Monthly Archives: May 2013
REO Sales at Five-Year Low
Foreclosure-related home sales retreated to a 21 percent share of all homes sales in the country during the first quarter of 2013. RealtyTrac reported that a total of 190,121 houses that were bank-owned (REO) or in some stage of foreclosure sold during the quarter, down 18 percent from the number of such sales in the fourth quarter of 2012 and 22 percent lower than in the first quarter of 2012. These sales peaked in the first quarter of 2009 when they accounted for 45 percent of the home sale market.
An additional 15 percent of residential sales in the first quarter were ones in which the banks agreed to take less than the outstanding balance in satisfaction of the loan, so-called short sales, even though the property was not in foreclosure. This brought the total market share of homes that might be considered “distressed” to 35 percent in the first quarter. These non-foreclosure short sales were down 10 percent from the previous quarter and 35 percent from the same quarter in 2012.
Both types of foreclosure related sales decreased from the previous quarter and from the first quarter of 2012. Pre-foreclosure sales (typically short sales) numbered 88,750, down 20 percent from both the previous quarter and a year earlier and the lowest quarterly number of pre-foreclosure sales since the third quarter of 2009 . These sales had a 10 percent market share compared to 11 percent in the first quarter of 2012.
Third parties purchased a total of 101,371 REO properties in the first quarter of 2013, down 16 percent from the fourth quarter of 2012, 23 percent from the first quarter of 2012, and the lowest quarterly total of REO sales since the first quarter of 2008. This was an 11 percent market share, the same as in the fourth quarter but down from 13 percent of all sales a year earlier.
“We expected foreclosure-related sales to be lower given the downward trend in new foreclosure activity nationwide over the past two and a half years, but the decrease in non-foreclosure short sales was a bit of surprise given the 11 million homeowners nationwide still underwater,” said Daren Blomquist, vice president at RealtyTrac. “Rising home prices in many markets are stunting the continued growth of short sales by reducing incentive for both underwater homeowners and lenders. Underwater homeowners may be willing to stick it out a few more months or even years in the hope that they will be able to walk away with money at the closing table and without a hit to their credit rating, and for lenders a failed short sale may no longer translate into bigger losses down the road given that average prices of bank-owned homes are rising – at a faster pace than non-distressed home prices in many markets.”
Based on the average prices provided by RealtyTrac the prices of distressed homes do not appear to recovering as fast as home prices nationally. The average price of a foreclosure related sale was down a slight 1 percent quarter over quarter but up 3 percent from a year ago, the fourth straight quarter with an annual price increase. The consensus among national surveys, some of which exclude distressed sales from their calculations, is that home prices have risen between seven and 11 percent over the 12 months ended in March.
The average sales price of a foreclosure related home in the first quarter was $167,095. This reflected an average discount of 30 percent compared to 31 percent in the previous quarter but up from a 28 percent discount a year earlier. Short sales sold at a much higher price than REO properties, an average of $187,040 compared to $147,810. The pre-foreclosure sales price was down 1 percent from the previous quarter but was 5 percent higher than the prior year. Pre-foreclosure sales were discounted an average of 22 percent, down from 23 percent in the fourth quarter but up from 20 percent in Q1 2012.
The REO sale price was 1 percent below that of the previous quarter but 1 percent higher than a year earlier. This was the fourth consecutive quarter with an annual increase. The average price of an REO residential property in the first quarter was 38 percent below the average price of a non-foreclosure residential property, down from a 39 percent discount in the previous quarter but up from a 34 percent discount in the first quarter of 2012.
The highest level of foreclosure-related home sales were in Georgia (35 percent), Illinois (32 percent), California (30 percent), Arizona (28 percent), and Michigan (28 percent). States where foreclosure-related sales accounted for less than 10 percent of all sales include Massachusetts, New York, and New Jersey.
States with the biggest annual increases in average REO sales prices included Georgia (up 29 percent), Arizona (up 24 percent), Nevada (up 22 percent), California (up 22 percent), and Missouri (up 17 percent).
REOs that sold in the first quarter took an average of 168 days to sell after being foreclosed, down from the 178-day average from both the previous quarter and a year ago.
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Average Home Prices Back to Late 2003 Levels
S&P Dow Jones reported today that both its 10-City and 20-City Case-Shiller Composite Indices posted increases in the first quarter of 2013 that were more than 10 percent above prices in the first quarter of 2012. In addition, 15 of the 20 cities it tracks had single month price increases in March that exceeded 1.2 percent.
