The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury have released the August edition of the Obama Administration's Housing Scorecard. The August 2010 Scorecard was marked primarily by how few changes were evidenced since the July Report.
Housing prices have been relatively flat on a month to month basis since January 2009 when they ended their 30 month decline. Historic low interest rates continued to promote home affordability and refinancing options for the nation's families, but few people were taking advantage of it either to purchase a home or refinance their existing one. Overall, the market remains fragile with foreclosure starts showing a slight increase and serious delinquencies continuing to work through the pipeline. MND has described the housing market as "stagnant".
"While there has been some stabilization in the housing market, it remains clear that we have more work ahead," said HUD Assistant Secretary Raphael Bostic. "Through the Obama Administration's efforts over the past 16 months, we have seen increased price stabilization and improved home affordability for prospective, qualified homebuyers. At the same time, we know that we must continue to provide support to underwater borrowers, unemployed homeowners, and to the nation's hardest hit neighborhoods."
Attempts to streamline the Home Affordable Mortgage Program (HAMP) by requiring homeowners to submit the necessary documentation up front in order and thus cut down the amount of time they spend in trial modifications have resulted in a reduction in the number of homeowners entering the program. It is hoped that the dip is temporary and that the change will move borrowers through the program faster and ultimately result in more permanent modifications.
24,577 distressed homebuyers entered into a HAMP trial since the July report compared to 38,700 the month before. Permanent modifications also dropped with 36,100 homeowners converting to permanent modification status compared to 51,200 a month earlier. Since the HAMP program began in the late winter of 2009 1.31 million homeowners have entered HAMP trials, and 434,700 have converted to permanent modifications.
About 48% of the 1.31 million homeowners who started a mortgage modification through July have dropped out, up from the 41% noted in June. Modification trials offered in the program prior to June 1 did not require up-front documentation of income or eligibility, and many trials are now being canceled. As a result, Treasury said 100,114 participants dropped out of the program in July -- more than four times the 24,577 new modification trials started.
Other assistance to homeowners was provided by the Federal Housing Administration (FHA) which provided loss mitigation interventions to 56,100 homeowners last month compared to 32,900 the month before and HOPE Now which provided modifications to 123,200 borrowers in June, the latest month for which figures are available, compared to 112,100 in May.
Delinquent mortgages declined slightly to 1.86 million prime mortgages, 1.91 million subprime, and 559,600 FHA mortgages. Each figure represented a decrease of less than 1.5 percent or less from the previous reporting period. 97,100 homes entered the foreclosure process in July compared to 96,200 in June; auctions were scheduled on 135,200 homes, up from 132,100 in June and 92,900 homes were taken as owned real estate compared to 85,500.
The number of homeowners who are underwater on their mortgages is estimated at 11.28 million, a slight improvement over the June figure of 11.32 million. Aggregate home equity increased an estimated 28.6 billion.
Mortgage originations continue to be in the range of dismal. The preliminary count of conventional refinancings during the month was 1.13 million and purchase originations totaled 925,000. Refinancings were up about 80,000 from June figures which were adjusted upwards slightly from earlier estimates. Purchase originations were substantially than those a month earlier, but the revised figures for June, 614.700, were cut almost in half from the preliminary figure announced earlier. FHA originations were down dramatically from the previous month. 27,000 FHA refinancings were completed compared to a revised figure of 32,000 in June and purchase originations dropped from an upwardly revised June figure of 128,100 to 63,000. Purchases by first time home buyers dropped from 89,700 to 47,300.
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