Foreclosure reviews may take another year

WASHINGTON – Sept. 27, 2011 – A review of about 4.5 million foreclosures from 2009 and 2010 from the nation’s banks could take “another year and more,” said a top fed official.

John Walsh, acting head of the federal Office of the Comptroller of the Currency, said 14 major banks will be reaching out to borrowers who may have been wrongly foreclosed upon and are fixing their foreclosure protocols over the next year.

Last spring, regulators ordered banks to overhaul their foreclosure practices after several problems were uncovered in processing and filing errors. Since then, banks have been working with independent consultants to identify borrowers who may have been wrongly foreclosed upon.

Banks are setting up a single process for consumers who would like to request a review of their case from 2009 and 2010. An outreach campaign, expected to launch in the coming weeks, will include a toll-free number, a joint Web site, and an advertising campaign in an attempt to reach out to affected homeowners.

“We have pursued this matter aggressively because correcting improper practices in foreclosure processing and mortgage servicing is of the utmost importance for the safely and soundness of the banks, for the financial health of home owners, and for recovery in the U.S. housing sector,” Walsh said. “The reputation of the entire industry has suffered.”

Source: www.floridarealtors.org
Source: “Fixing Foreclosure Woes Could Take a Year,” Dow Jones Newswires (Sept. 23, 2011)

Rate on 30-year mortgage stays at record 4.09%

Mortgage Rate Trend Index

A solid majority (62%) of mortgage experts polled this week by Bankrate.com expect even lower fixed mortgage rates over the short term. Only 13% foresee an increase, and the remaining 25% predict no change.

WASHINGTON – Sept. 23, 2011 – Fixed mortgage rates hovered at record lows for a third straight week. They are likely to fall even further now that the Federal Reserve said it would shuffle its holdings to drive down long-term interest rates.

The average rate on the 30-year fixed mortgage was unchanged at 4.09 percent this week, Freddie Mac said Thursday. That’s the lowest rate seen since 1951.

The average rate on the 15-year mortgage ticked down to 3.29 percent. Economists say that’s the lowest rate ever for the loan.

Mortgage rates tend to track the yield on the 10-year Treasury note. One day after the Fed’s announcement, the yield on the 10-year note touched 1.74 percent Thursday. That’s the lowest level since Federal Reserve Bank of St. Louis started keeping daily records in 1962.

In July, the yield on the 10-year note was above 3 percent.

Low mortgage rates have done little to boost home sales. This year is shaping up to be the worst for sales of previously occupied homes since 1997. Few are buying, even though the average rate on the 30-year fixed mortgage has been below 5 percent for all but two weeks this year.

Many Americans are in no position to buy or refinance. High unemployment, scant wage gains and large debt loads have kept them away.

Others can’t qualify. Banks are insisting on higher credit scores and 20 percent down payments for first-time buyers. Some homeowners have too little equity invested in their homes to meet loan requirements.

Most people must also pay extra fees to get the low mortgage rates. Those fees are known as points, with one point equaling 1 percent of the total loan amount.

The average fees for the 30-year FRM held steady at 0.7 point. Fees paid on 15-year fixed loans and both 5-year and one-year adjustable-rate loans were all at 0.6 point.

Once fees are factored in, the average rate on the 30-year loan rises to 4.25 percent, Freddie Mac said.

A drop in mortgage rates could provide some help to the economy if more people could refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend.

But many homeowners with good jobs and stable finances have already refinanced in the past year. The average rate on the 30-year fixed loan fell to 4.17 percent last November, and to 4.15 percent last month. Both were previous lows.

Homeowners typically pay a few thousand dollars in closing costs when they refinance. To refinance again, most experts say rates would need to fall an additional 1-percentage point to make it worthwhile.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.

The average rate on a five-year adjustable-rate mortgage rose to 3.02 percent. That’s higher than last week’s 2.99 percent.

The average rate for the one-year adjustable-rate mortgage increased slightly to 2.82 percent from 2.81 percent, the lowest rate on records going back to 1984.

Source: www.floridarealtors.org
Source: Copyright 2011 The Associated Press, Derek Kravitz (AP Real Estate Writer). All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Consumer confidence rises a bit in Sept.

