One in Three Think Home Prices Will Continue to Fall
One in three homeowners believe home prices will fall further, though 38 percent think we’ve already reached bottom, according to the second quarter Zillow Homeowner Confidence Survey.
This is the worst sentiment about the short-term future of home values over the past three quarters.
Less than a third (30 percent) of those surveyed believe home values in their local market will increase in the next six months, down from 42 percent a quarter earlier.
“As homeowners have been so inundated recently with news of declining home sales post-tax credit, it’s no surprise that they would become more pessimistic about the future of home values,” said Dr. Stan Humphries, chief economist at Zillow.com, in a statement.
“Homeowners have become much more responsive to current market conditions than they were just two years ago, when a more typical reaction was denial.”
Despite being more realistic about their home’s value, five percent plan to sell at any sign of a real estate turnaround, which would equate to another 3.8 million homes dumped onto the market.
Inventory is already swelling given the number of distressed properties on the market, and that doesn’t factor in the so-called shadow inventory.
Add to that the terrible sales rate – just 5.2 million existing homes were sold in all of 2009, and you’ve got a problem.
These “sidelined sellers” pose more downside risk to home prices, which in turn could increase the number of homeowners facing foreclosure, putting even more pressure on home prices. Figure that one out…
As for the future, most believe their own homes’ values will either increase (27 percent) or remain unchanged (35 percent) over the next 12 months, while 12 percent expect a decline and 26 percent aren’t sure.
Interesting tidbit from the Census Bureau’s 2009 American Housing Survey, via Calculated Risk.
Per the forthcoming report, 24.1 million first mortgages had associated interest rates above six percent.
And only 6.2 million first mortgages had rates under five percent, despite mortgage rates currently being at record lows (4.42% for a 30-year fixed).
Nearly 10 million more had interest rates above seven percent, with roughly two million of those above nine percent.
While the number of borrowers with mortgage rates below six percent is sure to rise this year, it still reveals how many borrowers could stand to benefit from a refinance at today’s rates.
Of course, issues like negative equity and tighter underwriting guidelines have proven to be a roadblock for many.
But this explains why many have advocated for a blanket refinance of all Fannie and Freddie-backed loans to give borrowers some much needed breathing room.
The difference in monthly mortgage payment could be significant enough to stave off foreclosure, assuming the homeowner doesn’t mind being underwater for a while.
More data from CalcRisk:
- 76.4 million owner occupied housing units in 2009.
- 24.2 million were owned free and clear (no mortgage). That is 31.7%.
- 26.8 million primary mortgages were originated in 2004 or earlier.
- 12.7 million primary mortgages were originated prior to 2000.
The four largest U.S. banks, Wells Fargo, Bank of America, Chase, and Citibank, face up to $180 billion in home loan buybacks from government sponsored entities Fannie Mae and Freddie Mac, according to Fitch Ratings.
“Fitch anticipates that a focal point of repurchase requests will be reduced documentation loans (sometimes known as Alt-A loans),” the company said in a release.
“The actual amount of repurchase requests will ultimately depend on key variables such as quality of the originator’s underwriting, documentation standards, and foreclosure rates, while losses will be a function of “cure” rates and home prices.”
But using a more “moderate loss scenario,” where the put-back rate is 35 percent and the recovery rate drops to 55 percent, Fitch believes losses could total just $27 billion.
These estimates don’t include the risk of buybacks on troubled mortgages in existing private-label mortgage-backed securities, which probably have an even higher rate of soured loans.
“If these investors are successful in putting back asizeable portion of the troubled loans presently in inventory, Fitch believes the existing bank Individual and Issuer Default Ratings (IDR) not already at their Support Floor (i.e. Bank of America and Citigroup) could be susceptible to a downgrade in the future.”
Through the second quarter, Fitch estimates that the top four banks have received pending repurchase requests of $19.1 billion, with $10.7 billion from the main housing GSEs.
Prior to the mortgage crisis, mortgages were originated and quickly re-sold to investors on the secondary market via the originate-to-distribute model.
These loans have reportedly seen higher default rates than loans actually kept on banks’ books, probably because underwriting quality was thrown out the window.
As of June 30, Fannie and Freddie held a combined $354.5 billion in troubled mortgages (delinquent mortgages and real estate owned) on their books.
(photo: BenHusmann)
Mortgage Rates Drop Again
Mortgage rates improved yet again this week as investors shrugged off any concerns of inflation, according to the latest survey from mortgage financier Freddie Mac.
The popular 30-year fixed-rate mortgage averaged 4.42 percent, down from 4.44 percent last week and 5.12 percent a year ago.
The 15-year fixed dipped to 3.90 percent from 3.92 percent, and sits well below the 4.56 percent seen this time last year.
“Investors in long-term bonds appear very confident that inflation will remain in check, and as a result long-term fixed mortgage rates have continued to fall,” said Amy Crews Cutts, Freddie Mac deputy chief economist, in a statement.
“This week marks the ninth straight week in the Primary Mortgage Market Survey® that 30-year-fixed mortgage rates have met or set a new record low.
Meanwhile, both the five-year adjustable-rate mortgage and the one-year ARM remained unchanged at 3.56 percent and 3.53 percent, respectively.
A year ago, the five-year averaged 4.57 percent and the one-year stood at 4.69 percent.
While rates continue to trickle lower, it looks as if there isn’t much more room to fall, as evidenced by the negligible movement over the past few weeks.
Still, the low rates have surely increased affordability for those looking to purchase a home, or those lucky enough (with enough equity) to refinance.
The interest rates above are good for conforming loan amounts at 80 percent loan-to-value; pricing adjustments may increase or lower the rate you ultimately receive.
Jumbo loans continue to price a half percentage point or more higher than conforming mortgages.
So much for the American dream. More than one in four renters (27%) surveyed by real estate search company Trulia never plan to buy a home. Ever.
And of the renters who do plan to buy a home, 68 percent don’t plan on doing so for more than two years.
Not great news for home sales, which have declined steadily since the homebuyer tax credit expired.
And even worse for the growing inventory, which will be slow to clear, especially as the shadow inventory increases and weighs on home prices.
“Large numbers of people delaying their plans to buy a home, or not planning to buy at all, could have an enormous domino delaying effect on economic recovery in the U.S.,” said Pete Flint, CEO of Trulia, in a press release.
“Renters converting into buyers are crucial to turning around the housing slump, but the current economic crisis is causing people to become very hesitant to get off the fence and buy a home.”
But don’t fret – 72 percent of Americans still believe home ownership is part of their personal American dream, although that number is down from 77 percent six months ago.
Check out the “tipping factors” that would encourage current renters to buy within the next year:
Trulia conducted the survey between July 22-26, with responses coming from 2,055 U.S. adults aged 18 years and older. The sample included 1,345 homeowners and 663 renters.
Short Sales More Than Triple, But Cost Lenders Big
The number of short sales has more than tripled since 2008, but mortgage lenders are losing $310 million in “unnecessary losses” annually as a result, according to CoreLogic’s “The Cost of Short Sales” 2010 research study.
It is estimated that annual volume of short sales, in which a property is sold for less than the existing mortgage lien(s), has reached 400,000.
And over half (55.8%) occur in just four hard-hit states, including Arizona, California, Florida, and Texas.
While short sales are an important component to the overall housing recovery, they also tend to be riddled with fraud.
CoreLogic believes one in 53 short sale transactions includes an “unnecessary loss,” with the average loss $41,500.
“By definition, short sales constitute a financial loss to lenders but will continue to be a necessary part of the mortgage industry as it seeks stabilization. The primary objective for lenders is to eliminate unnecessary loss,” said Tim Grace, senior vice president of Fraud Analytics, CoreLogic, in a release.
“The best way to mitigate fraud risk and unnecessary loss is through a collaborative effort where lenders collectively share pre-closing and post-closing information. Lenders in the CoreLogic Mortgage Fraud Consortium will benefit greatly from sharing knowledge of concurrent transactions pending on short sale properties in real time.”
Short sale fraud often involves two sale transactions within a short window of time, with the subsequent sale amount vastly higher than the first.
A new poll from Rasmussen Reports found that just 28 percent of Americans favor a homeowner bailout after rumors of such a plan surfaced in recent weeks.
They were since put to rest by a Treasury spokesman, but there is still speculation that the Obama administration could do more to help struggling homeowners, possibly by offering widespread principal balance reductions.
However, 58 percent of those polled in a related survey opposed a proposal that would see the federal government forgive a portion of mortgage debt owed by troubled homeowners.
Another 14 percent said they weren’t sure about it, leaving just over a quarter in favor of such a plan.
Interestingly, opposition is higher among homeowners, and underwater borrowers, the very individuals targeted by the program, are opposed by a two-to-one margin.
Roughly two-thirds (63%) of all those surveyed believe the government forgiveness program would be unfair to those who are making their mortgage payments on time, while 23 percent disagree and believe it’s fair.
Nearly half of homeowners think it would be bad for the economy, 30 percent feel it would help, and 15 percent believe it would have no impact.
The poll involved 1,000 likely voters, including 40 percent who owe more on their mortgages than the current value of their homes.
Oh, and one-in-seven homeowners (14%) polled said they are at least somewhat likely to miss or be late with a mortgage payment in the next six months.
Wells Fargo retained the title of “top mortgage lender” in the second quarter as lending volume improved slightly from a quarter earlier, according to an analysis from MortgageDaily.com.
The San Francisco-based bank and mortgage lender saw $81.5 billion in second quarter production, beating out rivals Bank of America and Chase.
