The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury released the November 2010 edition of the Obama Administration’s Housing Scorecard (www.hud.gov/scorecard). The latest housing figures show continued signs of stabilization in house prices and high home affordability due in part to record low mortgage interest rates. The housing scorecard is a comprehensive report on the nation’s housing market.
“The Obama Administration has made significant strides in promoting stability for the housing market and the nation’s homeowners. Through a range of swift actions since we took office, we’ve seen millions more families able to stay in their homes and a steady rise in responsible borrowers refinancing their loans or becoming homeowners,” said HUD Assistant Secretary Raphael Bostic. “But, while we cannot stop every foreclosure, we know that more has to be done to reach homeowners in distress and to help unemployed borrowers. That’s why we’re continuing to focus on successfully implementing the programs we’ve put in place—such as neighborhood stabilization funding, additional assistance on refinancing and emergency loans to help unemployed homeowners—and ensuring that help is available to homeowners as early as possible.”
“The recent reports of problems in the foreclosure process underscore the importance of helping responsible homeowners avoid the pain of foreclosure,” said acting Assistant Secretary for Financial Stability Timothy Massad. “As we implement additional program enhancements to reach more homeowners, we continue to stress to mortgage servicers the importance of making every effort to enroll eligible homeowners in HAMP and provide meaningful alternatives to avoidable foreclosures.”
The November Housing Scorecard features key data on the health of the housing market including:
-An additional one million families refinanced their mortgages in the last quarter, taking advantage of the lowest rates in history on 30-year fixed mortgages. Since April 2009, record low interest rates have helped more than 8.3 million homeowners to refinance, resulting in more stable home prices and $15.2 billion in annual borrower savings.
-As expected with the expiration of the Home Buyer Tax Credit, new and existing home sales have remained below levels seen in the first half of 2010. At the same time, home prices remained level in the past year after 33 straight months of decline and homeowners added $95 billion in home equity in the second quarter.
-More than 3.73 million modification arrangements were started between April 2009 and the end of August 2010—more than double the number of foreclosure completions during that time. These modification arrangements included nearly 1.4 million trial Home Affordable Modification Program (HAMP) modification starts, more than 600,000 Federal Housing Administration (FHA) loss mitigation and early delinquency interventions, and nearly 1.8 million proprietary modifications under HOPE Now. While some homeowners may have received help from more than one program, the number of agreements offered were more than double the number of foreclosure completions for the same period (1.6 million).
Data in the scorecard also show that the recovery in the housing market continues to remain fragile. While the recovery will take place over time, the Administration remains committed to its efforts to prevent avoidable foreclosures and stabilize the housing market.
Wednesday, November 24, 2010
Wednesday, November 17, 2010
Well-Kept Yards Signal Neighborhood Safety, Suggests New Relocation Survey
A new survey conducted by Relocation.com finds that 75% of Americans believe the most important factor in determining a neighborhood’s safety is the up-keep of surrounding homes, especially the conditions of the front lawns, which trumps even Googling neighborhood statistics to get a feel for a community.
The latest Relocation.com survey finds that 74% of respondents indicated they would select a neighborhood based on “word-of-mouth” or its local reputation over any other reason, while 67% of the respondents say they pay attention to local crime reports and statistics as reported in the local media. Less compelling, according to the Relocation survey are “a gated community with security patrols” and “proximity to a police or fire station” when determining the safety of a neighborhood.
“It’s interesting to see how home buyers determine neighborhood safety based on the neighborhood’s appearance and not as much based on police statistics or crime reports,” said Relocation.com Chairman and Founder Sharon Asher. “Our findings suggest that some home sellers who are struggling to generate interest may want to go the extra mile and help their neighbors with landscaping needs in order to create buyer interest.”
The Relocation.com survey was conducted in mid-October, 2010, in a continuing effort to provide information on lifestyle factors that drive moving and relocation decisions in the U.S.
