited from deferring interest or repayment of principal. “Balloon” payment loans would also be prohibited.
- Both fixed rate and adjustable rate mortgages may qualify (ARM) as a QRM, however an ARMs interest rates would be restricted to no more than a two percent increase in any twelve month period and six percent for the life of the loan.
- Creditors who offer a loan with a prepayment penalty would also have to offer a loan without a prepayment penalty.
- Points and fees for a QRM may not exceed three percent of the total loan amount.
- 20 percent down payment requirement. There are various rules based upon the appraised value of the home…too many to list, but they can found on page 80.
- Debt ratio cannot exceed 28 percent for the house payment and 36 percent for total obligations.
- A QRM could not be assumable by any person who was not a borrower under the original mortgage transaction.

The proposal also sets forth policies in regards to mortgage servicers responsibility in the event of a default.

If you’d like to read the whole proposal (I know you’re all just dying to) you can view it here.

Tags: risk retention proposal, QRM, Dodd-Frank, home loans, mortgage lenders, five percent retention, qualified residential mortgages

Bank of America Prepares Mortgage Write Downs in California

March 29, 2011 (Brian Michael)

Bank of America has announced that they will begin soliciting homeowners who are eligible for mortgage prinicipal write downs as part of the Treasury Department’s Hardest Hit Fund being implemented through the California Housing Finance Agency (CalHFA).

The state has received almost $700 million in funds as part of the Obama Administrations Hardest Hit Fund which provides additional funds for anti-foreclosure programs in the states that have been hardest by the current economic downturn.

As part of that program, Bank of America is beginning a pilot program allowing some California homeowners the opportunity to receive mortgage principal write downs.

A spokesperson for CalHFA said that there is no set funding limit at this time for the amount of loans that Bank of America is targeting “unless they blow us out of the water.”

"We're really excited to get the program going," the CalHFA spokesperson said.

CalHFA is in talks with other mortgage lenders and mortgage servicers and reports that they have also recruited Ally Financial and Guild Mortgage Company to participate in the mortgage principal write down program.

Bank of America announced at the beginning of March that it was ready to launch a similar program in Arizona and that they were finalizing plans with the state of Nevada to provide a mortgage principal reduction program there too. The state of Arizona hoped to be able to provide assistance for up to 8,000 homeowners.

“Since the Obama administration established the Hardest Hit Fund initiative one year ago, Bank of America has worked closely with both the Department of Treasury and state housing agencies to design and implement the program to provide interim payment assistance to unemployed borrowers, as well as funding for loan modification assistance to delinquent borrowers,” said Terry Laughlin, head of Bank of America’s Legacy Asset Servicing.

Tags: Bank of America, Hardest Hit Fund, CalHFA, anti-foreclosure programs, economic downturn, mortgage principal write downs, loan modification

Is $21K “Cash for Keys” Proposal the Worst Idea Ever?

March 29, 2011 (Chris Moore)

Last week Federal Deposit Insurance Corporation (FDIC) Chairperson Sheila Bair proposed a “Cash for Keys” program as an option that would allow 90-day plus delinquent homeowners to be paid $21,000 to move out of their homes. With visions swirling in my head of millions of current homeowners taking such an offer and those millions of homes then being dumped on the real estate market, you could probably hear my jaw hit the ground all the way to New York. Apparently, I’m not the only one.

According to Rep. Spencer Bachus (R-Ala.), chairman of the House Financial Services Committee, "This proposal is simply outrageous and the worst bailout idea dreamed up so far.”

Apparently the proposal came up as one of many proposals being considered during a meeting between the many parties involved in the foreclosure settlement proposal by the 50 state attorneys general and federal regulators that the FDIC participated in.

Traditionally, cash for key programs involve much smaller offers, usually in the neighborhood of $1000, that are made to borrower to vacate their property within a defined time frame. The money is generally used to provide help for moving expenses.

Bair, like many officials, has been interested in different options for solving the foreclosure crisis. So far there has yet to be any meaningful negotiations between the banks and the parties who proposed the foreclosure settlement, but cracks in the ranks among some of the state attorneys general and some government regulators are starting to appear.

Last week, four state attorneys general sent a letter to Iowa Attorney General Tom Miller, who is leading the investigation, expressing their fears and reservations about the proposal. House Republicans, meanwhile, have also vocally expressed their displeasure with the proposal and the Office of the Comptroller has indicated it is not supportive of the 27 page settlement.

Acting Comptroller John Walsh reportedly wants to draft an agreement of its own because he believes the terms of the original proposal are too harsh.

The proposal was given to the mortgage servicers with the hope that any negotiations and revisions would lead to a final draft in two months. With nearly half of that time already passed and negotiations yet to take place, plus the deep divisions starting to surface between many of the parties, a quick solution is probably not in the cards.

Tags: FDIC, Sheila Bair, cash for keys, Spencer Bachus, foreclosure settlement, mortgage servicers, options, negotiations, revisions, Office of the Comptroller

LPS: Huge Backlog of Foreclosures, Option ARM Foreclosures Skyrocket

March 29, 2011 (Brian Michael)

Lender Processing Services (LPS) released its February Mortgage Monitor Report revealing that a huge backlog of foreclosures continues to exist despite a continued decline in delinquencies. The data also shows a 23 percent increase in Option ARM foreclosures over the last six months, far higher than any other product type.

