Daily Archives: June 22, 2015

Mortgage Modifications have changed | Chappaqua Real Estate

There’s been a dramatic change in the assistance offered to struggling homeowners.

In February, 49% of borrowers with a loan backed by federally controlled housing-finance giants Fannie Mae and Freddie Mac received modifications that only extended the length of their mortgage. That share was up 20 percentage points from a year earlier, according to a report from the Federal Housing Finance Agency, which regulates the government sponsored enterprises. Over that same time period, the share of borrowers receiving a modification that combined an extended term with other actions, such as a rate reduction and principal forbearance, fell by 19 percentage points.

Similar trends are seen in quarterly data from the Office of the Comptroller of the Currency, which publishes a snapshot of the U.S. mortgage market. According to the OCC, the chance that a modification included a term extension rose by 10% in 2014. Meanwhile, the likelihood dropped 15% for a rate reduction and 66% for a principal deferral.
The reason? The big rise in home prices since 2012.

“As the market improves, the number of borrowers who are in deep distress goes down, so the average modification tends to get lighter because they don’t need to provide as much relief,” said Jim Parrott, a former housing-policy adviser for the White House’s National Economic Council and a senior fellow at the Urban Institute, a Washington think tank.

Also, as time has passed, the pool of borrowers who are eligible for the most rigorous modifications has narrowed.

Officials have tweaked mortgage-help programs since the bubble burst, including an important change in 2014 to enable borrowers with loan-to-value ratios under 80% to receive a GSE modification that will generally only extend the term of a mortgage. Thanks to rising home prices — they bottomed out in early 2012 and are now about 9% down from a bubble peak — owners have become increasingly likely to have equity.

“The practice of providing a modification to somebody with significant equity is fairly new,” said Julia Gordon, senior director for housing and consumer finance at the Center for American Progress, a left-leaning think tank in Washington. “The assumption in the past, pre-crisis, was if you get into terrible trouble with your mortgage, your solution was to downsize.”

 

read more…

 

http://www.marketwatch.com/story/the-changing-face-of-mortgage-modifications-2015-06-18?link=MW_Nav_NV

Sales of Existing Homes to First-Time Buyers Rise | Armonk Real Estate

Existing home sales, as reported by the National Association of Realtors (NAR), rose to the highest pace in six years in May. The report was also notable due to an increase in purchases by first-time buyers, which rose to the highest share experienced since September 2012.

The May pace of existing home sales (5.35 million on seasonally adjusted annual basis) was 5.1% higher than the prior month and 9.2% higher than the rate set during May of 2014. Sales of single-family homes were up 5.6% for the month, reaching a 4.73 million annual rate.

EHS_may15

The first-time buyer share increased to 32% in May, up from 30% in April. NAR reported that first-time buyer share reached its highest level since September 2012. This increase is consistent with prior analysis of Fannie Mae data illustrating that the share of mortgage originations to first-time home buyers is expected to rise in 2015.

Regionally, existing home sales increased strongly in the Northeast (11.3% for May) and are up 11.3% year-over-year. Midwest sales increased 4.1% for the month and now stand 12.4% higher than May 2014. Sales in the West rose 4.3% in May and are up 9% from a year ago. Finally, sales in the South increased 4.3% compared to April and are 6.9% higher than May 2014.

Total housing inventory, as estimated by NAR, increased 3.2% t0 2.29 million existing housing units. This marks a 5.1 months-supply at the May sales pace.

The median existing home price in May was $228,700. NAR noted that May represented the 39th consecutive month of year-over-year price gains for existing homes.

 

read more…

 

http://eyeonhousing.org/2015/06/