The S&P Case-Shiller U.S. National Composite index which covers the nine Census Districts rose by 1.2 percent in the first quarter compared to the fourth quarter of 2012 and was up 10.2 percent year-over-year. Both the 10-City and the 20-City Indices gained 1.4 percent from February to March; the 10-City was up 10. 3 percent on an annual basis and the 20-City was up 10.9 percent.
“Home prices continue to climb,” David M. Blitzer, Chairman of the Index Committee said. Home prices in all 20 cities posted annual gains for the third month in a row. Twelve of the 20 saw prices rise at double digit annual growth. The National Index and the 10- and 20-City Composites posted their highest annual returns since 2006.”
There were some notable month over month increases. San Francisco was up 3.9 percent, Seattle 3.0 percent, and Las Vegas and Portland, Oregon both rose 2.7 percent. Only two cities posted price decreases from February to March; Minneapolis was down 1.1 percent and New York down 0.4 percent. Prices in Chicago and Cleveland were unchanged.
All 20 cities had positive year-over-year changes and all have shown annual increases for at least three consecutive months. Blitzer called even the weakest gains in New York (2.6 percent), Cleveland (4.8 percent), and Boston (6.7 percent) “substantial.” The strongest gains were seen in Phoenix (22.5 percent), San Francisco (22.2 percent), and Los Vegas (20.6 percent.)
As of March, average home prices across the U.S. are back to their late 2003 levels for both the 10- and the 20-City Composites. Measured from the June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 28 to 29 percent and they have recovered from their respective troughs in March 2012 by 10.4 for the 10-City and 10.9 percent for the 20-City.
“Other housing market data reported in recent weeks confirm these strong trends; housing starts and permits, sales of new homes and existing homes continue to trend higher,” Blitzer said. “At the same time, the larger than usual share of multi-family housing, a large number of homes still in some stage of foreclosure, and buying-to-rent by investors suggest that the housing recovery is not complete.”
The S&P indices combine matched price pairs for thousands of individual houses from the available universe of arms-length sales data. The National Composite is issued quarterly based on information for the nine census districts. The 20- and 20-City Indices are value-weighted averages. Each has a base value of 100 in January 2000. Therefore a current index of 150 translates to a 50 percent appreciation in price since that date.
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Delinquency Rate Hits Post Housing Crisis Low for Freddie Mac
Freddie Mac said today that its total mortgage portfolio increased by $951 million in April to $1.949 trillion, an increase of 0.6 percent. This was the second straight month the portfolio has increased. Purchases totaled $47.3 billion compared to $52.0 billion in March, liquidations were ($45.7) compared to ($44.85) billion and sales were ($627) million, up from ($617) million. The year to date growth in that portfolio is (1.1) percent and the annualized liquidation rate is 29.2 percent.
The Mortgage-Related Investments Portfolio declined from an unpaid principal balance of $534.2 billion in March to 528.3 billion in April, a change of 13.2 percent. Purchases totaled $15.0 billion compared to $13.57 billion in March. Liquidations increased from ($10.10) billion the month before to ($10.5) billion and sales decreased from ($12.01) billion to ($10.4) billion. Year to date purchases total $57.59 billion, liquidations ($42.11) billion, and sales ($44.76) billion for an annual growth year-to-date of (15.8) percent.
The company’s Mortgage Related Securities and Other Guarantee Commitments had an ending balance of $1.60 trillion, an annualized increase of 4.1 percent.
The Mortgage-Related Investments Portfolio consists of $177.32 billion of PCs REMICs and other structured securities, $20.81 billion in Agency Securities, $119.73 billion Non-Agency Securities, and $210.41 billion in mortgage loans. The ending balance of the Mortgage-Related Investments Portfolio was $528.3 billion, a decrease of $5.9 billion since March.
The overall delinquency rate in Freddie Mac’s portfolios dropped below 3 percent for the first time since the beginning of the housing crisis, to 2.91 percent. It was 3.03 percent in March. . The Non-credit enhanced delinquency rates dropped 9 basis points to 2.40 percent and the credit enhanced portion of the portfolio had a rate of 6.42 percent compared to 6.74 percent the previous month. Multi-family delinquencies were 0.09 percent compared to 0.16 percent in March.
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Staten Island Homes Selling at Fastest Pace Since Boom
Strong demand and still limited supply mean homes are now selling nearly three times as fast as they normally would.
The average number of days a listing stayed on the market in April was 46, down from 62 in March, and down from the normal pace of 90-120 days, according to the National Association of Realtors.
The sales pace is back to what it was during the housing boom in 2005 and 2006, but the circumstances are of course very different. Back then it was all about easy money, and now it’s about stiff competition for limited supply.
“We need to see home builders increase production,” said Lawrence Yun, chief economist for the NAR in a press conference. “We need a 50 percent increase in starts.”