The report cites three primary reasons for the enormous backlog in foreclosures:

- There are three times the number of loans deteriorating greater than 90+ days delinquent as compared to foreclosure starts;
- There are three times the number of foreclosure starts vs. foreclosure sales;
- Foreclosure inventory levels are over 30 times monthly foreclosure sale volume.

Option ARM foreclosures accounted for 18.8 percent of all foreclosures, a level the report notes, that was higher than sub-prime loans ever reached.

In addition, deterioration continues in the Non-Agency Prime segment. Both Jumbo and Conforming Non-Agency Prime loans showed increases in foreclosures and were the only product areas with increases in delinquencies.

LPS’ data also showed 22 percent of loans that were 90+ days delinquent 12 months ago are now current, which they attributed to banks’ loan modification efforts.

However, foreclosure timelines continued to be extended as the average foreclosure now has been delinquent for a record 537 days and a 30 percent of loans in foreclosure have not made a payment in two years.

Foreclosure inventories continue to grow as foreclosure starts decline and foreclosure suspensions, due to self-imposed moratoriums by mortgage servicers caused by paperwork scandals, slows the amount of foreclosures to market.

2010 originations peaked in Q4 2010, with government loans making up almost 87 percent of all originated loans. Prepayment rates (an indicator of refinance activity) have dropped sharply since, indicating that this is unlikely to continue into 2011.

Tags: LPS, Mortgage Monitor Report, foreclosure backlog, deteriorating loans, ARM foreclosures, sub-prime loans, delinquencies, loan modifications, foreclosure timelines

Freddie Mac Reports Drop in Single-Family Delinquencies in February

March 28, 2011 (Shirley Allen)

Government backed mortgage giant Freddie Mac reports the seriously delinquent rate, mortgages that are 90 days or more delinquent or in foreclosure, of single family homes fell to 3.78 percent in February, while the multifamily delinquency rate, mortgages that are 60 days or more delinquent or in foreclosure, increased to 0.36 percent.

February’s single family home delinquency rate is down from 3.82 percent in January and down from 4.20 percent in February 2010. Multifamily delinquencies in February are up from 0.28 percent in January and up from 0.23 percent from a year earlier.

The February Monthly Summary Report also revealed that so far this year, Freddie Mac has completed 23,017 loan modifications for the first two months of the year. February’s loan modifications totaled 11,885, while January’s total was 11,153 loan modifications completed.

Also in February, single-family, refinance-loan purchase and guarantee volume hit $31.4 billion, representing 81% of total mortgage purchases and issuances. That compares to last month when the single-family refinance-loan purchase and guarantee volume was $32.4 billion or 83% of total loan volume.

The aggregate unpaid balance on all of Freddie Mac’s mortgage-related portfolios increased by $1.3 billion, while total mortgage-related securities and other guarantee commitments decreased at an annualized rate of 1.7% in February. The total mortgage portfolio increased at an annualized rate of 0.1 percent in February.

Tags: Freddie Mac, monthly summary report, delinquency rate, single-family homes, multi-family, loan modifications, refinance-loan purchases, mortgage portfolio

Winans International: Index Posts New Price Low

March 28, 2011 (Chris Moore)

The Winans International Real Estate Index (WIREI)™ reports that new home prices have declined 24% from their high in 2007 to a new low of $224,050, the worse price decline since the Depression. This eclipses the indices previous record low in October, 2010, of $229,300.

The all time high for the Index was in March of 2007 when the index reported new home prices averaged $296,000, a 110 year peak.

"This marks the worst price decline in U.S. new home prices since the 33% decline from December 1939 to December 1945. Clearly, residential real estate prices nationwide continue to be weak, and I doubt there will be sustained U.S. economic recovery without a rebound in housing values," said Ken Winans, President of Winans International Investment Management & Research.

Winans had stated at the end of January, "Even with low mortgage rates, a nationwide recovery in housing will probably not happen in 2011. Past real estate bear markets ended when new housing inventory was below 5 months, and the median length of time to sell a new house declined to 4 months. It could easily take another year to dry up excess inventory and for mortgage credit to ease.”

The Winans International Real Estate Index (WIREI)™ is the only index that measures U.S. home prices from 1830 to present and posts new housing data without a 2-month lag found with other popular real estate indexes.

More information on the Winans International Real Estate Index can be found at www.winansintl.com. WIREI charts and data can be purchased from www.globalfinancialdata.com and www.srcstockcharts.com

Tags: WIREI, new home prices, worse price decline, Depression, economic recovery, mortgage rates, bear market, housing inventory

Congressional Oversight Committee: TARP Shortchanged Homeowners

March 25, 2011 (Chris Moore)

In one of its last reports issued before its demise, the Congressional Oversight Committee (COC) faulted the Troubled Asset Relief Program (TARP) for failing to spend enough money to curb foreclosures. TARP was launched by the Bush Administration in response to the 2008 financial crisis, but was also to include aid to help struggling homeowners.

