MND NewsWireMND NewsWire : Housing and Economic Newshttp://www.mortgagenewsdaily.com/channels/news/atom.aspxCommunity Server2012-02-07T16:06:00ZMortgage Delinquency Spikes in TransUnion Q4 Report/02142012_delinquency_rates.asp2012-02-14T16:58:03Z2012-02-14T16:58:03Z<p>TransUnion is reporting that <b>serious
mortgage delinquencies rose</b> during the fourth quarter of 2011 for only the
second time since the end of 2009. The
rate increased 13 basis points from 5.88 percent in the third quarter to 6.01
percent. </p>
<p>The increase was widespread; 37
percent of the states reported increases as did 64 percent of metropolitan
areas. The latter figure is unchanged
from Quarter 3 but up substantially from the 21 MSAs that experienced an
increase in Quarter 2. New Jersey and
Vermont had the largest annual increases.
Their delinquency rates rose between Quarter 4, 2010 and Quarter 4, 2011
by 11.98 percent and 11.11 percent respectively. South Dakota had an increase of 10.36
percent. Arizona, California, and
Wyoming had the greatest decreases in their rates, all three in the range of 20
percent. </p>
<p>The highest serious delinquency
rates, defined as over 60 days, were reported in Florida (14.27 percent),
Nevada (12.08 percent) New Jersey (8.32 percent) and Arizona (7.50 percent) and
the lowest rates in North Dakota (1.50 percent), South Dakota (2.45 percent),
Nebraska (2.57 percent) and Alaska (2.77 percent).</p>
<p>"To see that, quarter over
quarter, fewer homeowners were able to make their mortgage payments is not
welcome news," said Tim Martin, group vice president of U.S. Housing in
TransUnion's financial services business unit. "However, it was not
unexpected. First, there tends to be a natural seasonality, evident well before
the recession, of higher delinquencies in the fourth quarter; perhaps explained
by borrowers balancing holiday spending vs. debt payments. Secondly, on the
economic front, house prices continued to deteriorate in the fourth quarter and
unemployment remained stubbornly high. This combination leads to more negative
equity in homes and reduced real personal income that can affect borrowers'
ability and willingness to pay their mortgages.</p>...(<a href="http://www.mortgagenewsdaily.com/02142012_delinquency_rates.asp">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong> <a href="http://www.mortgagenewsdaily.com/channels/247365/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=247365" width="1" height="1">jpatswansonhttp://www.mortgagenewsdaily.com/members/jpatswanson/default.aspxCFPB Designs New Mortgage Statement, Feedback Wanted/02132012_consumer_protection_bureau.asp2012-02-14T16:15:18Z2012-02-14T16:15:18Z<p>The Consumer Financial Protection Bureau
(<b>CFPB</b>) has rolled out a <b>prototype</b> of a form for mortgage lenders to send to
borrowers during each billing cycle to keep those borrowers abreast of crucial
information about their loan. The
prototype was published on CFPB's blog on Monday and the Bureau is asking for
consumer and lender reaction.</p>
<p>The <b>new model statement</b>, designed for sending
by mail or by electronic transmission, is based on a set of information that
lenders are required, under the Dodd-Frank Wall Street Reform Act, to provide
to their borrowers. CFPB is seeking to
provide lenders a model for displaying that information in a clear and easily
understandable format.</p>
<p>Dodd-Frank requires that consumers be notified
on a regular basis about:</p>
<ul>
<li>Their
principal loan amount</li>
<li>Current
interest rate</li>
<li>The
date on which that interest rate may reset</li>
<li>A
description of any late payment fees or potential prepayment fee</li>
<li>Information
about how to seek help from housing counselors</li>
<li>Contact
information for the lender.</li>
</ul>
<p>The model form proposed by CFPB goes
beyond that outline. It shows the
borrower how the current payment will be applied, interest, principal, escrow,
or special fees, and gives an accounting both of the previous month's activity
and activity for the year to date and how those funds were applied as well. It also gives the borrower the ability to
designate how to apply any extra payment amounts. In addition to the amount of any prepayment
fee it also gives the expiration date of such penalties. It does not inform the borrower of the current
balance in escrow accounts which would be a nice addition for planning
purposes. </p>
<p>Lenders
who provide coupon books to their borrowers are not required to use the form,
but the coupon book must contain essentially the same information. Once the final form is adopted lenders will
have some flexibility to adapt it to their own needs. </p>
<p>Lenders
and borrowers can <a href="http://www.consumerfinance.gov/a-model-form-for-mortgage-statements/">comment about the form</a> on CRPB's website.
<br /><br /><span style="font-size: small;"><b><br />Early Draft of Model Mortgage Statement</b></span></p>
<p><img src="/cfs-file.ashx/__key/CommunityServer.Components.SiteFiles/2102_2E00_/mortgage_2D00_statement.png" /></p>...(<a href="http://www.mortgagenewsdaily.com/02132012_consumer_protection_bureau.asp">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong> <a href="http://www.mortgagenewsdaily.com/channels/247257/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=247257" width="1" height="1">jpatswansonhttp://www.mortgagenewsdaily.com/members/jpatswanson/default.aspxBankers Dismiss Bank Tax as Arbitrary/02142012_budget_tarp.asp2012-02-14T15:56:00Z2012-02-14T15:56:00Z<p>The <b>American Bankers Association</b> (ABA)
reacted negatively late Monday to a part of the President's FY 2013 Budget
which was released earlier in the day. The
ABA issued a statement through its president and CEO Frank Keating that was
strongly critical of a revenue raising measure that is aimed directly at the
large financial institutions which ABA represents. </p>
<p>The<b> Financial Crisis Responsibility Fee</b>,
which is expected to raise $61 billion over its first ten years, is part of
President Obama's $3.8 trillion budget which includes $350 billion for job
creation and $476 billion for upgrades to the nation's transportation system. The fee is presented as a mechanism to recover
funds dispersed under the Toxic Asset Relief Program (TARP) of 2008, which "bailed
out" many financial institutions viewed to be in danger of collapse in the wake
the housing crash and as a way to discourage excessive risk-taking. </p>
<p>TARP allocated $700 billion to banks to
shore up their balance sheets and purchase some of the defaulted loans on their
books, primarily residential mortgages and mortgage-backed securities. Ultimately $413 billion was dispersed and as
the banks recovered many have completely repaid the advances. To date $318 billion has been recovered and
the Treasury Department estimates that the program will finally cost $68
billion assuming that the $45.6 billion that has been set aside for housing
initiatives is utilized. </p>
<p>The budget document calls TARP an
extraordinary step necessary to stem a deeper financial crisis. "The cost associated with the excessive
risk-taking by the largest financial institutions continues to ripple through
the economy," it says, and even though many firms have repaid the Treasury, the
entire financial system benefited enormously from TARP support, "shared
responsibility requires that the largest financial firms pay back the taxpayer
for the extraordinary support they received as well as to discourage excessive
risk taking." </p>
<p>The fee will be restricted to financial
firms with assets <b>over $50 billion</b> and meets the statutory requirement that
requires the President to propose a way for the financial sector to pay back
taxpayers "so that not one penny of the Government's TARP-related debt is
passed on to the next generation." The
tax is proposed to extend beyond 2022 as necessary to repay Treasury and to
offset the cost of the President's new mortgage refinancing program. </p>
<p>The fee was described in the budget
documents only as "consistent with principles agreed to by the G-20 Leaders and
similar to fees proposed by other countries."