Home builders are actually slowing production, trying to take advantage of home price gains that are nearing double digits. High-end home builder Toll Brothers, based in Horsham, PA, reported that it raised prices by $26,000 on average, or about five percent, during the second quarter. The average price of a contract signed in the quarter was up sixteen percent from a year ago.
While homes are certainly selling faster, double digit price gains are not considered healthy, especially when wage growth is nowhere near that. At some point buyers will hit the wall, unable to afford the homes they want.
First time home buyers are already dropping out of the market, representing just twenty-nine percent of home buyers in April, according to the NAR—the lowest in two years. Rising mortgage rates, now at their highest in two months, are playing a part, but there are also fewer low-end homes to buy. The number of homes in the foreclosure process is now down nearly twenty-five percent from a year ago, according to a new report from Lender Processing Services.
Just eighteen percent of home sales in April were of distressed properties, the lowest since the Realtors began tracking this number in 2008. Compare that to thirty-five percent about a year and a half ago. Sales of homes priced below $100,000 were down ten percent in April compared to a year ago, while every other price range saw sales gains. Those who can get credit are now competing for what little there is to buy, and pushing prices well beyond expectations.
“I don’t see it lasting,” added Fairweather. “I think the minute they increase interest rates, you’ll see people pull back.”
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Payrolls Increased in 30 U.S. States in April, Unemployment Rate Dropped in 40. New York Among Leaders in Both
Payrolls climbed in 30 U.S. states in April, while the unemployment rate dropped in 40, showing the labor market strengthened across the country.
Texas led the gains in payrolls, adding 33,100 jobs last month, followed by New York and Florida, according to figures released today in Washington by the Labor Department. California, New York and South Carolina were among states with the biggest decreases in joblessness.
Widespread employment gains indicate that stronger demand has induced companies to fire fewer workers and, at times, boost staff levels. Those decisions will be challenged in May and the following month as slower manufacturing activity, diminished business with the government and a slowdown in consumer spending offer less support to the U.S. expansion.
“The hiring backdrop has been much more steady than economic growth,” Julia Coronado, chief economist for North America at BNP Paribas in New York, said before the report. “I expect it to improve and look better in the second half” of the year.
Other reports today showed consumer sentiment jumped to an almost six-year high and the index of leading indicators climbed more than projected.
Employment Gains
Employment rose by 25,300 in New York last month, the second-biggest gain of any state in today’s report. Florida followed with a 17,000 increase.
Wisconsin and Minnesota showed the biggest decreases in payrolls last month, according to the report.
The jobless rate dropped by 0.4 percentage point in California, New York and South Carolina in April.
Unemployment fell to 9.6 percent in Nevada from 9.7 percent in March. Nonetheless it remained the state with the highest rate in the country. Illinois was second, with a rate of 9.3 percent, followed by Mississippi at 9.1 percent.
North Dakota remained the state with the lowest jobless rate in the nation at 3.3 percent.
State and local employment data are derived independently from the national statistics, which are typically released on the first Friday of every month. The state figures are subject to larger sampling errors because they come from surveys of smaller size, in turn making the national figures more reliable, according to the government’s Bureau of Labor Statistics.
Fed’s View
Additional progress in the labor market will make those at the Federal Reserve more confident the U.S. economy doesn’t need as much support as they’re currently providing. Federal Reserve Bank of San Francisco President John Williams said yesterday that as early as this summer the central bank may begin slowing the pace of its $85 billion in monthly bond purchases.
“It’s clear that the labor market has improved since September” when the Fed began its third round of asset buying, Williams said during a speech in Portland, Oregon. The Federal Open Market Committee said May 1 that it’s prepared to increase or decrease the size of its monthly bond-buying as officials gauge the health of the economy.
Still, economists anticipate the expansion will cool to a 1.6 percent pace this quarter after growing at a 2.5 percent rate in the first three months of 2013, according to the median forecast in a Bloomberg survey from May 3 to May 8. The estimate reflects the lagged effect from a two percentage-point increase in the payroll tax at the start of 2013 and $85 billion in automatic budget cuts that began on March 1.
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Mortgage Rates In Staten Island Move Higher for Second Consecutive Week
– Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed-rate mortgages following U.S. Treasury bond yields higher this week on signs of stronger consumer spending.
News Facts
30-year fixed-rate mortgage (FRM) averaged 3.51 percent with an average 0.7 point for the week ending May 16, 2013, up from last week when it averaged 3.42 percent. Last year at this time, the 30-year FRM averaged 3.79 percent.
