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Only 4% get help under foreclosure prevention
According to the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision, nearly 80% of all loan modifications resulted in lower payments in the second quarter (the latest figures available) -- up from just over 50% three months earlier. When loans are made affordable, borrowers are less likely to default. The trouble is that only about 4% of troubled borrowers have received long-term help under the Obama administration's foreclosure prevention program. The report, the first comprehensive tally of permanent modifications made, shows that loan servicers have converted 31,382 people from trial adjustments to long-term assistance as of Nov. 30. But 30,650 people in trial modifications have been denied, according to Treasury officials. The dearth of permanent modifications has fueled concerns that the $75 billion plan will fall far short of its goal to help up to 4 million delinquent homeowners. The number of troubled borrowers currently in tria
l modifications rose to 697,026, up from 650,994, a month earlier. "Our focus now is on working with servicers, borrowers and organizations to get as many of those eligible homeowners as possible into permanent modifications," said Phyllis Caldwell, chief of Treasury's Homeownership Preservation Office.
Consumer prices flat in November
The Labor Department said its Consumer Price Index rose 0.4 percent on a seasonally adjusted basis after an unrevised 0.3 percent gain in October. A 4.1 percent hike in the energy index led the rise, as gasoline, electricity, fuel oil, and natural gas prices rose. Prices rose 1.8 percent over the last 12 months, as expected, the first year-over-year gain since February. Core prices rose 1.7 percent over the 12-month period. Prices rose 1.8 percent over the last 12 months, as expected, the first year-over-year gain since February. Core prices rose 1.7 percent over the 12-month period. Separately, the U.S. current account deficit widened as expected in the third quarter to $108 billion, largely driven by a big trade shortfall, a Commerce Department report showed on Wednesday. The deficit rose from a downwardly revised $98 billion in the second quarter and was in line with analysts' forecasts for a third quarter shortfall of $108 billion. The third-quarter deficit equaled 3
percent of gross domestic product, up from 2.8 percent in the April-June period, a Commerce Department official said.
Foreclosures fall -- for now
According to RealtyTrac, foreclosure filings fell by 8% in November, making it the fourth consecutive month of improvement in the housing market. There were 306,627 filings last month, a decline that follows a 3% drop in October, 4% in September and 1% in August. "Loan modifications and other foreclosure prevention efforts, along with the recently extended and expanded homebuyer tax credit, are keeping a lid on the most visible symptoms of the nation's ailing housing market -- foreclosures and home value depreciation," RealtyTrac CEO James Saccacio said in a prepared statement. However, while there are signs of improvement, the industry has yet to turn around: Foreclosure filings were still 18% above November 2008's levels.
RealtyTrac spokesman Rick Sharga isn't convinced the decline is a natural outgrowth of improved market conditions. "I really don't believe we're looking at a trend that suggests the problem is going away," he said. "Much of the drop was artificially induced." RealtyTrac reported 76,701 homes were repossessed during the month, only a tad down from the 77,077 lost in October. For the year, there have been a total of 777,630 properties taken back by banks. The "sand states" -- Nevada, Florida, California and Arizona -- continued to amass the largest numbers of foreclosure filings with Nevada the hardest hit state of all. One of every 119 households had a filing in November, nearly four times the national average of one for every 417. Florida had one for every 165 households, California one for every 180, and Arizona one for every 186.
MBA -- Mortgage Applications Increase Slightly
The Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending December 11, 2009 increased 0.3 percent on a seasonally adjusted basis from one week earlier, and decreased 0.3 percent on an unadjusted basis compared with the previous week. The Refinance Index increased 0.9 percent from the previous week and the seasonally adjusted Purchase Index decreased 0.1 percent from one week earlier. The unadjusted Purchase Index decreased 3.6 percent compared with the previous week and was 15.4 percent lower than the same week one year ago. The four week moving average for the seasonally adjusted Market Index is up 1.5 percent.
The four week moving average is up 4.2 percent for the seasonally adjusted Purchase Index, while this average is up 0.8 percent for the Refinance Index. The refinance share of mortgage activity increased to 75.2 percent of total applications from 74.4 percent the previous week. This is the highest refinance share observed in the survey since the week ending April 24, 2009. The adjustable-rate mortgage (ARM) share of activity decreased to 4.1 percent from 4.7 percent of total applications from the previous week, which is the lowest share since mid-June 2009. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.92 percent from 4.88 percent, with points decreasing to 1.08 from 1.17 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
Housing starts lower than expected
The Commerce Department said housing starts increased 8.9 percent to a seasonally adjusted annual rate of 574,000 units -- but were lower than expected in November as construction activity for single family dwellings increased only marginally, a government report showed on Wednesday. Analysts polled by Reuters had expected housing starts to rise to 580,000 units. However, the percentage increase last month was the largest since May, indicating housing remained on a steady recovery path October's housing starts were revised downwards to 527,000 units from the previously reported 529,000 units. Compared to the same period a year-ago, housing starts were down 12.4 percent, but way off the 54.9 percent decline seen in January. Applications for new building permits were also up, rising 6 percent to an annual rate of 584,000 units, a stronger showing than economists predicted.
Above Post Written by: Chris Mclaughlin with Short Sale Riches.com
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