However, earlier this month the President said the fee would be based on
the size of the institution and the riskiness of its activities. </p>
<p>The ABA's Keating said in part, "The
banking industry strongly opposes the $61 billion bank tax included in
President Obama's budget proposal. Despite claims to the contrary, the
facts on TARP are very clear: Taxpayers have profited $13 billion from their
investments in banks through the program and Treasury predicts they will see a
lifetime positive return of more than $20 billion. Given that non-bank
programs are responsible for all of TARP's losses, this would simply be an
arbitrary tax with no regard to where losses actually occurred. "</p>
<p>Keating said the plan made for a good political sound bite but would
needlessly damage the economy by reducing credit availability and driving
capital away. "A 10-year tax of $61 billion means that up to $600 billion
in loans would not be made over that same time period. Millions of small
business loans would be in danger of not being funded, borrowing costs would
likely increase and consumers and businesses would have less credit
availability as the economy struggles to find its way forward."</p>
<p>The President used the budget to restate the proposal made earlier this
month for a broad program to refinance homeowners who are underwater on their
mortgage but remain current on their payments.
The new program, similar to the HARP 2.0 program for homeowners with
mortgages guaranteed by Freddie Mac or Fannie Mae, would be available to
homeowners with non-GSE loans.</p>
<p>Congress has not passed a single one of President Obama's budgets and it is
widely expected that the FY2013 budget will meet the same fate and that the
government will continue to operate on short-term interim appropriations.</p>...(<a href="http://www.mortgagenewsdaily.com/02142012_budget_tarp.asp">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong> <a href="http://www.mortgagenewsdaily.com/channels/247352/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=247352" width="1" height="1">jpatswansonhttp://www.mortgagenewsdaily.com/members/jpatswanson/default.aspxMBS At Highest Levels Since Thursday, Stocks Down After Data/02142012_mbs_morning.asp2012-02-14T15:30:00Z2012-02-14T15:30:00Z<p>It's been a light day for new originations so far in MBS with current totals in Fannie/Freddie 30yr Fixed around 1/4 to 1/3 of their recent averages. That light supply environment, in conjunction with a decent enough rally in broader bond markets has helped lift production MBS to their highest levels since last Thursday. Fannie 3.5's are currently up more than a quarter of a point at 103-25 (note: chart below shows 103-23 as it was snapped slightly prior to this post). As far as the broader rally is concerned, 10yr yields are just over 3bps lower, currently trading in the mid 1.94's. </p>
<p><a href="http://www.mortgagenewsdaily.com/mbslive/"><img src="/cfs-file.ashx/__key/CommunityServer.Components.UserFiles/00.00.00.21.04/21412-Dash.gif" /></a></p>
<p>(source:<a href="http://www.mortgagenewsdaily.com/mbslive/"> MBS Live Dashboard</a>)</p>
<p>In the broader markets, volume today is slightly better than yesterday, although totals are still on the light side of normal. Markets are ostensibly waiting for tomorrow's "second chance" vote among European finance ministers to approve the current tranche of the Greek bailout. In the meantime, weaker-than-expected Retail Sales helped to pull stocks down at a moderate pace although very much in line with recent examples of "down days." </p>
<p>With the main items of interest not occurring until tomorrow, bond markets are left to play the range, taking some cues from stock's reaction to this morning's data, as well as simply ebbing and flowing within broader ranges. Said ranges are broad indeed, as can be seen in the chart below of 10yr yields so far in 2012. Granted, this is just one of the several ways to infer a directional bias, but things seem to line up well with the long-term, downwardly sloped trend channel seen at the outer limits below. With this chart in mind, you might also consider that 10's are just seeking out a more central position ahead of potential market movers. The solid line shows the 1.94-ish pivot point (which has really been more like one side of a BAND of yields between 1.94 and 1.96, with the latter getting more playing time as resistance over the past few sessions).</p>
<p><img src="/cfs-file.ashx/__key/CommunityServer.Components.UserFiles/00.00.00.21.04/21412-TSY.gif" /></p>
<p>Although the shorter term break below 1.96 in 10yr yields (seen above) is, thus far, frustrated by the current measure of resistance at 1.94, MBS are doing a better job of breaking their recent horizontal resistance level at 103-18. Much like Treasuries, MBS have also been operating in a broader trend channel and pivoting around horizontal pivot points. As seen in the following chart, Fannie 3.5's have had only a brief foray under 103-18 and are decidedly back above today. But to the point of "ebbing and flowing within a broader range," there's still quite a way to go before they'd be threatening to test the upper end of the longer term trend channel. </p>
<p><img src="/cfs-file.ashx/__key/CommunityServer.Components.UserFiles/00.00.00.21.04/21412-MBS.gif" /></p>...(<a href="http://www.mortgagenewsdaily.com/02142012_mbs_morning.asp">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong> <a href="http://www.mortgagenewsdaily.com/channels/247372/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=247372" width="1" height="1">mgrahamhttp://www.mortgagenewsdaily.com/members/mgraham/default.aspxHUD Ready with FY2013 Budget/02132012_hud_programs_budget.asp2012-02-13T22:14:37Z2012-02-13T22:14:37Z<p>The Department of Housing and Urban
Development (HUD) unveiled its 2013 budget proposal today, asking Congress for
about $44 billion. The amount is roughly
the same as the amount Congress authorized for the 2012 budget year. </p>
<p>In addition, HUD is asking for authority
to guarantee $400 billion in mortgages through FHA's Mutual Mortgage Insurance
Fund which is expected to provide 1.2 million single family mortgages, $149
billion in loan volume, during the year and $500 billion in Ginnie Mae
guarantee authority in order to help finance a wide array of government-insured
products. In addition it requests $25 billion
in loan guarantee authority for the General and Special Risk Insurance Panel
which will provide an estimated 156,000 units in multifamily housing properties
and 80,600 beds in health care facilities.</p>
<p><img src="/cfs-file.ashx/__key/CommunityServer.Components.SiteFiles/2102_2E00_/HUDBudget_2D00_2.png" /></p>
<p>Approximately 75 percent of HUD's budget
goes to rental assistance including both tenant and project based
assistance. Among the tenant based program
(TBA) funds requested for the year are:</p>
<ul class="unIndentedList">
<li>
<i>$</i>17.238
billion for the renewal of existing Section 8 vouchers, providing
affordable housing for more than 2.2 million families in need, including the
renewal of special purpose vouchers funded in previous years;</li>
<li>
$1.575 billion for administrative fees associated with
operating TBA. </li>
<li>
$111
million for Mainstream Section 811 vouchers to enable persons with
disabilities access to affordable, private housing of their choice, and
accommodate the provision of supportive services;</li>
<li>
$75 million in Tenant Protection vouchers, which
are provided to tenants to replace either public housing that is demolished or
sold or projects
assisted by Multifamily Housing programs that stop receiving federal subsidies;
and</li>
<li>
$75 million for the HUD-Department of Veterans
Affairs Supportive Housing (HUD-VASH) vouchers to assist an estimated 10,000
homeless veterans.</li>
</ul>
<p>Project-based assistance provides
funds to state and local Public Housing Authorities to supplement rents and
maintain the properties. HUD is
requesting $6.59 billion to operate public housing programs and modernize its
aging structures. This request includes:</p>
<ul class="unIndentedList">
<li>
$4.524 billion in Public Housing Operating Funds to
