Archive for March 2013

OCC: Mortgage Performance Improves in Q4

March 31, 2013


Is this because things are getting better or is because of the mortgage modification program?  Please read the article below and let me know what you think.

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A higher share of mortgages were current and performing at the end of the fourth quarter, while the number of new foreclosures hit a record low, the Office of the Comptroller of the Currency (OCC) revealed in its Mortgage Metrics Report.

As of the end of December, 89.4 percent of mortgages were still current and performing, an increase from 88.6 percent in the third quarter and an improvement from 88 percent during the same quarter a year ago.

Servicers also began a fewer number of foreclosures after initiating 156,773 new foreclosures in Q4, the the lowest number since Q1 2008, which is when the OCC began the report.

In addition, the number of loans in the foreclosure process ended the year below the one million mark, a first since the end of June 2009. The fourth quarter figure for loans in foreclosure totaled 967,467, a 16.5 percent quarterly decrease and 23.4 percent yearly decline.

Completed foreclosures were also down and fell to 105,875, a 7.7 percent decrease from the third quarter and an 8.9 percent drop from a year ago.

This OCC’s report is based on first-lien mortgages serviced by selected national and federal savings banks. The portfolio includes 29 million loans and represents 57 percent of all mortgages outstanding in the country.

The report also found the number of seriously delinquent loans (60-plus delinquencies) in the portfolio fell by 288,064 in Q4 to 4.4 percent, a quarterly and yearly decrease of 1.1 percent and 11.6 percent, respectively.

The percentage of mortgages that were 30 to 59 days past due stood at 2.9 percent, which represents a decline of 8.2 percent from Q3 and a 6.1 percent decrease from a year ago.

According to the OCC report, a number of factors led to the yearly improvement, such as “strengthening economic conditions, the ongoing effects of both home retention efforts and home forfeiture actions, and servicing transfers to institutions outside the federal banking system.”

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Mortgage Performance

Delinquent Loans Rolling into Foreclosure Inventory after Settlement

March 31, 2013


This is very good news for buyers. I won’t lower the purchase price for homes in general but it will give them more homes to choose from.  Please read the article below and let me know what you think.

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Foreclosure inventory seems to be making a comeback after experiencing steady declines following the national mortgage settlement, RealtyTrac revealed in a report Thursday.

In the first quarter of 2013, the number of properties that were in the foreclosure process or bank-owned rose 9 percent year-over-year to 1.5 million, according to data from the online foreclosure marketplace.

“Delinquent loans that fell into a deep sleep after the robo-signing controversy in late 2010 are gradually coming out of hibernation following the finalization of the national mortgage settlement in April 2012,” said Daren Blomquist, VP at RealtyTrac.

The most recent figure represents a 12 percent increase from the five-year low seen in May 2012, but foreclosure inventory is still 32 percent below the December 2010 peak of 2.2 million.

A 59 percent spike in pre-foreclosure inventory or loans in default and without a sale date, led to the overall annual increase in foreclosure inventory, RealtyTrac explained.

“The settlement provided some closure regarding accepted foreclosure processing practices, and as a result lenders have been reviving more of these delinquent loans and pushing them into foreclosure over the past 12 months, particularly in states where a lengthy court process has resulted in a bigger backlog of non-performing loans still in snooze mode,” Blomquist added.

While pre-foreclosure inventory surged over a one-year period, the inventory of homes scheduled for a foreclosure auction decreased 25 percent in the first quarter of this year, and the inventory of bank-owned homes was down 3 percent, according to the report.

RealtyTrac also found 35 percent of the homes in the foreclosure process were abandoned by the homeowner. The number of vacant foreclosures in Florida numbered 90,556, the highest out of any other state. Illinois came in second with 31,668 abandoned properties, followed by California (28,821), Ohio (17,367), and New York (15,212).

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Delinquent Loans

GSEs Complete 541K Foreclosure Prevention Actions in 2012

March 30, 2013


I wonder what the total costs to the US tax payers are to date and what they will end up being. Please read the article below and let me know what you think.

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Fannie Mae and Freddie Mac continue to administer foreclosure prevention efforts while experiencing declines in delinquencies, foreclosures, and REO inventories, according to a report from the Federal Housing Finance Agency (FHFA).

The GSEs enacted 541,219 foreclosure prevention actions in 2012, contributing to a total of 2.7 million foreclosure prevention efforts since the enterprises came under government conservatorship in 2008, according to the report.

