Foreclosure Delays Reach New Records and Low Mortgage Rates

Delinquent home owners are living in their homes longer, rent-free. Home owners with a loan in foreclosure haven’t made a payment, on average, for 20 months or 599 days--a new record, according to new data by Lender Processing Services Inc.

Of nearly 1.9 million loans that are 90 or more days delinquent--but not yet in foreclosure--42 percent of the home owners have not made a payment in more than a year, with an average delinquency of 397 days--another record, LPS reports.

The slowdown in foreclosures was most evident in judicial foreclosure states. At the current rate of foreclosure sales, judicial foreclosure states would require 111 months to work through inventories of loans that are 90 or more days delinquent or in foreclosure. On the other hand, non-judicial states would be able to clear inventories in about 32 months, according to LPS data.

Mortgage rates this week are averaging at or near historic lows, Freddie Mac reports in its weekly mortgage market survey.

"Weaker economic data reports eased upward pressure on mortgage rates this week and kept them at or near all-time record lows,” says Frank Nothaft, Freddie Mac’s chief economist.

Here’s a closer look at rates for the week:

30-year fixed-rate mortgages: averaged 4.22 percent this week, holding steady at last week’s average. Last year at this time, 30-year rates averaged 4.32 percent and people are doing loan modifications which means they are remodeling their home. Most of the people I speak with are having their kitchen re done. If you want Kitchen Remodeling by a name you can trust. Try out Sears Home Services because they offer professional kitchen cabinet and kitchen counter top installation. Another Company to consider is Lowes. Besides heping people with their kitchen they offer 20% off All Patio Blocks, Including Patio Stones, Retaining Walls, and EdgersThe reason I say that is because at the end of August the 30-year rates had reached a new record of 4.15 percent and that means it is a good time to take advantage of these great rates.

15-year fixed-rate mortgages: averaged 3.39 percent this week, dropping from last week’s 3.44 percent average. Last year at this time, 15-year rates averaged 3.83 percent.

5-year adjustable-rate mortgages: set an all-time record of 2.96 percent this week. This is the eighth consecutive week that the 5-year ARM has fallen and it is down from last week’s 3.07 percent average. A year ago, the 5-year ARM averaged 3.54 percent.

1-year ARMs: averaged 2.89 percent, dropping from last week’s 2.93 percent average. A year ago at this time, the 1-year ARM averaged 3.50 percent.

NAR to Host Housing Summit

As the leading advocate for homeownership, the National Association of REALTORS® will host a summit of policy makers, industry leaders, and government stake holders to develop strategies to help stabilize and revitalize the nation’s housing market and economy.

“Homeownership is an investment in your future, strengthens our communities, and is integral to our nation’s economy,” said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “Our goal is to develop solutions and recommendations for Congress and the administration so that they can develop strong housing policies to stabilize the nation’s housing market and lead the country out of today’s economic struggles.”

The event is scheduled to take place early in October in Washington, D.C. While planning is still underway, NAR expects that REALTOR® leaders will join legislators, government officials, business leaders, top industry executives, and economists to design a housing recovery plan that will address today’s critical homeownership, mortgage finance and real estate investment challenges.

A housing recovery is key to America’s economic strength, and NAR wants to make sure that any proposed legislation and regulatory rules or changes to current programs and incentives help address industry issues and don’t further exacerbate problems within the fragile real estate industry.

“To move the real estate market and economy forward there needs to be a broad discussion among all stakeholders about what needs to be done to reshape real estate in America and put the country back on the right track,” said Phipps. “We look forward to delivering valuable recommendations and solutions to promote home ownership and restore the nation’s housing industry and economy.”

Police are warning that squatters are getting more clever, even presenting fake deeds to try to prove ownership of a property without ever paying a dime.

A Raleigh, N.C., man was recently arrested and faces several charges for allegedly squatting for at least seven months in a home valued at nearly $2 million and filing a fake deed and paperwork with the county, according to police.

Thomas Everette Jr., 31, allegedly created a fake company--the International Fidelity Trust--and created forged documents and a false deed that he filed at the county’s Register of Deeds to transfer the home to himself at no cost, according to police reports.

The $1.9 million, 7,664-square-foot home, which fell into foreclosure last year, boasts six bedrooms, six full bathrooms, theater and game rooms, a wine cellar, elevator, and a swimming pool.

A neighbor had contacted police to report someone living in the home since February. Everette avoided arrest back in February by showing paperwork that showed him as the trustee of the property.