fund
more than 3,100 public housing authorities to operate and manage approximately
1.2 million units of publicly owned affordable rental housing units, and</li>
<li>
$2.07 billion in Public Housing Capital Funds, primarily to
address capital repair and replacement needs.</li>
</ul>
<p>HUD's Project-Based Rental
Assistance (PBRA) program provides rental assistance funding to privately owned
multifamily rental housing projects. The
amount of PBRA funding paid to each owner is generally the difference between
what a household can afford (up to 30 percent of income) and the HUD-approved
rent for the unit. For FY 2013, HUD is
requesting a total $8.7 billion in funding for PBRA programs which includes:</p>
<ul class="unIndentedList">
<li>
$8.44 billion for the renewal and amendment
of existing PBRA contracts; and </li>
<li>
$260 million for Project-Based Contract
Administrators to
effectively administer the PBRA program.</li>
</ul>
<p>Another
budget item is over $7 billion to fund capital grants toward local housing and
community development initiatives. These include: </p>
<ul class="unIndentedList">
<li>
$9.95 billion for Community Development Block
Grants;</li>
<li>
$2.07 billion for modernization capital grants,
administrative receiverships and financial and physical assessment support
through Public Housing Capital funds.</li>
<li>
$150 million for the Choice Neighborhood initiative;
and</li>
<li>
$60 million for Indian Community Development Block
Grants.</li>
</ul>
<p>Approximately
five percent of the HUD budget goes to various initiatives including remediation
of lead based paint hazards, housing counseling, fair housing and equal
opportunity, family self-sufficiency counselors, and research and data
collection. This year HUD is requesting
a total of $2.1 billion for these initiatives.</p>
<p>In
presenting the budget, HUD Secretary Shaun Donovan said that it includes
several proposals to improve the efficiency and effectiveness of department
programs. </p>
<ul class="unIndentedList">
<li>
It merges its Public Housing Operating and Capital
Funds programs into a single subsidy stream.</li>
<li>
Outlines a proposal to streamline and enhance the
Family Self-Sufficiency program,</li>
<li>
.Includes a series of reforms to rental assistance
programs that save over $500 million without reducing the number of families
served; </li>
</ul>
<p>Donovan said that while the
budget is holding the line on increased expenditures, it:</p>
<ul class="unIndentedList">
<li>
Maintains
housing assistance for all families currently receiving rental subsidies;</li>
<li>
Serves
almost 2.5 million families living in public housing and project-based Section
8 developments over 60 percent of whom are elderly and disables;</li>
<li>
Supports
tenant-based vouchers for more than 2.2 million families over $45 percent of
whom are elderly and disabled;</li>
<li>
Provides
10,000 new vouchers to homeless and funds 5,300 more in supportive housing;</li>
<li>
Enables
FHA and Ginnie Mae to continue their crucial, temporary countercyclical roles;</li>
<li>
Brings
private capital back to the market through FHA premium increases and other
measures; </li>
<li>
Assists
nearly 5.5 million households, an increase of 82,000 over fiscal year 2011;</li>
<li>
Creates
or retains 423,000 jobs directly and 360,000 more indirectly.<br /><br /></li>
</ul>
<p><img src="../../cfs-file.ashx/__key/CommunityServer.Components.SiteFiles/2102_2E00_/HUDBudget.png" /></p>...(<a href="http://www.mortgagenewsdaily.com/02132012_hud_programs_budget.asp">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong> <a href="http://www.mortgagenewsdaily.com/channels/247246/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=247246" width="1" height="1">jpatswansonhttp://www.mortgagenewsdaily.com/members/jpatswanson/default.aspxAMI Takes Position against Mortgage Servicing Settlement/02132012_mortgage_serving_settlement.asp2012-02-13T17:42:16Z2012-02-13T17:42:16Z<p>In a strongly worded statement on behalf of the <b>American
Association of Mortgage Investors</b> (AMI), Jonathan Lieberman, Managing Director
of Angelo, Gordon & Company, criticized the recent settlement agreement
over alleged mortgage servicing and foreclosure processing abuses. Lieberman, told the Association's bondholders
in a conference call that the settlement, reached last week between five major
banks and their servicing subsidiaries, the Departments of Justice and Health
Education and Welfare, and 49 of the 50 states' attorneys general that, "Current
press reports tell a story of regulators imposing penalties not only on the bad
actors but also on Americans' investors, pension funds, and retirees," and that
"the rush to finalize a flawed and opaque settlement smells funny.</p>
<p>Members of AMI, he said, have neither direct control of
servicing nor direct contact with mortgage borrowers; rather have suffered
material losses due to the bad acts of mortgage servicers. He compared the current climate to the time
period of 2007 and 2008 "during which our government and regulators picked winners
and losers among domestic banks, broker dealers, foreign banks, insurance companies,
and auto manufacturers; mortgage investors are confronted by like-minded
governmental behavior." </p>
<p>Lieberman said that winners from the settlement, which will
cost the banks between $25 and $40 billion dollars, are "potentially
<b>irresponsible borrowers</b>, self-servicing, poorly managed and unprincipled banks
and servicers, rating agencies with no alignment of interest with investors,
situational regulators and select members of the political class." The losers are "Responsible Americans -
especially prudent conservative investors, borrowers and savers. Investors'
returns will probably suffer, private capital will continue to shy away from
mortgage lending and long term the cost of capital will escalate for
responsible borrowers. All Americans are
ultimately the BIG (emphasis is Lieberman's) losers."</p>
<p>Lieberman said he sees no penalty, just continued erosion of
responsibility, community standards of care, moral values and fiduciary
standards. "At its root, credit is a
privilege, not a right and not democratically allocated. You earn credit which allows you to borrow
tomorrow's money to pay for something you get today."</p>
<p>With the background of the $350 billion in cumulative losses
experienced by investors since 2007, the 1 million loan modifications that have
helped homeowners remain in their homes, and the 2.5 million mortgages that are
delinquent today there are a number of issues that investment managers in the
mortgage sector need to ask.</p>
<ul class="unIndentedList">
<li>
Can firms effectively assess, protect, and
control investor capital?</li>
<li>
Do American standards of fair play and rule of
law apply to mortgages investments?</li>
<li>
Why are Fannie Mae and Freddie Mac excluded from
the settlement? Were the banks following
the GSE guidelines, using their law and document preparation firms and didn't
the GSEs have the unilateral right to terminate and move servicing?</li>
<li>
Why were investors not included in the servicing
negations nor protected during the settlement?</li>
<li>
Have government officials decided that investors
will be the losers in the fight among borrower, banks, and investors.</li>
</ul>
<p>Lieberman concluded his statements by saying Association
members stand ready to provide information and support to government officials
and regulators and borrowers who have been abused by servicers and "stand ready
to support the write down of underwater second lien mortgages."</p>...(<a href="http://www.mortgagenewsdaily.com/02132012_mortgage_serving_settlement.asp">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong> <a href="http://www.mortgagenewsdaily.com/channels/247199/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=247199" width="1" height="1">jpatswansonhttp://www.mortgagenewsdaily.com/members/jpatswanson/default.aspxBernanke Speaks to Home Builders on Housing's Role in Recovery/02102012_bernanke_housing_recovery.asp2012-02-10T20:12:19Z2012-02-10T20:12:19Z<p>Federal Reserve Bank Chairman<b> Ben S.
