Posts Tagged ‘homeowners’

Federal Mortgage Modification Program Hits Target

Thursday, October 29th, 2009

Federal Mortgage Modification Program Hits TargetThe federal government’s program to help homeowners facing foreclosure has reached its target of 500,000 mortgage modifications by November 1.  “There is a lot of work left to do,” said Shaun Donovan, Secretary of Housing and Urban Development.  “Today’s announcement is a good step forward, but we are nowhere near the finish line.”  The long-term goal is to help 3,000,000 to 4,000,000 homeowners over the next three years.

Currently, 63 servicers are participating in the program, an increase over the 47 reported at the end of August, according to Treasury Department data.  JP Morgan Chase has started the most modifications, with 117,000 underway, representing 27 percent of their eligible delinquencies.  Bank of America increased its modifications by 62 percent during September, with nearly 95,000 trial modifications covering 11 percent of eligible loans underway.

Mortgage Bankers Association statistics note that, as of August, one in 7.6 mortgages was late with payments or in foreclosure.  The poor economy and declining real estate prices are the primary reason for these foreclosures.  Additionally, 25 percent of homeowners owe more on their house than it is currently worth.

A September report on loan servicer performance found that 19 percent of eligible homeowners had been offered loan modifications, though problems persist.  For example, Bank of America – the servicer with the most eligible loans – had started modifications on just seven percent of its mortgages during September.

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Home Sales, Values on the Rise; Consumer Confidence Down

Monday, August 10th, 2009

Sales of new and existing homes rose in June for the third straight month, due primarily to low prices and attractive mortgage rates.  Home sales also rose 11 percent over the previous month. The federal tax credit for first-time homebuyers helped to drive the uptick.  Additionally, home prices rose for the first time in three years in May, a sign that the market might be stabilizing.

nhsaprilAccording to the Standard & Poor’s/Case-Shiller index, home prices have fallen more than 32 percent from their 2006 peaks.  The pace of the decline slowed in May for the fourth consecutive month.  “This could be an indication that home price declines are finally stabilizing” after plunging to levels last seen six years ago in 2003, noted David M. Blitzer, chairman of the S&P index committee.

On the downside, the weakening job market battered consumer confidence in July, possibly delaying a quick economic recovery.  The U.S. Conference Board’s consumer confidence index fell to 46.6 in July from 49.3 in June.  A recent Reuters survey had forecast that the June reading would be 49.  This erosion in confidence is in tune with the rising percentage of Americans who say jobs are hard to find.  Unemployment has hit a 26-year high, with several states reporting double-digit numbers.

“People are getting a bit discouraged.  Jobs are not coming as quickly as expected,” according to John Silvia, chief economist with Wells Fargo.  “This won’t be a V-shaped recovery for either the economy or the jobs market.”

Las Vegas Underwater

Monday, June 1st, 2009

Las Vegas may be in the middle of a desert, but right now it’s underwater.  Fully two-thirds of the once fast-growing city’s housing stock is underwater,  meaning that the owners owe more on their mortgages vegasthan the home is worth.

According to www.zillow.com, borrowers who are underwater totaled 20.4 million at the end of the first quarter of this year, compared with 16.3 million at the end of last year.  This represents 21.9 percent of all homeowners.

The irony in these numbers is that falling prices are making homes more affordable for first-time buyers who previously were shut out of the housing market.  At the same time, the decline in home prices compounds problems for owners who get into financial trouble by making it harder for them to refinance and take advantage of the current low interest rates.

“What’s going on here is that you don’t have any markets that have turned around and you have new markets, like Dallas, that have joined the ranks of communities where home prices have fallen,” noted Stan Humphries, a Zillow.com vice president.

Zillow.com reports that the nation’s top 10 underwater cities are:

  • Las Vegas, NV                    67.2 percent
  • Stockton, CA                       51.1 percent
  • Modesto, CA                       50.8 percent
  • Reno, NV                             48.5 percent
  • Vallejo Fairfield, CA       46.5 percent
  • Merced, CA                         44.4 percent
  • Port St. Lucie, FL              43.5 percent
  • Riverside, CA                     42.8 percent
  • Phoenix, AZ                        41.7 percent
  • Orlando, FL                         41.7 percent