Housing Inventory Drops in November, Still Above 2009 Numbers

A new report from ZipRealty shows the supply of homes for sale in November declined by an average of 3.8 percent in 26 major metropolitan areas that the company researched. The largest inventory declines were seen in Austin, Texas, where the for-sale supply fell 9.5 percent, and Boston, Massachusetts, down 10 percent. The company says declines could be indicative of sellers deciding to take their homes off the market, and could also be a result of foreclosure moratoriums.

Pressure Mounts for Fannie and Freddie to Write Down Mortgages

With property values still tumbling, it's no surprise that nearly a quarter of the nation's mortgage borrowers owe more than their home is worth. Industry studies support the consensus that the farther a borrower sinks into negative equity, the more likely they are to throw in the towel. The severity of this catch-22 is now top-of-mind for government officials. The administration is reportedly pressuring Fannie Mae and Freddie Mac to make principal write-downs a key component of their foreclosure prevention efforts.

Radar Logic Says Home Prices Not as Stable as Thought

Recently released information from Radar Logic claims home prices experienced a much sharper decline than the decline shown in other companies' reports. Radar Logic's September housing market report released on Thursday shows the composite index of home prices experienced a 2.7 percent decline from the previous month. Radar Logic asserts that its data, which is compiled from measurements of 25 metropolitan statistical areas, shows that the housing market is weaker than it might appear.

Distressed Homes 25% of Third-Quarter Sales: RealtyTrac

New data released by RealtyTrac Thursday shows that distressed homes - including those in default, scheduled for foreclosure auction, and REO - accounted for 25 percent of all U.S. residential sales during the third quarter. These properties sold at an average of 32 percent below the price of their non-distressed counterparts. The company tracked 113,933 REO sales during the July to September period and 74,815 pre-foreclosure, typically short sale, transactions.

CoreLogic Home Price Index Shows Decline for Second Straight Month

Home prices in the United States have declined for two months in a row, according to CoreLogic's market index, after rising for the first seven months of the year. The latest CoreLogic Home Price Index (HPI) shows that national home prices, including distressed sales, declined 2.79 percent in September 2010 when compared to September 2009. That follows a drop of 1.08 percent in August 2010 from a year earlier. All but seven states saw a decline in residential property values during the month of September.

Analysts See 7% Drop in Home Prices over Next Year

Despite a bounce in home prices during the first half of 2010, Fiserv Inc. says it expects property values nationally to fall another 7.1 percent over the next 12 months before beginning to stabilize at the end of 2011. The company sees double-dip territory ahead for many major markets, particularly those that saw the strongest appreciation during the spring and summer months of this year. The analysts at Standard & Poor's have released a similar forecast for the path of home prices. They anticipate an additional 7 percent to 10 percent drop through 2011.

FHA's Annual Single-Family Business Down 10% from Last Year

The Federal Housing Administration (FHA) insured 1.74 million single-family mortgages during fiscal year 2010, which for the agency ended in September. The collective value of the loans endorsed was $318.8 billion. FHA's loan volume for the year was down 10.3 percent from 2009, and came in below the 1.87 million mortgages it had previously projected would be endorsed in the 2010 fiscal year. The agency's serious delinquency rate stood at 8.4 percent at year-end. At the same time in 2009, the rate was 8.3 percent.

Fitch Says 7M Homes in the Shadows Will Take 40 Months to Clear

Fitch Ratings puts the industry's shadow inventory - meaning loans that are seriously delinquent, in foreclosure, or REO - at 7 million homes. The agency says based on recent liquidation trends, it will take more than 40 months to clear this distressed inventory. While the volume of newly delinquent mortgages has begun to improve, liquidation rates have been constrained by weak demand and initiatives to modify loans. On top of that, Fitch says the recent discovery of defects in the foreclosure process is prolonging the housing correction.

Study: Shadow Inventory to Keep REO Supply Elevated for Several Years

An estimated 4.1 million borrowers are in the process of foreclosure or are more than 90 days delinquent. Their homes make up what's been termed the shadow inventory -- a pent up supply of REOs that could drive down home prices and perhaps cause another wave of defaults. Guhan Venkatu, an economist at the Federal Reserve Bank of Cleveland, says even under the most benign projections, the stock of REO properties is likely to remain elevated for the next several years.