Bernanke</b>, speaking to the National Association of Home Builders, said that the
<b>typical post-recession behavior of the housing market</b>, resurging to help fuel
reemployment and rising incomes, has not played out this time and housing remains
a key impediment to a recovery.</p>
<p>The chairman reviewed the current state
of the housing market, telling the builders of a major imbalance between supply
and demand with 1-2/4 million homes currently unoccupied and for sale and 2
million more in the foreclosure process. At the same time, factors are constraining
demand such as a decline in household formation, high unemployment and
uncertain job prospects, and wariness about home ownership as an investment. The availability of credit is another
constraint. This imbalance has been
reflected in a drop in home prices of historic proportions.</p>
<p>In contrast, he said, rental markets
have strengthened somewhat; vacancy rates have declined, rents have increased,
and the construction of apartment buildings has picked up.</p>
<p>Home builders pay close attention to
these issues, Bernanke said, but the problems in housing have important
implications outside the construction industry. Foreclosures diminish the value of nearby
properties and can directly affect the quality of life in a neighborhood by leading
to increases in vandalism or crime. Declining
neighborhoods depress the tax base leading to cutbacks in services and thus a
vicious circle which putts neighborhood stabilization further out of reach.</p>
<p>The <b>decline in home prices</b> and
consequent loss of owner equity has reduced the ability and <b>willingness of households
to spend</b>. There are estimates that
homeowners spend between $3 and $5 less for every $100 of housing value they
lose which means the loss of housing wealth may have an impact on the economy
of $200 to $375 billion in consumer spending per year. Low or negative equity also means homeowners
cannot tap equity to pay for emergencies or college tuition, sell their homes
to move to better job markets, or take advantage of low interest rates by refinancing.</p>
<p>Returning
to the subject of <b>mortgage credit</b>, Bernanke said home mortgage credit has
contracted about 13 percent since its peak in 2007. "In
prior recoveries," he said, "mortgage credit had begun to grow four years after
the business cycle peak--but not this time around." Much of this is a reaction by lenders to the
fallout from earlier lax standards, but current practices may be limiting or
preventing lending even to creditworthy households. Some lenders are reluctant to loan even to
borrowers who could meet the underwriting standards of the government-sponsored
enterprises (GSEs). "Indeed, fewer than
half of lenders are offering mortgages to borrowers with a FICO score of 620
and a down payment of 10 percent, even though such loans could be within the
GSE purchase parameters."<a name="f10"> </a> Bernanke said this may be because of the
difficulty of obtaining private mortgage insurance or a concern on the part of
lenders about representations and warranties.
Another reason for tight lending is that private label mortgage
securitizations have virtually disappeared which may have discouraged lenders from
originating loans that don't exactly fit GSE or FHA criteria.</p>
<p>Tight credit has disproportionately
affected lending to first-time homebuyers which has dropped dramatically. Younger households are taking out mortgages
at lower rates than 10 years ago, well before prices began their run-up. First-time buyers are an important source of
incremental housing demand so this affects house prices and construction and may
also prevent existing homeowners from buying up.</p>
<p>Tight money has implications for
monetary policy as well and Federal Reserve actions to put downward pressure on
<a href="/mbs/">longer term rates</a> and to improve financial conditions have had less effect on
both the housing sector and overall economic activity than they otherwise would
have.</p>
<p>Policymakers have been focusing on
refinancing borrowers, loan modifications, and other ways to prevent more foreclosures
which is important but not all foreclosures can be prevented and there has been
increased focus on reducing the overhang of empty and foreclosed homes.</p>
<p>Bernanke said with home prices
falling and rents rising, it could make sense in some markets to <b>turn
foreclosed homes into rental properties</b>.
The Federal Reserve calculates that most REO properties in metropolitan
areas are in neighborhoods with median house values and incomes similar to
those in the area as a whole and tend to commutable to where jobs are. A financial comparison of annual cash flows
from renting properties to discounted sales of REO suggests that some lenders
might come out ahead renting rather than selling some of their properties. </p>
<p>In addition, keeping paying tenants
in home, including leasing to former owners could be the best way to maintain
property values and the quality of neighborhoods and appropriately structured
REO-to-rental programs could help some involuntary renters become owners again.</p>
<p>Such rental programs have
<b>drawbacks</b>. Bulk selling to investors can
present financing problems, some properties are in too poor condition to be
attractive, and it may be difficult to put together sufficiently large clusters
of properties to allow for economies of scale in their management but Bernanke
pointed to a number of cities where appropriate conditions exist.</p>
<p>Land banks are another option for foreclosed
houses with low value or in poor condition.
