RealEstateEconomyWatch.com

Banks Could Tank New FHA Refinancing Program

A new FHA program launching next Tuesday allows homeowners who are underwater on their mortgages to refinance at today's record low rates, take at least 10 percent off their principal, and get a new FHA loan that will leave them with positive equity in their home.

Positive Pending Home Sales Stifle Tax Credit Talk

Just when it seemed that only one more negative housing report would be enough to rev up the bandwagon for a new federal homebuyer tax credit, today's pending home sales index for August baffled prognosticators and restored hope the no more government stimulus would be needed to stabilize housing markets.

REOs Put New Pressure on Prices

Rising numbers of real-estate owned properties (REOs) and delinquencies are creating excess supply in housing markets across the country.

Economists Saw Housing Recovery Faltering Before July Sales Report

Inventories Soar to Critical Levels

Inventories of existing homes for sale as measured by months supply broke an all-time record in July.

Geithner Blasts Fannie and Freddie

He also announced the Administration will not support returning Fannie and Freddie to the role they played before they entered conservatorship in 2008, "where they fought to take market share from private competitors while enjoying the privilege of government support."

Foreclosure Report Stuns Wall Street

However, RealtyTrac;s news wasn't all bad.  In fact, it confirmed a trend of declining default, suggesting foreclosures will decline as well in the months to come

Foreclosures Show Signs of Decline

Another foreclosure listing site reported today that foreclosures are declining at an accelerating rate as subprime resets abate and unemployment, though high, remains relatively unchanged.

Job Losses and Medical Bills Drive PA Foreclosures

A new study by the Pennsylvania of Realtors provides new evidence that job losses and unexpected medical bills, not subprime mortgages, are the two leading causes of foreclosure in that state.

BP Oil Spill Will Cost Gulf Real Estate $3 Billion

The BP DeepWater Horizon oil spill will cost homeowners n in the coastal counties along the Gulf Coast communities from $648 million over one year and to as much as $3 billion over five years, according to a report today from CoreLogic.

Home Prices Heading for a Second Dip

Recent gains in home values are temporary and markets are poised for a 5 percent dip during the balance of 2010.

Home Prices Expected to Weaken

Virtually every other indicator from Pending Sales to Mortgage Purchase Applications is showing home sales headed south with the expiration of the homebuyer tax credit ended April 30.

Ten Percent of Homeowners Regret Buying Their Current Homes

Translated into hard numbers, the poll suggests that 6.75 million homeowners are unhappy and two million feel trapped in their homes because they cannot sell them in the current real estate markets. 

Home Sales Contracts Plunge to All-time Low

Home purchase contracts signed in May dropped to their lowest level in the history of the Pending Home Sales Index.  Contracts fell to a level of 77.6\, 30 percent below April and 15.9 percent below May 2009.

Strategic Defaults May Have Peaked Last Year

Despite the recent publicity and current debate about homeowners who walk away from their mortgages even thought hey have the ability to pay; the phenomenon of "strategic default" may have peaked before it was identified.

Homebuyer Tax Credit Extension Hits the Wall

Legislation containing a three month extension of the popular homebuyer tax credits to allow buyers to close by September 30th died in the Senate last night and the opportunity to extend the credits past the current deadline of June 30th may have passed.

Fannie Ignites Firestorm Over Strategic Defaults

The tough strategic default policy ignited a firestorm of debate across the nation as defenders and opponents of borrowers who abandon their homes even though they have the capacity to pay took to blogs and news outlets.

Housing Crisis Wreaks Havoc on Children

So many families are now paying half or more of their income to pay housing costs that they have little left to support their children, according to the latest State of the Nation's Housing Report from the Harvard Joint Center for Housing Studies.

Most Modified Loans Will Re-default in 12 Months

Despite the extensive and lengthy process required to modify mortgages in default so that borrowers could afford their payments, most will default again in a year or less, according to Fitch Ratings.

Post Tax Credit Price Cutting Eases

Price cutting of listed properties apparently has eased as real estate markets recover from the boom and bust of the tax credit. On an annual basis, price cutting declined slightly.

Broker Price Opinions are Focus of Short Sale Fraud

 Banks using real estate brokers and agents to value short sales are increasingly becoming the victims of fraudulent schemes that have occurred in more than 1 percent of short sales this year and have already cost lenders at least $50 million in lost revenue, according to CoreLogic.

Tidal Wave of Buyers Eyes Beleaguered FHA

Of the 12,000 readers of the Home Buying Institute website last month, some 87 percent of those who responded to the survey said they were planning to use an FHA loan to finance their home purchase.