Foreclosures Sales, REO Inventories Increase Along West Coast: Report

ForeclosureRadar has released its September market report, and the company's data shows that both foreclosure sales and inventories of bank-owned properties are on the rise throughout the West Coast states of Arizona, California, Nevada, Oregon, and Washington. In Nevada, for example, foreclosure sales increased by nearly 40 percent from August to September, with the majority going back to the bank and swelling the REO supply even further.

Mortgage Rates Drop Yet Again to New Lows

The last time rates for 30-year mortgages were as low as they are now was in April 1951. Thirty-year fixed-rate mortgages have been under 5 percent for 23 weeks in a row, according to data gathered by Freddie Mac. This week, the GSE reports that the average 30-year rate fell again to break the survey's all-time low, hitting 4.19 percent. The 15-year fixed rate also averaged a record low of 3.62 percent.

Administration Officials Reject Idea of National Foreclosure Moratorium

Evidence of major servicers mishandling foreclosure paperwork has cast a cloud of doubt over the entire industry and servicing procedures across the board. Consumer advocacy groups and a number of state attorneys general have demanded a nationwide moratorium on foreclosures. But two senior White House officials have indicated that the Obama administration will not support an all-out foreclosure freeze. So far, five companies have announced voluntary foreclosure suspensions because of potential deficiencies in the legal paperwork.

Wells Fargo Offers Pick-a-Payment Customers a Reprieve

Wells Fargo & Co. announced this week that from December 18, 2010, through June 30, 2013, Wachovia Pick-a-Payment customers who are at-risk of default may be eligible to earn principal forgiveness by making on-time mortgage payments. The company says it has already written mortgage principals down by a total of nearly $3.4 billion for Pick-a-Payment customers. The bank will also contribute $24 million to eight states to help with customer outreach and alleviate the impact of foreclosure in local communities.

Clear Capital Sees Evidence of Early Winter Slowdown in Home Prices

Data released by Clear Capital Thursday shows that quarter-over-quarter home prices were down 0.2 percent in September compared to the previous month's reading. It's the first time in months the company has seen national home prices slip into negative territory. Clear Capital says signs of a slowdown are apparent and likely mark an early onset of the typically weaker winter season. However, the company says home prices are still 10 percent above their 2009 lows, so the risk of carving out a new trough this year remains small.

Wells Fargo Puts a Stop to Short Sale Extensions

Wells Fargo will no longer delay foreclosure proceedings in hopes that a short sale deal will come through. At the requests of its mortgage investors, including Fannie Mae and Freddie Mac, the bank has stopped granting extensions for distressed homeowners to complete short sales. Going forward, borrowers must close on short sales by the date quoted in their approval letter. The policy change will allow the bank's foreclosure proceedings to advance, even if a short sale is already in negotiation.

Mortgage Rates Fall to New Lows...Again

How low can we go? When it comes to mortgage rates, the floor keeps dropping. Industry reports released Thursday show that interest rates for home loans - already at their lowest marks in more than a half-century - dropped again this week. Market analysis conducted by Freddie Mac puts the 30-year fixed rate at 4.32 percent and the 15-year rate at 3.75 percent. Bankrate says rates for the larger jumbo 30-year fixed mortgage also inched lower to 5.16 percent.

S&P: $460B Shadow Inventory Will Take 41 Months to Clear

It's no secret that the volume of distressed residential properties is weighing heavy on U.S. housing markets and prolonging any meaningful recovery. Of even greater concern is the industry's growing backlog of homes that need to be liquidated and resold but have yet to make their way to the market. Standard & Poor's has just released a new report in which it estimates that the principal balance of this shadow inventory now stands at $460 billion and will take the industry about 41 months to clear.

John Burns Says the Shadow Inventory Is Stepping into the Light

That dreaded shadow inventory of homes that has captured headlines and gripped the industry and market analysts with angst is beginning to make its way out of the darkness, according to John Burns Real Estate Consulting. The firm says loan modifications were successful in delaying the inevitable foreclosure. But homes that have been stuck in that neverland of somewhere between delinquency and repossession are now winding their way through the foreclosure pipeline at a quicker pace and will soon come out the other end as a short sale or REO.

More Delinquent Loans Entering Foreclosure Process: LPS

Lender Processing Services (LPS) is offering a sneak peak at its upcoming mortgage market report, scheduled for release September 24. The company's study will show that the national home loan delinquency rate has retreated, while the foreclosure rate is on the rise. LPS says the numbers are a sign that more delinquent loans are entering the foreclosure process, as servicers pick up the pace working through their default backlogs. According to LPS, the country's inventory of pre-sale foreclosures stood at 2,038,000 at the end of August.