Land banks have the ability to purchase and sell real estate, clear
titles, accept donated properties, rehabilitate properties for resale or rental
or even demolish the structure. Not all
states have passed legislation to permit land banks and most existing ones lack
the resources to keep pace with the number of low value properties in the
current market.</p>
<p>Bernanke concluded by saying that we
need to continue to develop and implement policies that will help housing get
back on its feet. Sustained efforts to
address the many interlocking factors hold the market back will pay dividends
in the long run.</p>...(<a href="http://www.mortgagenewsdaily.com/02102012_bernanke_housing_recovery.asp">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong> <a href="http://www.mortgagenewsdaily.com/channels/247123/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=247123" width="1" height="1">jpatswansonhttp://www.mortgagenewsdaily.com/members/jpatswanson/default.aspxFHA Claims Against Bank of America / Countrywide Resolved/02092012_countrywide_mortgage_fraud.asp2012-02-09T19:42:18Z2012-02-09T19:42:18Z<p>Loretta E. Lynch, U.S. Attorney for
the Eastern District of New York announced the settlement of claims her office
had brought against Bank of America, Countrywide Financial Corporations and
some of its affiliates for underwriting and origination mortgage fraud. The <b>settlement ends an inquiry</b> into whether
Countrywide, acquired by Bank of Boston in 2008, had knowingly made loans insured
by FHA to unqualified home buyers. </p>
<p>The
settlement, in the amount of <b>$1 billion</b> requires an immediate payment of $500
million to correct some of the harm done to FHA by Countrywide's conduct. The remaining $500 million will be deferred
to fund a loan modification program for borrowers across the nation with Countrywide
mortgages that are under water. If, after the expiration of three years, the bank has not applied
the full $500 million to provide such relief, any remainder will be paid
directly to the United States.</p>
<p>According to the announcement,
this is the largest ever False Claims Act settlement relating to mortgage
fraud. In addition to lending to
unqualified borrowers the allegations against Countrywide included claims that
they had originated loans based upon inflated appraisals.</p>
<p>The settlement was announced "as
part of the global resolution between the United States of America and the five
largest mortgage servicing banks in the country," but it is unclear whether the
$1 billion to be paid by Bank of America is part of the $25 billion master
settlement or an addition to that amount. </p>...(<a href="http://www.mortgagenewsdaily.com/02092012_countrywide_mortgage_fraud.asp">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong> <a href="http://www.mortgagenewsdaily.com/channels/246923/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=246923" width="1" height="1">jpatswansonhttp://www.mortgagenewsdaily.com/members/jpatswanson/default.aspxNAR: Home Affordability Increases Nationwide/02092012_home_prices.asp2012-02-09T17:38:19Z2012-02-09T17:38:19Z<p>As prices continued to decline during
the fourth quarter of 2011 in most metropolitan areas of the U.S., <b>housing
affordability</b> rose due not only to the lower prices but also because of <a href="/mortgage_rates/">record
low interest rates</a>. The National
Association of Realtors® released its Housing Affordability Index (HAI) including
a new annual metro-level housing affordability index which shows historically
favorable conditions dominating across the country. </p>
<p>The <b>median price</b> of an existing single-family
home rose in 29 out of 149 metropolitan statistical areas (MSAs) in the fourth
quarter compared to the fourth quarter of 2010.
Prices were unchanged in two MSAs and fell in 118. The national median existing home price was
$163,500 in the fourth quarter compared to $170,600 one year earlier, a
decrease of 4.2 percent. Distressed
homes - foreclosures and short sales - sold for discounts averaging 15 to 20
percent and represented 30 percent of total sales compared to 34 percent during
the same quarter of 2010. The median
price of a condo was $160,800, down 1.7 percent from one year earlier. </p>
<p>The
national HAI rose to a record high 184.5 in 2011. The Index base of 100 is defined as the point
where a median-income household has exactly enough income to qualify for a
median priced existing home with a 20 percent down payment and 25 percent of
the income devoted to mortgage principal and interest payments. The higher the index, the greater the
household purchasing power. For
first-time buyers making small downpayments, the affordability levels are
relatively lower.</p>
<p>Existing
homes sales, including single-family houses and condos, increased 5.9 percent
to a seasonally adjusted annual rate of 4.42 million compared to 4.17 million
in the third quarter. This was 9.2
percent above the 4.04 million pace one year earlier. </p>
<p>Inventories
of existing homes fell 21.2 percent over the period between Q4 2010 and Q4 201,
dropping from 3.02 million homes for sale to 2.38 million </p>
<p>The
share of all-cash home purchases in the fourth quarter was 29 percent, unchanged
from the third quarter and up one percentage point from the fourth quarter of
2010. Investors, who are largely the all-cash purchasers, accounted for
19 percent of home sales in the third quarter virtually unchanged from the two
earlier reporting periods. First-time buyers purchased 33 percent of homes in
the fourth quarter again nearly unchanged from earlier quarters. </p>
<p>Sales
rose in <b>all four regions</b> both from third quarter figures and those of one year
earlier, but prices declined. The
largest annual increase in sales was in the Midwest where sales were up 14.1
percent from Q4 2010. Quarter-over-quarter sales were up at least 3.8 percent
in every region with the West showing the greatest increase at 8.1 percent. Median prices now range from $134,100 in the
Midwest to $229,200 in the Northeast. . </p>
<p>Lawrence Yun, NAR chief economist, said the figures reflect greater home
sales activity at lower price points. "Sales have risen strongly in
lower price ranges from one year ago, while sales at the upper end remain
sluggish," he said. "More importantly, we're seeing a consistent trend of
declining inventory, which means supply and demand conditions are becoming more
balanced in more areas, which will help stabilize home prices."</p>
<p>Metro
areas with the greatest housing affordability conditions in 2011 include the
Detroit-Warren-Livonia area of Michigan, with an index of 383.4; Toledo, Ohio,
at 242.9; and Decatur, Ill., at 236.8. Only 24 out of 152 metros measured
had an affordability index below 100 in 2011.</p>...(<a href="http://www.mortgagenewsdaily.com/02092012_home_prices.asp">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong> <a href="http://www.mortgagenewsdaily.com/channels/246901/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=246901" width="1" height="1">jpatswansonhttp://www.mortgagenewsdaily.com/members/jpatswanson/default.aspxMortgage Servicer Settlement Finally Reached/02092012_attorneys_general_settlement.asp2012-02-09T16:51:05Z2012-02-09T16:51:05Z<p>A
final settlement between the nation's <b>five largest mortgage servicers</b>, two federal
agencies and 49 of the states' attorneys general (AGs) was announced this
morning by officials representing the AGs, the Departments of Justice (DOJ) and
Housing and Urban Development (HUD). The settlement, the result of a 16 month nationwide investigation into
foreclosure abuses, fraud, and unacceptable mortgage servicing practices is, as