Housing Crisis Takes Toll on Agents

Hard times have come to real estate agents as well as to their customers.  With fewer houses to sell and commissions shrinking due to lower prices, more and more agents are looking for work in other fields or settling for less money.

Policy by Polling to Seal Fates of Fannie and Freddie

Yesterday the Treasury Department released a seven question public poll whose results will provide input on the future of Fannie Mae and Freddie Mac.

America’s Ten Fastest Declining Real Estate Markets

A web site popular with real estate agents yesterday released its choices for the ten residential real estate markets in greatest decline based on falling property values in 2009 and other economic factors.

Fannie Mae Economists Lower First Quarter Forecast

Unpleasant surprises in January home sales and home starts have convinced Fannie Mae's economists to lower significantly their projection of real residential investment in the first quarter released yesterday.

Delinquencies Slow But They Exceed Modifications

The February 2010 Mortgage Monitor report, released by Lender Processing Services, Inc. shows that while delinquency rates in the U.S. have risen to historic highs, the pace of deterioration has slowed. However, the nation's housing market remains far from a full recovery.

Risk of Mortgage Default Rises 58 Percent Higher than in 1990s

Lenders and investors can expect defaults on loans currently being originated today to be 58 percent higher than the average of the 1990, according to the latest University Financial Associates (UFA) Mortgage Report.

One Quarter of Mortgage Holders Sink Underwater

More than 11.3 million, or 24 percent, of all residential properties with mortgages, were in negative equity at the end of the fourth quarter of 2009.

Ready for a Housing Shortage this Year?

With healthy inventories, 3 million foreclosures, more and more short sales, falling values, rising vacancy rates, shrinking rents and one third of all homeowners underwater, could we possibly be heading for a national housing shortage this year?

Homeownership Hangs Tough

Homeownership, thought by many to be a certain victim of the foreclosure crisis, weathered a record year of foreclosures without losing a beat...statistically speaking.

Obama Was Quiet on Housing

Though most economists believe the nation's housing crisis shares the stage with unemployment as the two fronts where we are failing in America's war to revive its economy, housing barely received a mention in President Obama's first State of the Union message last night.

Property Taxes Clobber Hurting Homeowners

Local governments across the country are responding to the threat to their bottom line by raising taxes.

Ten Percent of Wealthier Homeowners are Delinquent on Their Mortgages

 The report is yet another sign that the housing crisis and the negative equity it has caused is climbing upscale to some of the wealthiest neighborhoods in America.

Mortgage Rate Prospects Stir Fears of Re-Recession

Nobel Prize-winning economist Paul Krugman told Bloomberg News yesterday that he sees about a one-third chance the U.S. economy will slide into a recession during the second half of the year.

Lender Failures Set New Record

More than 200 mortgage-related firms ended operations or failed last year.

NY Fed Economists Foresee Steep Decline in Homeownership

The official homeownership rate "will experience significant downward pressure" in the coming years, according to the staff report as dramatic increases in negative equity reduce incentives to own rather than rent.

Fannie Mae’s Delinquencies Rise 163 Percent in 12 Months

The percentage of seriously delinquent loans in Fannie Mae's portfolio jumped in October, rising 26 basis points to 4.98 percent.

RE/MAX Sees New Federal Short Sales Guidelines Helping Chicago

 New Federal guidelines on short sales are likely to have a beneficial  impact on the metropolitan Chicago real estate market.

Ten Percent of Homeowners Would Walk Away

Nearly one out of ten homeowners, 9.2 percent or 7.4 million homeowners, say they would likely walk away from their homes, default on their mortgages and suffer the consequences to their credit if they felt financially vulnerable and owed more on their homes than they are worth, according to a new national survey released today.

Ohio AG Holds Appraisers Accountable

Ohio Attorney General Richard Cordray charged a Washington D.C. area home appraisal company with improperly influencing Ohio appraisals.

Unemployment Drives Record Mortgage Delinquencies

Fourteen percent of all American mortgages are either delinquent or in the process of foreclosure.

Delinquent Mortgages Will Set a Record This Year

Mortgage delinquencies hit an all-time high of 6.25 percent in the third quarter.

Lenders Torpedo Home Sales

While the Federal government will be paying out nearly $17 billion in tax credits over the next five months to stimulate home buying, the nation's system of mortgage finance is undermining their ability to get financing.