15-year FRM this week averaged 2.69 percent with an average 0.7 point, up from last week when it averaged 2.61 percent. A year ago at this time, the 15-year FRM averaged 3.04 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.62 percent this week with an average 0.5 point, up from last week when it averaged 2.58 percent. A year ago, the 5-year ARM averaged 2.83 percent.
1-year Treasury-indexed ARM averaged 2.55 percent this week with an average 0.4 point, up from last week when it averaged 2.53 percent. At this time last year, the 1-year ARM averaged 2.78 percent.
Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for the Regional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.
Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.
“Mortgage rates followed U.S. Treasury bond yields higher this week on signs of stronger consumer spending. Advanced retail sales rose 0.1 percent in April, above the market forecast consensus of a 0.3 percent decline. Excluding such items as automobiles and gasoline, sales were up 0.5 percent for the second time in three months.
“Households are also shoring up their balance sheets. Total household debt fell by about $110 billion in the first quarter. In addition, approximately 3.0 million homeowners were seriously delinquent (90 days or more delinquent or in foreclosure) on their first mortgages, down from a peak of about 5.1 million in the fourth quarter of 2009.”
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four home borrowers and is one of the largest sources of financing for multifamily housing. For more information please visit http://www.FreddieMac.com and Twitter: @FreddieMac.
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Staten Island Housing Inventory Moving Quickly Despite More Listings and Higher Prices in April
The spring market may be bringing a little of the hoped for increase in available homes for sale.
April data from Realtor.com indicated the inventory of homes listed on the nationwide site increased by 4.12 percent in April to 1.75 million and list prices were up 2.64 percent.
Despite the increase from March to April, the nationwide inventory was down from a year earlier in all but 11 of the 146 local markets the website monitors and 36 of the markets had a decrease in inventories of 20 percent or more. Nationwide the inventory was 13.54 percent lower than a year ago.
Houses were on the market nationwide for an average of 81 days, an improvement of 11 percent from a year earlier. Thus while more homes are entering the market, they are not contributing long term to inventories.
The number of markets with declining list prices are decreasing with only 37 that had lower list prices in April 2013 than in April 2012. Median list prices increased in 109 markets and the national median list price was $194,900.
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Freddie Mac Announces Immediate Availability of Streamlined Modification for Delinquent Borrowers
Freddie Mac (OTCQB: FMCC) today announced it is making its new Streamlined Modification program immediately available to all eligible borrowers nationwide in order to expedite financial relief for potentially thousands of distressed families. Freddie Mac’s Streamlined Modification program had originally been scheduled to start on July 1, 2013.
News Quote
“Today, Freddie Mac is giving a green light to its mortgage servicers to speed up financial relief for potentially thousands of families with delinquent mortgages across the nation. Now mortgage servicers can send eligible borrowers their Streamlined Modification trial period terms as soon as they are ready and borrowers can modify their loans by making the three trial period payments on time. No borrower documentation is needed. Freddie Mac is focused on adding momentum to the housing recovery by giving distressed borrowers more options to avoid foreclosure.”
News Facts:
Today’s announcement extends to the entire country Freddie Mac’s decision to make the Streamlined Modification immediately available to eligible Hurricane Sandy victims.
Under the Streamlined Modification program, servicers are required to send modification offers to borrowers who are at least 90 days, but no more than 720 days, delinquent on mortgages that are at least 12 months old and meet other eligibility criteria.
Eligible borrowers are not required to submit documentation for a Streamlined Modification.
The modification becomes permanent after the borrower demonstrates their ability to pay making on-time payments during the three month trial period.
The Streamlined Modification offers the same mortgage terms as Freddie Mac’s Standard Modification which enables servicers to reduce monthly mortgage payments by adjusting interest rates, extending payment terms to 40 years, and, in certain cases, provide principal forbearance.
Since 2009 Freddie Mac has helped more than 830,000 distressed borrowers avoid foreclosure and more than 6.7 million families refinance into more affordable mortgages through Freddie Mac’s refinance options including the Relief Refinance Mortgage(SM) and the Home Affordable Refinance Program (HARP).
More information about the Streamlined Modification can be found at FreddieMac.com
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four homebuyers and is one of the largest sources of financing for multifamily housing. http://www.FreddieMac.com.
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Presidential WEEKLY ADDRESS: Growing the Housing Market and Supporting our Homeowners. Mortgage Lending Staten Island
WASHINGTON, DC— In this week’s address, President Obama said seven years after the real estate bubble burst, our housing market is healing. The administration’s policies have helped responsible homeowners save money on their mortgages and stay in their homes, and the President’s consumer watchdog agency is working to protect consumers from being taken advantage of on their mortgages, but there is still more work to do. The President urges Congress to quickly confirm Mel Watt to lead the Federal Housing Finance Agency, and take action to give every responsible homeowner the chance to refinance and save money on their mortgage, so that we can keep growing the housing market, support working families, and strengthen the economy.
