June 2013 Scorecard on Administration’s Comprehensive Housing Initiative

An interesting report on the state of the housing market today.  An excerpt:

“”The President’s housing market recovery efforts began immediately
after taking office in February 2009. The June 2013 housing
scorecard includes key indicators of market health and results of the
Administration’s comprehensive response, as outlined above:
• The Administration’s foreclosure mitigation programs
are providing relief for millions of homeowners as we
continue to recover from an unprecedented housing
crisis. More than 1.6 million homeowner assistance actions
have taken place through the Making Home Affordable Program,
including more than 1.2 million permanent modifications through
the Home Affordable Modification Program (HAMP), while the
Federal Housing Administration (FHA) has offered more than
1.8 million loss mitigation and early delinquency interventions.
The Administration’s programs continue to encourage improved
standards and processes in the industry, with HOPE Now lenders
offering families and individuals more than 3.6 million proprietary
mortgage modifications through April.
• Homeowners in HAMP continue to benefit from
significant payment relief increasing the long-term
likelihood of avoiding foreclosure. As of May, more
than 1.2 million homeowners have received a permanent
modification through HAMP, saving approximately $547
on their mortgage payments each month – a 39 percent
savings from their previous payment. In May, 69 percent of
homeowners with eligible non-GSE mortgages benefited from
principal reduction with their HAMP modification. Homeowners
currently in permanent HAMP modifications have been granted
an estimated $10.6 billion in total principal reduction.
View the Making Home Affordable Program Report with data
through May 2013.
Given the current fragility and recognizing that recovery will take
place over time, the Administration remains committed to its efforts
to prevent avoidable foreclosures and stabilize the housing market.””

Read the full report here:

Click to access huddoc

NY, NJ Among Top 5 In Non-Current Loans

But the good news is that, nationwide, foreclosures are down.

LPS’ “First Look” Mortgage Report  

April Month-End Data Shows Delinquency Rate Below 6.5 Percent for First Time Since July 2008; Foreclosure Inventory Down Nearly 25 Percent Year-Over-Year

May 22, 2013

JACKSONVILLE, Fla. – May 22, 2013 – Lender Processing Services, Inc. (NYSE: LPS), a leading provider of integrated technology, data and analytics to the mortgage and real estate industries, reports the following “first look” at April 2013 month-end mortgage performance statistics derived from its loan-level database representing approximately 70 percent of the overall market.

Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure):  ​	6.21%​
Month-over-month change in delinquency rate: ​	-5.81%​
Year-over-year change in delinquency rate: ​	-9.61%​
Total U.S. foreclosure pre-sale inventory rate: ​	3.17%​
Month-over-month change in foreclosure presale inventory rate: ​	-5.83%​
Year-over-year change in foreclosure presale inventory rate: ​	-24.55%​
Number of properties that are 30 or more days past due, but not in foreclosure: (A) ​	3,111,000​
Number of properties that are 90 or more days delinquent, but not in foreclosure:  ​	1,394,000​
Number of properties in foreclosure pre-sale inventory: (B)  ​	1,588,000​
Number of properties that are 30 or more days delinquent or in foreclosure: (A+B) ​	4,699,000​
States with highest percentage of non-current* loans: ​	FL, NJ, MS, NV, NY ​
States with the lowest percentage of non-current* loans: ​	MT, WY, AK, SD, ND​

 *Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.

Notes:

(1) Totals are extrapolated based on LPS Applied Analytics’ loan-level database of mortgage assets.

(2) All whole numbers are rounded to the nearest thousand.

The LPS full report should be out by June 5.

ZILLOW HOME VALUE INDEX SHOWS IMPROVEMENT IN MAY

Home values rose in May month-over-month and quarter-over-quarter, but fell on a yearly basis, according to Zillow’s Real Estate Market Reports.   The upside to the yearly decline is it’s the smallest year-over-year drop since October 2007.

In the New York Metro area, the monthly gain was 0.3%, quarterly gain was 0.5%, but the year-over-year values were down 3.3 %.

Sale prices rose in the NY area as well, up 1.2% month-over-month, 2.3% for the quarter although for the year there was a drop of 4.7%.

The number of foreclosures dropped in May, with 6.3 out of every 10,000 homes being foreclosed nationwide compared to 7.2 out of every 10,000 in April.

With such a slight increase in the picture, other analysts say we should not get too optimistic.

HUD Pilot Program Announced to Help Stabilize Home Prices

from Reverse Mortgage Daily 6/11/12

The Department of Housing and Urban Development announced Friday it is expanding a pilot program aimed at stabilizing distressed assets by allowing private investors to purchase pools of delinquent loans on the condition of trying to keep homeowners in their houses and help bring the loans out of default.

Through the Distressed Asset Stabilization Program, the Federal Housing Administration will competitively sell severely delinquent notes for market-determined rates, generally below the outstanding balance, in an effort to stem the tide of foreclosure-induced real estate owned (REO) properties. Beginning in September, the agency will sell 5,000 mortgages in the foreclosure process each quarter.

A housing scorecard for May showed fewer foreclosure starts, but also revealed a rise in delinquent and severely delinquent loans. HUD acknowledged the implications of foreclosure on not just the homeowners in question, but also on other people, as property values in areas with high foreclosure rates are often negatively affected.

“While our housing market has momentum we haven’t seen since before the crisis, there are still thousands of FHA borrowers who are severely delinquent today—who have exhausted their options and could lose their homes in a matter of months,” said HUD Secretary Shaun Donovan. “With this program, we will increase by as much as ten times the number of loans available for purchase while making it easier for borrowers to avoid foreclosure.”

Once notes are purchased, foreclosure on a property will be delayed for at least six additional months while the servicer directly works with the borrower to find ways to avoid foreclosure.