Homebuyer Tax Credit Set to Pass Senate This Week

An amendment to extend the $8000 first-time homebuyer tax through June and expand it to include all homebuyers is expected to pass the Senate this week despite recent headlines reporting extensive abuse of the program following an investigation by the Treasury Department.

Freddie Mac’s Delinquency Rate Rises for 29th Month

Freddie Mac's mortgage delinquency rate for its single family mortgages rose for the 29th straight month in September, reaching a record 3.33 percent of its portfolio.

Lend America Charged with Fraud

A mortgage lender known for  its television infomercials touting FHA-backed loans is the target of a Federal civil suit and an ongoing investigation for mortgage fraud.

Analyst Report Trashes Fannie and Freddie

Fannie Mae and Freddie Mac shares each fell more than 21 percent yesterday after analysts at Keefe, Bruyette & Woods said their common stock was worthless.

Fitch Downgrades Prime Mortgages

Rising unemployment and negative home equity are causing an increasing number of mortgage borrowers whose mortgages have been converted to prime residential mortgage-backed securities (RMBS) to fall behind on their monthly payments, according to Fitch Ratings.

Fed Vice Chair Sees “Subdued” New Home Starts in 2010

The outlook for new housing starts in the coming years is "relatively subdued" due to an oversupply of vacant homes and the likelihood that foreclsures will remain elevated, the vice chairman of the Federal Reserve said yesterday.

Negative Equity Cripples Mortgage Performance

Negative home equity is preventing sustained improvement in U.S. mortgage performance, according to the new monthly report from Fitch Ratings released today

Data Confirms Government Dominated the U.S. Mortgage Business Last Year

Just released mortgage data for 2008 confirm that the federal government effectively took over the housing credit markets last year.

Reverse Mortgages Could Become a Fiasco for Senior Citizens

Senior households may become the next group of consumers harmed by irresponsible marketing and selling practices according to a report released by a major consumer organization released yesterday.

One in Ten Homeowners with a Mortgage is Delinquent

One out of ten American homeowners with a mortgage were seriously delinquent in the second quarter and more than half the homeowners whose mortgages have been modified to reduce monthly payments are re-defaulting within a year, according to a new study released today by two Federal financial regulatory agencies.

Fannie Mae’s Delinquent Loans Soar

Nearly one out of twenty mortgages guaranteed by Fannie Mae was seriously delinquent in July, according to the latest data released today from the Congressionally-chartered company.

Home Builders are Strapped for Credit

Nearly two-thirds of the nation's single-family home builders are putting single-family construction projects on hold due to a severe lack of acquisition, development and construction financing, according to a new builder survey conducted by the National Association of Home Builders (NAHB).

New Home Orders Increase 62 Percent at KB Home

KB Home (NYSE:KBH), the nation's fifth largest home builder, said orders increased 62 percent and 27 percent fewer consumers cancelled contracts during the third quarter, compared with 51 percent a year ago.

Freddie Mac’s Delinquent Loans Rise for 28th Month

Freddie Mac's mortgage delinquency rate for its single family mortgages rose for the 28th straight month in August, reaching a record 3.13 percent of its portfolio 1.11 percent in August 2008.

FHA is Now Running on Empty Says Noted Housing Economist

The Federal Housing Administration took the right steps last week to bring the agency's lending standards in line with private industry practices, but with the loss of its excess reserves, FHA is now essentially running on empty and the jury is out on whether the agency has adequate capital reserves to weather projected losses from defaults and foreclosures, said a noted housing economist who first raised concerns about FHA's financial condition in an article in Real Estate Economy Watch last June (Can FHA Dodge the Bullet?).

Loss of State Consumer Powers Contributed to Mortgage Crisis

The assumption of states' powers to enforce consumer protection laws by the Federal government over the past 13 years is a significant cause of irresponsible lending and the housing crisis, according to a new white paper issued by the National Consumer Law Center.

Home Prices Will Fall Five More Years

Home prices will continue to fall over the next five years, though the greatest declines have already occurred this year and property value reductions will gradually decrease until 2014, according to a national price forecast released Tuesday at a conference on Challenges in Residential and Commercial Mortgage Backed Securities hosted by Fitch Ratings.

Did Household Debt Trigger Worldwide Recession?

The national economic crisis was triggered by the red ink of millions of American homeowners who refinanced their homes, not the trading pits of Wall Street or the boiler rooms of fraudulent lenders, according to a new study released nearly one year after the stock market plummeted worldwide recession began.