anticipated, for $25 billion dollars but there was no information released as
to which state was not participating in the action. </p>
<p>Bank of America, JPMorgan Chase
& Co., Wells Fargo & Company, Citibank, and Ally Financial, (formerly
GMAC) and their servicing subsidiaries have agreed to commit a minimum of $17
billion directly to borrowers through a series of relief effort options
including principal reduction. Servicers
will likely provide up to an estimated $32 billion in direct homeowner relief. There will be $4.2 billion paid directly to
the states and $750 million to the federal government. In addition, a comprehensive set of new standards
will be implemented to protect homeowners from future abuses and an independent
monitor will be appointed to ensure servicer compliance.</p>
<p>Nothing in the agreement grants any
immunity from criminal offenses and will not affect criminal
prosecutions. The agreement does not prevent homeowners or investors from
pursuing individual, institutional or class action civil cases against the five
servicers. The pact also enables state attorneys general and federal
agencies to investigate and pursue other aspects of the mortgage crisis,
including securities cases.</p>
<p>U.S. Attorney General Eric Holder
told an audience attending the announcement about the scope of the investigation
which led to the settlement calling it a remarkable example of cooperative law
enforcement. It involved multiple
federal agencies working in partnership with state AG offices and state banking
regulators. The U.S. Trustees Program alone reviewed more
than 37,000 bankruptcy documents and similar large-scale reviews were also
conducted by HUD, FHA, and others. Holder said the investigations revealed
disturbing practices. "For instance, we saw that - far too often -
servicers pushed borrowers into foreclosure, even though federal regulations
required the servicers to try other alternatives first. These failures
didn't just hurt borrowers who might have been able to afford modified
mortgages. They fueled the downward spiral of our economy - and of
communities nationwide." </p>
<p>Holder stressed that, while the
agreement resolves some civil claims, it <b>does not prevent state and federal
authorities</b> from pursuing criminal enforcement actions nor does it prevent any claims by any individual borrowers who wish
to bring their own lawsuits. </p>
<p> "I also want to note that,
with this settlement, we aren't just holding mortgage servicers accountable for
wrongs they committed. We are using this opportunity to fix a broken
system, and to lay the groundwork for a better future. Our nation's
leading mortgage servicers will be required to follow a new set of standards,
which will be overseen by an independent monitor." and will be enforceable in
federal court." </p>
<p>Iowa Attorney General Tom Miller,
who led the settlement talks on behalf of the states said, "One of the hardest
battles I fought over the last 16 months was over <b>principal reduction</b>. At first the banks tried to tell us that was
a non-starter. We kept fighting back, and now I'm very proud to say that
we got it across the finish line." He said that targeted principal
reduction will be one of the keystones of the agreement, and will help keep
many families in their homes and out of foreclosure. "People will see
that this works, it'll result in lower re-default rates, and I think it'll be a
catalyst for more."</p>
<p>Miller released a statement through
his office that said the final agreement will be filed in U.S. District Court
in Washington, probably later this month, and will have the authority of a
court order. </p>
<p>"Because of the complexity of the
<a href="/mbs/">mortgage market</a> and this agreement, which will span a three year period,
borrowers in some cases may be contacted directly by one of the five included
mortgage servicers regarding loan modification offers, may be contacted by a
settlement administrator or their state attorney general, or may need to
contact their mortgage servicer to obtain more information about specific
programs and whether their loan qualifies. More information will be made
available as the settlement programs are implemented."</p>
<p>Simultaneous with the settlement
agreement, the Office of the Comptroller of the Currency (OCC) announced it had
agreed in principal on a settlement of civil money penalties against four of
the five banks in connection with unsafe and unsound mortgage servicing and foreclosure
practices against which OCC had issued cease and desist orders last April. </p>
<p>Under this settlement the four banks
(Ally is not included in this action) agree not to contest the OCC's ability to
impose penalties totaling $394 million and the OCC agrees to hold in abeyance
imposition of such penalties if the servicers make payments or take other actions
under the larger federal-state settlement with a value of at least the penalty amounts
that each servicer agrees OCC could impose.
Additional penalties will be assessed if the agreement is not fulfilled
within three years. Bank of America is
liable for $164 million, Citibank, $34 million, Chase $113 million, and Wells
Fargo $83 million. </p>...(<a href="http://www.mortgagenewsdaily.com/02092012_attorneys_general_settlement.asp">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong> <a href="http://www.mortgagenewsdaily.com/channels/246896/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=246896" width="1" height="1">jpatswansonhttp://www.mortgagenewsdaily.com/members/jpatswanson/default.aspx"House Lock" - Negative Equity not Hurting Employment Numbers/02092012_negative_equity_unemployment.asp2012-02-09T14:06:09Z2012-02-09T14:06:09Z<p>"<b>House lock</b>" is not a major factor when
it comes to a homeowner's ability to find a job. A
working paper commissioned by the <b>Federal Reserve Bank of Boston</b> found that,
while many Americans lack mobility because their homes are "underwater" in
respect to their mortgages, this is only a marginal contributing factor to continued
unemployment.</p>
<p>Migration across states and among
homeowners has <b>fallen sharply</b> at the same time as a widespread drop in housing
prices has resulted in wide-spread negative home equity. According to CoreLogic, 10.7 million homes, 22.1
percent of all residential properties with a mortgage, were worth less than
their mortgages at the end of the third quarter of 2011 and an additional 2.4
million borrowers had less than 5 percent equity.</p>
<p>The nation's unemployment rate has
hovered around 9 percent since early 2009.
At the same time, data from the Bureau of Labor Statistics show that,
despite increasing numbers of job openings since June of 2009, there has been
little increase in hiring. Not only has
unemployment been especially persistent during this economic downturn, but
individuals have remained out of work for exceptionally long periods. Yet <b>some employers state that they cannot
find workers</b> with the right mix of skills suggesting that some type of mismatch
might be occurring. </p>
<p>Data from the Internal Revenue Service
indicates that, while mobility across states has been declining gradually for
more than two decades, there has been a recent sharp downturn. While migration across labor markets is cyclical,
the drop during this recession has been larger than in other post-war recessions. It has also <b>disproportionately involved
homeowners</b>. The number of home owners
who moved cross-state between 2006 and 2009 fell by 25.5 percent versus a
decline of 13.6 percent among renters.</p>
<p>In their working paper, <i><a href="http://www.bos.frb.org/economic/wp/wp2012/wp1201.pdf">Are
American Homeowners Locked into Their Houses?