There was no ranking change involving the top eight lenders, but Flagstar moved past Quicken loans to rank ninth, and BB&T fell out of the top 10.
U.S. mortgage lenders saw loan origination volume increase by 6.50 percent from the first quarter, but the numbers were still off 37.9 percent from a year ago.
The industry drop could be partially attributed to a decrease in FHA loan demand, which was down from both the first quarter of 2010 and the second quarter of 2009.
The FHA endorsed 401,981 loans for $71.6 billion in the second quarter, down from 422,568 loans for $77.9 billion in the previous quarter and 519,567 loans for $98.1 billion during the same period last year.
Reverse mortgage demand also declined from $8.1 billion a year ago to just $3.9 billion.
But things could turn around in the third quarter thanks to the ridiculously low mortgage rates currently on offer.
“Recent data indicate loan pipelines have strengthened, suggesting third-quarter originations will come in even stronger,” said Mortgage Daily Publisher Sam Garcia, in a release.
“Also, many borrowers might see a psychological threshold being broken as fixed rates teeter below 4 percent — potentially fueling demand for more refinance activity.”
But the big questions remains whether there are many homeowners out there who haven’t already refinanced.
Top 10 Mortgage Lenders Second Quarter 2010
Home values nationwide fell 0.6 percent in the second quarter from a quarter earlier and were off 3.2 percent compared to last year, according to real estate information service Zillow.
But the rate of decline slowed for the second straight quarter, likely a result of the homebuyer tax credit, improved affordability, and ongoing loan modification efforts.
Still, 21.5 percent of homeowners were in negative equity positions, meaning they owed more on their mortgages than the current value of their homes.
However, that’s down from 23.3 percent in the first quarter and 23 percent from a year ago.
Conditions certainly varied by region, with more than a quarter of markets experiencing increases in home values over the past year.
In California, five markets have seen home value increases over the past five quarters, with the San Diego MSA leading the way with a 7.3 percent rise year-over-year.
“As the national housing market limps toward stabilization, individual markets are a mixed bag,” said Zillow Chief Economist Dr. Stan Humphries, in a release.
“The double tax credits for some California homebuyers have certainly stimulated housing demand there and are partly responsible for the rapid – and likely unsustainable – rates of appreciation in many markets across the state.”
At the same time, home values in hard-hit Arizona and Florida continued to fall, with the Miami- Fort Lauderdale MSA seeing a 15.2 percent year-over-year decline and the Phoenix MSA slipping 11.8 percent.
High supply seems to be the culprit there, and the shadow inventory is likely exacerbating matters as well.
Home sales are expected to fall significantly post-tax credit, which could extend the time until the nation as a whole sees a home price bottom.
Currently, Zillow expects a bottom sometime in the latter half of 2010.
FHA Short Refinance Program to Launch Next Month
More relief is on the way for underwater borrowers, assuming lenders agree to take part in the voluntary program.
On September 7, the FHA will begin offering FHA loans to certain underwater non-FHA borrowers who are current on their existing mortgages via the FHA Short Refinance program, originally unveiled back in March.
In order to take advantage of the FHA’s “short refi,” homeowners must qualify for the new loan under standard FHA underwriting requirements, and have a credit score of 500 or higher.
The property must be the homeowner’s primary residence (1-4 units), and the borrower’s existing first mortgage holder must agree to write off at least 10 percent of their unpaid principal balance, bringing the borrower’s combined loan-to-value ratio (CLTV) to no more than 115 percent.
Additionally, the existing loan must not be an FHA-insured loan, and the refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent.
The Treasury will provide incentives to existing second lien holders who agree to full or partial extinguishment of the liens – though second mortgages can be re-subordinated so long as the CLTV stays below 115 percent.
“We’re throwing a life line out to those families who are current on their mortgage and are experiencing financial hardships because property values in their community have declined,” said FHA Commissioner David H. Stevens, in a statement.
“This is another tool to help overcome the negative equity problem facing many responsible homeowners who are looking to refinance into a safer, more secure mortgage product.”
Currently, borrowers are also able to refinance with negative equity up to 125 percent LTV via the Home Affordable Refinance Program (HARP).
A Treasury spokesman today put to rest rumors government mortgage financiers Fannie Mae and Freddie Mac were set to forgive mortgage debt for millions of American homeowners.
There had been speculation the pair would soon offer principal balance reductions to underwater borrowers, those who owe more on their mortgages than the current value of their homes, so they could refinance and take advantage of the record low mortgage rates.
But Treasury spokesman Andrew Williams told Reuters “the administration is not considering a change in policy in this area.”
Before the statement, investors were dumping mortgage bonds in anticipation they would sustain large losses if a refinancing wave were to come – they have since parred losses.
Some political pundits speculated that the White House would give orders to forgive portions of underwater mortgages backed by Fannie and Freddie “to win back the hearts and minds of voters” before a key midterm election.
Obviously, such a massive principal write-down would cost billions, likely paid for taxpayers, making it an unlikely proposal.
It would probably also prop up home prices that are still unsustainable in many parts of the country, even with mortgage rates as low as they are.
There’s still always the option of easing underwriting requirements so more borrowers can refinance, regardless of how high their loan-to-value is, or how insufficient their income is.
Currently, borrowers with mortgages backed by Fannie and Freddie can refinance with negative equity up to 125 percent LTV, which clearly isn’t high enough...
The Senate late last night unanimously approved legislation to grant the FHA authority to raise the annual mortgage insurance premium from 0.55 percent to 1.55 percent.
However, FHA officials only expect to raise the premium to 0.9 percent, while lowering the upfront mortgage insurance premium.
Earlier this year, the upfront mortgage insurance premium was increased from 1.75 percent to 2.25 percent.
The result would mean borrowers taking out a $170,000 loan at five percent would pay just $38 more each month.
At the same time, the FHA would stand to bring in an additional $3.6 billion annually to bolster its depleted reserves.
“Our legislative proposals provide FHA the ability to hold lenders accountable for the loans they underwrite,” said HUD Secretary Shaun Donovan, in prepared remarks.
“And, we have also proposed giving FHA the flexibility to respond to changes in the marketplace by granting additional authority to adjust the annual mortgage insurance premium and, in turn, reduce the upfront mortgage insurance premium paid by borrowers.”
While FHA loans may be more expensive going forward, the costs will be spread out over time, keeping upfront costs low, which is essentially why borrowers choose these loans.
A few weeks back, the FHA proposed a minimum credit score requirement and may soon require borrowers with Fico scores below 580 to bring in at least a 10 percent down payment.
Those with credit scores of 580 and above will still be eligible to bring in as little as 3.5 percent down, the FHA’s flagship loan program.
Over the last 18 months, the FHA has insured roughly 30 percent of home purchases and 20 percent of refinances in the housing market.
New record lows were achieved this week as mortgage rates sank across the board, according to the latest survey from mortgage financier Freddie Mac.
The 30-year fixed, 15-year fixed, and five-year adjustable-rate mortgage all reached new lows during the week ending August 5 as economic news pushed rates lower (how mortgage rates work).
“And yet again, interest rates for fixed-rate mortgages and now the hybrid 5-year ARM fell to all-time record lows this week following the second quarter GDP release,” said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement.
“Annual revisions cut the cumulative GDP growth in half over the past three years ending in the first quarter of 2010 from 1.4 percent to 0.6 percent. This reduces inflationary pressures and allows longer-term rates room to ease.”
The popular 30-year fixed averaged 4.49 percent, down from 4.54 percent last week and 5.22 percent a year ago.
The 15-year fixed slipped to 3.95 percent from 4.00 percent a week ago, and sits well below the 4.63 percent seen this time last year.
Meanwhile, the five-year ARM dipped to 3.63 percent from 3.76 percent, putting it more than a point below the 4.73 percent seen last year.
And finally, the one-year ARM averaged 3.55 percent, down from 3.64 percent last year and 4.78 percent last year.
The interest rates above are for conforming loan amounts at 80 percent loan-to-value; pricing adjustments may increase or lower the rate you ultimately receive.
Jumbo loans continue to price a half percentage point or more higher than conforming mortgages
Fifty-seven percent of the 500 Pennsylvania homeowners surveyed by the Pennsylvania Association of Realtors said they experienced job loss in the 12 months leading up foreclosure.
Another 47 percent said they had experienced an unexpected medical bill, while 36 percent said they had other unexpected bills.
Nearly half (41 percent) of those surveyed had prime, fixed-rate loans, while just eight percent had subprime, adjustable-rate mortgages.
Additionally, 71 percent said they had lived in their homes for more than five years when the foreclosure process began.
The findings call into the question the assertion that the majority of those in foreclosure were unqualified borrowers in over their heads.
Of course, it’s unclear if the data takes into account those that subsequently refinanced (once, maybe twice) after purchasing their homes.
And more than a quarter of respondents didn’t even know what type of mortgage they had, which could also have been part of the problem.
Interestingly, nearly 60 percent of homeowners surveyed had never heard of the Making Home Affordable program, and only about four percent said it helped them.
Roughly 91 percent of those surveyed said they attempted to contact their mortgage lender about a foreclosure solution, but 48 percent said they were “not at all” willing to work with them.
Top 10 Big Bank Mortgage Lenders
Below is a list of the top 10 residential mortgage lenders in the first quarter of 2010, based on data from MortgageStats.com.
Each bank in the top 10 saw fundings drop compared to a year earlier, with many seeing declines of 25-50 percent.