GAO Defines the Future for Freddie and Fannie

After excoriating Fannie Mae and Freddie Mac for a history of undermining market discipline, missing goals to help underprivileged groups and failing to support housing finance markets during times of financial need, the Government Accountability Office yesterday urged Congress to consider only three options for the future structure of the two government-sponsored housing enterprises.

Foreclosures Will Overwhelm Government Efforts

Even if the disappointingly slow Federal foreclosure program achieves the goals for which it was designed, the foreclosure crisis could be as bad in three years as it is today.  A flood of new foreclosures generated by the double whammy of unemployment and resetting exotic loans will overwhelm the government efforts and impede recovery.

Reverse Mortgage Fraud Targets Elderly

Reverse mortgages, the kind of loans sold by aging celebrities to seniors interested in converting the equity in their homes into cash, aren't the safe haven they are portrayed by marketers, according to a General Accounting Office report released in July.

Foreclosures Set a New Record–Again

Foreclosure filings for July rose 32 percent over a year ago and seven percent over June, according to RealtyTrac.  One in every 355 US homes received a default notice, was scheduled for auction or was repossessed by a bank last month

Sizing up The Deutsche Bank Study

Two analysts at Deutsche Bank issued a residential market forecast last week that shook the housing industry and cooled the sound bites about "signs of stabilization."

The Pending Supply

Perhaps you've heard of the pending demand for real estate-prospective buyers who have postponed taking action until they perceive conditions have optimized. There's also a pending supply of real estate and it's large enough to have a serious impact on the housing markets if a recent study is correct.

Real Progress on the Foreclosure Front

With the raging recession killing jobs, falling prices driving even more homeowners underwater, and thousands of loans that should never have been made resetting, reports of record foreclosures have become the norm.

Public Utilities Numbers One and Two

Listening to the policy makers who will decide the fates of Fannie Mae and Freddie Mac brings home the reality of how far these once mighty pillars of residential real estate finance have fallen-and that they will never rise again to their former glory.

Don’t Forget! June is Homeownership Month

With barely a whisper, HUD ushered in its most celebrated month of the year, National Homeownership Month, so quietly most of the nation didn't even take notice.

Delinquencies: Trading One Nightmare for Another

If there is any slight comfort to be taken from today's record-breaking mortgage delinquency numbers from the Mortgage Bankers Association, it's that there are early signs that the option ARM nightmare may not be as bad as many feared.

Remodelers on the Rebound

There's an old construction industry adage that goes something like this: when home builders prosper, remodelers have hard times and when remodelers are doing well, it's a bad market for builders.

One Fifth of Homeowners Now Underwater

One fifth (21.9 percent) of all American homeowners have negative equity in their homes, a 4.3 percent increase over the fourth quarter of last year, as property values continued to fall nationally at an alarming rate.

First-timer Tax Credit is Working

Looks like last year's first-time homebuyer tax credit-the one the housing industry pooh-poohed because it required buyers to pay it back over 15 years-is doing a lot better than most people expected.

Cram Downs Fade Away

Four months ago they were just about the only part of the new Administration's foreclosure policy that seemed to be going anywhere.

Second Lien Compromise Puts Obama Plan Back on Track

Second lien servicers and investors are the big winners in changes to the Administration's loan modification program announced April 28.

Treasury Sets New Affordability Requirements for GSEs

Many observers of the housing crisis lay at least some blame at the feet of housing affordability targets for Fannie Mae and Freddie Mac mandated by Congress and administered by the executive branch—first the Department of Housing and Urban Development and now the Treasury Department.

Bank of America Begins Refinancing Under Obama Plan

Last week Bank of America became the first of the mega-lenders to invite homeowners to apply for refinancing applications under the "Making Home Affordable" program.

Senate Doubles Tax Credit in Stimulus

With its back against the goal line and the fourth quarter clock ticking down, the housing industry broke off a big touchdown run, but missed the field goal that would have given it the lead in the struggle for stimulus funds. However, the titanic and critical contest over how to jump start the housing markets is still up in the air, and will end in the next week or two as pressure to act becomes overwhelming.

Moratoria Mask Foreclosures

For real estate market watchers anxious to see the end of the foreclosure plague that has poisoned property values across the nation...

Secondary Loans Send Obama Plan Back to the Drawing Board

Barely a month old, the Administration’s Home Affordability Program is going back to the drawing board to resolve an issue that has tied up the modification of billions of dollars of worth of secondary mortgages and home equity lines of credit and threatens the future of the $75 billion program to keep 3 to 4 million families from foreclosure...