Investigation Finds Criminals Making FHA Loans

The Federal Housing Administration (FHA) has failed to root out several executives with criminal records whose firms continue to do business with the agency, according to the Center for Public Integrity. The Center's investigation found that more than 34,000 home loans have been issued over the past two years by FHA-approved lenders that have employed people who were convicted of felonies, banned from the securities industry, or previously worked for firms barred by FHA. Nine percent of these loans are delinquent.

Home Prices Edge Up in June, but Appreciation Already Slowing: S&P

Home prices rose in June for the third consecutive month - a precipitate of the homebuyer tax credit that sparked a flurry of purchase activity in the spring. Buyer demand, though, has now dropped off substantially, and it's a trend that will likely rob the market of the recent rebound in home prices. According to the S&P/Case-Shiller index released Tuesday, home prices rose 1.0 percent in June compared to May. While June itself was positive, growth rates have already decelerated in 14 of the 20 metros included in S&P's study.

NY Banking Department Issues New Regulations for Mortgage Servicers

In its efforts to protect homeowners and avoid another mortgage and foreclosure crisis, the New York State Banking Department has issued new rules regarding the business practices of mortgage loan servicers. The regulations, which go into effect October 1, include halting foreclosure actions for borrowers being considered for, or currently in, a trial or permanent modification, as well as developing procedures for consumer complaints and ensuring homeowners do not have to submit multiple copies of required documents.

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Study Shows Foreclosure Lowers a Property's Value by 27%

Foreclosed homes permeate the American landscape. According to data from the Massachusetts Institute of Technology (MIT), they make up about one in 12 houses with under $1 million left on the mortgage. These foreclosures drive down home prices, but it can be hard to determine how much depreciation is caused by the foreclosure and how much is economical factors. One economist from MIT and two Harvard researchers have put a price tag on foreclosures. They've determined that foreclosure itself reduces the value of a home by 27 percent.

Double-Dip Recession Threatens to Shave 20% off Home Prices: Moody's

Could the U.S. economy slip back into the throes of the recession that nearly crippled the nation's financial system and protracted any semblance of a housing recovery? The analysts at Moody's think so. They say the odds of a near-term double-dip recession have increased to one in four. And they warn that if the economy sinks back into recession, housing activity will follow. If such a scenario were to play out, Moody's says home prices are likely to fall by another 20 percent before they stabilize in early 2012.

Flooded with housing inventory, Freddie Mac REO sales surge despite foreclosure alternatives

The number of Freddie Mac “foreclosure alternatives” completed in the first half of 2010 increased 123% from the same period in 2009, but for all its efforts, the government-sponsored enterprise (GSE) is still taking on record numbers of housing inventory.
Year-over-year, Freddie’s single-family portfolio increased 84.2% and the multifamily portfolio doubled. Monday morning’s quarterly results reveal a 655% increase in forbearance agreements, where distressed homeowners simply get more time to begin paying back the mortgage. These forbearance agreements numbered 21,673 at the end of the first half of 2010, up from 2,869 at the end of the first half of 2009

Housing Forecasts Scaled Back

The nation's two largest mortgage companies, Fannie Mae and Freddie Mac, have published forecasts lowering their projections for home sales and mortgage production, industry-wide. The economists at Fannie are tempering public expectations for the housing market with a candid warning: the headwinds in housing have picked up. Freddie's economic team slimmed down its projected numbers, but said the market has gained enough momentum to carry through the occasional setbacks.

Pending Home Sales Dip 2.6% in June 2010

After tumbling 30 percent in May in the wake of the expiration of the homebuyer tax credit, pending home sales continued to edge down in June, hitting the lowest level recorded in more than a year, the National Association of Realtors (NAR) reported Tuesday. NAR's pending sales index is a forward-looking indicator based on contracts signed during the month. It declined 2.6 percent from May to June, and is 18.6 percent below year-ago levels. The trade group says the weak numbers imply closing activity will languish at least through August.

Mortgage Applications Down

The MBA mortgage applications index fell 4.4% to 720.6% for the week ending July 23. The purchase index rose 2.0% to 172.3%, its second consecutive gain. Nevertheless, purchase applications are down more than 40% since the expiration of the homebuyers' tax credit at the end of April and remain at one of the lowest levels in the past 14 years. The refinance index tumbled 5.9% last week to 3918.1% but because of record low rates, has increased 85% since the end of April and is up 110.4% from its year ago level. Refinance activity accounts for nearly 80% of all new mortgage activity.