The latest Relocation.com survey finds that 74% of respondents indicated they would select a neighborhood based on “word-of-mouth” or its local reputation over any other reason, while 67% of the respondents say they pay attention to local crime reports and statistics as reported in the local media. Less compelling, according to the Relocation survey are “a gated community with security patrols” and “proximity to a police or fire station” when determining the safety of a neighborhood.
“It’s interesting to see how home buyers determine neighborhood safety based on the neighborhood’s appearance and not as much based on police statistics or crime reports,” said Relocation.com Chairman and Founder Sharon Asher. “Our findings suggest that some home sellers who are struggling to generate interest may want to go the extra mile and help their neighbors with landscaping needs in order to create buyer interest.”
The Relocation.com survey was conducted in mid-October, 2010, in a continuing effort to provide information on lifestyle factors that drive moving and relocation decisions in the U.S.
Monday, October 18, 2010
Builder Confidence Improves in October
Builder confidence in the market for newly built, single-family homes rose three points to 16 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for October, released today. This was the first improvement registered by the HMI in five months, and returns the index to a level last seen in June of this year.
"Builders are starting to see some flickers of interest among potential buyers, and are hopeful that this interest will translate to more sales in the coming months," said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. "However, because most builders still have no access to credit for building homes, there is a real concern that we will not be able to meet the pent-up demand when consumers are ready to get back in the market. This problem threatens to severely slow the housing and economic recovery."
"The new-homes market is finally moving past the lull that occurred when the home buyer tax credits expired and economic growth stalled this summer," noted NAHB Chief Economist David Crowe. "While challenges such as competition from foreclosures, inaccurate appraisal values, and general consumer uncertainty about the economy and job market continue to be major factors, builders have seen a slight increase in consumers who are considering a home purchase. The toughest obstacles really come down to financing – the scarcity of construction credit for builders along with tougher mortgage requirements for consumers."
Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
All three of the HMI's component indexes registered gains in October. The index gauging current sales conditions rose three points to16, while the index gauging sales expectations in the next six months rose five points to 23 and the index gauging traffic of prospective buyers rose two points to 11.
Builder confidence also improved across every region in October. The South and West each posted four-point gains, to 18 and 12, respectively, while the Northeast and Midwest each posted single-point gains, to 17 and 13, respectively.
"Builders are starting to see some flickers of interest among potential buyers, and are hopeful that this interest will translate to more sales in the coming months," said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. "However, because most builders still have no access to credit for building homes, there is a real concern that we will not be able to meet the pent-up demand when consumers are ready to get back in the market. This problem threatens to severely slow the housing and economic recovery."
"The new-homes market is finally moving past the lull that occurred when the home buyer tax credits expired and economic growth stalled this summer," noted NAHB Chief Economist David Crowe. "While challenges such as competition from foreclosures, inaccurate appraisal values, and general consumer uncertainty about the economy and job market continue to be major factors, builders have seen a slight increase in consumers who are considering a home purchase. The toughest obstacles really come down to financing – the scarcity of construction credit for builders along with tougher mortgage requirements for consumers."
Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
All three of the HMI's component indexes registered gains in October. The index gauging current sales conditions rose three points to16, while the index gauging sales expectations in the next six months rose five points to 23 and the index gauging traffic of prospective buyers rose two points to 11.
Builder confidence also improved across every region in October. The South and West each posted four-point gains, to 18 and 12, respectively, while the Northeast and Midwest each posted single-point gains, to 17 and 13, respectively.
Housing Tax Incentives Benefit Younger Households Most
New research from the National Association of Home Builders (NAHB) reveals that the benefits of housing-related tax deductions, such as the mortgage interest deduction, generally decline in value as individuals age. Using Internal Revenue Service Statistics of Income (SOI) data, NAHB was able to report for the first time how various tax deductions are used by different age groups. The analysis demonstrates that the biggest beneficiaries are younger households, who typically have large mortgages, small amounts of equity in their homes and growing families.