In the report, COC credited TARP for providing critical support at a time of profound uncertainty citing the restructuring of insurer American International Group Inc. (AIG) and providing aid to the ailing automakers as examples of the programs success.

However, Sen. Ted Kaufman, chair of the COC commented that in his opinion, more money was spent on bailing out Wall Street and too little was left in aid to ailing homeowners.

"One of my major concerns is that there was a heck of a lot more attention paid to Wall Street than there was to Main Street," said Kaufman.

The original forecast for the federal bailout of the U.S. financial system was expected to cost as much as $700 billion. TARP was created to facilitate the dispersal of the funds. The Treasury Department originally allocated almost $46 billion for three major housing programs to help distressed homeowners, but according to the panel, only about $1 billion in TARP funds has been spent on government anti-foreclosure programs.

The lack of success of these programs has led House Republicans to terminate all of the Obama Administrations anti-foreclosure programs except for the Home Affordable Modification Program (HAMP), which is expected to be voted on next week.

Despite the fact that the Obama Administration has threatened to veto any such bills and the Senate has declared they will not take up any of the anti-foreclosure bills, Republicans continue to press on and at the very least are sending a very strong message.

At the time TARP was enacted, it was impossible to know exactly how much the program would ultimately cost. TARP is now expected to cost the taxpayers about $25 billion after all the paybacks which makes the $1 billion used to aid the ailing homeowners seem pretty insignificant compared to the $699 billion used to bailout Wall Street.

Kind of makes you wonder who our government works for.

Tags: Congressional Oversight Committee, TARP, HAMP, ailing homeowners, Wall Street, Main Street, Treasury Department, House Republicans

Fannie Mae Help Center Celebrates 1,000 Helped in First Year

March 25, 2011 (Shirley Allen)

Fannie Mae is celebrating the one year anniversary at its South Florida Help Center that has helped over 1,000 struggling families since its opening. Fannie Mae partners with the Neighborhood Housing Services of South Florida (NHSSF) and was the first of six help centers that Fannie Mae opened in hard-hit cities across the country.

Since the help center opened in March 2010, Fannie Mae and NHSSF have reached out to over 5,000 South Floridians, meeting one-on-one with highly trained mortgage specialists to discuss their mortgage situations. Utilizing experienced housing advisors who speak English, Spanish, and Creole, customers are guided through the broad range of foreclosure prevention options available, working closely with mortgage servicers to ensure efficient response times.

"Our top priority is to ensure that struggling homeowners have access to the help they need. More than 60 percent of customers who have worked with our advisors at the South Florida Mortgage Help Center have been able to remain in their homes and avoid foreclosure," said Jeff Hayward, Senior Vice President, National Servicing Organization, Fannie Mae. "The Mortgage Help Centers are an essential component of our goal to bring stability to the housing market and minimize the negative impact foreclosure has on families and communities."

Of the 1,000 struggling families that Fannie Mae has helped, sixty-four percent received a retention solution that allowed them to remain in their homes. Solutions have included mortgage modifications, forbearances, and repayment plans, with a staff that has been able to process the mortgage and communicate an outcome on average, in 30 days.

Services available at the center include reviewing mortgage loans with families who are behind on their mortgage or may be at-risk of foreclosure, discussing loan modification and other alternatives to foreclosure, processing their documentation and making timely decisions on any pending loan workout efforts.

The center can also assist you if you’ve been a victim of fraud by fraudulent groups charging fees for modifications and foreclosure related services, and other mortgage related scams.

The services from the help center are free for families who have mortgages owned by Fannie Mae. Find out if your home is owned by Fannie Mae by going to www.fanniemae.com/loanlookup or call 1-800-7FANNIE. Services are provided by appointment only which can be scheduled by calling 1-877-208-3652

If your loan is not owned by Fannie Mae, contact NHSSF at 1-305-751-5511 for assistance and advice to avoid foreclosure.

Tags: Fannie Mae, NHSSF, South Florida, Mortgage help centers, mortgage servicers, mortgage modifications, repayment plans, mortgage loans, foreclosure, fraud

Wells Fargo Home Preservation Workshop Coming to Phoenix

March 25, 2011 (Brian Michael)

Wells Fargo is holding another Home Preservation Workshop in Phoenix on March 30 and 31, 2011. The event is being held at the Phoenix Convention Center and will be open from 9:00 a.m. until 7:00 p.m. each day. You still have until March 28 to register for the event.

You can register online at www.wfhmevents.com/leadingthewayhome or call 1-800-405-8067. If you can’t make the event but would like more information on your options if you’re having difficulty making your mortgage payments, call 1-800-678-7986.

The address for this event is:

Phoenix Convention Center
West Building, Hall 1
100 North 3rd Street
Phoenix, AZ 85044

The last Home Preservation Workshop Wells Fargo conducted in Phoenix was in 2009, which resulted in the bank meeting with nearly 2,000 Arizona customers.

“Wells Fargo wants our customers to succeed financially, and helping them stay in their homes is a top priority,” said the lender’s Arizona regional president, Pamela Conboy. “This workshop will offer homeowners who are facing payment challenges the opportunity to meet face to face with a representative to help find options available for them.”