Wells Fargo led the way with $77 billion in first quarter originations, followed closely by Bank of America with $71.5 billion and Chase with $32.8 billion.
The San Francisco-based bank and mortgage lender held a 24 percent market share, while Bank of America grabbed 22 percent and Chase took 10 percent.
The numbers dropped off significantly from there, with Ally Bank/ResCap (GMAC) doing just $13 billion in lending volume, followed by CitiMortgage with $11 billion and U.S. Bank Home Mortgage with $9 billion.
The biggest year-over-year loser was SunTrust, which saw fundings fall 58 percent from the first quarter of 2009, back when refinancing was the hot ticket.
Top 10 Mortgage Lenders First Quarter 2010
1. Wells Fargo – $77 billion (-25%) 23.90% market share
2. Bank of America – $71.5 billion (-20%) 22.19% market share
3. Chase – $32.8 billion (-16%) 10.16% market share
4. Ally Bank/ResCap (GMAC) – $13 billion (-2%) 4.02% market share
5. CitiMortgage, Inc. – $11 billion (-55%) 3.43% market share
6. U.S. Bank Home Mortgage – $9 billion (-33%) 2.78% market share
7. PHH Mortgage – $7.8 billion (-12%) 2.43% market share
8. SunTrust Bank – $5.6 billion (-58%) 1.75% market share
9. Provident Funding Associates – $5.3 billion (-52%) 1.65% market share
10. Branch Banking & Trust Company – $5.2 billion (-33%) 1.60% market share
The market share information is based on an estimated total market size of $322,551,000,000.
Real estate analytics company CoreLogic released a new program this week that can predict a borrower’s willingness to continue making mortgage payments, enabling loan servicers to make more informed loss mitigation decisions.
The system, known as WillCap, categorizes borrowers into 22 “clusters,” allowing loan holders to determine how, when, and with whom they should take action to reduce defaults.
Several of the clusters predict candidates that are likely to “ruthlessly default,” despite having the ability to continue making mortgage payments.
WillCap can also pinpoint borrowers who will benefit from a principal balance reduction, and determines the optimal principal reduction amount.
Additionally, it can assess whether a borrower will succeed with a loan modification and refine the terms to minimize re-default.
If it determines the borrower is better off with a short sale, it recommends the optimal price to ensure the property is sold within a specified amount of time on-market.
“WillCap brings objectivity, transparency and predictability to loss mitigation and default management, said George Livermore, group executive for Data and Analytics, CoreLogic.
“Servicers and investors can use this new solution to craft workable distressed loan treatments that can increase loan modification success, while significantly reducing losses.”
With re-default rates on loan modifications as high as 68.7 percent, a program like this certainly seems worthwhile.
(photo: scoobay)
Mortgage rates continue to dip deeper into record territory, with both the 30-year fixed and 15-year fixed reaching new lows during the week, according to mortgage financier Freddie Mac.
The popular 30-year fixed-rate mortgage averaged 4.56 percent during the week ending July 22, down from 4.57 percent a week ago and 5.20 percent last year.
The 15-year fixed fell to 4.03 percent from 4.06 percent a week ago, and sits well below the 4.68 percent average seen this time last year.
Meanwhile, the five-year adjustable-rate mortgage slipped to 3.79 percent from 3.85 percent, and sits about a point below the 4.74 percent seen a year ago.
Finally, the one-year ARM averaged 3.70 percent, down from 3.74 percent a week ago and 4.77 last year.
While the low mortgage rates are good for those looking to purchase a home or refinance an existing mortgage, they come at a cost (how mortgage rates are determined).
“The decline in mortgages rates over the past few weeks echoes the recent signs of weakening confidence in the strength of the economy, particularly the housing and consumer sectors,” said Frank Nothaft, Freddie Mac chief economist, in a release.
“For example, homebuilder confidence declined in July to lows not seen since April 2009, as measured by the NAHB/Wells Fargo Housing Market Index, following the large drop in housing starts reported for June.”
The interest rates above are for conforming loan amounts at 80 percent loan-to-value; pricing adjustments may increase or lower the rate you actually receive.
Jumbo loans continue to price a half percentage point or more higher than conforming mortgages.
Mortgage defaults fell for the fifth consecutive quarter between April and June to the lowest point in three years, according to real estate data provider DataQuick.
A total of 70,051 Notices of Default (NODs) were filed during the second quarter, down 13.6 percent from 81,054 a quarter earlier and 43.8 percent lower than the 124,562 filed in the second quarter a year ago.
The peak for NODs was 135,431 in the first quarter of 2009.
“Obviously, motivated sellers and accommodating lenders have played a part in bringing the default filings down, especially when it comes to short sales, said John Walsh, DataQuick president, in a release.
“Public policy has also been a factor. We also need to remember that prices have come up off bottom over the past year. If they continue to rise, fewer homeowners will find themselves under water, which is a significant factor in letting a home go.”
Zip codes with sub-$300,000 median home prices saw 10.6 default notices for every 1,000 homes last quarter, compared with just 2.9 per 1,000 homes in zips with $800,000-plus median home prices.
Most Bad Loans Originated in 2006
The median loan origination month for last quarter’s defaulted mortgages was August 2006, with World Savings, WaMu, Countrywide, Wells Fargo, and Bank of America accounting for the most.
However, smaller mortgage lenders like ResMae, OwnIt, and First NLC had default rates of more than 65 percent, which expains why they no longer exist.
On primary mortgages, homeowners for a median five months behind on mortgage payments before the lender filed a NOD.
Borrowers owed a median $15,008 in back payments on a median $325,567 loan amount.
On home equity lines of credit and home equity loans, borrowers owed a median $4,187 on a median $65,740 credit line.
Repos Rises
The number of Trustees Deeds (TDs), where borrowers actually lose their homes, increased 11.2 percent to 47,669 during the second quarter.
The numbers are up 4.4 percent from the second quarter of 2009, though nowhere near the all-time peak of 79,511 in the third quarter of 2008.
TDs hit an all-time low of 637 in the second quarter of 2005, just before the mortgage crisis got underway.
(photo: wonderlane)
A foreclosure reduces the value of a home by 27 percent on average, according to a MIT study titled “Forced Sales and House Prices,” which examined 1.8 million home sales in Massachusetts from 1987 to 2009.
Researchers weren’t surprised to find that foreclosures were selling for a discount, but were shocked at how large it was.
Other types of “forced sales” lowered home prices by much smaller amounts – when a house was sold after the death of the owner, the price only dropped about five to seven percent.
And when a homeowner declared bankruptcy, the home price fell just three percent on average.
They believe the gap in home price reductions has to do with the tendency of foreclosed properties to fall into disrepair.
You know, the homes with overgrown weeds and brown lawns accompanied by foreclosure notices in windows.
The brains behind the study found that those same properties also lower the values of homes in the surrounding area, but not by much.
If a property is located within 250 feet of a foreclosed home, you can expect the value of the home to fall by just one percent on average.
Doesn’t seem so bad, unless your home is surrounded by other foreclosed properties…
Top 10 Big Bank Mortgage Lenders
Below is a list of the top 10 residential mortgage lenders in the first quarter of 2010, based on data from MortgageStats.com.
Each bank in the top 10 saw fundings drop compared to a year earlier, with many seeing declines of 25-50 percent.
Wells Fargo led the way with $77 billion in first quarter originations, followed closely by Bank of America with $71.5 billion and Chase with $32.8 billion.
The San Francisco-based bank and mortgage lender held a 24 percent market share, while Bank of America grabbed 22 percent and Chase took 10 percent.
The numbers dropped off significantly from there, with Ally Bank/ResCap (GMAC) doing just $13 billion in lending volume, followed by CitiMortgage with $11 billion and U.S. Bank Home Mortgage with $9 billion.
The biggest year-over-year loser was SunTrust, which saw fundings fall 58 percent from the first quarter of 2009, back when refinancing was the hot ticket.
Top 10 Mortgage Lenders First Quarter 2010
1. Wells Fargo – $77 billion (-25%) 23.90% market share
2. Bank of America – $71.5 billion (-20%) 22.19% market share
3. Chase – $32.8 billion (-16%) 10.16% market share
4. Ally Bank/ResCap (GMAC) – $13 billion (-2%) 4.02% market share
5. CitiMortgage, Inc. – $11 billion (-55%) 3.43% market share
6. U.S. Bank Home Mortgage – $9 billion (-33%) 2.78% market share
7. PHH Mortgage – $7.8 billion (-12%) 2.43% market share
8. SunTrust Bank – $5.6 billion (-58%) 1.75% market share
9. Provident Funding Associates – $5.3 billion (-52%) 1.65% market share
10. Branch Banking & Trust Company – $5.2 billion (-33%) 1.60% market share
The market share information is based on an estimated total market size of $322,551,000,000.
Real estate analytics company CoreLogic released a new program this week that can predict a borrower’s willingness to continue making mortgage payments, enabling loan servicers to make more informed loss mitigation decisions.
The system, known as WillCap, categorizes borrowers into 22 “clusters,” allowing loan holders to determine how, when, and with whom they should take action to reduce defaults.
Several of the clusters predict candidates that are likely to “ruthlessly default,” despite having the ability to continue making mortgage payments.
WillCap can also pinpoint borrowers who will benefit from a principal balance reduction, and determines the optimal principal reduction amount.
Additionally, it can assess whether a borrower will succeed with a loan modification and refine the terms to minimize re-default.
If it determines the borrower is better off with a short sale, it recommends the optimal price to ensure the property is sold within a specified amount of time on-market.