The Impact of Housing Market Conditions on State-to-State Migration</a>,</i>
Alicia Sasser Modestino and Julia Dennett of the Fed's New England Public
Policy Center looked at these three factors to determine whether having
negative equity in their homes prevents homeowners from relocating to states
with better job markets.</p>
<p>The concept of "housing lock" is not new
and a number of studies have examined how it might contribute to geographic
mobility. However, much of the earlier
research has been restricted either in terms of the geographic area studied,
the length of the study, or the group studied (i.e. younger households.). This was nationwide, included all demographic
groups, and used a time period that roughly coincides with the recession. The
study used a logistic regression framework to estimate the <b>impact of negative
equity</b> on migration while controlling for changes in relative economics
conditions and differences in time-invariant characteristics between origin and
destination states. Finally the authors
did a "back-of-the-envelope calculation" to determine the potential impact of
restricted mobility on the national unemployment rate.</p>
<p>The analysis found that negative equity
did reduce cross-state migration between 2006 and 2009. A one-standard deviation increase in the
share of underwater households in the origin state reduces the outflow of
migrants to the destination state by 2.93 percent. For the average origin-destination pair this
meant a reduction in out-migration between 0.595 to 0.578 per 1000 initial
residents or 85 migrants each year.
Summed across all possible destination states this would mean a decrease
in the outflow from the average origin state of roughly 4,000 residents.</p>
<p>This is a small number relative to total
migration in the U.S and reduces national migration by 0.05 percent or 110,000
to 150,000 fewer individuals migrating across state lines in any given year
compared to observed migration in 2008-2009 of 5.6 million persons.</p>
<p>Assuming that all migrants who were constrained
from moving due to negative equity were unemployed and seeking a job and that
they would have found employment in the new state, the <b>absence of house lock</b>
would have reduced the nation's unemployment rate by <b>at most 0.10 percentage
points annually</b> between 2006 and 2009 or a rate of 9.0 rather than 9.3 in
2009. Recognizing that not all migrants
are job-seekers or would be successful in finding work after moving, "Yields a
national unemployment rate that is virtually unchanged from the actual one that
prevailed in each year." The
disproportionate impact on the mobility of homeowners versus renters has no
effects on labor market statistics. </p>
<p>The authors conclude that it seems
reasonable for policymakers to focus on efforts that stimulate aggregate demand
in order to reduce unemployment rather than policies to reduce negative
impact. Instead, increased efforts to
alleviate the housing sector's drag on the economy such as by assisting
homeowners to refinance or reducing foreclosures may be more effective in
stimulating aggregate demand and reducing the high rate of joblessness. </p>...(<a href="http://www.mortgagenewsdaily.com/02092012_negative_equity_unemployment.asp">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong> <a href="http://www.mortgagenewsdaily.com/channels/246867/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=246867" width="1" height="1">jpatswansonhttp://www.mortgagenewsdaily.com/members/jpatswanson/default.aspxAlly said to be Shopping Mortgage Unit/02082012_ally_fincl_tarp_recipients.asp2012-02-08T19:05:52Z2012-02-08T19:05:52Z<p>One of the financial institutions that are
party to the reported settlement agreement with the attorneys general of the
majority of the states is reportedly on the auction block. According to Bloomberg News, <b>Ally Financial</b> is
talking with private equity firms about selling its mortgage unit, <b>Residential
Capital LCC</b>, through a pre-package bankruptcy.
</p>
<p>Any sale of the company would be
complicated by its recent financial history.
The company was founded as General Motors Acceptance Corporation (GMAC) in
1919 by General Motors as an intermediary to provide financing for the purchase
of its autos. Over the years it expanded
into other types of lending and into real estate brokerage and adopted the acronym
as its brand name. </p>
<p>GMAC was hard hit by the housing crash
and was one of the beneficiaries of Toxic Asset Relief Funds (TARP). In addition to the company's potential liabilities
- a share of a reported $25 billion to be paid to the states in the above
referenced settlement deal represents merely one of the many suits arising out
of the company's role in the financial crisis - the U.S. Treasury has a large
stake in the parent company. According to the company's website, the Treasury owns
73.8 percent; other large stakeholders at less than 10 percent each are GM
Trust, Cerberus and affiliates, and third party investors. In 2010, reportedly to distance the financial
arm from the auto company, its name was changed to Ally. </p>
<p>The company reported a fourth quarter
loss on a $270 million charge to cover expected penalties from regulators.</p>
<p>According to Bloomberg, Ally has
contacted Fortress Investment Cerberus Capital Management, Centerbridge
Capital, and Leucadia National Corporation to see if they have any interest in
a purchase. Bloomberg also said the company is seeking a sale in
order to limit its liability. The
pre-packaged bankruptcy would allow it to reach agreements with creditors and
stakeholders before filing for court protection.</p>...(<a href="http://www.mortgagenewsdaily.com/02082012_ally_fincl_tarp_recipients.asp">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong> <a href="http://www.mortgagenewsdaily.com/channels/246724/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=246724" width="1" height="1">jpatswansonhttp://www.mortgagenewsdaily.com/members/jpatswanson/default.aspxDelinquencies, Foreclosures, and Inventories Improve in CoreLogic Data/02082012_delinquencies_foreclosures.asp2012-02-08T17:54:46Z2012-02-08T17:54:46Z<p>According to CoreLogic, the Santa Ana
California based provider of information and business services, there were a
total of <b>830,000 foreclosures nationwide in 2011 </b>compared to 1.1 million in
2010. The most recent monthly numbers, for
December 2011, were down from foreclosures both a month earlier and in December
2010. </p>
<p>There were 55,000 foreclosures during
the month of December, a drop of 2,000 from the November total and a
significant decrease from a year earlier when there were 67,000, a -15 percent
change. According to CoreLogic, there
have been approximately 3.2 million foreclosures since the beginning of the
financial crisis in September 2008.</p>
<p>The <b>foreclosure inventory</b> - the stock of
homes in the process of foreclosure - also decreased on an annual and accelerating
basis. There were 1.4 million homes, 3.4
percent of all mortgaged homes in the U.S.*, in the inventory in December. This was a drop of 8.4 percent in the
inventory compared to December 2010. The
November inventory had declined on an annual basis by 5.3 percent.</p>
<p>The <b>serious delinquency rate</b>, homeowners
who are 90 or more days in arrears on their mortgage payments, improved to 7.3
percent in December from 7.8 percent one year earlier but was up one basis
point compared to November.</p>
<p>CoreLogic provides a metric that
indicates the rate at which servicers are processing distressed assets. The distressed clearing ratio is calculated
by dividing the number of sales of lender-owned properties (REO) by completed
foreclosures. The higher the ratio the
faster the REO inventory is clearing. In
December the ratio was 1.03; in November it was 0.94.</p>
<p>Mark Fleming, chief economist with
CoreLogic, commented, "The inventory of foreclosed properties has begun to
shrink and the pace at which properties are entering foreclosure is
slowing. While foreclosure filings are
being curtailed by a variety of judicial and regulatory constraints, mortgage
servicers are completing REO sales faster than they are completing foreclosures. This is the first time in a year that REO
sales have outpaced completed foreclosures and part of the reason for the decrease
in the foreclosure inventory."</p>
<p>Of the top 100 markets tracked by CoreLogic,
34 showed an increase in the foreclosure inventory in December versus one year
earlier. In November inventories in 46
of the markets had increased.</p>
<p>States with the highest percentage of foreclosure
inventories were Florida (11.9), New Jersey (6.4), Illinois (5.4), Nevada (5.4)
and New York (4.6).</p>
<p>*Approximately one-third of U.S. homes
are owned without a mortgage. These
properties do not enter into the calculations of distressed clearing ratios.</p>...(<a href="http://www.mortgagenewsdaily.com/02082012_delinquencies_foreclosures.asp">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong> <a href="http://www.mortgagenewsdaily.com/channels/246693/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=246693" width="1" height="1">jpatswansonhttp://www.mortgagenewsdaily.com/members/jpatswanson/default.aspxRefinancing Apps Rise on Record Low Rates/02082012_mortgage_applications_survey.asp2012-02-08T13:58:46Z2012-02-08T13:58:46Z<p>Mortgage
rates broke another set of records during the week ended February 3,
establishing several new historic lows.