To prepare for your discussion with a Wells Fargo mortgage representative, please bring the following materials with you to the Home Preservation Workshop:

- Most recently filed and signed federal tax return with all schedules, including Schedule E-Supplemental Income and Loss
- Most recent statement for every savings, Money Market, CD, bond, stock IRA, and 401 (k) account
- Most recent statement for every credit card or department store card, auto loan or student loan, and other mortgages or liens

For each salaried borrower:

- Recent pay stubs covering a period of one month
- Most recent W-2s

For each self-employed borrower:

- Most recent quarterly or year-to-date profit/loss statement
- Recent bank statements covering a period of 90 days

For each borrower with income such as Social Security, disability or death benefits, pension, adoption assistance, public assistance, or unemployment:

- Benefits statement or letter from provider stating amount, frequency, and duration of the benefit
- Two most recent bank statements showing receipt of the benefit payments

For each borrower relying on alimony or child support as qualifying income*:

- Divorce or other court decree, or separation agreement or other written agreement filed with the court, stating the amount of the payments and the period of time they will be received
- Two most recent bank statements showing receipt of the payments

For borrowers relying on rental income:

- Lease agreements

The next Home Preservation Workshop will be at the Hyatt Regency Dearborn-Detroit in Detroit, Michigan, on April 19 and 20. Registration is now available until April 15.

Tags: Wells Fargo, Home Preservation Workshop, Phoenix, mortgage help, homeowners, payment challenges, options

GOP Introduces Bill Targeting GSE Overhaul

March 24, 2011 (Brian Michael)

House Republican Jeb Hensarling of Texas has introduced the first bill to scale back Fannie Mae and Freddie Mac and privatize the government-sponsored enterprises within the next five years. The bill calls for eliminating the government’s role in the two mortgage giants and the mortgage market. It also calls for the maximum size of loans across the country backed by Fannie and Freddie to drop to $417,000, which now currently range from $417,000 and up to $729,750 in higher priced markets.

"What we're trying to do is have a market-based system that doesn't put people into homes that ultimately they can't keep," or require taxpayers to do pricey bailouts, Hensarling says.

The legislation comes on the heels of the Obama Administration’s “white paper” report last month outlining the administrations plan to phase out the GSE’s. The Obama plan did not have a definitive route to take, but instead proposed three possible options.

The first option, which is similar to Hensarling's bill, would provide no loan guarantees to protect mortgage investors beyond those made by existing agencies such as the Federal Housing Administration.

The second option would create some type of government backstop that would kick in only during market emergencies.

The third option would create new federal loan guarantees to replace some of the roles played by Fannie and Freddie. Many Democrats, and some Republicans, have indicated their preference for such a model.

The bill coincides with the Republican beliefs that a piecemeal approach of proposing individual bills could offer more opportunities for cooperation with the White House.

Some government officials have commented that it may take up to two years before the decision on Freddie Mac and Fannie Mae are resolved, however, GOP lawmakers have expressed concern that the urgency for overhaul will dim as the housing market settles out.

If Fannie and Freddie become profitable by 2013, any changes to the companies are "going to morph more and more in the direction of saving the current system," said Laurie Goodman, senior managing director at Amherst Securities Group LP.

As with the GOP’s other legislation pertaining to phasing the federal government’s anti-foreclosure programs, the Hensarling bill isn’t expected to go far according to industry experts. Even if it does pass the GOP-led House, analysts say it’s unlikely the Democratic-led Senate will take up the bill.

Tags: GOP, Fannie Mae, Freddie Mac, privatization, Hensarling, maximum loan size, white paper report, pricey bailouts, no loan guarantees, overhaul

More State AGs Speak Out Against Proposed Foreclosure Settlement

March 24, 2011 (Chris Moore)

Last week we reported that Virginia Attorney General Kenneth Cuccinelli stated that his state was among “at least a dozen” that doesn’t back the Obama Administration’s proposed foreclosure settlement, now three more Republican Attorneys General have come forward and joined Cuccinelli expressing their displeasure with parts of the plan that they feel are too consumer friendly and could lead to more strategic defaults.

Florida Attorney General Pam Bondi, Texas Attorney General Greg Abbott, South Carolina Attorney General Alan Wilson, and Cuccinelli have sent a letter to Iowa Attorney General Tom Miller, who is leading the investigation, expressing their fears that homeowners would strategically default on their mortgages in order to take advantage of the consumer-friendly terms and that Miller and other participants in the proposal may be overstepping their bounds.

"Because of the term sheet’s vague principal reduction standards, some homeowners may simply default on their loan and use the States’ agreement to obtain a principal reduction— whether or not they actually made an effort to maintain their mortgage," according to the letter.

The proposal, sent to the large mortgage servicers in early March, is considered to be a draft from which both parties can begin negotiating. It outlines new requirements that servicers must follow in order to complete the foreclosure process on a property such as, an end to pursuing a foreclosure while a borrower is being evaluated for a loan modification and a buyer workout, such as considering a principal reduction, would be mandatory.

Also servicers would be required to provide one contact point for the entire foreclosure process and a decision on a modification must be made within 30 days of receiving documentation.

Although in the letter the Attorneys General agreed with many of the terms of the proposal, they felt that some of the terms should be scaled back and that modification proposals would not remedy the violations that the mortgage servicers made.