“WillCap brings objectivity, transparency and predictability to loss mitigation and default management, said George Livermore, group executive for Data and Analytics, CoreLogic.
“Servicers and investors can use this new solution to craft workable distressed loan treatments that can increase loan modification success, while significantly reducing losses.”
With re-default rates on loan modifications as high as 68.7 percent, a program like this certainly seems worthwhile.
(photo: scoobay)
Mortgage rates continue to dip deeper into record territory, with both the 30-year fixed and 15-year fixed reaching new lows during the week, according to mortgage financier Freddie Mac.
The popular 30-year fixed-rate mortgage averaged 4.56 percent during the week ending July 22, down from 4.57 percent a week ago and 5.20 percent last year.
The 15-year fixed fell to 4.03 percent from 4.06 percent a week ago, and sits well below the 4.68 percent average seen this time last year.
Meanwhile, the five-year adjustable-rate mortgage slipped to 3.79 percent from 3.85 percent, and sits about a point below the 4.74 percent seen a year ago.
Finally, the one-year ARM averaged 3.70 percent, down from 3.74 percent a week ago and 4.77 last year.
While the low mortgage rates are good for those looking to purchase a home or refinance an existing mortgage, they come at a cost (how mortgage rates are determined).
“The decline in mortgages rates over the past few weeks echoes the recent signs of weakening confidence in the strength of the economy, particularly the housing and consumer sectors,” said Frank Nothaft, Freddie Mac chief economist, in a release.
“For example, homebuilder confidence declined in July to lows not seen since April 2009, as measured by the NAHB/Wells Fargo Housing Market Index, following the large drop in housing starts reported for June.”
The interest rates above are for conforming loan amounts at 80 percent loan-to-value; pricing adjustments may increase or lower the rate you actually receive.
Jumbo loans continue to price a half percentage point or more higher than conforming mortgages.
Mortgage defaults fell for the fifth consecutive quarter between April and June to the lowest point in three years, according to real estate data provider DataQuick.
A total of 70,051 Notices of Default (NODs) were filed during the second quarter, down 13.6 percent from 81,054 a quarter earlier and 43.8 percent lower than the 124,562 filed in the second quarter a year ago.
The peak for NODs was 135,431 in the first quarter of 2009.
“Obviously, motivated sellers and accommodating lenders have played a part in bringing the default filings down, especially when it comes to short sales, said John Walsh, DataQuick president, in a release.
“Public policy has also been a factor. We also need to remember that prices have come up off bottom over the past year. If they continue to rise, fewer homeowners will find themselves under water, which is a significant factor in letting a home go.”
Zip codes with sub-$300,000 median home prices saw 10.6 default notices for every 1,000 homes last quarter, compared with just 2.9 per 1,000 homes in zips with $800,000-plus median home prices.
Most Bad Loans Originated in 2006
The median loan origination month for last quarter’s defaulted mortgages was August 2006, with World Savings, WaMu, Countrywide, Wells Fargo, and Bank of America accounting for the most.
However, smaller mortgage lenders like ResMae, OwnIt, and First NLC had default rates of more than 65 percent, which expains why they no longer exist.
On primary mortgages, homeowners for a median five months behind on mortgage payments before the lender filed a NOD.
Borrowers owed a median $15,008 in back payments on a median $325,567 loan amount.
On home equity lines of credit and home equity loans, borrowers owed a median $4,187 on a median $65,740 credit line.
Repos Rises
The number of Trustees Deeds (TDs), where borrowers actually lose their homes, increased 11.2 percent to 47,669 during the second quarter.
The numbers are up 4.4 percent from the second quarter of 2009, though nowhere near the all-time peak of 79,511 in the third quarter of 2008.
TDs hit an all-time low of 637 in the second quarter of 2005, just before the mortgage crisis got underway.
(photo: wonderlane)
A foreclosure reduces the value of a home by 27 percent on average, according to a MIT study titled “Forced Sales and House Prices,” which examined 1.8 million home sales in Massachusetts from 1987 to 2009.
Researchers weren’t surprised to find that foreclosures were selling for a discount, but were shocked at how large it was.
Other types of “forced sales” lowered home prices by much smaller amounts – when a house was sold after the death of the owner, the price only dropped about five to seven percent.
And when a homeowner declared bankruptcy, the home price fell just three percent on average.
They believe the gap in home price reductions has to do with the tendency of foreclosed properties to fall into disrepair.
You know, the homes with overgrown weeds and brown lawns accompanied by foreclosure notices in windows.
The brains behind the study found that those same properties also lower the values of homes in the surrounding area, but not by much.
If a property is located within 250 feet of a foreclosed home, you can expect the value of the home to fall by just one percent on average.
Doesn’t seem so bad, unless your home is surrounded by other foreclosed properties…
Fannie and Freddie Move to Pennie Stock Status.. Effects of Government Management at its Best
It’s the end of an era, and a sign of the times.
Today, shares of government mortgage financiers Fannie Mae and Freddie Mac were removed from the New York Stock Exchange and sent to the lowly OTC Bulletin Board where most other penny stocks dwell.
Fannie Mae, which used to trade under the symbol FNM, will now trade under the four-digit symbol FNMA.OB.
Freddie Mac will trade under the symbol FMCC.OB, formerly FRE.
Since the FHFA announcement to delist the pair was made back in mid-June, both stocks plummeted from around a buck to mere pennies on the dollar.
They were removed from the powerful NYSE stock index for failing to maintain an average closing price of $1 over thirty days for most months since conservatorship was established in September 2008.
Prior to the conservatorship, both companies were trading in the high teens to $20-range.
But the pair have been riddled with massive losses since the mortgage crisis got underway, and their multi-billion dollar tabs seem to keep swelling larger.
Freddie Mac was trading down more than 20 percent to 27 cents per share this morning, while Fannie Mae was down six percent to 23 cents a share.
Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks provide more than $5.9 trillion in funding for the U.S. mortgage markets and financial institutions.
Mortgage rates were mostly lower this week as the 30-year fixed-rate mortgage hit a new all time low, according to the latest survey from mortgage financier Freddie Mac.
The popular mortgage program averaged 4.57 percent during the week ending July 8, down from 4.58 percent last week and 5.20 percent a year ago.
Meanwhile, the 15-year fixed climbed to 4.07 percent from 4.04 a week ago, but stayed well below the 4.69 percent average seen a year ago.
The five-year adjustable-rate mortgage fell to 3.75 percent from 3.79 percent, also an all-time low, and more than a point lower than the 4.82 percent seen this time last year.
Finally, the one-year ARM averaged 3.75 percent, down from 3.80 percent last week and 4.82 percent last year.
“With mortgage rates falling to historic lows, refinance activity has been strong over the past three months,” said Frank Nothaft, Freddie Mac vice president and chief economist, in a press release.
“The Bureau of Economic Analysis reported that the effective mortgage rate of all loans outstanding was just below six percent in the first quarter of 2010, the lowest since the series began in 1977.
The interest rates above are good for conforming loan amounts at 80 percent loan-to-value at par; pricing adjustments may raise or lower the rate you actually receive from a lender.
Jumbo loans continue to price a half percentage point or more higher than conforming mortgages.
Wells Fargo Financial to Close 638 Stores, Halt Origination of Non-Prime Portfolio Mortgages
Wells Fargo plans to close 638 Wells Fargo Financial stores across the United States as part of a wide-scale restructuring, the company said today in a press release.
The move will result in roughly 3,800 layoffs, with the remaining 10,000-odd employees expected to be re-assigned to other Wells Fargo businesses.
Additionally, the company will halt the origination of non-prime portfolio mortgage loans, which are higher risk loans kept on a lender’s books instead of being sold on the secondary market.
Wells Fargo expects the restructuring to cost approximately $185 million, with $137 million recorded during the second quarter of 2010, and the remainder during the second half of 2010.
The San Francisco-based bank and mortgage lender said less than two percent of all its real estate loans were originated in Wells Fargo Financial stores during the first quarter, so the impact should be quite minimal.
Wells Fargo Financial branches offered FHA loans, auto loans, and credit cards, all of which will now be available via the company’s network of community banking and mortgage stores.
Thanks to their merger with Wachovia in 2008, Wells Fargo has 6,600 bank branches and 2,200 Wells Fargo Home Mortgage locations nationwide.
Today’s news mirrors a similar strategy employed by Citi, which announced the closure of nearly 400 CitiFinancial branches last month.
Check out the updated list of mortgage-related layoffs, closures, and mergers.
Citibank has reportedly increased mortgage lending at its retail branches by 60 percent in the past two months, according to the Wall Street Journal.
The New York City-based bank, which had to reassess its risk appetite after teetering on the brink of failure, also doubled its mortgage application pipeline in a matter of months.
The overall mortgage application pipeline increased to $2 billion in June from less than $1 billion in February, likely spurred on by record low mortgage rates.
Citi’s North American retail banking business head Brad Dinsmore told the paper that home loans had become a “top priority” for the company, and said most of the applications were likely to turn into loans, partially because of a focus on more affluent customers.
He added that mortgage application volume was strong in major cities like Los Angeles, New York, Chicago, and San Francisco, with 30 percent going toward home purchases rather than refinances.
Additionally, applications for jumbo mortgages are up 30 percent, likely because Citi is offering a 30-year fixed-rate mortgage at around five percent, well below competitor rates hovering above 5.6 percent.
Citi has roughly 1,000 retail banking branches in the United States, but recently announced the closure of 376 CitiFinancial branches nationwide and in Canada, along with hundreds of related layoffs.
