The Home Front

In North Carolina, individuals without legal permanent resident status can still qualify for what is known as an "ITIN mortgage" as long as they have an individual taxpayer identification number (ITIN), a sound credit history, and proof that they have filed their taxes.

And according to the Charlotte Observer, "borrowers who have ITIN mortgages have proven to be some of the sturdiest as foreclosures climb to record highs."

From the Charlotte Observer:

According to estimates from the Hispanic National Mortgage Association and local lenders, less than 1 percent of ITIN loans have gone into foreclosure. That compares with 1.2 percent for prime mortgages and nearly 11 percent for subprime mortgages given to borrowers with poor credit history, according to the latest available data from the Mortgage Bankers Association.

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Senate leaders said Tuesday that they had reached agreement on a housing rescue bill, Reuters reports.

Next step: negotiations with the House.

From Reuters:

The legislation was expected to be considered by the full Senate within days, with lawmakers keen to deliver a final bill to President George W. Bush by July 4.

Rep. Barney Frank, chairman of the House of Representatives Financial Services Committee, in an interview with Reuters called the Senate bill "good progress."

But the Massachusetts Democrat said, "It's not yet where we should be.... To the extent that people say the House will just accept the Senate bill, that's not appropriate."

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Home building is "probably getting very close to a bottom," says Brian Wesbury, chief economist at First Trust Advisors.

The optimistic outlook came in a report issued Tuesday after the government announced that May housing starts were down about 3 percent from April and 32 percent from a year earlier. May's figures put housing starts at their lowest level since 1991.

Why might this signal a bottom, Brian?

The number of homes under construction is down 27.8 percent versus last year, the largest 12-month decline since 1980. Given this decline and the drop the year before, the level of housing construction is low enough that the industry can work off excess inventories—a necessary step toward a sustainable recovery. With housing starts near a bottom on a nationwide basis, there are many communities across the country where home building is already rebounding.

Still, that doesn't mean Wesbury expects prices to rebound soon. "We continue to expect home prices to drop on a nationwide average basis through mid-2009, as the market continues to work off excess inventories," he said in the report.

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While RealtyTrac's most recent report—which found that May foreclosure filings at the national level surged nearly 50 percent from a year earlier—was just more bad news for the already-despondent housing market, BusinessWeek's HotProperty blog points out that it included some striking findings about one particular state: Maryland.

From BusinessWeek's HotProperty:

Maryland, which had the sixth worst foreclosure rate in April, had fallen back to No. 22 on the list in May. The May rate of foreclosure filings dropped by 61% in Maryland from a month earlier. Why such a big drop off? One possibility: a new law in Maryland that took effect in April gives distressed homeowners a little breathing room. Lenders must wait at least 90 days after a borrower defaults on a loan before initiating foreclosure proceedings. Lenders must also warn homeowners at least 45 days in advance that they are initiating foreclosure actions.

Maryland officials, however, need to keep their fingers crossed that their efforts will enable struggling borrowers to work with their lenders to avoid foreclosure altogether—rather than simply delay the filings for a couple of months.

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