“Opponents falsely argue that the deduction is only for the wealthy, but it is clear that the mortgage interest deduction is also of great value to younger homeowners,” said Robert Dietz, assistant vice president for Tax and Policy Issues for NAHB. “Any tampering with this deduction would have a disproportionate impact, as a share of household income, on younger homeowners who have relatively higher mortgage interest payments. These are households who have growing demand for homeownership due to marriages and children.”
The average mortgage interest deduction peaks for taxpayers in the 35 to under-45 age group, followed by the 18-to 34-aged taxpayers, and declines as the taxpayer gets older. According to the research, this occurs because the mortgage interest deduction peaks soon after the taxpayer moves from renting to homeownership, and declines over time as homeowners pay down existing mortgage debt and increase homeowner equity.
When examining the age distribution of those claiming the deduction for mortgage insurance, which is associated with homeowners making a downpayment of less than 20%, the analysis found that the largest share—59%—goes to those aged 18 to under-45.
The age-related pattern for the smaller tax deduction for local and state real estate taxes, however, differs slightly. Unlike the mortgage interest deduction, which declines in value as taxpayers age, the value of the real estate tax deduction increases as taxpayers age, primarily due to increases in home values as household income and wealth increases.
The report also shows that both housing deductions—for mortgage interest and real estate taxes—fall as a share of household income for older taxpayers. In contrast, the share of other non-housing deductions, such as the medical expense, charitable contribution, and investment interest expense deductions, rises for taxpayers who are 65 and older.
“Opponents falsely argue that the deduction is only for the wealthy, but it is clear that the mortgage interest deduction is also of great value to younger homeowners,” said Robert Dietz, assistant vice president for Tax and Policy Issues for NAHB. “Any tampering with this deduction would have a disproportionate impact, as a share of household income, on younger homeowners who have relatively higher mortgage interest payments. These are households who have growing demand for homeownership due to marriages and children.”
The average mortgage interest deduction peaks for taxpayers in the 35 to under-45 age group, followed by the 18-to 34-aged taxpayers, and declines as the taxpayer gets older. According to the research, this occurs because the mortgage interest deduction peaks soon after the taxpayer moves from renting to homeownership, and declines over time as homeowners pay down existing mortgage debt and increase homeowner equity.
When examining the age distribution of those claiming the deduction for mortgage insurance, which is associated with homeowners making a downpayment of less than 20%, the analysis found that the largest share—59%—goes to those aged 18 to under-45.
The age-related pattern for the smaller tax deduction for local and state real estate taxes, however, differs slightly. Unlike the mortgage interest deduction, which declines in value as taxpayers age, the value of the real estate tax deduction increases as taxpayers age, primarily due to increases in home values as household income and wealth increases.
The report also shows that both housing deductions—for mortgage interest and real estate taxes—fall as a share of household income for older taxpayers. In contrast, the share of other non-housing deductions, such as the medical expense, charitable contribution, and investment interest expense deductions, rises for taxpayers who are 65 and older.
Thursday, October 14, 2010
NAR Says Families Will Suffer if Foreclosure Freeze Continues
Thousands of first-time and move-up buyers who hoped to make a foreclosed property their new home now face uncertainty, anxiety and possibly remorse as they worry that closing on their desired property could be in jeopardy.
For many, the dream of homeownership could turn into agony if their home purchase is indefinitely delayed by a moratorium on foreclosures declared by some banks, the National Association of Realtors® said today. The moratoriums are needed, banks say, to review all of the foreclosures in their portfolios to make sure they’re in compliance with the law and that titles are clear.
NAR warned that a prolonged review process would have a damaging impact on many communities and hinder the nation’s economic recovery.
“As the leading advocate for homeownership issues, we understand that many lenders need a time-out to review their actions to ensure that homeowners are not improperly foreclosed on and that the lenders are following regulations and state laws. After that, the foreclosure process must resume quickly to return stability to families, the housing market and the economy,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates, Tucson, Ariz.
Over the past few months NAR has met with officials of top banks to discuss market issues. NAR urged banking leaders to seek resolution quickly through loan modifications and the short-sale process rather than through foreclosure. “We stand ready to help lenders develop better short-sale procedures,” Golder said.
