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Home Sales Beat Expectations: What's Next? 5 Things to Know
Tweet Share on Facebook July 27, 2009 Comment (4)Three years into the worst housing slump since the Great Depression, a new report is offering more evidence that the residential real estate market is on the mend. New-home sales in June jumped 11 percent from the previous month, marking the sharpest such increase since December of 2000, the Commerce Department said Monday. Although the monthly increase is within the margin of error—and sales remain 21 percent below June 2008 levels—Monday's data help pull the three-month moving average of new-home sales up from its January lows, says Patrick Newport, an economist at IHS Global Insight. "That is telling you that sales are starting to grow," Newport says. "You can believe that."
Here are five things you need to know about the June new-home sales report:
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Why Do Home Foreclosures Keep Rising? 6 Things You Need to Know
Tweet Share on Facebook July 16, 2009 Comment (41)Five months after the Obama administration unveiled a sweeping initiative designed to reach 9 million struggling homeowners, home foreclosures continue to rise at an alarming rate. Foreclosure filings were reported on more than 1.5 million properties in the first six months of the year, a 15 percent increase over the same period of last year, according to RealtyTrac. All told, 1 in 84 American homes—or 1.19 percent—received a foreclosure filing during the period. "We talk about green shoots or about things getting worse at a slower rate, but this is one thing that is getting worse month by month," says Patrick Newport, an economist for IHS Global Insight.
[Check out Obama's Housing Rescue Expands: 6 Things to Know.]
Here are six things you need to know about the rise in home foreclosures:
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Government Insured Share of Mortgage Applications Spike
Tweet Share on Facebook July 13, 2009 CommentWith the private mortgage market remaining tight, home loans backed by Uncle Sam have become increasingly essential to the housing market. And in a release issued last week, the Mortgage Bankers Association detailed just how essential such support has become:
The government-insured (FHA and VA loans) share of mortgage applications was 35.9 percent in June 2009, the highest level since November 1990, according to the Mortgage Bankers Association.
Based on data from MBA’s Weekly Mortgage Applications Survey, the government-insured share jumped from 25.7 percent a month earlier and 27.0 percent in June 2008. Since the MBA survey’s inception in January 1990, the lowest recorded share was 5.8 percent in August 2005.
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The Top 10 Mortgage Fraud States For 2008
Tweet Share on Facebook July 8, 2009 Comment (17)An FBI report released Tuesday found that mortgage fraud-related Suspicious Activity Reports increased 36 percent in fiscal year 2008 from the previous year. Meanwhile, financial firms reported at least $1.4 billion in mortgage fraud-related losses last fiscal year, an 83.4 percent jump.
“Mortgage fraud hurts borrowers, financial institutions, and legitimate homeowners,” Assistant Director Kevin Perkins, of the FBI Criminal Investigative Division, said in a statement. “The FBI, in conjunction with our law enforcement, regulatory, and industry partners, continues to diligently pursue perpetrators of mortgage fraud schemes.”
Here's a look at the top 10 mortgage fraud states for 2008:
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Job Losses Drive Consumer Delinquencies to Record Highs
Tweet Share on Facebook July 7, 2009 Comment (3)The American Bankers Association is blaming the eroding labor market for a rise in consumer loan delinquencies, which have hit record high rates.
From the ABA:
The trade group says that more than two million jobs were lost in the first quarter of 2009, bringing the job-loss tally to more than 6 million since the onset of the recession. As layoffs mount, more Americans become unable to make loan payments. The delinquent balances on accounts included in the ABA's composite of eight different installment loan categories increased to 3.35 percent in the first three months of 2009, up from 3.16 percent in the last quarter of 2008, according to the ABA's most-recent Consumer Credit Delinquency Bulletin, released Tuesday.
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Obama's Housing Rescue Expands: 6 Things to Know
Tweet Share on Facebook July 2, 2009 Comment (25)In a move that suggests its initial rescue plan was insufficient, the Obama administration yesterday announced plans to widen the eligibility parameters of a key housing initiative. The change would allow borrowers with mortgages valued at 125 percent of their home's worth to refinance into more affordable loans. Previously, only borrowers with so-called loan-to-value ratios of 105 percent or less could do so. The mortgage refinancing program is part of the president's two-pronged plan to pull the nation out of its worst housing slump since the Great Depression. Coupled with efforts to modify troubled mortgages, the government believes its Making Home Affordable initiative can reach up to 9 million American homeowners. "The president's Making Home Affordable plan is already helping far more families than any previous foreclosure initiative, and with today's announcement we will extend its reach still further," Housing and Urban Development Secretary Shaun Donovan said.
Here are six things you need to know about the expanded rescue:
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Mortgage Modification Efforts So Far: 5 Things You Need to Know
Tweet Share on Facebook July 1, 2009 Comment (79)The lynchpin of President Barack Obama's plan to rescue troubled home owners--and the housing market as a whole--is a sweeping effort to restructure distressed home loans through a process known as "mortgage modifications." The plan offers cash incentives to mortgage servicers who agree to bring a borrower's monthly loan payments down to 31 percent of their gross monthly income. The administration believes that making monthly mortgage bills more manageable will limit the home foreclosures that are putting such downward pressure on real estate prices.
[See Obama's Loan Modification Plan: 7 Things You Need to Know]
But mortgage modifications have a checkered history of success. The Office of the Comptroller of the Currency, for example, says that almost 53 percent of loans modified in the first quarter of 2008 went bad again within six months. Proponents of loan modifications, meanwhile, argue that the approach can work--as long as mortgages are restructured the right way. The first-quarter mortgage metrics report released Wednesday by the OCC and the Office of Thrift Supervision included detailed findings on the mortgage industry's efforts to modify home loans so far. Here are five things you should know:
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Prime Loans Going 'Seriously Delinquent' At Quickest Pace
Tweet Share on Facebook July 1, 2009 Comment (5)
The first-quarter mortgage metrics report released Wednesday by the Office of the Comptroller of the Currency and the Office of Thrift Supervision had all kinds of telling data. Among the most interesting was this finding:
Prime loans, which represented two-thirds of all mortgages in the portfolio, experienced the highest percentage increase in serious delinquencies, climbing by more than 20 percent from the prior quarter to 2.9 percent of prime mortgages.
The finding is another example of how the eroding labor market is playing a key role in driving mortgage delinquencies higher. And as the economy continues to shed jobs, additional borrowers with good credit will fall behind on their mortgage payments as well.
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Mortgage Applications Dip to 7-Month Lows--Even as Rates Fall
Tweet Share on Facebook July 1, 2009 Comment (1)The Mortgage Bankers Association said Wednesday that the number of applications for home loans fell nearly 19 percent in the week ending June 26 from the previous week, as demand for mortgages dropped to seven-month lows. Refinancing applications plunged 30 percent from a week earlier.
The number of people applying for mortgages--especially to refinance--has been hammered by the recent sell off in the Treasury market, which sent fixed mortgage rates screaming towards 6 percent. But what's interesting about the most-recent dip in mortgage applications is that it comes even as mortgage rates move modestly lower. Thirty-year, fixed mortgage rates hit 5.57 percent during the week of June 12, but have since fallen steadily, reaching 5.34 percent in the most recent report.
[Mortgage Rates Head for 6 percent: 5 Reasons They Might Retreat]