However, CitiFinancial only offered personal loans and smaller home purchase and refinance loans, which doesn’t seem to be part of their long-term strategy.
Mortgage application volume increased 6.7 percent on a seasonally adjusted basis during the week ending June 2, the Mortgage Bankers Association said today.
It was helped along by a 9.2 percent increase in refinance activity, which was offset by a 2.0 percent decline in purchase applications.
The refinance index climbed to its highest point since May 15, 2009, while the purchase index fell for the eighth time in the past nine weeks.
That pushed the refinance share of mortgage activity to 78.7 percent of total applications from 76.8 percent the previous week.
Meanwhile, mortgage rates inched up thanks to continued economic uncertainty (how mortgage rates work).
The popular 30-year fixed-rate mortgage increased to 4.68 percent from 4.67 percent, while the 15-year fixed climbed to 4.11 percent from 4.06 percent.
The unpopular one-year adjustable-rate mortgage jumped to 7.20 percent from 7.05 percent, which explains its unpopularity.
“Mortgage rates remained near record lows last week, as incoming data on the job and housing markets were weaker than anticipated,” said Michael Fratantoni, MBA’s Vice President of Research and Economics, in a press release.
“For the month of June, purchase applications declined almost 15 percent relative to the prior month, and were down more than 30 percent compared to April, the last month in which buyers were eligible for the tax credit.”
The MBA’s weekly survey covers more than half of all retail, residential loan applications, but does not factor out duplicate or rejected apps, which have surely risen since the mortgage crisis got underway.
Summary of the Mortgage Reform and Anti-Redatory Lending Act
Below is a summary of the “Mortgage Reform and Anti-Predatory Lending Act,” which is a part of the wider Dodd-Frank Wall Street Reform And Consumer Protection Act:
- Require Lenders Ensure a Borrower’s Ability to Repay: Establishes a simple federal standard for all home loans: institutions must ensure that borrowers can repay the loans they are sold.
- Prohibit Unfair Lending Practices: Prohibits the financial incentives for subprime loans that encourage lenders to steer borrowers into more costly loans, including the bonuses known as “yield spread premiums” that lenders pay to brokers to inflate the cost of loans. Prohibits pre-payment penalties that trapped so many borrowers into unaffordable loans.
- Establishes Penalties for Irresponsible Lending: Lenders and mortgage brokers who don’t comply with new standards will be held accountable by consumers for as high as three-years of interest payments and damages plus attorney’s fees (if any). Protects borrowers against foreclosure for violations of these standards.
- Expands Consumer Protections for High-Cost Mortgages: Expands the protections available under federal rules on high-cost loans — lowering the interest rate and the points and fee triggers that define high cost loans.
- Requires Additional Disclosures for Consumers on Mortgages: Lenders must disclose the maximum a consumer could pay on a variable rate mortgage, with a warning that payments will vary based on interest rate changes.
- Housing Counseling: Establishes an Office of Housing Counseling within HUD to boost homeownership and rental housing counseling.
Keep in mind that the mortgage section alone is 206 pages, so I didn’t get a chance to read it all, nor do I want to read it all, and I’m not sure anyone else did/does either…
Much of the language is vague, so only time will tell if the changes are meaningful, assuming the bill passes in a vote before Congress this week.
Of course, most regulation, especially that in the mortgage industry, is circumvented within days of being enacted, so don’t expect anything groundbreaking.
The never-ending oil spill in the Gulf of Mexico may further exacerbate matters for struggling Florida homeowners, according to Fitch Ratings.
A study conducted by the company revealed that half of all securitized non-agency mortgages in the Sunshine State are 60 days or more delinquent, thanks largely to home price depreciation.
On an aggregate basis, more than 81 percent of all home loans in the state are underwater, and the average loan-to-value (LTV) is a staggering 138 percent, meaning many loans are probably beyond the point of no return.
Additionally, nearly 40 percent of Florida borrowers owe more than 150 percent of the current value of their homes, making strategic default quite likely.
Taking into account that terrible negative equity, “further economic stress brought on by the Gulf oil spill and declines in the tourism and fishing industries would be likely to further increase default rates,” said Fitch Managing Director Roelof Slump, in a release.
Florida already ranks the worst for mortgage delinquencies in all product types, which Fitch attributes to a large concentration of non-prime loans, such as Alt-A and subprime mortgages accounting for 85 percent of outstanding mortgages.
More findings from Fitch:
- 80% of Tampa MSA borrowers underwater, current average LTV 126%
- 90% of Cape Coral/Fort Meyers MSA underwater, current average LTV 188%
- 85% of Miami and Orlando MSAs underwater, current average LTV 150% and 140%, respectively
- 60+ day delinquency rates range from 46%-58% in these MSAs
Florida accounts for 10 percent of the securitized non-agency mortgage loans in the United States, but 16 percent of all 60+ day delinquencies, the worst default ratio of any state.
(photo: babasteve)
Fixed Rates Up
Fixed mortgage rates climbed higher during the week ending June 17 as adjustable-rate mortgages saw some relief, Freddie Mac said today.
The popular 30-year fixed averaged 4.75 percent, up from 4.72 percent last week, but well below the 5.38 percent average seen this time last year.
The 15-year fixed rose to 4.20 percent from 4.17 percent, but remains nearly three-quarters of a point below the 4.89 percent average last year.
Meanwhile, the five-year ARM slipped to 3.89 percent from 3.92 percent, more than a point below its 4.97 percent year-ago average.
It is now at its lowest point since Freddie Mac began tracking the loan program back in January of 2005.
Finally, the one-year ARM averaged 3.82 percent, down from 3.91 percent last week and 4.95 percent last year.
It hasn’t been this low since the week ending May 6, 2004, when it averaged 3.76 percent.
“Mortgage rates were little changed this week amid preliminary signs that the expiration of the homebuyer tax credit in April may have led to a slowdown in new construction ,” said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement.
Despite that pessimism, household balance sheets have improved and homeowners have regained $1.1 trillion in home equity over the past year.
The interest rates above are good for conforming loan amounts at 80 percent loan-to-value at par; pricing adjustments may increase or lower the rate you actually receive.
Jumbo loans continue to price a half percentage point or more higher than conforming mortgages.
Home Sizes Get Smaller After Increasing for 30 Years
After nearly three decades, the average size of a newly constructed single-family home got smaller, according to the National Association of Home Builders.
The average size peaked at 2,521 square feet in 2007, was flat in 2008, and declined about 100 square feet in 2009.
“We also saw a decline in the size of new homes when the economy lapsed into recession in the early 1980s,” said NAHB Chief Economist David Crowe, in a release.
“The decline of the early 1980s turned out to be temporary, but this time the decline is related to phenomena such as an increased share of first-time home buyers, a desire to keep energy costs down, smaller amounts of equity in existing homes to roll into the next home, tighter credit standards and less focus on the investment component of buying a home.”
New homes constructed last year had both fewer bedrooms and bathrooms than in previous years.
The proportion of single-family homes with four bedrooms or more peaked at 39 percent in 2005, and eventually fell to 34 percent last year.
Meanwhile, the proportion of homes with three or more bathrooms fell to 24 percent last year, down from the peak of 28 percent seen in 2007 and 2008.
Builders are also constructing fewer two-story homes, with such properties accounting for just 53 percent of new homes last year, down from 57 percent in 2006.
From 1973 to 2006, homes with two stories or more increased in market share from 23 percent to 57 percent as McMansions became all the rage.
Small is the new black.
Finally some good news for former Indymac customers.
A proposal offered up by House lawmakers under the wider financial-overhaul bill would see former Indymac banking customers recoup a portion of the $265 million in lost deposits after the mortgage lender and thrift collapsed back in 2008.
It would make the temporarily increased FDIC-insured deposit limit of $250,000 permanent and retroactive back to January 1, 2008, just months before the bank collapsed.
At the time, customers were only insured for up to $100,000 on individual accounts, so some high net-worth clients were left out in the cold.
It would mean sizable refunds for those who weren’t able to pull their money out in time, paid for by the FDIC’s deposit-insurance fund.
The Office of Thrift Supervision noted that customers withdrew more than $1.3 billion in deposits in just 11 days after a letter written by Senator Charles Schumer regarding the bank’s (in)stability was made public – they also attributed it to the bank’s subsequent failure.
Indymac got into trouble after delinquencies skyrocketed on the many Alt-A and subprime mortgages the company specialized in hard-hit states like California.
After being acquired by the FDIC, Indymac morphed into Indymac Federal bank, and eventually became OneWest Bank, a company that seems to be flourishing.
Deposits lost at other banks between January 1, 2008 and October 2008, when the FDIC deposit limit was increased, would be eligible for refunds as well.
If the proposal doesn’t fly, the standard insurance amount will return to $100,000 per depositor for all account categories except certain retirement accounts, on January 1, 2014.
Remember when: Indymac bank run photos.
The highly criticized (and praised) immigration bill set to take effect in Arizona in six weeks could boost foreclosures and wreak havoc on housing in the state, according to a report from Azcentral.com.
Apparently there are “thousands if not tens of thousands” of illegal immigrants who purchased homes in Arizona during the housing boom, thanks to the widespread availability of mortgage products like no documentation loans.
And many real estate professionals and mortgage lenders simply looked the other way when it came to immigration status – if they did “check,” it wasn’t difficult to produce false documentation.
Heck, during the boom you could get whatever you needed in the way of fudged documentation and it appears as if most mortgage lenders didn’t care how seemingly obvious it may have been.
