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.