"In our view, the fifty-state working group has a unique opportunity to address the mortgage servicers’ legal and financial malfeasance on a national scale—but we are concerned that expanding beyond the scope of our already expansive charge may ultimately undermine the effectiveness of our law enforcement efforts," the Attorneys General wrote in the letter.

Tags: foreclosure settlement, Republican Attorneys General, strategic defaults, loan modification, mortgage modification, mortgage servicers, Tom Miller

New Single Family Home Sales Plummet, Well Maybe

March 24, 2011 (Chris Moore)

Sales of new single family homes plummeted by 16.9 percent in February, compared to January, to a seasonally adjusted annual rate of 250,000 according to estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). However, there is a huge asterisk next to that data as the estimate could be off by as much as 19.1 percent.

The drop in sales compares to a revised rate of 301,000 in January and is 28 percent lower than February 2010 which was at a rate of 347,000.

The Census Bureau figures are survey estimates subject to large sampling errors. Monthly estimates are almost always revised. With a margin of error of 19 percent, the actual figure could be anywhere from 202,000 to 298,000, however, they do provide a rough estimate of how things are trending. For example, January’s new home sales was originally estimated at 284,000, but was later revised to 301,000. Compare that to February 2010’s figures, and one can assert that there has been a definite decline in new home sales.

The median sales price of a new home sold in February was $202,100, while the average sales price was $246,000.

The report calculates that based upon the seasonally adjusted estimate of 186,000 new homes for sale at the end of February, that there is an 8.9 month supply of homes on the market.

By region, the Northeast reported 15,000 new home sales, the Midwest reported 29,000 sales, the South reported 148,000 sales, and the West reported 58,000 new home sales.

Tags: single family home sales, census bureau, HUD, median sales price, average sales price

LendingTree Weekly Mortgage Rate Pulse: Slow Economy a Drag on Housing

March 23, 2011 (Shirley Allen)

According to the data collected on March 22, 2010, for LendingTree’s Weekly Mortgage Rate Pulse, average home loan rates offered by network lenders was 5.02 percent (5.22% APR) for 30-year fixed mortgages, which is down from 5.08 percent from the previous report, 4.15 percent (4.46% APR) for 15-year fixed mortgages, which is down from 4.29 percent from the previous report, and 3.63 percent (3.78% APR) for 5/1 adjustable rate mortgages (ARM), which was down from 3.83 percent from the previous report.

The lowest mortgage rates offered on the same day by lenders on the LendingTree network was 4.50 percent (4.70% APR) for a 30-year fixed mortgage, which is down from 4.75 quoted from the previous report, 3.75 percent (3.99% APR) for a 15-year fixed mortgage, which is down from 3.875 percent quoted on the previous report, and 3.00 percent (3.26% APR) for a 5/1 ARM, which was down from 3.25 percent quoted on the previous report.

"Declines in existing and new home sales announced this week indicate that the housing market is still in intensive care," said Cameron Findlay, LendingTree Chief Economist. "Low mortgage rates are offering some relief but home sales volume, home prices and unemployment are a continued drag on housing's recovery. The latest data on average loan-to-value ratio by state and percent of homeowners with negative equity (reflected in the chart below) highlights the concern that there is no panacea to the economy's ailments."

The LendingTree Weekly Mortgage Rate Pulse is a snapshot of the lowest and average home loan rates available within the LendingTree network of lenders and is compiled every Wednesday from data that is gathered from the previous day to reflect the most up to date information on current mortgage rates.

See how your state compares below by comparing mortgage data including a snapshot of the lowest 30-year fixed rates offered by lenders on the LendingTree network, average loan-to-value ratio and percentage of consumers with negative equity:

STATE-BY-STATE MORTGAGE DATA 3/23/11 *Updated Quarterly
STATE	LOWEST MORTGAGE RATE	LOAN-TO-VALUE RATIO*	% WITH NEGATIVE EQUITY*
US Average	4.50% (4.70% APR)	70.2%	35.0%
Alabama	4.50% (4.62% APR)	67.0%	28.9%
Alaska	4.63% (4.82% APR)	66.3%	17.3%
Arizona	4.50% (4.62% APR)	94.6%	39.4%
Arkansas	4.50% (4.62% APR)	72.6%	43.9%
California	4.50% (4.62% APR)	70.6%	34.8%
Colorado	4.63% (4.76% APR)	71.9%	22.2%
Connecticut	4.50% (4.62% APR)	59.5%	43.3%
Delaware	4.50% (4.61% APR)	67.6%	50.3%
District of Columbia	4.50% (4.74% APR)	58.3%	25.5%
Florida	4.50% (4.59% APR)	90.8%	41.1%
Georgia	4.50% (4.70% APR)	80.9%	25.8%
Hawaii	4.63% (4.82% APR)	54.2%	25.4%
Idaho	4.63% (4.76% APR)	73.4%	29.8%
Illinois	4.75% (4.89% APR)	72.4%	31.7%
Indiana	4.63% (4.76% APR)	69.4%	28.5%
Iowa	4.63% (4.82% APR)	66.7%	42.9%
Kansas	4.63% (4.82% APR)	70.5%	31.8%
Kentucky	4.50% (4.65% APR)	67.6%	53.1%
Louisiana	4.50% (4.70% APR)	78.5%	75.5%
Maine	4.50% (4.62% APR)	58.6%	30.1%
Maryland	4.50% (4.74% APR)	70.4%	25.6%
Massachusetts	4.63% (4.75% APR)	60.7%	46.0%
Michigan	4.50% (4.62% APR)	84.3%	32.2%
Minnesota	4.50% (4.61% APR)	65.6%	22.2%
Mississippi	4.63% (4.82% APR)	78.4%	30.1%
Missouri	4.50% (4.62% APR)	71.6%	31.0%
Montana	4.63% (4.82% APR)	60.2%	33.4%
Nebraska	4.63% (4.82% APR)	72.3%	46.5%
Nevada	4.63% (4.82% APR)	118.0%	55.3%
New Hampshire	4.50% (4.70% APR)	69.8%	25.2%
New Jersey	4.50% (4.61% APR)	62.2%	29.0%
New Mexico	4.63% (4.78% APR)	66.4%	45.8%
New York	4.63% (4.73% APR)	50.1%	42.1%
North Carolina	4.50% (4.70% APR)	71.2%	33.2%
North Dakota	4.63% (4.82% APR)	60.1%	37.7%
Ohio	4.50% (4.62% APR)	75.4%	27.0%
Oklahoma	4.50% (4.62% APR)	71.0%	52.4%
Oregon	4.63% (4.79% APR)	69.6%	19.6%
Pennsylvania	4.50% (4.61% APR)	62.5%	75.7%
Rhode Island	4.63% (4.82% APR)	62.6%	36.6%
South Carolina	4.50% (4.62% APR)	71.0%	29.0%
South Dakota	4.50% (4.62% APR)	N/A	N/A
Tennessee	4.50% (4.70% APR)	71.2%	30.7%
Texas	4.50% (4.62% APR)	68.8%	30.6%
Utah	4.63% (4.87% APR)	73.7%	22.2%
Vermont	4.50% (4.70% APR)	N/A	N/A
Virginia	4.50% (4.61% APR)	71.7%	25.0%
Washington	4.63% (4.73% APR)	67.9%	21.4%
West Virginia	4.63% (4.82% APR)	67.0%	68.0%
Wisconsin	4.63% (4.82% APR)	68.3%	35.6%
Wyoming	4.63% (4.76% APR)	64.2%	23.0%

Home loan rates above are reflective of actual rates offered to borrowers by lenders on the LendingTree network. Lowest rates shown reflect the payment of one discount point. Rates will vary based on the borrower's loan details and credit profile.

More information is available here:

Tags: lendingtree, mortgage rates, mortgage loans, average home rates, 30 year fixed, 15 year fixed, 5/1 arm, adjustable rate mortgage, fixed mortgage, lenders

Mortgage Applications Up Slightly, Mortgage Rates Stable

March 23, 2011 (Chris Moore)

The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending March 18, 2011. The Market Composite Index, a measure of mortgage loan application volume, increased 2.7 percent on a seasonally adjusted basis from last week.

On an unadjusted basis, the Index increased 2.8 percent compared with the previous week. The four week moving average for the seasonally adjusted Market Index is up 2.5 percent.

The seasonally adjusted Purchase Index increased 2.7 percent from one week earlier. The four week moving average is up 1.0 percent for the seasonally adjusted Purchase Index. The unadjusted Purchase Index increased 3.0 percent compared with the previous week and was 15.3 percent lower than the same week one year ago.

The Refinance Index increased 2.7 percent from the previous week. The four week moving average is up 3.3 percent.

The refinance share of mortgage activity remained the same as last week at 66.4 percent of total applications.

The adjustable-rate mortgage (ARM) share of activity increased to 5.9 percent from 5.6 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages increased to 4.80 percent from 4.79 percent last week, with points decreasing to 0.96 from 1.07 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.02 from 4.03 percent last week, with points increasing to 0.90 from 0.85 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

Tags: MBA, home purchase applications, mortgage rates, fixed rate mortgage, adjustable rate mortgage, refinance, interest rate

Less Than Half of Homeowners Expect Value to Go Up in Five Years

March 23, 2011 (Shirley Allen)

The onslaught of bad economic news has apparently affected homeowners moods as pessimism about the recovery of home values in the short term has grown, as less than half of the nations homeowners now expect the value of their homes to go up in the next five years, according to a recent poll by Rasmussen Reports.

In a survey of 720 homeowners conducted on March 15-16, fifty-three percent of the homeowners say that their home is worth more than they still owe on it, which is up from 51 percent last month, the lowest finding since May 2009

But 31 percent believe they owe more than their home is worth, with another 16 percent not sure. Since April 2009, the number that say they owe more than their home is worth has ranged from 28 to 36 percent, while those who thought their homes were worth more than they owe has ranged from 49 to 61 percent.

The number of homeowners who said they were unlikely to miss or be late on a payment was 84 percent; while 13 percent said they think they are at least likely to miss or be late on a mortgage payment over the next six months. This was consistent with findings for well over a year.