You can blame the originate-to-distribute model for that, as the loans were typically only held for a month or so before being packaged into toxic mortgage securities (let’s not forget the loan volume incentives offered up by the big banks either).
Once SB 1070 goes into effect on July 29, many illegal immigrants and legal residents who are making on-time mortgage payments may decide to strategically default, while others thinking of moving to the state may choose to go elsewhere.
That’s partially attributable to the stigma attached to being Hispanic in the state, according to Jay Butler, director of realty studies at Arizona State University, who spoke with the paper.
The result could be lower home prices, more foreclosure filings, and a larger inventory overhang, which could spell trouble for a state that already holds one of the highest distressed housing unit totals in the country.
There are also fears that investors may opt to buy second homes and investment properties elsewhere, as the economic impact of the bill is largely unknown.
And many renters already look to be leaving the state for greener pastures, all this while home sales are expected to flounder this summer.
Loan Application Volume Lowest Since 1997
Home loan applications fell 1.5 percent on a seasonally adjusted basis for the week ending May 14, the Mortgage Bankers Association said today.
The refinance index actually jumped 14.5 percent from one week earlier thanks to the low interest rates on offer, but home purchase applications plummeted 27.1 percent to their lowest point since May 1997.
It’s pretty clear the expiration of the homebuyer tax credit in late April led to this extreme drop-off, and it makes you wonder if home prices will be able to sustain, even with the near record-low mortgage rates on offer.
The decline in purchase apps pushed the refinance share of mortgage activity from 57.7 percent to 68.1 percent of total applications.
Meanwhile, the popular 30-year fixed-rate mortgage slipped further to 4.83 percent from 4.96 percent, and the 15-year fixed averaged 4.19 percent, down from 4.32 percent.
The one-year adjustable-rate mortgage dipped to 6.81 percent from 6.86 percent.
Mortgage points increased on all loan types, somewhat eliminating any benefit tied to the interest rate improvement.
The interest rates above are good for mortgages at 80 percent loan-to-value.
The MBA’s weekly survey covers more than half of all retail, residential loan applications, but does not factor out duplicate or rejected apps, which have surely risen since the mortgage crisis began.
Of the estimated 211,154 residential units foreclosed on in California during 2009, roughly 77,145 were rental units, according to a new report focused on tenant rights.
The foreclosures resulted in the displacement of an estimated 208,795 tenants who were living in single-family homes, condos, and multi-family apartments, despite likely making on-time payments every month.
From 2008 to 2009, there was a 70 percent increase in the foreclosure rate of apartment buildings of five units or more – single-family foreclosures fell 3.1 percent year-to-year.
An overwhelming 85 percent of the foreclosed properties went back to banks in 2009, while private investors took the rest.
During the year, banks forfeited more than $776 million in rental income, focusing on booting tenants by hiring lawyers to litigate eviction cases and having real estate agents carry out cash-for-keys deals.
“Once the properties are vacated, they become prime targets for vandalism, further contributing to plunging property values, and creating legal liability for banks as the owners of blighted vacant property,” the Tenants Together report said.
“Furthermore, banks continue to tarnish their standing in local communities by maintaining their policies to evict rent- paying tenants.”
Fannie Mae and Freddie Mac have implemented post-foreclosure programs to assist renters, but many banks apparently continue to see tenants as obstacles to future profits.
Tenants Together is calling for better tenant protections, including making the “Protecting Tenants at Foreclosure Act” (PTFA) permanent, passing local “just cause for eviction” laws, providing tenant notification when a landlord receives a foreclosure filing, and boosting legal funding for tenants in foreclosure situations.
Currently, PTFA provides tenants with the right to a 90-day notice to vacate after foreclosure and requires new owners to allow tenants with leases to continue occupying properties until the end of the lease term, unless sold to a buyer who intends to occupy the property as their primary residence.
California's Delinquencies Vary Greatly Depending on Location
In sunny California, mortgage delinquencies vary widely by county, as evidenced by a Fitch Ratings study.
Fitch took a look at all securitized, non-agency mortgage loans in the state and discovered that “delinquencies are highly correlated with the level of negative equity.”
And while mortgage performance in California is not substantially different than that of the remainder of the country, certain parts of the state are underperforming or outperforming the rest of the nation.
In the hard-hit Riverside-San Bernardino-Ontario MSA, 23 percent of prime loans are 60+ days delinquent, making it the worst performing region in the nation.
Meanwhile, the San Francisco-San Mateo-Redwood City MSA is the best performing region in the country, with just four percent of prime loans 60+ days delinquent.
Additionally, high-risk option arms and subprime loans in San Francisco outperform less risky Alt-A mortgages in Riverside.
“From 2000-2006, nominal home prices in San Francisco increased by 81% and have since declined 22% from their peak. Over the same period, prices in Riverside have declined 55% from their peak after jumping 193%,” Fitch said in a release.
As a result, 90 percent of Riverside mortgages are now underwater, with nearly 60 percent of mortgage holders owing more than 150 percent of the value of their home.
“Fitch estimates the weighed average current loan-to-value ratio (LTV) in Riverside to be 164%. By comparison, less than 1% of San Francisco mortgages are more than 50% underwater, with a weighted average current LTV of 81%.”
Over the past year, San Francisco home prices have increased by 12 percent, while residences in Riverside have appreciated by just one percent.
An amendment introduced by Oregon Senator Jeff Merkley and Minnesota Senator Amy Klobuchar aimed at protecting homeowners from deceptive lending practices passed the Senate by a vote of 63-36 today.
As a result, mortgage lenders and loan originators will be banned from accepting payments based on the interest rate and other terms of the loan, which effectively wipes out loan steering.
The legislation also seemingly kills off yield spread premium, which was one of the main ways mortgage brokers were compensated (how mortgage brokers make money).
“Deceptive mortgage practices like hidden steering payments directly led to the Wall Street meltdown and resulted in millions of families losing their homes,” said Senator Merkley in a release.
“We took a huge stride forward today in the fight to restore fairness for homeowners and strengthen the financial foundations of our families. I look forward to seeing this amendment become law so that never again will hidden steering payments put millions of homeowners on the fast track to foreclosure.”
Current rules allow loan originators and mortgage lenders to place borrowers into higher-cost and riskier loans, even when they qualify for more affordable loans.
Merkley cited a WSJ study, which found that 61 percent of subprime loans originated in 2006 went to borrowers who qualified for prime loans.
The bill will also require lenders to document income and “other underwriting standards” to ensure borrowers can actually repay their loans, putting an end to no doc loans and so-called “liar loans,” otherwise known as stated income loans.
These are huge changes and the implications may be great for the mortgage industry.
The amendment was also co-sponsored by Senators Chuck Schumer (D-NY), Olympia Snowe (R-ME), Scott Brown (R-MA), Mark Begich (D-AK), Barbara Boxer (D-CA), Chris Dodd (D-CT), Carl Levin (D-MI), Al Franken (D-MN) and John Kerry (D-MA).
Refinance demand surged last week as mortgage rates benefited from economic uncertainty, but purchase activity cooled following the expiration of the homebuyer tax credit, according to data from the Mortgage Bankers Association.
“The recent plunge in rates on US Treasury securities, due to a flight to quality as investors worldwide sought shelter from the Greek debt crisis, benefitted US mortgage borrowers last week,” said Michael Fratantoni, MBA Vice President of Research and Economics.
“Rates on 30-year mortgages dropped to their lowest level since mid-March. As a result, refinance applications for conventional loans jumped, hitting their highest level in six weeks.”
The refinance index increased 14.8 percent during the week ending May 7, pushing its share of mortgage activity to 57.7 percent of total applications from 51.9 percent the previous week.
“In contrast, purchase applications fell almost 10 percent in the first week following the expiration of the homebuyer tax credit, as the tax credit likely pulled some sales into April that would otherwise have occurred in May or later.”
The seasonally adjusted purchase index fell 9.5 percent week-to-week; the unadjusted purchase index was off 8.9 percent from the previous week and 0.6 percent lower than the same week a year ago.
Meanwhile, the average contract rate for a 30-year fixed-rate mortgage fell to 4.96 percent from 5.02 percent, and the 15-year fixed slipped to 4.32 percent from 4.34 percent.
The one-year adjustable-rate mortgage averaged 6.86 percent, down from 7.03 percent – the ARM share of activity remained unchanged at 6.3 percent of total applications.
The rates above are good for mortgages at 80 percent loan-to-value.
The MBA’s weekly survey covers more than half of all retail, residential loan applications, but does not factor out duplicate or rejected apps, which have surely risen since the mortgage crisis began.
(photo: qmnonic)
Black Eyed Peas frontman will.i.am has taken on the foreclosure crisis, creating the i.am home fund to help those in jeopardy of losing their homes as a result of the economic downturn.
Yesterday, he unveiled the program on Oprah, surprising two struggling families facing foreclosure by paying off their mortgages.
Sure beats the other freebies Oprah has been known to throw out to guests on the show…
One family with eight children owed $250,000 on their mortgage and had already exhausted their 401k and savings account after the breadwinner lost his job.
The other lucky victim was a single mom who had been laid off after her company downsized, leaving her eight months behind on the mortgage and owing about $100,000.
Both families are now free-and-clear, let’s just hope they don’t try to pull cash-out anytime soon.
“Growing up I dreamt that one day I’d be able to buy my mom a house and take care of my family,” said will.i.am on his website. “I realized that dream and experienced the positive effect giving back had on my family.”
“Now I am compelled to help others who are in jeopardy of losing their homes and inspire others to join the movement.”
