Archive for June 2013

Pending Home Sales Index Jumps in May

June 30, 2013

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This is just another sign of the recovery starting to build a little more momentum. Please read the article below and let me know what you think.

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The Pending Home Sales Index (PHSI) rose 6.7 percent in May to 112.3, its highest level since December 2006, the National Association of Realtors, which compiles the index, reported Thursday. Economists expected the index to improve 1.0 percent to 107.1 from April’s 106.0. In December 2006, the index was 112.8.

The May increase was larger than forecast in part because April’s index was revised downward to 105.2.

The improvement in the PHSI followed a series of favorable housing reports in the past two weeks: the National Association of Home Builders reported its Housing Market Index was positive (over 50) in June, the NAR reported May existing-home sales rose 4.2 percent in May, and new home sales rose 2.1 percent in May.

Earlier this week, Standard & Poor’s reported its Case-Shiller Home Price Index posted the strongest monthly increase on record in April.

The PHSI tracks contracts for sale as does the government’s new home sales report. The PHSI has increased in three of the five months this year—January, March, and May—while the new home sales report increased each month this year except in February.

The PHSI is up 12.1 percent over May 2012, the 25th straight month of year-over-year increases. New homes have been up year-over-year for 20 straight months and in 23 of the last 25 months.

The PHSI, the NAR said, is based on a sample of about 20 percent of transactions for existing-home sales. An index of 100 is equal to the average level of contract activity during 2001, the base year.

To read the complete article – please use the link below.

Pending Home Sales

OCC: 90% of Mortgages Current in Q1 as Foreclosure Efforts Continue

June 30, 2013

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This is probably because most of the bad loans have already be through the foreclosure process and many of them are on their second time around. Please read the article below and let me know what you think.

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Mortgage performance improved in the first quarter of this year, with 90.2 percent of mortgages current and performing, the Office of the Comptroller of the Currency (OCC) reported Thursday.

The share is up from 89.4 percent in the previous quarter and 88.9 percent a year ago. The OCC’s report represents 55 percent of all mortgages and is based on data from seven national banks and a federal savings association with the largest mortgage-servicing portfolios.

For the most part, delinquencies and foreclosures were down across the board, with the exception of early delinquencies and newly initiated foreclosures.

The OCC found the percentage of loans 30 to 59 days past due showed a slight increase year-over-year after ending at 2.6 percent, up by 3 percent from a year ago, but still down by 9.3 percent compared to the previous quarter.

Loans past due by 60 to 89 days fell to 0.9 percent, down quarterly and yearly by 16.7 percent and 5.3 percent, respectively. Serious delinquencies (90 days or more past due) averaged 2.1 percent, down 7.5 percent from the previous quarter and 13.6 percent from last year.

Furthermore, the number of loans in foreclosure fell to 907,231, down 28.6 percent from a year ago and down by 1.9 percent from the previous quarter.

During the first quarter, servicers covered in the report foreclosed on 84,972 properties, down by 19.7 percent from the end of last year and down by 30.9 percent from a year ago.

As for foreclosure prevention solutions, servicers were able to complete 43,137 short sales in the first quarter, down 30.2 percent from a year ago, while deeds-in-lieu of foreclosure increased by 151.8 percent to 3,595 during the same time period.

Despite a near 14 percent quarterly increase in newly initiated foreclosures, home retention actions far outpaced new foreclosures in the first quarter.

During the first three months of this year, the OCC reported servicers implemented 348,733 home retention actions, which include loan modifications, trial-period plans, and payment plans, compared to 178,356, newly initiated foreclosures.

To read the complete article – please use the link below.

Mortgages Current in Q1

Fixed Rates Skyrocket in Response to Fed Remarks

June 29, 2013

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This should not hurt the recovering housing market in the long run but it is another bump in the road.  Please read the article below and let me know what you think.

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Mortgage rates shot up in the last week following remarks from the Federal Reserve that it may be tapering its bond purchases later this year.

According to Freddie Mac’s Primary Mortgage Market Survey, the average 30-year fixed-rate mortgage (FRM) rose to 4.46 percent (0.8 point) for the week ending June 27, an increase from only 3.93 percent last week and the highest figure since the week of July 28, 2011. The weekly increase is the largest since April 1987.

Last year at this time, the 30-year fixed averaged 3.66 percent.

The 15-year FRM this week averaged 3.50 percent (0.8 point), up from 3.04 percent the previous week.

Adjustable rates also saw sizable increases, though they weren’t as dramatic. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.08 percent (0.7 point), up from 2.79 percent. The 1-year ARM averaged 2.66 percent (0.5 point) compared to last week’s 2.57 percent.

“Following Fed chief Bernanke’s remarks on June 19th about the possible timing of reduced bond purchases, Treasury bond yields jumped over the week and mortgage rates followed. He indicated that the Fed may moderate the pace of its buying later this year and end the purchases around the middle of 2014,” said Frank Nothaft, VP and chief economist at Freddie Mac.

While the massive rate hike will certainly dampen some housing activity, Nothaft noted the effect “will be muted by the high level of buyer affordability, and home sales should remain strong.”

To read the complete article – please use the link below.

Fixed Rates Skyrocket

What’s Happening Beyond ‘Recovery’ Headlines?

June 29, 2013

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This article points out some major problems that remain in the housing market. Unemployment is among major areas for concern that this article doesn’t touch on.

While the government is crowing about job gains the unemployment rate is still over 7.5% and when you factor in the people who are out of work but have given up looking for jobs, the government doesn’t count these people as unemployed, the rate is well over 14%.  Please read the article below and let me know what you think.

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Industry indicators such as rising prices, increases in construction, and declines in the number of underwater homeowners tell a story of a broad housing recovery, but Harvard’s Joint Center for Housing Studies (JCHS) sheds light on a less popular story in a report released Wednesday.

