GSEs Foreclosure Prevention Actions Nearly 3.2M through Q1

The one number that is never published in these reports is the amount of money that the US Taxpayers paid out for all this “success”. The last amount found was $2.5 Billion dating from around the end of 2013. For a more detailed look at this subject – please read the article below.

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Fannie Mae and Freddie Mac have completed nearly 3.2 million foreclosure prevention actions since the start of the government’s conservatorship of the two companies in 2008. According to the Federal Housing Finance Agency’s Foreclosure Prevention Report, 88,000 actions were performed in the first quarter of 2014 alone.

The agency found that foreclosure prevention actions in Q1 allowed 2.6 million borrowers to remain in their homes, while 1.6 million borrowers received permanent loan modifications.

“There were nearly 54,700 permanent loan modifications in the first quarter, bringing the total number of permanent modifications to more than 1.6 million since conservatorship,” FHFA said. “In addition, the Enterprises completed approximately 16,100 repayment plans and 2,900 forbearance plans to help delinquent borrowers during the quarter.”

Properties currently utilizing the Home Affordable Modification Program (HAMP) totaled 431,000 in the first quarter of 2014.

Of all permanent loan modifications in the first quarter, 42 percent reduced monthly homeowner payments by over 30 percent. “Approximately 27 percent of borrowers who received permanent loan modifications during the quarter had portions of their mortgage balance forborne,” FHFA said.

The FHFA found that approximately 14,900 short sales and deeds-in-lieu were completed during the quarter, bringing the total to more than 566,800 since the start of the conservatorship.

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Foreclosure Prevention Actions

Freddie Mac Scales Back Expectations for 2014

Scaling back forecasts is an indication of steady growth at a sustainable rate .  This is a good sign for the housing market. Freddie Mac’s earlier outlook was more wishful thinking than anything. For a more detailed look at this subject – please read the article below.

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Despite a disappointing first quarter and a mediocre second quarter, Freddie Mac still expects the economy to improve throughout the second half of 2014. The company is, however, tempering its New Year’s optimism.

In its June U.S. Economic and Housing Market Outlook, Freddie offers a mid-year assessment that sees more humble growth in gross domestic product that mirrors the 2 to 2.5 percent growth that the economy has seen the past few years.

Contributing to this modest growth will be an upswing in the workplace. U.S. unemployment is down from 6.7 to 6.3 percent, and May showed the fourth straight month in which 200,000 new jobs were created.

For housing, the even-better news is that construction jobs are picking up, particularly in the residential building and specialty trade sector. These areas are averaging about 9,500 jobs per month so far this year.

Still, there’s hardly cause for joy bells just yet. “Construction has rebounded over the past two years but is still significantly below the levels one would expect to see given projections of household formations,” said Frank Nothaft, Freddie Mac’s chief economist.

Nothaft is also tenuous in his view of the overall housing picture. “We’re nearly half way through the year and single-family housing remains weaker than we projected six months ago, while multifamily appears to be right on track,” he said.

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Freddie Mac Scales Back Expectations

Mortgage Rates Continue Month-Long Slide

This is good news for all parties in the housing industry. For a more detailed look at this subject – please read the article below.

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Mortgage rate declines have continued now for more than a month straight, bringing interest rates down once again to new 2014 lows.

In its weekly released Primary Mortgage Market Survey, Freddie Mac found the average rate for a 30-year fixed-rate mortgage (FRM) was 4.12 percent (0.6 point) for the week ending May 29, down from 4.14 percent last week and the lowest 30-year fixed average since October 2013.

The 15-year FRM also slid down, averaging 3.21 percent (0.5 point) compared to last week’s 3.25 percent.

The latest rate movements accompanied mixed news in the housing market, noted Frank Nothaft, Freddie Mac’s chief economist: “Fixed mortgage rates eased a bit for the fifth consecutive week as reports that existing home sales are up 1.3 percent but not as much as expected. However, new home sales rose 6.4 percent in April to a seasonally adjusted annual rate of 433,000, which followed an upward revision of 11,000 units for the prior two months.”

Movements were mixed for adjustable-rate mortgages (ARMs). According to Freddie Mac, the 5-year Treasury-indexed hybrid ARM averaged 2.96 percent (0.3 point), unchanged from the last survey. Meanwhile, the 1-year ARM averaged 2.41 percent (0.4 point), down from 2.43 percent.

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Mortgage Rates Slide

Economists Outline What to Watch for in the Real Estate Market of 2014

Nobody is really sticking their nose out too far in this article. Slow growth with not much action in the younger segment of buyers is just about what is to be expected. For a more detailed look at this subject – please read the article below.

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Experts at Freddie Mac and Equifax expect falling unemployment and economic growth to keep the housing market steady in 2014. This, despite climbing interest rates and anticipated growth in housing prices nationwide.

Unemployment dipped to 6.7 percent nationally in December, and the Federal Reserve is expecting that figure to drop below 6.5 percent later this year. If the Fed is right, it will be the first time since the Great Recession began in 2008 that unemployment will be so low.