State Attorney General Roy Cooper recently warned city officials that a group of residents had been filing fake paperwork at the county’s Register of Deeds office trying to claim ownership of at least six foreclosed homes.

Obama Expected to Unveil Plan to Revive Housing

The Obama administration is expected to announce a new mortgage relief program next week to help struggling home owners stay in their home and reduce the number of foreclosures, Reuters reports.

While the exact details of the proposal are still unknown, analysts are speculating that President Barack Obama is likely to announce a plan that would help more borrowers to refinance loans, allowing them to lower their monthly payments and ward off possible foreclosure.

The refinancing plan will reportedly apply to loans backed by government-owned Fannie Mae and Freddie Mac or the Federal Housing Administration, allowing more home owners who have been unable to refinance due to poor credit, owing too much above their home’s current value, or unemployment, to take advantage of current low interest rates.

Other lawmakers who have pushed for such a move have argued that by lowering home owners’ monthly payments, it would free up cash for other spending, which will help stimulate the overall economy.
Many home buyers have been reluctant in recent weeks to move forward on home purchases due to fears that the country could be heading to a double-dip recession, but new data suggests they have nothing to fear.

The job picture seems to be improving, according to new economic data. For example, a report from ADP, a payroll processing company, showed that private employers had added 91,000 new jobs in August--after expanding by 114,000 in July. Also, unemployment rates were lower in July than a year earlier in 257 of the 372 metro areas, according to the U.S. Bureau of Labor Statistics. The government’s labor market report, coming on Friday, also is expected to show a modest increase in employment.

What’s more, the number of planned layoffs at companies, which has been rising for the last three months, curtailed in August.

“The labor market is soft but not falling apart,” says Joel L. Naroff, chief economist at Naroff Economic Advisors in Holland, Pa. “The economy is not on the verge of a recession.”

Also, economic data pointed to a strong rebound in demand for manufactured goods in July, particularly for cars. Orders for motor vehicles posted their largest gain since 2003.

Source: “White House Could Unveil Mortgage Plan Next Week,” Reuters (Aug. 31, 2011)

FDIC: Mortgage delinquency rate drops to lowest level since 2009

The combined delinquency rate on mortgages held by major banks dropped to 6.68% in the second quarter, the lowest level since the third quarter of 2009, according to Federal Deposit Insurance Corp. data.

The FDIC insures deposits at 7,513 national banks. In the second quarter, bank failures slowed, the "Problem List" of troubled banks shrunk, net income rose and the FDIC's Deposit Insurance Fund turned positive for the first time in two years.

Work on bank mortgage books continued as well. The dollar amount of loans between 30 days and 90 days delinquent dropped for seventh consecutive quarter to $70 billion, the lowest level since the fall of 2007.

It was a 10% reduction from the previous quarter. One year ago, banks reported nearly $100 billion in these early-stage delinquencies.

The banks reported $102 billion in principal balance more than 90-days delinquent, according to the FDIC, down 2.6% from the previous quarter and down 3.5% fro one year ago.Nationwide Foreclosures!

Still, the early and late stage delinquencies added up to more than $172 billion in mortgages sit in nonaccrual status. The banks also reported another $12 billion the carrying value of REO, or previously foreclosed, property.

Banks held $25 billion in nonaccrual mortgages before the crisis at the end of 2006.

"Recent events have reminded us that the U.S. economy and U.S. banks still face serious challenges ahead," Acting Chairman Gruenberg concluded. "The FDIC will remain alert to these challenges going forward."

Home Prices in U.S. Showed Signs of Stabilizing

Residential real estate prices in the U.S. decreased in the year ended in June at a slower pace than in the prior month, a sign the market may be stabilizing.
The S&P/Case-Shiller index of property values in 20 cities fell 4.5 percent from June 2010, after a 4.6 percent drop in the 12 months ended May that was the biggest since 2009, the group said today in New York. The median forecast of 31 economists surveyed by Bloomberg News projected a 4.6 percent decline.
Values fell by 0.1 percent in June from the prior month after adjusted for seasonal changes, matching the decrease in May, indicating the deterioration is slowing. Nonetheless, any recovery in home values is probably years away as foreclosures dump more properties onto to the market, while a jobless rate hovering around 9 percent and strict lending rules hurt sales.
“Prices aren’t going to rebound back rapidly,” said Paul Dales, a senior U.S. economist at Capital Economics Ltd. in Toronto. “Most people think that when the downturn ends the recovery will be pretty good, but that’s not going to be the case at all.”
Another report today showed consumer confidence plunged in August by the most since October 2008 as Americans grew more concerned about job prospects. The New York-based Conference Board’s gauge dropped to 44.5, the lowest reading since April 2009, when the economy was in a recession, the private research group said.
Shares Fall
Stocks fell amid concern the recent rally had gone too far given the U.S. economic outlook. The Standard & Poor’s 500 Index fell 0.9 percent to 1,199.22 at 10:03 a.m. in New York. Treasury securities rose, sending the yield on the benchmark 10-year note down to 2.17 percent from 2.26 percent late yesterday.Find Foreclosures Nationwide