“With rising home prices helping to revive household balance sheets and expanding residential construction adding to job growth, the housing sector is finally providing a much needed boost to the economy,” says Eric S. Belsky, managing director of JCHS.

“But long-term vacancies are at elevated levels in a number of places, millions of owners are still struggling to make their mortgage payments, and credit conditions for homebuyers remain extremely tight. It will take time for these problems to subside,” he said.

Homeownership is down, and consumer spending on housing as a portion of income is up.

Thirty-seven percent of households were spending more than 30 percent of their pre-tax income on housing in 2011, according to the Center’s report.

Furthermore, 17.9 percent of the nation’s households were spending more than 50 percent of their pre-tax incomes on housing. These households, which the Center considers “severely burdened,” have increased 49 percent since 2001.

Market conditions are pushing more households into rentals, even those in categories that used to maintain high homeownership rates, such as couples with children, high-income households, and white households, the report states.

“For each 10-year age group between 25 and 54, the share of households owning homes is now at its lowest point since recordkeeping began in 1976,” the Center states.

Additionally, while foreclosures and delinquencies are declining, they remain at historically elevated levels.

The delinquency rate fell from its peak of 10.1 percent in the first quarter of 2010 to 7.3 percent in the first quarter of this year.

“Still, more than 1.4 million homes were in foreclosure, representing 3.6 percent of all mortgages in service,” the report states, adding that this equates to more than four times the average rate between 1974 and 1999.

To read the complete article – please use the link below.

Beyond ‘Recovery’ Headlines

FHFA’s Home Price Index Records Annual Gain of 7.4%

June 28, 2013

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All the reports that have been coming out regarding annual price gains show just about the sane percentage. The recovery must be real. Please read the article below and let me know what you think.

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The Federal Housing Finance Agency (FHFA) reported a 0.7 percent increase in its House Price Index (HPI) from March to April.

As of April, the index stands at a reading of 200.8. March’s index, meanwhile, was revised upward to 199.4 (a 1.5 percent increase as opposed to the original estimated gain of 1.3 percent).

Year-over-year, the HPI was up 7.4 percent.

The latest increase marks the 15th straight monthly price improvement in the purchase-only, seasonally adjusted index.

For the nine Census divisions, seasonally adjusted monthly price changes ranged from a low of -0.2 percent in the New England, South Atlantic, and West South Central divisions to a high of +2.2 percent in the Mountain division. Year-over-year, changes ranged from +2.9 percent in the Middle Atlantic division. to +17.1 percent in the Pacific division.

The HPI is calculated using home sales price information from mortgages sold to or guaranteed by the GSEs.

To read the complete article – please use the link below.

Home Price Index

CFPB Proposes Revisions to Mortgage Rules

June 28, 2013

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These revisions should have already been in place. Please read the article below and let me know what you think.

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The Consumer Financial Protection Bureau (CFPB) announced Monday proposed revisions to its ability-to-repay rule, mortgage servicing rules, and rules regarding consumer protections.

“Today’s proposal revises and clarifies certain aspects of our rules to ease implementation and to pave the way for more effective consumer protections in the marketplace,” said Richard Cordray, director of the CFPB.

One of the clarifications specified in Monday’s announcement is the definition of a loan originator. CFPB rules detail qualifications and compensation guidelines for loan originators, and industry participants have expressed a need to ensure tellers and administrative staff are not considered loan originators for the purposes of these new guidelines.

The CFPB also clarified rules relating to loss mitigation. If a loss mitigation application is incomplete, the servicer must notify the applicant within five days and let him/her know what is missing.

The bureau’s proposal would outline procedures services should follow if information is missing. For one, the proposal clarifies servicers must seek the missing information from the borrower if it is needed for a complete assessment. Furthermore, the proposal seeks to ensure consumers do not lose foreclosure protections under the rule until they have “had a reasonable time to supply the needed documents or information,” according to the CFPB.

The proposal would also allow servicers to offer short-term forbearance plans to delinquent borrowers without going through a full loss mitigation evaluation process first.

Monday’s proposals also addressed the ban on financing credit insurance premiums, which is set forth in Dodd Frank and in the CFPB’s loan originator compensation rules.

“The proposal would provide guidance on when credit insurance premiums are considered to be calculated and paid on a monthly basis for purposes of an exclusion from the statutory prohibition,” the CFPB stated.

To read the complete article – please use the link below.

CFPB Proposes Revisions

Delinquency, Foreclosure Rates Decrease to Post-Crisis Lows in May

June 27, 2013

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This seems to be good news but is it because the times are a lot better or is it because so many homes have already been foreclosed upon? Please read the article below and let me know what you think.

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The national delinquency rate and foreclosure inventory rate each fell to post-crisis lows in May, Lender Processing Services (LPS) reported Tuesday.

At 6.08 percent, the national delinquency rate in May stood at the lowest level since May 2008, when the rate was 5.96 percent.

Month-over-month, the delinquency rate decreased 2.1 percent from April and plunged 12 percent from May 2012.

At the same time, the foreclosure inventory rate slipped to 3.05 percent, which represents the lowest point since March 2009 when the rate was 2.90 percent. The rate has also fallen for 13 straight months now.

Over the last year, foreclosure inventory has plunged 27 percent and also fell by 3.9 percent over the last month.

LPS also reported about 3.04 million mortgages were past due by at least one month, but not yet in foreclosure. Of that total, about 1.34 million are 90 days or more past due but not in foreclosure.

Properties in foreclosure pre-sale inventory numbered 1.52 million as of May, bringing the total number of delinquencies and foreclosures to 4.56 million.

To read the complete article – please use the link below.

Foreclosure Rates Decrease