What this spells for the housing market is greater buying power and an upswing in new-home construction, according to Ilyce Glink, managing editor of the Equifax Finance Blog. “The housing market may not return to its pre-recession ‘normal’ in 2014 or even 2015,” Glink said, “but with more Americans employed and able to buy homes, we should see the real estate market, especially new construction housing, continue to pick up steam.”

This rise in the number of employed Americans dovetails with expected growth in the U.S. economy. Frank Nothaft, chief economist at Freddie Mac, says the economy should increase by 2.5 percent to 3 percent in 2014, which should empower more Americans to buy homes.

Experts feel this double-edged uptick will be enough to overcome a 3.7 percent increase in home sale prices nationally (as predicted by the National Association of Realtors) and an increase in mortgage interest rates.

Interest rates hit historic lows in 2013 and then gradually rose a full percentage point by year’s end. Freddie Mac reported that as of mid-January, rates on fixed 30-year mortgages averaged 4.41 percent; rates on fixed 15-year mortgages averaged 3.45 percent.

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Real Estate Market of 2014

Mel Watt Sworn in as FHFA Director

This is good and bad news for the country. With Mr. Watt running the FHFA you can expect more principle forgiveness with more buyers qualifying for mortgages. On the down side his programs will cost the U.S. Taxpayer a lot more money in the form of government subsidies (HAPM, HARP, Etc.). For a more detailed look at this subject – please read the article below.

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After months of contentious debate, the Federal Housing Finance Agency (FHFA) finally has a new director. Mel Watt, the former democratic North Carolina senator, was sworn in Monday to a five-year term as the first Senate-confirmed director of the FHFA. Anthony Foxx, the U.S. Secretary of Transportation and former mayor of Charlotte, North Carolina administered the oath.

FHFA was created by the Housing and Economic Recovery Act of 2008 to oversee Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks and is responsible for oversight of the $5.5 trillion mortgage finance market.

“I am honored to serve as director of the Federal Housing Finance Agency,” Watt said. “Today’s housing finance system is one of the keys to our economic recovery and I am grateful for the opportunity to help develop a strong foundation for moving this system forward for the benefit of all Americans at this critical point in our nation’s history.”

Watt, 68, represented the 12th congressional district of North Carolina as a member of the U.S. House of Representatives for more than 21 years, being first elected to that office in 1992. As a member of Congress, Watt served on the House Financial Services Committee, and its Capital Markets Subcommittee and Government Sponsored Enterprises. Watt also served on the House Judiciary Committee, where he was ranking member of the Intellectual Property, Competition, and the Internet Subcommittee. Watt also served as Chairman of the Congressional Black Caucus.

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Mel Watt Sworn In

New Head of FHFA Expected

This is good and bad news for the country. With Mr. Watt running the FHFA you can expect more principle forgiveness with more buyers qualifying for mortgages. On the down side his programs will cost the U.S. Taxpayer more money in the form of government subsidies (HAPM, Etc.)  For a more detailed look at this subject – please read the article below.

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Analysts expect to see a new face at the helm of the agency overseeing Fannie Mae and Freddie Mac now that Democrats in the Senate have changed the rules, eliminating the use of the filibuster to block presidential appointments.

The Senate majority’s instatement of the so-called nuclear option “has cleared the path for Mel Watt’s confirmation” as director of the Federal Housing Finance Agency (FHFA), according to secondary market analysts at Barclays.

Under the chamber’s new rules, the president’s nominees for all positions except Supreme Court judge can be approved with a simple majority vote, rather than the previous requirement of 60 “yay” votes.

Rep. Mel Watt (D-North Carolina) received 56 votes in favor of his confirmation on October 31st, just 4 votes shy of the number needed under the old rules but enough to be confirmed under the new simple-majority requirement.

“[H]e has the required votes and should be confirmed as the new FHFA director. In our view, this raises the level of policy risk,” Barclays said, “as we would generally expect him to be more supportive of the administration’s policies. … [K]ey areas of concern would be principal forgiveness for the GSEs and potential expansion of the HARP [Home Affordable Refinance Program] eligibility date.”

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Head of FHFA

Borrowers Refinancing in Q3 Expected to Save $6B Next Year

With interest rates still in the low to mid 4s it just makes sense that if you can lower your current rate by a point or more you do it. For a more detailed look at this subject – please read the article below.

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Despite a steady climb in mortgage interest rates since May, borrowers continued to take advantage of low rates to refinance into lower monthly payments, Freddie Mac reported Tuesday.

According to the results of the company’s latest quarterly refinance analysis, the average interest rate reduction among those who refinanced in Q3 was about 1.8 percentage points, representing a savings of about 30 percent ($3,500 over 12 months on a $200,000 loan). For borrowers who refinanced last quarter, the estimated interest savings over the next year will be about $6 billion.

For those who refinanced through the Home Affordable Refinance Program (HARP), the average rate reduction in Q3 was 1.9 percent points, representing savings of $3,850 over the next 12 months.

The number of borrowers deciding to shorten their loan terms last quarter rose 5 percent to a share of 37 percent, the highest level since 1992, Freddie Mac reported. Out of those who refinanced outside of HARP, 40 percent shortened their term; 32 percent of HARP borrowers did the same.