“There are valid foreclosures that should move ahead quickly, and we shouldn’t lump them in with mortgages that are suspect. That would cause deep problems in an already fragile market and throw many families into uncertainty,” Golder said.
Golder said that she is receiving reports from Realtors® that the moratorium is already creating some anxiety among purchasers as transactions are being delayed and that some foreclosure listings are being removed from the market.
Compounding the problem is that the requirements for foreclosure vary by state, and practices to meet these requirements vary by firm. NAR is working with regulators, such as the Federal Housing Finance Agency; and encouraging them to identify and quickly address process problems.
In a letter today to the U.S Treasury Department, the U.S Department of Housing and Urban Development, and the Federal Housing Finance Agency, NAR stated the hope that banks would complete their foreclosure review expeditiously to assure that the rights of borrowers are protected and remove doubt that buyers will receive clear title to their purchase.
“NAR has long urged the lending industry to take every feasible action to keep families in their homes with a loan modification and, if that is not possible, to give them a ‘graceful exit’ through a short sale. These options are far better than a foreclosure, and nothing has driven this point home more clearly than the questions being raised about foreclosures. Lenders should place additional resources into processing loan modifications and short sales,” NAR wrote.
For many, the dream of homeownership could turn into agony if their home purchase is indefinitely delayed by a moratorium on foreclosures declared by some banks, the National Association of Realtors® said today. The moratoriums are needed, banks say, to review all of the foreclosures in their portfolios to make sure they’re in compliance with the law and that titles are clear.
NAR warned that a prolonged review process would have a damaging impact on many communities and hinder the nation’s economic recovery.
“As the leading advocate for homeownership issues, we understand that many lenders need a time-out to review their actions to ensure that homeowners are not improperly foreclosed on and that the lenders are following regulations and state laws. After that, the foreclosure process must resume quickly to return stability to families, the housing market and the economy,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates, Tucson, Ariz.
Over the past few months NAR has met with officials of top banks to discuss market issues. NAR urged banking leaders to seek resolution quickly through loan modifications and the short-sale process rather than through foreclosure. “We stand ready to help lenders develop better short-sale procedures,” Golder said.
“There are valid foreclosures that should move ahead quickly, and we shouldn’t lump them in with mortgages that are suspect. That would cause deep problems in an already fragile market and throw many families into uncertainty,” Golder said.
Golder said that she is receiving reports from Realtors® that the moratorium is already creating some anxiety among purchasers as transactions are being delayed and that some foreclosure listings are being removed from the market.
Compounding the problem is that the requirements for foreclosure vary by state, and practices to meet these requirements vary by firm. NAR is working with regulators, such as the Federal Housing Finance Agency; and encouraging them to identify and quickly address process problems.
In a letter today to the U.S Treasury Department, the U.S Department of Housing and Urban Development, and the Federal Housing Finance Agency, NAR stated the hope that banks would complete their foreclosure review expeditiously to assure that the rights of borrowers are protected and remove doubt that buyers will receive clear title to their purchase.
“NAR has long urged the lending industry to take every feasible action to keep families in their homes with a loan modification and, if that is not possible, to give them a ‘graceful exit’ through a short sale. These options are far better than a foreclosure, and nothing has driven this point home more clearly than the questions being raised about foreclosures. Lenders should place additional resources into processing loan modifications and short sales,” NAR wrote.
Wednesday, October 6, 2010
Will Foreclosure Freezes Fix the Housing Market?
MoneyWatch)—On Friday, Bank of America announced that it would suspend foreclosures in 23 states while it amended filed paperwork. That makes B of A the third major bank in two weeks to put its foreclosure process in limbo. Two days earlier J.P. Morgan Chase announced it would freeze foreclosures on more than 50,000 homes currently in receipt of a foreclosure filing. Last week, Ally Financial Inc. (the former GMAC Mortgage) also froze foreclosures.