More than 1.3 million of these actions have taken the form of permanent loan modifications. While the government’s Home Affordable Modification Program (HAMP) has contributed to this number, proprietary modifications continue to outpace HAMP.

Since HAMP’s launch in April 2009, more than 1 million trial modifications have been administered through the program. Of these trials, just a little more than half—568,500 as of the end of the fourth quarter—have transpired into permanent modifications for homeowners.

In the fourth quarter of 2012, about 17,500 HAMP trials entered into permanent status.

GSE-backed homeowners who received loan modifications in the fourth quarter—both through HAMP and through proprietary programs—received an average reduction in monthly mortgage payment of more than 30 percent.

While proprietary modifications outpace HAMP in volume, HAMP modifications continue their record of better performance. As of the third quarter of 2012, 88 percent of HAMP-modified loans remained current after three months, while 81 percent of proprietary-modified loans were current after three months.

The GSEs continue to experience falling delinquencies and foreclosures and declining REO inventories.

The percentage of seriously delinquent loans at the GSEs fell from 3.39 percent in the third quarter to 3.27 percent in the fourth.

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Foreclosure Prevention Actions

NAR: Inventory Shortage Brings Down Pending Home Sales in January

March 30, 2013


This will cause the number of homes for sale to eventually increase as more owners list their homes do to the increase in prices that go hand and hand with lower inventory? Please read the article below and let me know what you think.

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The National Association of Realtors’ (NAR) Pending Home Sales Index (PHSI) fell 0.4 percent to 104.8 in January, the third month-over-month decline in the last four months, the association reported Wednesday.

Economists had expected a 0.7 percent drop to 105.2 from January’s originally reported 105.9 The January index reading was revised to 105.2.

The NAR report came one day after the Census Bureau and HUD reported new home sales fell 4.6 percent in to 411,000 in February, the sharpest drop in two years. Both the new homes sales and the pending home sales reports measure contract signings and are designed to be forward-looking indicators.

The last time the PHSI dropped in three of four months was at the beginning of 2011, when the index fell in January and February, improved in March, and fell again in April.

NAR chief economist Lawrence Yun attributed the drop in the PHSI to weak inventory of existing homes for sale.

According to the latest existing home sales report—which tracks closings—there were 1.94 million homes for sale at the end of February, a 4.7-month supply. The number of homes for sale has averaged 2.19 million for the last 12 months, down from an average of 2.8 million in the previous 12 months.

Yun said the inventory shortage would be relieved by an uptick in construction of new single-family homes, though single-family home completions regularly exceed new home sales. Government reports indicate builders have shifted from construction of single-family homes to multifamily, suggesting reluctance among younger, first-time homebuyers who witnessed the impact of the housing meltdown.

The month-over-month trend in sales correlates inversely with the movement in the median price; that is, when the median price falls, sales improve, as happened four times in the last 12 months.

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Inventory Shortage

ICBA Addresses Regulations and Their Impact on Community Banks

March 29, 2013


Are these complaints accurate or are the small banks just trying to get around the new regulations? Please read the article below and let me know what you think.

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The Independent Bankers of America (ICBA) outlined its regulatory priorities for this year at the National Convention and Techworld in Las Vegas earlier this month. The organization addressed several industry reforms and pending regulations it asserts will negatively and unfairly impact community banks.

“Our policy agenda is focused on minimizing the negative impact of excessive regulations, addressing the overly aggressive examination environment, minimizing risks to our financial system and creating greater economic activity and growth in local communities,” said Bill Loving, ICBA chairman.

As the Consumer Financial Protection Bureau (CFPB) and other government agencies work to define new guidelines for the mortgage banking industry, ICBA charges, “any regulatory response to the financial crisis of 2008, including any changes to the capital standards, should begin with the recognition that community banks were not the cause of that crisis.”

ICBA warns some proposed regulations will unnecessarily harm community banks and the communities they serve.

For example, ICBA suggests any financial institution with $50 billion or less in assets be exempt from Basel III.

Likewise, ICBA argues community banks should be exempt from new mortgage lending and mortgage servicing reforms set forth by CFPB. ICBA suggests these regulations will be too expensive for community banks and should only apply to larger institutions.

ICBA also positions “the overly strict exam environment” as a threat to community banks and aims to warn regulators “about the impact of excessively tough safety-and-soundness compliance exams.”