Out of all refinancers, 59 percent kept the same term, and 4 percent lengthened their term.

The vast majority—more than 95 percent, according to Freddie Mac—of refinancing borrowers went with a fixed-rate loan in Q3, with fixed rates being preferable regardless of what the original loan product had been. Only 3 percent of borrowers who had a fixed-rate late chose to refinance into an adjustable-rate mortgage.

The median age the original loan was outstanding before refinance in Q3 was 6.7 years, an increase from Q2 and the highest age since analysis began in 1985.

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Borrowers Refinancing

GSEs to Return Another $39B to Taxpayers

This is a great example of what happens when you let the government run any kind of a business. While Freddie and Fannie where losing money by the boatload there was nary a peep out of our duly elected representatives about getting rid of these entities. Now that they are making a bucket loads of money they what to give them to their buddies in the private sector. Nothing underhanded going on here – just move along. For a more detailed look at this subject – please read the article below.

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In the midst of an ongoing political debate surrounding their future, Fannie Mae and Freddie Mac continue to see strong profits. Both GSEs put out their earnings reports Thursday, showing elevated numbers as they continue to benefit from an improving housing market.

According to its quarterly report, Fannie Mae brought in $8.7 billion in profits in the third quarter, marking the seventh consecutive quarter of gains. The same time last year, the mortgage giant reported a comparatively small net income of $2.6 billion.

Fannie Mae attributed its third-quarter wins to continued positive developments in home prices, which brought a reduction in the company’s loan loss reserves. Numbers also saw a boost from compensatory obligations stemming from a settlement with Bank of America early in the year.

Meanwhile, profits shot up to $30.5 billion at Freddie Mac, though most of that came from tax benefits. Pre-tax income was $6.5 billion compared to $4.9 billion last year. It was the eighth straight quarter of positive earnings and the second most profitable quarter in the company’s history, Freddie Mac said.

While the quarter’s figures look encouraging for two companies that not long ago relied on a taxpayer-funded bailout to get by, they noted that current growth levels are supported largely by abnormally high home price appreciation, making such gains unsustainable over the long run as prices moderate.

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$39B to Taxpayers

More Homeowners Receiving Principal Reductions Under HAMP

This is hard to understand. Why does the American Taxpayer stand still for the government taking their money to reduce the debt of a lot of people that the taxpayer doesn’t even know? It should not be a function of our government to pay for some people’s debt and not others. For a more detailed look at this subject – please read the article below.

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As of September, more than 1.2 million homeowners have received a permanent modification through the Home Affordable Modification Program (HAMP), according to Treasury.

Those granted permanent relief through HAMP are saving approximately $547 on their mortgage payments each month—almost a 40 percent savings from their previous payment on average. Government officials say this represents a total estimated savings of $22.9 billion in monthly mortgage payments since the inception of the program.

Homeowners currently in HAMP permanent modifications with some form of principal reduction have been granted an estimated $12.1 billion in reduced principal, Treasury reports. Of all non-GSE loans eligible for principal reduction entering HAMP in September, 72 percent included a principal reduction feature, according to the Department’s latest report.

Servicers awarded 12,884 permanent HAMP modifications in September, of which 5,854 included principal reduction. September’s program numbers are down considerably compared to the previous month when an estimated 19,100 permanent mods were granted to struggling borrowers.

The government’s Home Affordable Foreclosure Alternatives (HAFA) program showed even greater monthly falloff. In September, Treasury reports 11,816 homeowners exited their homes through a short sale or deed-in-lieu of foreclosure with assistance from HAFA, compared to approximately 21,000 HAFA transactions completed in August.

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Mortgage Rates

Mortgage Rates Reverse Trend, Heading Higher

Three weeks after the end of the showdown that closed the government, economic data has shown enough improvement to provide some lift to mortgage rates.

Freddie Mac’s Primary Mortgage Market Survey shows the 30-year fixed-rate mortgage (FRM) averaging a rate of 4.16 percent (0.8 point) for the week ending November 7, up from last week’s average of 4.10 percent. A year ago, the 30-year FRM was averaging 3.40 percent.

The 15-year FRM this week averaged 3.27 percent (0.7 point), rising from 3.20 percent.

“Fixed mortgage rates rebounded slightly this week on more positive economic data releases,” said Frank Nothaft, VP and chief economist at Freddie Mac. “Production in the manufacturing industry expanded for the fifth month in a row in October to the strongest pace since April 2011. Similarly, the non-manufacturing sector grew for the second consecutive month in October and beat the market consensus forecast of a decline. These increases were widespread across the nation, from Chicago to Milwaukee to New York.”

Adjustable rates, on the other hand, were flat to down. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.96 percent (0.5 point) this week, unchanged from last week, while the 1-year ARM was 2.61 percent (0.5 point), down from 2.64 percent.

Financial site Bankrate.com reported similar findings in its weekly national survey, with the 30-year fixed average coming up to 4.35 percent and the 15-year fixed rising to 3.42 percent.

Bankrate’s measure for the 5/1 ARM, meanwhile, slid down 1 basis point to 3.25 percent.

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Mortgage Rates