Credit Union Woes Worsen

Friday the National Credit Union Administration sent a shock wave through the credit union industry when it seized control of two of the 28 large corporate credit unions that provide financing and investment services to the nation’s 7,800 federally insured credit unions.

REO Discounts Drive Down Values

Last year the gap between sales prices of REO properties and non-foreclosed homes grew dramatically in a number of the nation’s leading residential markets, suggesting that REO properties are increasingly discounting their prices and driving down home values at a faster rate.

States Woo Buyers with Tax Credits.

California new home buyers now have an $18,000 reason to get off the fence. That’s how big a tax credit they will receive from both the Federal ($8,000) and a new state tax credit ($10,000) when they buy a newly built home in the Golden State after March 1.

Cram Downs Cool Down

An intense lobbying campaign by the financial services industry has slowed and possibly killed legislation that would give bankruptcy courts the power to write down mortgages

Treasury Sets New Affordability Requirements for GSEs

Many observers of the housing crisis lay at least some blame at the feet of housing affordability targets for Fannie Mae and Freddie Mac mandated by Congress and administered by the executive branch—first the Department of Housing and Urban Development and now the Treasury Department.

Cram Downs Are Coming.

Banned since Congress reformed the bankruptcy laws in 2006, cram downs are making a come back and may reappear in thousands of bankruptcy courts. Whether that’s a good thing or a bad thing depends on who you ask, because every side has its own studies and experts to prove its case.

Delinquencies Set a Record, Moratoria Create Artificial Spike

In the fourth quarter of last year, more homeowners—nearly 8 percent—were delinquent on their mortgages than 1972, when records were first kept. Jay Brinkmann, MBA’s chief economist and senior vice president for research and economics attributed the increase in delinquencies to factors that had nothing to do with the economy.

Bank Problems and the Housing Sector

The U.S. banking system is ailing and further deterioration could have serious negative implications for the economy and housing sector. To date, the Treasury has injected $196 billion into the nation's top banks by purchasing preferred bank stock. In addition, the Federal Reserve has increased its lending facilities, including the Term Auction Facility, which offers $150 billion in secured loans to banks per auction.  And now the government has increased its ownership of Citigroup.

How Far Has Fannie Mae Fallen?

Nearly half of Fannie's loss occurred in the fourth quarter, after it was "placed under conservatorship" by the Treasury Department in September. Immediately, Treasury began to use Fannie and Freddie to buy up mortgage backed securities at a loss in an effort to restore faith in the MBS market. Now it is clear that Fannie and Freddie will be the Obama Administration's primary conduits for refinancing and modifying mortgages held by foreclosure prospects-and the costs will be borne by the taxpayers.

Federal Ownership of Citigroup Reaches 36 Percent

Investors have punished the shares of Citigroup and other banks in recent weeks out of concern the government could nationalize troubled banks, which would involve replacing management and wiping out shareholders.

Obama Budget Limits Mortgage Interest Deduction

Last week President Barack Obama proposed $634 billion in new taxes on upper-income Americans and cuts in government spending over the next decade to pay for his promised health care expansion. The new taxes included a limitation on the amount taxpayers earning over $250,000 can deduct for mortgage interest payments and other deductions.

Credit Union Bailout Ignites Civil War

Until very recently, credit unions have gloated over the woes besetting their competitors in financial services. Unshackled by mark-to-market accounting requirements, largely untaxed, non-profit and free of the pressures of Wall Street, and only minimally exposed to the risk of subprime defaults, credit unions as a whole survived 2008 like islands of soundness in a sea of chaos.

Buyer Tax Credit is Cut to $8,000 in Stimulus

It was fourth and goal and time was running out in the conference committee between the House and Senate on the stimulus package. The quarterback stepped back to pass but…there was no one to catch the ball.

Did the 1975 Tax Credit Really Work?

Did the 1975 tax credit really work as its advocates claim? Are tax credits what the housing market needs today?

Is USDA’s Loan Guarantee Program Broke?

Loan guarantees provided through the US Department of Agriculture’s Housing and Community Facilities Programs are the lat­est victims of the financial crisis. The pro­gram is virtually on hold, but don’t fret. Help is on the way.

Bankruptcy Cramdown Bill Takes Off

Underwater homeowners could soon have a power­ful new weapon in their negotiations with lenders to modify their mortgages. New legislation on a fast track in the Senate would give judges the power to set new repayment terms for borrowers in bankruptcy court, including dramatically reducing the loan principal—known as a “cramdown.”