Private investors can purchase the loan at a discount and must take further steps to help the borrower avoid default, whether it’s by modifying their loan terms or by helping them through a short sale, in order to maximize the return on the sale.

“The Distressed Asset Stabilization Program offers a better shot for the struggling homeowner and lower losses to the FHA,” said Acting FHA Commissioner Carol Galante in a statement. “By addressing the growing back log of distressed mortgages, FHA is helping to mitigate the negative effects of the foreclosure process as part of the Administration’s broader commitment to community stabilization.”

Improvements in foreclosure numbers may signal revitalization of mortgage market

Foreclosure signs, Mortgage crisis, (Photo credit: Wikipedia)

According to CoreLogic’s National Foreclosure Report for January 2012, the distressed clearing ratio, which calculates the rate at which REO properties are sold, was 0.69 for January 2012, down from 0.80 in December 2011. The ratio is found by dividing the number of REO sales by the number of completed foreclosures. A higher ratio indicates a faster pace of REO sales relative to the pace of completed foreclosures.

“The pace of completed foreclosures is gradually increasing again, but the clearing ratio is falling as REO sales have slowed in the winter months,” said Mark Fleming, chief economist with CoreLogic, who also added non-judicial foreclosure states completed almost twice as many foreclosures per 1000 active loans as judicial foreclosure states in January.

On a year-over-year basis, the number of foreclosures actually dropped, going from 80,000 in January 2011 to 69,000 in January 2012.

Approximately 1.4 million homes, or 3.3 percent of all homes with a mortgage, were in the foreclosure inventory as of January 2012, compared to 1.5 million, or 3.6 percent, in January 2011. Nationally, the number of loans in the foreclosure inventory decreased by 145,000, or 9.5 percent in January 2012 compared to the previous year.

The foreclosure inventory is the stock of homes in the foreclosure process. A property moves into the foreclosure inventory when the mortgage servicer places the property into the foreclosure process after serious delinquency is reached and remains there until the foreclosure is completed.

“We are encouraged by the noticeable progress we are seeing over the last several months in the mortgage industry,” said Anand Nallathambi, CEO of CoreLogic.  “During the last several years, the industry has faced enormous challenges working through difficult and complex issues.  We are hopeful that these recent improvements are early signals of revitalization in the mortgage market.”

The share of borrowers nationally that were more than 90 days late on their mortgage payment, including homes in foreclosure and REO, decreased to 7.2 percent in January 2012, compared to 7.8 percent a year ago, but remained unchanged compared to December 2011.

Five non-judicial states with the highest percentage of foreclosure inventory

Nevada (5 percent), New York (4.7 percent), Kentucky (2.8 percent), Oregon (2.8 percent), and Mississippi (2.7 percent)

Five states with the highest foreclosure rates

Florida (11.8 percent), New Jersey (6.4 percent), Illinois (5.3 percent), Nevada (5.0 percent), and New York (4.7 percent)

Five states with the lowest foreclosure rates

Wyoming (0.7 percent), Alaska (0.8 percent), North Dakota (0.8 percent), Nebraska (1.1 percent), and Texas (1.3 percent)

Forclosures Hold Steady Overall, NY Rate Rises

Image via Wikipedia

Foreclosures are leveling out nationwide as serious delinquencies seem to be dropping.  Remember, today’s “new” data is compiled from statistics up to June 2011.

Among the 100 largest metropolitan areas, serious delinquencies – those 90 days or more past due or in foreclosure – declined from 10.4 percent to 9.3 percent from its December 2009 peak to June 2011.

The decline in serious delinquencies can be attributed to a decline in delinquent loans, according to Foreclosure-Response.org, which states delinquencies fell from 5.5 percent at the end of 2009 to 3.7 percent in mid-2011.

Areas experiencing higher rates of serious delinquencies include Florida, California and some areas of New Jersey, the Great Lakes region, and the South.

Areas with lower rates of serious delinquencies include Texas, the Central and Mountain Time zone regions, and some areas of the Pacific Northwest.

Seventeen of the top 25 metros ranked for serious delinquencies and four of the top five are located in Florida.

While serious delinquencies decline, foreclosures have “flat-lined,” according to Foreclosure-Response.org. The foreclosure rate has stayed at about 5.5 percent over the three quarters ending in June.

The two metros experiencing the greatest decline in foreclosures are in California – Riverside (1.9 percent) and Stockton (1.7 percent).

In contrast, metros in Florida, New York, and Illinois are seeing rising foreclosure rates. Tampa saw a 2.8 percent increase from December 2009 to June 2011, while Chicago saw a 2.3 percent increase, and New York saw a 2.1 percent increase.

Foreclosure-Response.org notes that these three states are judicial states, which “can create a significant backlog of foreclosures.”

“The foreclosure inventory that is building up is going to take an incredibly long time for lenders to clear,” said Urban Institute research associate Leah Hendey. “At the current pace of foreclosure sales, we are looking at a process that could take decades to complete.”

“It is critical that the status of these properties be resolved quickly if we want to stabilize communities and housing markets,” Hendey continued.

Title Insurance: More Important Than Ever

Understanding the tenets of title insurance is especially important considering the turmoil in the real estate industry.

Title insurance is intended to protect the insured from improper titling, including defects in foreclosure proceedings, forgery, or impersonation or cases in which no title is legally conveyed. Other defects are partial, such as a neighboring fence or garage encroaching on the insured person’s property.

The title insurance industry recently set down strict guidelines for when and if they will insure a title to a property on which there has been a foreclosure.

The buyer should be equally vigilant, insisting on a 60-year search and paying for an owner’s policy as well as the lender’s policy that the bank will demand.

Source: Washington Post, Harvey S. Jacobs (11/27/2010)