All three banks have admitted to problems in the processing of foreclosures, including the use of so-called “robo-signatures,” employees who job it is tp solely sign foreclosure docs without reviewing the paperwork.
Today, Ohio’s Secretary of State Jennifer Brunner asked federal prosecutors to investigate foreclosure irregularities in her state. Ohio has been pushing lenders to do better. On September 17, Ohio Attorney General Richard Cordray announced that the state court had affirmed its case and legal strategy of holding loan servicers accountable in the foreclosure crisis.
So will Chase’s and Ally’s foreclosure freeze ultimately fix the housing market? That’s one theory put forth in today’s New York Times. But, I’m not so sure. What will happen in the short run is that all of the banks will put a moratorium on the foreclosures. Law firms that have become foreclosures processing machines in places like Florida, will have a lot of extra time on their hands.
I suppose, in the best of all worlds, slowing down or freezing foreclosures might actually force lenders to take a harder look at ways they might keep folks in their homes, like doing more loan modifications. That would reduce the so-called “shadow inventory” and keep housing values from crashing again.
Again, that’s the best possible scenario. I think it’s too soon to tell. And, there’s a lot that’s going wrong with the economy right now (jobs, anyone?) which could complicate the view in any rose-colored glasses.
Right now, those who have Chase and GMAC on the top of their loans are getting a reprieve.
All three banks have admitted to problems in the processing of foreclosures, including the use of so-called “robo-signatures,” employees who job it is tp solely sign foreclosure docs without reviewing the paperwork.
Today, Ohio’s Secretary of State Jennifer Brunner asked federal prosecutors to investigate foreclosure irregularities in her state. Ohio has been pushing lenders to do better. On September 17, Ohio Attorney General Richard Cordray announced that the state court had affirmed its case and legal strategy of holding loan servicers accountable in the foreclosure crisis.
So will Chase’s and Ally’s foreclosure freeze ultimately fix the housing market? That’s one theory put forth in today’s New York Times. But, I’m not so sure. What will happen in the short run is that all of the banks will put a moratorium on the foreclosures. Law firms that have become foreclosures processing machines in places like Florida, will have a lot of extra time on their hands.
I suppose, in the best of all worlds, slowing down or freezing foreclosures might actually force lenders to take a harder look at ways they might keep folks in their homes, like doing more loan modifications. That would reduce the so-called “shadow inventory” and keep housing values from crashing again.
Again, that’s the best possible scenario. I think it’s too soon to tell. And, there’s a lot that’s going wrong with the economy right now (jobs, anyone?) which could complicate the view in any rose-colored glasses.
Right now, those who have Chase and GMAC on the top of their loans are getting a reprieve.
Friday, September 24, 2010
Obama Administration September Housing Scorecard Shows Continued Advances in Housing Market; Challenges Remain
The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury recently released the September edition of the Obama Administration’s Housing Scorecard (www.hud.gov/scorecard), a comprehensive report on the nation’s housing market. The latest housing figures show continued signs of stabilization in house prices. Although existing and new home sales declined in July, recent data shows housing starts rebounded in August.
“Over the last 17 months, the Obama Administration has taken comprehensive action to keep interest rates at record lows, provide incentives to responsible home buyers, and help millions of families stay in their homes,” said HUD Assistant Secretary Raphael Bostic. “But we’re certainly not going to stop fighting to turn things around. That’s why we are focusing on successfully implementing the programs we have put in place, such as additional assistance on refinancing and helping unemployed homeowners stay in their homes, and will continue to monitor the market closely in case more is needed.”
“We’ve been steadily enhancing our programs to help struggling homeowners avoid foreclosure,” said Treasury Assistant Secretary for Financial Stability Herb Allison. “We understand that the foreclosure crisis can be highly localized and some regions have seen severe home price declines and faced severe unemployment. As a result, we have announced more than $4 billion for states hit hardest by this crisis. Our goal is to help build a sustainable, long-term housing recovery. As part of that effort, we have delivered critical support to struggling homeowners while the market continues to heal.”