The audio of the address and video of the address will be available online at http://www.whitehouse.gov at 6:00 a.m. ET, Saturday, May 11, 2013.
Remarks of President Barack Obama
Weekly Address
The White House
May 11, 2013
Hi, everybody. Our top priority as a nation is reigniting the true engine of our economic growth – a rising, thriving middle class. And few things define what it is to be middle class in America more than owning your own cornerstone of the American Dream: a home.
Today, seven years after the real estate bubble burst, triggering the worst economic crisis since the Great Depression and costing millions of responsible Americans their jobs and their homes, our housing market is healing. Sales are up. Foreclosures are down. Construction is expanding. And thanks to rising home prices over the past year, 1.7 million more families have been able to come up for air, because they’re no longer underwater on their mortgages.
From the day I took office, I’ve made it a priority to help responsible homeowners and prevent the kind of recklessness that helped cause this crisis in the first place.
My housing plan has already helped more than two million people refinance their mortgages, and they’re saving an average of $3000 per year.
My new consumer watchdog agency is moving forward on protections like a simpler, shorter mortgage form that will help to keep hard-working families from getting ripped off.
But we’ve got more work to do. We’ve got more responsible homeowners to help – folks who have never missed a mortgage payment, but aren’t allowed to refinance; working families who have done everything right, but still owe more on their homes than they’re worth.
Last week, I nominated a man named Mel Watt to take on these challenges as the head of the Federal Housing Finance Agency. Mel’s represented the people of North Carolina in Congress for 20 years, and in that time, he helped lead efforts to put in place rules of the road that protect consumers from dishonest mortgage lenders, and give responsible Americans the chance to own their own home. He’s the right person for the job, and that’s why Congress should do its job, and confirm him without delay.
And they shouldn’t stop there. As I said before, more than two million Americans have already refinanced at today’s low rates, but we can do a lot better than that. I’ve called on Congress to give every responsible homeowner the chance to refinance, and with it, the opportunity to save $3,000 a year. That’s like a $3,000 tax cut. And if you’re one of the millions of Americans who could take advantage of that, you should ask your representative in Congress why they won’t act on it.
Our economy and our housing market are poised for progress – but we could do so much more if we work together. More good jobs. Greater security for middle-class families. A sense that your hard work is rewarded. That’s what I’m fighting for – and that’s what I’m going to keep fighting for as long as I hold this office.
Thank you. And have a great weekend.
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Ten Things You Need to Know Today: May 10, 2013
1 WHO MAY HAVE SURVIVED 17 DAYS IN BANGLADESH RUBBLE
Rescue workers stop clearing the site of a collapsed factory building after a soldier says a woman waved her hand at them.
2. WITHDRAWING FROM THE WORLD
A global gang of criminals drains $45 million in a matter of hours from reserves held by banks to fund pre-paid credit cards.
3. POLICE DESCRIBE CLEVELAND CAPTIVES’ ORDEAL
Horrific details emerge about the captivity of three women, while prosecutors weigh seeking the death penalty for suspect Ariel Castro.
4. HOW OBAMA IS PROMOTING HIS HEALTH CARE LAW
The president is targeting women and young people to help him stave off GOP challenges to “Obamacare.”
5. WHERE MEN AND WOMEN ARE BATTLING OVER THE RIGHT TO PRAY
Israeli police are holding back hundreds of men protesting against women praying at Jerusalem’s Western Wall.
6. THE NEW `SCOTT’ AND `JENNIFER’
Jacob and Sophia have become the top names for baby boys and girls. Parents with perhaps greater expectations are opting for the increasingly popular “Messiah.”
7. WHY AT LEAST ONE SON DOESN’T LIKE MAKING MOM HIS `FRIEND’
Some Facebook users don’t care for the comments mothers share on the social media site.
8. OLYMPIC GOLD MEDALIST KILLED IN YACHT ACCIDENT
A sailboat capsizes in San Francisco Bay during a practice for the upcoming America’s Cup, trapping Andrew “Bart” Simpson of Great Britain underneath.
9. LAST ORIGINAL JUDGE LEAVING `AMERICAN IDOL’
Randy Jackson, after 12 seasons, says he wants to focus on his record label and other business opportunities.
10. SPOTLIGHT FINDS AUTHOR ONCE AGAIN
F. Scott Fitzgerald is enjoying a posthumous revival with the latest film remake of “The Great Gatsby,” opening today.
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Mortgage Lending Staten Island 