In regards to the CFPB, ICBA opposes the current structure and advocates a bureau with a five-member commission in place of a single director.

In addition to these regulatory threats, ICBA also plans to address industry rules that allow government or other organizations to overstep their bounds and infringe on the prospects of community banks.

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ICBA Addresses Regulations

Report: FHFA Lacks Plan to Ensure Compliance for GSEs’ Counterparties

March 28, 2013


While these agencies play “It’s Not My Job” the home buyers are probably unfairly paying for it. Please read the article below and let me know what you think.

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A new report from the watchdog for the Federal Housing Finance Agency (FHFA) charges that the department isn’t doing enough to make sure companies doing business with the GSEs are adhering to consumer protection laws.

The Office of the Inspector General for FHFA (FHFA-OIG) released an audit report Tuesday examining the agency’s oversight of Fannie Mae and Freddie Mac’s monitoring of businesses that sell and service loans. While FHFA maintains the review and enforcement of consumer laws falls under the responsibilities of the Consumer Financial Protection Bureau (CFPB) and related federal agencies, the inspector general argues that FHFA “has a statutory responsibility—under the Housing and Economic Recovery Act of 2008 (HERA)—to protect the public interest, which in this instance is at least partially defined by federal and state consumer protection laws.”

FHFA, in coordination with the GSEs, released last September a new framework for representations and warranties, which states that mortgages that were not originated in accordance with applicable laws are indefinitely subject to repurchase, even if they have acceptable payment histories and meet other criteria. However, the inspector general found that Fannie Mae and Freddie Mac tend to only focus on cases where they themselves may be held liable for a lender or servicer’s noncompliance.

Furthermore, like FHFA, the two enterprises “have indicated that it is not their duty to monitor and enforce compliance with federal consumer protection laws because there are regulatory agencies with these responsibilities.”

For its part, OIG says the agency has not performed any reviews specific to how Fannie Mae and Freddie Mac monitor counterparty compliance, and its new supervisory examination guidance (under development) does not explain how such a review should be conducted.

“FHFA is thus vulnerable to questions about why it does not have a strategy to monitor the Enterprises’ activities to assess whether they are aligned with the public interest as reflect in federal and state laws and regulations (e.g., consumer protection laws),” the report says. “FHFA and the Enterprises recognized their shared responsibility for protecting the public interest when they explicitly excluded violations of federal state laws and regulations from the universe of representation and warranty violations that may be forgiven after 36 months of on-time mortgage payments.”

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FHFA Lacks Plan

Shadow Inventory Down to 2.2M Homes, Falls 28% from Peak

March 28, 2013


This is one of the main reason that home prices are on the way up. Please read the article below and let me know what you think.

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In January, the number of homes still hidden in the shadows fell to 2.2 million, a 28 percent decrease from the January 2010 peak when an estimated three million housing units were in shadow inventory, data fromCoreLogic.

The data provider’s calculation is based on the number of properties that are seriously delinquent, in foreclosure, or bank-owned, but not yet listed on multiple listing services.

The 2.2 million units represent a supply of nine months and a year-over-year decline of 18 percent from January 2012, CoreLogic reported.

“The shadow inventory continued to drop at double the rate in January from prior-year levels. At this point in the recovery, we are seeing healthy reductions across much of the nation,” said Anand Nallathambi, president and CEOof CoreLogic.

Seriously delinquent loans were the main drivers of shadow inventory, accounting for one million (4.1 months’ supply) of the distressed properties yet to be released, according to CoreLogic. Foreclosures in shadow inventory totaled 798,000 (3.2 months’ supply), and REOs in the shadows numbered 342,000 (1.4 months’ supply).

Shadow inventory also represents 85 percent of the 2.6 million properties that are seriously delinquent, in foreclosure, or bank-owned.

The states that saw the steepest drop in serious delinquencies over a one-year period ending in January were Arizona (-40 percent), California (-33 percent), Colorado (-27 percent), Michigan (-25 percent) and Wyoming (-23 percent).

“The shadow inventory is declining steadily as properties are moving through the distressed pipeline,” said Dr. Mark Fleming, chief economist for CoreLogic. “States like Arizona, California and Colorado are experiencing significant declines year over year in the stock of serious delinquencies, a positive sign for further improvement in the shadow inventory.”

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Shadow Inventory Down