NEW YORK – Sept. 26, 2011 – The Conference Board Consumer Confidence Index, which had declined in August, remained essentially unchanged in September. The Index now stands at 45.4, up slightly from 45.2 in August.

The Present Situation Index decreased to 32.5 from 34.3. The Expectations Index, which gauges expectations for the future, edged up to 54.0 from 52.4 last month.

“The pessimism that shrouded consumers last month has spilled over into September,” says Lynn Franco, director of The Conference Board Consumer Research Center. “Consumer expectations, which had plummeted in August, posted a marginal gain. However, consumers expressed greater concern about their expected earnings, a sign that does not bode well for spending. In addition, consumers’ assessment of current conditions declined for the fifth consecutive month, a sign that the economic environment remains weak.”

Consumers’ assessment of current conditions weakened in September. Those claiming business conditions are “good” decreased to 11.7 percent from 14.1 percent, while those claiming business conditions are “bad” remained virtually unchanged at 40.4 percent. Consumers’ appraisal of employment conditions, however, was mixed. Those claiming jobs are “hard to get” increased to 50.0 percent from 48.5 percent, while those stating jobs are “plentiful” increased to 5.5 percent from 4.8 percent.

Consumers’ short-term outlook, which had deteriorated sharply last month, improved slightly in September. Those expecting business conditions to improve over the next six months decreased to 11.3 percent from 11.8 percent, while those expecting business conditions to worsen declined to 22.6 percent from 24.6 percent.

Consumers were also slightly less pessimistic about the outlook for the job market. Those anticipating more jobs in the months ahead edged up to 12.0 percent from 11.8 percent, while those expecting fewer jobs declined to 28.6 percent from 31.2 percent. The proportion of consumers anticipating an increase in their incomes, however, declined to 13.3 percent from 14.3 percent.

Nielsen conducts the monthly Consumer Confidence Survey for The Conference Board. The cutoff date for the preliminary results was September 15th.

Source: © 2011 Florida Realtors®

Fewer homeowners underwater in Q2

SEATTLE – Sept. 13, 2011 – CoreLogic released Q2 negative equity data showing that 10.9 million, or 22.5 percent, of all residential properties with a mortgage had negative home equity at the end of second quarter 2011. However, that’s down slightly from 22.7 percent in the first quarter.

An additional 2.4 million borrowers had less than five percent equity in the second quarter. The new report also shows that nearly three-quarters of homeowners in negative equity situations are also paying higher, above-market interest on their mortgages.

Negative equity, often referred to as “underwater” or “upside down,” means that borrowers owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.

Data highlights

• Nevada had the highest negative equity percentage with 60 percent of all of its mortgaged properties underwater, followed by Arizona (49 percent), Florida (45 percent), Michigan (36 percent) and California (30 percent).

• The negative equity share in the hardest hit states improved. Over the past year, the average negative equity share for the top five states has declined from 41 percent to 38 percent. Nevada had the largest decline over the last year, with the negative equity share dropping from 68 percent to 60 percent, due largely to the high number of foreclosures that removed those underwater mortgages from the equation.

• Nearly 28 million outstanding mortgages that are above-market rates and could refinance to save money.

• Twenty million borrowers with positive equity – 53 percent of all above-water borrowers – have mortgage rates higher than those currently offered.

• Eight million borrowers with negative equity – nearly 75 percent of all underwater borrowers – have above market rates.

• The disparity is greater for homeowners with severe negative equity. More than 40 percent of borrowers with 125 percent or higher loan-to-value (LTV) ratios have mortgages with rates at 6 percent or above compared to only 17 percent for borrowers with positive equity.

• Since the 2005 sales peak, non-distressed sales in zip codes with low negative equity have fallen 61 percent, compared to an 83 percent sales decline in high negative equity zip codes.

“High negative equity is holding back refinancing and sales activity, and is a major impediment to the housing market recovery,” said Mark Fleming, chief economist with CoreLogic. “The hardest hit markets have improved over the last year, primarily as a result of foreclosures. But nationally, the level of mortgage debt remains high relative to home prices.”

Source: © 2011 Florida Realtors®