The i.am home fund is collecting donations to help other families in similar situations, though it’s unclear how the money will be allocated.
A number of struggling homeowners have already written in on the website in hopes of receiving assistance.
(photo: nicogenin)
1.6 Million Distressed Sales Expected This Year
Barclays Capital expects 1.6 million distressed sales of homes this year, according to a report in the WSJ.
These “distressed sales” will mainly be in the form of foreclosures and short sales, and will make up roughly 30 percent of all home sales this year and next.
In 2011, the same number of distressed sales is expected, followed by a slight decline to 1.5 million in 2012.
Last year, the bank said such sales totaled 1.5 million.
Barclays currently estimates that banks and mortgage investors such as Fannie Mae and Freddie Mac own 480,000 homes – that number is expected to rise over the next 20 months and peak at 536,000 in January 2012.
However, there’s also the so-called shadow inventory, which they measure by tallying homeowners 90 days or more overdue on mortgage payments or already in the process of foreclosure.
As of the end of February, a startling 4.6 million households were in that category, though not all of them will lose their homes thanks to loan modifications and other loss mitigation efforts.
At the same time, you need to factor in strategic default, which includes borrowers that may be current but thinking about walking away.
Barclays estimates that home prices will fall another three to five percent on average over the next couple years.
There’s a better chance you’ll experience foreclosure if your math isn’t up to snuff, according to a new research paper from the Atlanta Fed.
Three researchers studied the effect of borrower’s financial literacy and cognitive ability to see what type of role, if any, they played in the mortgage crisis.
They surveyed subprime borrowers who took out mortgages between 2006 and 2007, and found foreclosure starts were approximately two-thirds lower in the group with the highest measured level of numerical ability compared with the group with the lowest measured ability.
Additionally, borrowers in the lowest numerical ability group spent, on average, about 25 percent of the time in delinquency, while borrowers in the highest group were only late on average 12 percent of the time.
The lowest group also missed nearly 15 percent of mortgage payments on average, while the highest group only missed six percent of payments.
Here’s a sample of some of the questions asked:
1. In a sale, a shop is selling all items at half price. Before the sale, a sofa costs $300. How much will it cost in the sale?
2. If the chance of getting a disease is 10 per cent, how many people out of 1,000 would be expected to get the disease?
3. A second hand car dealer is selling a car for $6,000. This is two-thirds of what it cost new. How much did the car cost new?
The researchers said a borrower’s inability to perform simple mathematical calculations likely impacts their ability to manage a budget and may lead to the selection of an unsuitable loan type.
Of course, socioeconomic issues could also be at play; for example, a borrower with poor numerical ability may experience less success in the labor market, and subsequently make less money and be more susceptible to default.
There’s also the thought that borrowers with poor numerical ability may be burdened with debt before even applying for a mortgage.
(photo: lrargerich)
Mortgage demand decreased 2.9 percent during the week ending April 23 compared with one week earlier, the Mortgage Bankers Association said today.
The weekly decline was led by an 8.8 percent drop in refinance applications, while purchase applications picked up the slack with a 7.4 percent week-to-week gain, thanks in part to the expiration of the homebuyer tax credit on April 30.
“Purchase activity continues to increase as we approach the end of the homebuyer tax credit program,” said Michael Fratantoni, MBA’s Vice President of Research and Economics, in a release.
“Purchase applications were up almost 9 percent from a month ago, with a disproportionate share of the increase due to government purchase applications. Government applications for purchasing a home accounted for almost 49 percent of all purchase applications last week.”
FHA loans seem to be the only game in town; I suppose it’s lucky the down payment requirement didn’t rise to five percent.
The refinance share of mortgage activity plummeted to 55.7 percent of total applications from 60 percent the previous week as mortgage rates crept up.
The ever-popular 30-year fixed rate mortgage averaged 5.08 percent, up from 5.04 percent, while the 15-year fixed increased to 4.38 percent from 4.34 percent.
And the one-year adjustable-rate mortgage rose to 7.03 percent from 6.95 percent.
The rates are good for mortgages at 80 percent loan-to-value.
The MBA’s weekly survey covers more than half of all retail, residential loan applications, but does not factor out duplicate or rejected apps, which have surely risen since the mortgage crisis got underway.
Equity Sharing Loan Modification Program Launched
ISGN Corp. and EquityRock have teamed up to offer the “industry’s first equity sharing, loan modification service.”
The program, coined RESET (Real Estate Shared Equity Transaction), allows borrowers eligible for a loan modification to receive a principal reduction in exchange for a share of their home equity.
The bank or mortgage lender will write down the borrower’s principal balance so the homeowner is no longer underwater, while gaining a stake in the future appreciation of the property should it be sold or refinanced.
“RESET provides lenders and borrowers with a much needed win-win solution to negative equity,” said Niraj Patel, group president of ISGN, in a press release.
“Borrowers get to stay in their homes and have pride of ownership. And lenders have an alternative to the losses associated with short sales and foreclosures—they finally have a way to recoup at least some of the deficit that results from addressing the seriously delinquent or underwater loans in their portfolios.”
The program also supports public policy, as it’s focused on home retention, while other alternatives may result in home abandonment and degeneration of neighborhoods.
It’s unclear what the debt-to-equity trade would be, and how such an event might impact a credit score. There’s still plenty of uncertainty regarding loan modifications and credit scores.
Last month, Bank of America introduced a novel concept known as earned principal forgiveness, where underwater borrowers earn equity by simply continuing to make on-time payments.
Going forward, borrowers who previously experienced a deed-in-lieu of foreclosure won’t have to wait as long to get approved for a subsequent mortgage.
Last week, mortgage financier Fannie Mae changed its required waiting period (the amount of time that must elapse after a pre-foreclosure event) to reflect current market conditions.
In the past, borrowers had to wait four years after a deed-in-lieu of foreclosure to get approved for a mortgage with Fannie Mae.
That time period has been slashed to just two years, though the maximum loan-to-value is limited to 80 percent. After four years, the maximum LTV climbs to 90 percent.
Pre-foreclosure sales and short sales, which Fannie categorizes as the same event, a property sold in lieu of foreclosure for less than the total amount owed, will also have a two year waiting period with the same LTV requirements.
Additionally, certain extenuating circumstances will allow borrowers to get loans after just two years at up to 90 percent LTV.
In all cases, borrowers must re-establish their credit, meaning they must meet minimum credit score requirements and eligibility requirements.
Fannie Mae and Freddie Mac currently require a five-year waiting period after foreclosure to re-establish credit; the waiting period is only three years for an FHA loan and two years for a VA loan.
Bank of America plans to waive mortgage payments for up to nine months for those jobless and collecting unemployment benefits, according to the Charlotte Observer.
There’s a bit of a catch though: borrowers must agree to hand over the house if they’re unable to find a job within those nine months.
Of course, BofA would give soon-to-be former homeowners $2,000 for relocation costs if they failed to get back on their feet during that time.
For those lucky enough to snag a job, the unpaid mortgage payments would be tacked onto the existing mortgage and paid back over time.
If the new job was lower paying than the original, BofA would consider a loan modification to make mortgage payments more sustainable.
The proposed program must still meet accounting and regulatory guidelines, as lenders are required to write down the value of a loan if the modified payment plan lasts beyond three months.
But BofA doesn’t see it as a “modification.” Will federal regulators see it that way too? Stay tuned…
Bank of America, which acquired under-fire Countrywide back when, hasn’t exactly starred under the Making Home Affordable effort.
Before turning things around recently, the banking giant had only completed 98 permanent loan modifications under the program, so image is clearly at stake.
The company also recently launched an earned principal forgiveness program for underwater borrowers, whereby homeowners will earn principal reductions by making on-time payments over time.
Two of the largest mortgage companies in the nation are hiring new sales staff to originate more home loans.
Chase announced today it plans to take on another 300 mortgage loan officers in the Tri-State area over the next six months in its bid to close more purchase and refinance loans.
I wonder if their home retention and loss mitigation departments are adequately staffed? Hmm.
The new hiring at bank branches in New York, New Jersey, and Connecticut will bring its local sales team to 700 employees.
Chase was the third largest home loan lender in the first quarter on $37.1 billion in loan origination volume.
It continues to pitch its paltry 1% Mortgage Cash Back offer to entice customers.
Meanwhile, GMAC, which shut down its wholesale lending channel Homecomings and shuttered many GMAC Mortgage retail branches, plans to go virtual.
The company is rolling out a direct-to-consumer virtual sales network to boost its home loan business, while keeping costs down.
A few weeks ago, GMAC also revealed it was adjusting the loan officer pay structure at its ResCap unit to focus on attracting qualified loan applicants, instead of simply compensating based on volume.
Yeah, the originate-to-distribute model didn’t pan out as expected…
Its retail brand Ditech is set to roll out a huge advertising campaign in the next few weeks as well.
GMAC saw loan origination volume climb to $66.2 billion in 2009 from $59.4 billion in 2008.
20% of Florida Foreclosure "Victims" Have Income of $100,000 +
Interesting little tidbit from the Florida Realtors regarding foreclosures and income levels released today.
A new research study on foreclosures in the state over a three year period (March 2006 – February 2009) found that 20 percent undergoing foreclosure have annual income of $100,000 or more.
Another 20 percent have annual income between $50,000 to $75,000, while just 27 percent have income of $35,000 or less.
The big question is how many of these high-income foreclosures are strategic?
After all, 48 percent of Florida mortgage properties are underwater, the third worst rate in the country behind just Arizona and hard-hit Nevada.