The September Housing Scorecard features key data on the health of the housing market including:
-Families continued to benefit from the lowest rates in history on 30-year fixed mortgages. Since April 2009, record low rates have helped more than 7.1 million homeowners to refinance, resulting in more stable home prices and $12.7 billion in total borrower savings.
-Existing and new home sales shifted downward in July, though stabilizing housing prices drove improving expectations in some regions. As expected with the expiration of the Home Buyer Tax Credit, new and existing home sales showed a dip in July. At the same time, home prices have leveled off in the past year after 30 straight months of decline and homeowners added $95 billion in home equity in the second quarter.
-More than twice as many modification arrangements have begun compared to foreclosure completions. More than 3.35 million modification arrangements were started between April 2009 and the end of July 2010. These included more than 1.3 million trial Home Affordable Modification Program (HAMP) modification starts, more than 510,000 Federal Housing Administration (FHA) loss mitigation and early delinquency interventions, and nearly 1.6 million proprietary modifications under HOPE Now. The number of agreements offered continued to more than double foreclosure completions for the same period (1.24 million).
-More than 468,000 permanent modifications granted to homeowners; more than 33,000 homeowners received a HAMP permanent modification in August. In addition, servicers continue to work aggressively through their backlog of pending modifications, which is expected to decline in coming months. Homeowners in permanent HAMP modifications have a median monthly payment reduction of 36%, or more than $500 per month. Homeowners in permanent modifications saw their median first-lien housing expenses fall from nearly 45% of their monthly household income to 31%.
For more information, visit www.hud.gov.
“Over the last 17 months, the Obama Administration has taken comprehensive action to keep interest rates at record lows, provide incentives to responsible home buyers, and help millions of families stay in their homes,” said HUD Assistant Secretary Raphael Bostic. “But we’re certainly not going to stop fighting to turn things around. That’s why we are focusing on successfully implementing the programs we have put in place, such as additional assistance on refinancing and helping unemployed homeowners stay in their homes, and will continue to monitor the market closely in case more is needed.”
“We’ve been steadily enhancing our programs to help struggling homeowners avoid foreclosure,” said Treasury Assistant Secretary for Financial Stability Herb Allison. “We understand that the foreclosure crisis can be highly localized and some regions have seen severe home price declines and faced severe unemployment. As a result, we have announced more than $4 billion for states hit hardest by this crisis. Our goal is to help build a sustainable, long-term housing recovery. As part of that effort, we have delivered critical support to struggling homeowners while the market continues to heal.”
The September Housing Scorecard features key data on the health of the housing market including:
-Families continued to benefit from the lowest rates in history on 30-year fixed mortgages. Since April 2009, record low rates have helped more than 7.1 million homeowners to refinance, resulting in more stable home prices and $12.7 billion in total borrower savings.
-Existing and new home sales shifted downward in July, though stabilizing housing prices drove improving expectations in some regions. As expected with the expiration of the Home Buyer Tax Credit, new and existing home sales showed a dip in July. At the same time, home prices have leveled off in the past year after 30 straight months of decline and homeowners added $95 billion in home equity in the second quarter.
-More than twice as many modification arrangements have begun compared to foreclosure completions. More than 3.35 million modification arrangements were started between April 2009 and the end of July 2010. These included more than 1.3 million trial Home Affordable Modification Program (HAMP) modification starts, more than 510,000 Federal Housing Administration (FHA) loss mitigation and early delinquency interventions, and nearly 1.6 million proprietary modifications under HOPE Now. The number of agreements offered continued to more than double foreclosure completions for the same period (1.24 million).
-More than 468,000 permanent modifications granted to homeowners; more than 33,000 homeowners received a HAMP permanent modification in August. In addition, servicers continue to work aggressively through their backlog of pending modifications, which is expected to decline in coming months. Homeowners in permanent HAMP modifications have a median monthly payment reduction of 36%, or more than $500 per month. Homeowners in permanent modifications saw their median first-lien housing expenses fall from nearly 45% of their monthly household income to 31%.
For more information, visit www.hud.gov.
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