Nine percent of the homeowners say they have missed or been late on a mortgage payment in the previous six months, eighty-eight percent had not.

Sixty four percent believed that if you couldn’t afford increased mortgage payments that you should sell your house and find a less expensive, while 22 percent say that the government should provide assistance instead of having to sell your house.

Homeowners who made more than $75,000 per year were more opposed to government assistance for troubled homeowners. Women were more supportive of government assistance programs than men and unmarried Americans favored government help more than those who were married.

There’s even more, if you’d like to read it, click here.

Tags: Rasmussen Reports, economic pessimism, home values, homeowners, miss a mortgage payment, increased mortgage payment, government assistance

Arizona’s Novel Proposal to Help Underwater Homeowners

March 23, 2011 (Chris Moore)

Legislation backed by Scottsdale Republican Sen. Michelle Reagan proposes to allow homeowners who have underwater mortgages to bypass banks and use private investors to refinance their mortgages allowing investors to benefit by earning interest paid by reliable borrowers, while homeowners benefit by lowering their monthly payments and possibly lowering their interest rates.

The legislation has passed the Senate and has been assigned to be heard in the House Commerce Committee, but that hearing is not yet scheduled.

The bill has several roadblocks that would need to be overcome and isn’t without risk. The program is meant to be short term, five to ten years, and works on the premise that prices would rebound by then so the homeowner can refinance their balances through traditional mortgage companies to pay off the investor at the end of the agreement.

It would require changes to current Arizona real estate laws and property records and would require the cooperation of the borrower’s bank. Typically, a homeowner is allowed to pay off the balance of a loan at any time. But, in this case, the homeowner is not the one paying off the loan. A third-party investor provides the cash and then that investor, not the bank, profits off the borrower's payments.

In essence, the banks would have to agree to give up their future profits to OK the deals.

"The legislation sounds similar to how people bid on tax liens in Arizona, but the bill is very vague and hard to figure out," said Jay Butler, director of realty studies at Arizona State University. "Also, who says lenders are going to agree to it?"

Here are the overall basics of the program:

- Arizona homeowners would qualify if they were current on their mortgage payments but owed more than their houses were worth.

- Qualifying homeowners would enter a marketplace managed by a state agency that has not yet been designated. They would publicly post the monthly payment they were willing to make - typically a payment lower than their current bill and equivalent to their current mortgage but with an interest rate of 2 to 5 percent.

- Investors would evaluate those mortgage requests and then bid on the loans they wanted to buy.

- When investors and borrowers were matched up, the investors would pay off the homeowners' old loans. Homeowners then could make payments, at a lower interest rate, to the investors. Investors would make 2 to 5 percent interest, which Reagan noted is more than they can currently earn by saving cash in a bank.

- Borrowers would have to sign away their "anti-deficiency" rights. Laws in Arizona say banks in most cases cannot pursue homeowners to recoup any losses after foreclosing on a home. Waiving anti-deficiency rights is meant to reassure investors that borrowers wouldn't abandon their homes without repaying.

- Investors would receive a home certificate giving them lender rights to the house as collateral for the short-term loan. Each month, 3 percent of a homeowner's payment would go into an insurance fund that would help cover potential losses for investors. The fund would be managed by a government agency.

Other questions remain: Would enough investors be willing to participate in the program, given that the homes are worth less than the value of the loans? Would homeowners who have signed over their anti-deficiency rights but who later lose their jobs and their homes end up also being sued by investors?

Arizona banking lobbyist Wendy Briggs said the banking industry is "neutral" on the legislation.

Reagan says, “It's a private program that is based on free-market principles.”

And unlike federal anti-foreclosure programs currently in use or being proposed, this one doesn’t require a taxpayer bailout.

What a novel idea.

Tags: Arizona, underwater mortgages, home certificate, investors, mortgage companies, refinance, real estate laws, lender rights, anti-deficiency rights

FHFA Home Price Index Drops 0.3 Percent

March 23, 2011 (Shirley Allen)

The Federal Housing Finance Agency (FHFA) reports that U.S. home prices declined by 0.3 percent in January 2011 compared to December 2010. The agency’s House Price Index (HPI) also revealed that prices were 3.9 percent lower than a year earlier in January of 2010.

The index is 16.5 percent lower than its April 2007 peak and is roughly at the same level as May 2004.

The FHFA monthly index is calculated using purchase prices of houses backing mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac.

On an unadjusted basis, prices have been dropping every month since June of 2010 and on a seasonally adjusted basis, prices have only increased once since that same time.