Foreclosures Also Hurting Long Time Homeowners
Critics and economists often speculate that many of the recent foreclosures were the result of borrowers moving into homes they couldn’t afford and quickly defaulting.
The data from the Florida Realtors says otherwise: 35 percent of all matched foreclosure records represent homeowners who have lived in the home for more than 10 years!
Looks like a few cash out refinances went down in the state, because it’d be pretty hard to lose 10+ years of equity…
Another near 20 percent have lived in the home for 11-15 years, while more than 40 percent just 1-5 years.
As with most other areas, there has been a growing gap between foreclosure starts and homes actually lost to foreclosure, so many of these people who have received foreclosure notices may not actually be going anywhere…
A shock poll from mortgage financier Fannie Mae revealed nearly nine in 10 Americans believe it’s unacceptable to stop making payments on an underwater mortgage.
That includes seven in 10 who are currently delinquent on their own mortgages.
However, 15 percent said financial distress would make stopping payments on an underwater mortgage acceptable.
And both delinquent and current borrowers are more than twice as likely to seriously consider stopping their payments if they know someone else who has defaulted.
So it sounds like a lot of respondents may be dodging the truth, or at least giving the standard “I wouldn’t do it” survey response.
But it seems as if everyone would consider strategic default if the proverbial seal was broken, whether that’s their neighbor defaulting first or another trusted party endorsing it.
After all, it is believed that more than a quarter of mortgage defaults are strategic, especially when negative equity exceeds 15 percent.
The survey, conducted between December 12 and January 12, was based on responses from 3,451 Americans aged 18 and older.
Respondents included current homeowners, mortgage borrowers, renters, and hundreds of underwater borrowers.
It included questions related to housing, the economy, renting, challenges facing homeowners, and more.
Nearly two-thirds think it’s a good time to buy a house, and 31 percent think it’s a very good time to buy, matching sentiment seen in 2003 before the bubble grew out of control.
Two more lenders fell victim to the FHA’s ongoing campaign to remove bad players from the mortgage market.
Last week, it permanently withdrew approval for Atlanta-based RSA Financial and 1st Alliance Mortgage LLC of Houston, Texas.
FHA lending seems to be the only game in town these days, so the move could lead to their eventual demise.
RSA Financial was cited for providing misleading information to the HUD regarding its licensing; there was also the matter of criminal history tied to one of its executives.
1st Alliance was cited for participation in prohibited branch arrangements, providing false certifications, failing to implement a Quality Control Plan, and a bevy of other violations of HUD/FHA standards.
“If lenders want to do business with the FHA, it’s critical that they provide complete and truthful information so that we can properly determine who we’re dealing with,” said FHA Commissioner David Stevens, in a statement.
“If any lender can’t operate within FHA’s guidelines, they can’t do business with us.”
Over the past year, FHA has suspended a number of high-volume FHA lenders, including Taylor, Bean and Whitaker and has withdrawn FHA-approval for 354 others, including heavy-hitter Lend America.
In 2008, only 28 lenders lost their FHA-approval, but recent capital woes and rising defaults have forced HUD to take a stronger look at those they do business with.
The FHA has also announced a number of policy changes, including higher credit score requirements and mortgage insurance premiums, along with reduced seller concessions to prevent appraisal-related fraud.
NYC Residents Facing Foreclosure to Receive Free Legal Assistance
A new initiative spearheaded by mayor Michael Bloomberg aims to provide free legal aid to New York City residents facing foreclosure.
The so-called “NYC Service Legal Outreach” will support homeowners with free legal assistance during the mandatory settlement conference stage, which is a meeting between the bank and homeowner where foreclosure alternatives are negotiated.
Such conferences give homeowners an opportunity to avoid foreclosure, and the presence of legal representatives will likely improve a homeowner’s chances.
The NYC Service Legal Outreach program intends to recruit 300 volunteer attorneys over the next three months – 100 will be stationed at courthouses to screen homeowners and provide counsel.
An additional 200 attorneys will be directly matched with individual homeowners and will advocate for the homeowners throughout the foreclosure settlement process.
“The City’s legal community has a long, proud history of pro bono work, and we are tapping into that tradition to bolster our comprehensive effort to prevent foreclosures,” said NYC Mayor Michael Bloomberg, in a release.
“The City has not been hit as hard as some other areas by the foreclosure crisis, in part due to our efforts, but we are seeing a serious impact. No family facing the loss of their home should be without representation.”
Last year, there were 20,773 foreclosure filings in New York City, up from roughly 14,000 in 2007 and 2008.
That compares to less than 7,000 foreclosure filings in the City in 2004.
The NYC neighborhoods most impacted by foreclosure filings include Jamaica, Bellrose/Rosedale, Flatlands/Canarsie, East New York and the North Shore of Staten Island.
Homeowners facing foreclosure who are interested in retaining free legal services should go to www.nyc.gov or call 311.
We already know negative equity is plaguing millions of Americans nationwide, but perhaps worse is the fact that many won’t see any positive equity for many years to come, according to First American CoreLogic.
In fact, the typical homeowner who is currently underwater on their mortgage won’t see positive equity until 2015.
In the hardest-hit markets, homeowners won’t get back in the black until 2020, and even then, if they were to sell, they’d probably still take a loss thanks to associated fees and commissions.
So where is it going to take a while?
Well, in Detroit, Michigan, 2020 equity for current underwater borrowers will still be -$7,156…yep, it’ll still be in the red into the next decade.
It’s a little better in Las Vegas, but still pretty dismal – Sin City underwater homeowners can expect 2020 equity to be $1,039.
That’s probably not the best news, but I suppose it’s better than owing money on your home.
There are some winners out there though, in places like Boston, where 2009 equity of -$130,452 is expected to be $77,158 in 2020; Washington D.C. is displaying similar numbers.
More than 11.3 million, or 24 percent, of all residential properties with mortgages were in a negative equity position as of the end of 2009.
In Las Vegas, 70 percent were underwater, followed by 51 percent in Arizona and 48 percent in Florida.
A new option that should be available by fall of this year will allow borrowers current on their mortgages to execute short refinances into FHA loans, whether the original loan was FHA-insured or not.
The new FHA loan must have a balance no greater than 97.75 percent of the value of the home, and the total loan-to-value (including any second mortgages) cannot exceed 115 percent after the refinancing.
At the same time, the minimum write-down by the lender must be 10 percent of the unpaid balance of the original loan.
The total monthly payment, including any second mortgages, must not be greater than approximately 31 percent debt-to-income, though the borrower should benefit from both a reduced balance and a reduced interest rate thanks to the current low-rate environment.
Homeowner eligibility for the FHA short refinance program is as follows:
- Homeowners must be current on existing mortgage payment
- Homeowner must occupy the home as primary residence
- Homeowner must fully document income
- Homeowner must have Fico score of at least 500
- Existing lenders/investors must agree to principal write-down
Borrowers who execute an FHA short refinance should expect to see their credit score negatively impacted as with any other loan forgiveness.
And the standard FHA mortgage insurance premium structure will apply to the new FHA loans.
To increase lender participation, incentives for immediate write-downs of underwater second mortgages will be offered, based on the loan-to-value.
To fund the program, up to $14 billion in TARP funds will be used – FHA will publish data on the number of short refinance loans, the average percentage written down, and the quantity of principal reduced quarterly.
A number of changes are expected to be announced regarding the Home Affordable Modification Program (HAMP), which should slow the pace of foreclosures, for better or worse.
Herbert M. Allison, Assistant Secretary for Financial Stability, testified before the House Committee on Oversight and Government Reform today, detailing the added “borrower protections.”
The guidance will force loan servicers to consider borrowers in active bankruptcy if a request for a loan modification under HAMP is received.
Additionally, servicers will be prohibited from referring a loan to foreclosure unless the borrower does not respond to solicitation, was not approved for HAMP, or failed to make trial modification payments.
Servicers will also be required to provide homeowners with clear, written communication regarding the foreclosure/modification processes and state that a foreclosure sale will not take place during a trial loan modification period.
Even if a borrower turns out to be ineligible for a loan modification under HAMP, a foreclosure sale cannot be scheduled sooner than 30 days after the date of the Non-Approval Notice so borrowers have a chance to respond.
Loan servicers must also certify to their foreclosure attorneys that a homeowner is not eligible for a HAMP modification before a sale may be executed.
Of the roughly 5.6 million homeowners that are 60-days or more delinquent, about 1.7 million are eligible for HAMP.
As of last month, 170,000 homeowners received permanent loan modifications and an additional 91,800 permanent modifications have been approved by servicers, pending only borrower acceptance.
A number of changes have been made to the program since its inception – for all HAMP trial period plans with effective dates on or after June 1, borrowers will have to provide income documentation upfront in order to take part, which should ideally reduce the number of failed trial mods.
Update: HAMP will now offer temporary assistance to unemployed homeowners looking for new jobs. Mortgage payments will be reduced for a minimum of three months and up to six months for others.
Additionally, loan servicers will have to consider an alternative principal write-down approach for borrowers who owe more than 115 percent of the current value of their home, and will be incentivized to do so.
Similar to Bank of America’s earned principal forgiveness, the principal will be forgiven over the course of three years so long as the borrower keeps up on payments.
Finally, incentive payments will be increased for servicers who facilitate short sales and deeds-in-lieu of foreclosure, while relocation assistance payments for borrowers will be doubled to $3,000.
The big question remains whether HAMP is actually providing any value or simply delaying the inevitable.