In response, the seasonally adjusted Mortgage Bankers Association's (MBA)
Market Composite Index, a measure of <b>mortgage application volume</b>, rose 7.5
percent and 8.7 percent on an unadjusted basis.
</p>
<p>The increases were
driven solely by refinancing which represented 80.5 percent of total applications for the week,
up from 80.0 percent the previous week.
The Index measuring <b>applications for refinancing</b> increased 9.4 percent over
that of the week ended January 27 but the seasonally adjusted basis the
<b>Purchase Index</b> ticked up only 0.1 percent. The unadjusted Purchase Index was 6
percent higher than in the previous week and 4.1 percent lower than during the
same week in 2011. </p>
<p>The four-week
moving averages for the seasonally adjusted Market and Purchase Indices were up 4.88 percent and 0.65 percent respectively and
the moving average for the Refinance Index rose 5.72 percent. </p>
<p>Statistics for the
month of January indicate that investors played a slightly smaller part in the
purchase mortgage market than in December with the investor share of applications
for home purchase at 6.4 percent compared to 6.9 percent in December. In
addition, the share of purchase mortgages for second homes increased to 5.9
percent in January from 5.4 percent in December. The investor share of applications declined
in the West and East North Central regions. </p>
<p><b><span style="font-size: small;">Purchase Index vs 30 Yr Fixed</span></b>
</p>
<p>[purchaseappschart]</p>
<p><b><span style="font-size: small;">Refinance Index vs 30 Yr Fixed</span></b></p>
<p>[refiappschart]</p>
<p>Both the average
contract <a href="/mortgage_rates/">interest rate</a> and the effective rate for all types of mortgages with
loan-to-value ratios of 80 percent declined for the week and all fixed-rate
mortgages (FRM) reached new lows. </p>
<ul class="unIndentedList">
<li>
Rates for 30-year FRM with <a name="ThFRMChange">onforming loan balances of $417,500
or less </a>decreased to 4.05 percent from 4.09 percent, with points increasing to 0.44 from<a name="ThFRMBPSChng"> </a>0.41 including the
origination fee. </li>
<li>
Jumbo 30-year FRM, those with loan
balances <a name="MBA30J_RateDir">greater
than $417,500,</a> had averages
rates of 4.29 percent with .43 point compared to 4.33
percent with 0.41 point. </li>
<li>
The rate for 30-year fixed-rate mortgages backed by the
FHA decreased to 3.89 percent from 3.96 percent, with points increasing to 0.78
from 0.61. </li>
<li>
Fifteen-year FRM had an average
rate of 3.33 percent, down 3 basis points from the previous week and points decreased to
0.37 from 0.41. </li>
<li>
The rate for 5/1 adjustable-rate mortgages (ARM) decreased to
2.91 percent from 2.94 percent, with points increasing
to 0.40 from 0.39. The ARM share of mortgage
applications was up to 6.0 percent from 5.6
percent the previous week.</li>
</ul>
<p>MBA's Weekly
Mortgage Applications Survey covers over 75 percent of all U.S. retail
residential mortgage applications, and has been conducted weekly since
1990. Respondents include mortgage bankers, commercial banks and
thrifts. Base period and value for all indexes is March 16, 1990=100.</p>...(<a href="http://www.mortgagenewsdaily.com/02082012_mortgage_applications_survey.asp">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong> <a href="http://www.mortgagenewsdaily.com/channels/246665/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=246665" width="1" height="1">jpatswansonhttp://www.mortgagenewsdaily.com/members/jpatswanson/default.aspxHouse Committee Acts on Bill to Protect FHA Fund/02072012_fha_insurance_fund.asp2012-02-07T21:11:47Z2012-02-07T21:11:47Z<p>A sub-committee of the House Financial Services
committee today approved the <b>FHA Emergency Solvency Act</b> which is intended to
shore up the finances of the Federal Housing Administration (FHA). The legislation strengthens FHA's Mortgage Insurance
Fund by establishing minimum annual premiums for mortgage insurance; barring
unscrupulous lenders from participating in the program, improving the FHA's
internal financial controls, transparency, and disclosure requirements, and
requires lenders who commit fraud to repay any losses suffered by FHA as a
consequence. </p>
<p>FHA's cash reserves have been hard-hit
by the housing crash and have fallen below 2 percent Congress has mandated it
must maintain. According to the
subcommittee's press release, the agency's finances have deteriorated to the
point where a bailout might be required in 2012 if the housing market worsens
further. </p>
<p> "The FHA's cash reserves are <b>down to dangerous
levels</b>, and taxpayers cannot afford another Fannie- and Freddie-style bailout,"
said Rep. Biggert. "This Administration needs to enforce stronger
standards and create room for the private sector to replace taxpayers as the
primary source of funding. The FHA is facing an urgent fiscal crisis, and
this proposal gives HUD Secretary Donovan emergency tools to wind down the risk
before it's too late."<br />
<br />
Also on Tuesday the Subcommittee approved the Affordable Housing and Self-Sufficiency Improvement Act,<b> </b>which
is intended to expand opportunities for low-income families that receive
housing assistance to achieve self-sufficiency and reduces the costs of HUD's
affordable housing programs and the
Homeless Children and Youth Act, which harmonizes HUD's definition of
homeless children with that of other agencies like the Department of Education,
allowing HUD to more accurately estimate the number of homeless in the U.S.</p>
<p>All three measures were passed by
voice vote.</p>...(<a href="http://www.mortgagenewsdaily.com/02072012_fha_insurance_fund.asp">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong> <a href="http://www.mortgagenewsdaily.com/channels/246569/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=246569" width="1" height="1">jpatswansonhttp://www.mortgagenewsdaily.com/members/jpatswanson/default.aspx