Monthly price changes by region (December 10- January 11):

Region	Percent Change
Pacific	0.4$
Mountain	-1.3%
West North Central	-0.2%
West South Central	1.6%
East North central	-0.8%
East South Central	0.4%
New England	-0.2%
Middle Atlantic	-0.6%
South Atlantic	-1.3%
U.S.	-0.3%

Pacific: Hawaii, Alaska, Washington, Oregon, California
Mountain: Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona, New
Mexico
West North Central: North Dakota, South Dakota, Minnesota, Nebraska, Iowa, Kansas,
Missouri
West South Central: Oklahoma, Arkansas, Texas, Louisiana
East North Central: Michigan, Wisconsin, Illinois, Indiana, Ohio
East South Central: Kentucky, Tennessee, Mississippi, Alabama
New England: Maine, New Hampshire, Vermont, Massachusetts, Rhode Island,
Connecticut
Middle Atlantic: New York, New Jersey, Pennsylvania
South Atlantic: Delaware, Maryland, District of Columbia, Virginia, West Virginia,
North Carolina, South Carolina, Georgia, Florida

Tags: FHFA, home price index, Fannie Mae, Freddie Mac, mortgages, monthly index

Nevada Bill Makes Foreclosure Willful Damage a Felony

March 2, 2011 (Chris Moore)

Nevada Republican Assemblymember Peter Goicoechea has introduced legislation in the State Assembly that would make it a felony to willfully damage a home during the foreclosure process. The bill has been referred to the state judiciary committee.

AB373 was introduced by Goicoechea yesterday and states, “This bill provides that a person in possession of real property who, under certain circumstances, willfully removes damages or destroys any real property that is subject to foreclosure or any other action affecting the title or possession of the real property is guilty of a category E felony.”

Damaged property has been a major concern for banks holding these properties, the real estate agents charged with reselling them and neighbors forced to live next to them. Some homes have been virtually stripped of almost all contents including windows, bathrooms, appliances, and even whole kitchens.

I have witnessed myself on Craigslist in Orange County, California, where I live, people selling whole kitchens (you remove), air conditioners, and even outdoor fountains and other hardscape while their homes were in foreclosure.

In the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, the proportion of move-in ready foreclosed properties or real estate owned properties was a low 15.4% in February. That’s a lot of homes in need of repair.

Nevada has held the highest foreclosure rate of any state for more than four years. There, one in every 119 homes received a filing in February, according to RealtyTrac. Realtors have described some cities as littered with gutted properties with storage units throughout the city filled with stolen appliances.

In June of last year, Fannie Mae joined the fight by sifting through loan data to hold strategic defaulters accountable. Borrowers who were shown to have willfully damaged their properties would then be charged for any repairs to the damaged homes.

Tags: Nevada, AB373, Peter Goicoechea, willful damage, foreclosure, damaged property, REO, gutted properties, strategic defaulters

Freddie Mac Goes YouTube

March 22, 2011 (Brian Michael)

Mortgage giant Freddie Mac has launched its own YouTube Channel that features five 90 to 120 second videos that separate housing facts from fiction. Each video dispels one of five common myths that could prevent people from keeping their homes if they face foreclosure. It is based on content from the Freddie Mac “Get the Facts” on Homeownership education and outreach materials.

"Individuals are worried about scams and fraud, and don't know who to safely turn to for help," said Dwight Robinson, Freddie Mac senior vice president of corporate relations and housing outreach. "The videos provide information and resources that just might keep individuals from losing their home. This is another way we are trying to make a difference in communities across the nation."

You can catch each of the five videos on Freddie Mac’s YouTube Channel, or what the heck, you can watch them here:

Myth 1: If my house is foreclosed, I can never buy a house again -- the foreclosure will stay on my record forever.
Truth 1:



Myth 2: I should stop paying my mortgage so I can get assistance with my mortgage payments.
Truth 2:



Myth 3: If I'm late on my monthly payments, I'll lose my house.
Truth 3:



Myth 4: I am getting many offers for help from a variety of people. They are probably all scams.
Truth 4:



Myth 5: My lender is not responding to my inquiries, so I should just give up and face foreclosure.
Truth 5:



Tags: Freddie Mac, YouTube, housing videos, fact and fiction, Get the Facts, common myths, information and resources

HousingPulse Distressed Property Index Slips in February

March 22, 2011 (Brian Michael)

Distressed property home purchase transactions dipped in the month of February to 47.3 percent from 49.6 percent in January according to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, but it was not likely the result of a healing housing market.

The report blames the dip on a nationwide delay in the listing and sale of distressed properties as mortgage servicers continued to deal with the fallout from title and paperwork issues.

The survey reveals that the number of move-in ready properties declined to 15.4 percent in February compared to 17.5 percent in January.

The number of cash transactions set a survey record as 33.7 percent of purchases in February were cash. The increase in cash transactions parallels the rise in investor activity as investors scooped up 23.5 percent of home purchases in February, up from 19.9 percent in only two months.

“We are seeing investors come back into the market. One investor told me that one house he wanted came on Wednesday PM and had 9 offers by Thursday AM,” stated an agent in New Jersey. “There are a number of investors and businesses buying up the short sale and REO properties and renovating them and then selling them as traditional sales,” reported an agent from Arizona.

The report says that as an indicator that sales may be slipping at a time of the year they should be increasing, they noted that average transactions per real estate agent dropped to 1.7 in February versus 2.1 in January.

Traditionally transactions per real estate agent rise from January to February as the spring selling season begins but the decline may signal a slow start to this year's spring selling season.

The Campbell/Inside Mortgage Finance HousingPulse Tracking Survey involves more than 3,000 real estate agents nationwide each month and provides up-to-date intelligence on home sales and mortgage usage patterns.

Tags: distressed property, home purchase transactions, mortgage servicers, cash transactions, move-in ready, investors, spring selling season