Estimates for the price change from June 2010 ranged from declines of 4 percent to 5.5 percent, according to the Bloomberg survey. The Case-Shiller measure is based on a three-month average, which means the June data was influenced by transactions in May and April.
The year-over-year drop in May was the biggest in 18 months.
Nationally, prices decreased 5.9 percent in the second quarter from the same time in 2010. They increased 3.6 percent from the previous three months before seasonal adjustment and climbed 0.1 percent after taking those changes into account. Property values in the first quarter dropped to the lowest level in almost nine years.

REBAC Survey Offers Ideas to Connect With Buyers

The 2011 member survey by the Real Estate Buyer's Agent Council (REBAC), a wholly owned subsidiary of the National Association of REALTORS®, indicates that almost three-quarters of buyers' agents carry smartphones for real-time communications. Another 75 percent regularly use social networking sites to cultivate relationships with buyers, with 65 percent noting a preference for Facebook.

More than 50 percent of those polled use blogs, particularly RISMedia and Inman, to keep abreast of market conditions for their clientele; and more are taking steps to ensure that their Web sites can be viewed on mobile devices. Mortgage rates are at all time lows. Take advantage of this opportunity. Start saving today.

The survey also reveals that members are using innovative ways to thank clients after closings and are promoting their Accredited Buyer's Representative designation on marketing materials. They find that the negotiating skills and technology resources they receive as member benefits to be particularly useful.

Source: "Fresh Ideas to Build Buyer Business," RISMedia (08/29/11)

More Banks Offer Incentives to Unload REOs

Banks facing high inventories of REOs are turning to financial incentives in the hopes of accelerating sales of these often vacant, deteriorating properties.

For example, Fannie Mae and Freddie Mac are trying to liquidate its REOs, the National Mortgage News reports. By the end of 2010, Fannie Mae was authorizing lenders to offer the HomePath program for Fannie Mae REOs. In the program, which is available to individual buyers and investors, home buyers do not need perfect credit and can put down as little as 3 percent of the property price, qualifying for a loan up to 97 percent of the purchase price.

Also, HUD’s National Community Stabilization Trust “First Look” program is providing competitive prices on REO properties and giving buyers priority access to these homes before they are broadly listed for sale. Trying to Find A Lower Mortgage Rate? Your Search is Over. See How Much You Can Save.

Some cities are coming up with their own programs to stimulate sales. For example, JPMorgan Chase recently teamed with Detroit city officials to offer down payment assistance to police officers and city employees who purchase a vacant home in the city over the next two years. The first buyers will receive $25,000 in down payment assistance, while 60 other buyers will receive up to $15,000.

Source: “REO Incentives Accelerate,” National Mortgage News (Aug. 29, 2011)

HUD Extends Unemployed Mortgage Relief Program

The Department of Housing and Urban Development has once again extended its deadline for a program that provides up to $50,000 in interest-free loans to unemployed or medically ill home owners who are struggling to make their mortgage payments.

The new deadline is now Sept. 15. HUD resumed taking applications for the program on Monday. Are You Looking to Refinance? Don't wait! Lock in at record low rates. Start today and start saving. The $1 billion Emergency Homeowners Loan Program, which launched in June, was originally slated to end on July 22, but HUD first extended the deadline to July 27 to give home owners more time to apply.

Home owners eligible for the program will be able to qualify for up to $50,000 in interest-free loans for up to two years. Home owners who have had a drop in income of at least 15 percent from involuntary unemployment or underemployment due to economic conditions or a medical emergency are eligible for the program. Home owners must still be able to contribute $150 per month toward their mortgage. (Learn more about eligibility requirements and the participating states at http://findehlp.com.)

Source: “HUD Extends Deadline for Unemployed Mortgage Assistance,” HousingWire (Aug. 29, 2011)