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The Obama Administration’s Efforts To Stabilize The Housing Market and Help American Homeowners October 2010 U.S. Department of Housing and Urban Development | Office of Policy Development Research U.S Department of Housing and Urban Development | U.S. Department of the and Treasury The Administration’s goal is to promote stability for both the housing market and homeowners. To meet these objectives in the context of a very challenging market, the Administration developed a broad approach implementing state and local housing agency initiatives, tax credits for homebuyers, neighborhood stabilization and community development programs, mortgage modifications and refinancing, continued Federal Housing Administration (FHA) engagement, and support for Fannie Mae and Freddie Mac. In addition, Federal Reserve and Treasury MBS purchase programs have helped to keep mortgage interest rates at record lows over the past year. More detail on the Administration’s efforts can be found in the Appendix. October 2010 Scorecard on Administration’s Comprehensive Housing Initiative The President’s housing market recovery efforts began immediately after taking office in February 2009. The October 2010 housing scorecard includes the following key indicators of market health and results of the Administration’s comprehensive response, as outlined above: • Families continued to benefit from the lowest rates in history on 30-year fixed mortgages. Since April of 2009, record low rates have helped more than 7.1 million homeowners to refinance, resulting in more stable home prices and $12.7 billion in total borrower savings. • As expected with the expiration of the Homebuyer Tax Credit, new and existing home sales remained below levels seen in the first half of 2010. At the same time, home prices remained level in the past year after 33 straight months of decline and homeowners added $95 billion in home equity in the second quarter. • More than 3.52 million modification arrangements were started between April 2009 and the end of August 2010 —nearly triple the number of foreclosure completions during that time. These included more than 1.3 million trial Home Affordable Modification Program (HAMP) modification starts, more than 510,000 Federal Housing Administration (FHA) loss mitigation and early delinquency interventions, and more than 1.6 million proprietary modifications under HOPE Now. While some homeowners may have received help from more than one program, the number of agreements offered nearly tripled foreclosure completions for the same period (1.3 million). • At nine months, almost 90 percent of homeowners remain in their permanent HAMP modification, with 11 percent defaulted. Early data indicate that HAMP permanent modifications are performing well over time, with lower delinquency rates than those reported by the industry at large. At nine months, less than 16 percent of permanent modifications are 60+ days delinquent. To view the September HAMP Servicer Performance Report, visit: http://www.financialstability.gov/ docs/Sept%20MHA%20Public%202010.pdf Data in the scorecard also show that the recovery in the housing market continues to remain fragile, for example, foreclosure completions continue to move upward and a large supply of homes are being held off the market. While the recovery will take place over time, the Administration remains committed to its efforts to prevent avoidable foreclosures and stabilize the housing market. The impact of recent new and expanded resources is expected to contribute to progress captured in future Housing Scorecards. For example, in July the Federal Housing Administration (FHA) announced a short refinance option targeted to help people who owe more on their mortgage than their home is worth because their local markets saw large declines in home values. The option will allow certain underwater non-FHA borrowers – those current on their existing mortgage and whose lenders agree to write off at least 10 percent of the unpaid principal balance of the first mortgage – the opportunity to qualify for a new FHA-insured mortgage. The Obama Administration’s Efforts To Stabilize The Housing Market and Help American Homeowners | October 2010 Expectations On House Prices Have Shifted Up From 2009 House Prices Show Signs Of Stabilizing Existing Homes On The Market Below Peak, But Number Of Units Held Off The Market Has Increased Existing And New Home Sales U.S Department of Housing and Urban Development U.S. Department of the Treasury U.S Department of Housing and Urban Development U.S. Department of the Treasury The Obama Administration’s Efforts To Stabilize The Housing Market and Help American Homeowners | October 2010 Mortgage Rates Fall To Record Low And Affordability Index Remains High 7.1 Million Homeowners Have Refinanced Since April 1, 2009 Foreclosure Starts And Completions Remain Elevated Mortgage Aid Has Been Extended More Than 3 Million Times, Outpacing Foreclosures U.S Department of Housing and Urban Development U.S. Department of the Treasury U.S Department of Housing and Urban Development U.S. Department of the Treasury The Obama Administration’s Efforts To Stabilize The Housing Market and Help American Homeowners | October 2010 Homeowners Save From Reduced Mortgage Payments Home Equity Up More Than $1 Trillion Since First Quarter 2009 FHA Supports Mortgage Lending During Crisis Housing Counselors Serve Millions Of Families U.S Department of Housing and Urban Development U.S. Department of the Treasury U.S Department of Housing and Urban Development U.S. Department of the Treasury U.S Department of Housing and Urban Development U.S. Department of the Treasury U.S. DepartmentEff oforts Housing and Urban | Officeand of Policy and Research | October 2010 The Obama Administration’s To Stabilize ThDevelopment e Housing Market HelpDevelopment American Homeowners HOUSING ASSISTANCE AND STABILIZATION PERFORMANCE METRICS Indicator Distressed Homeowners Assisted (thousands) HAMP Trial Modifications HAMP Permanent Modifications FHA Loss Mitigation Interventions HOPE Now Modifications Counseled Borrowers (thousands) Borrower Annual Savings ($ millions) HAMP Trial Modifications HAMP Permanent Modifications All Refinances Activities Completed Under NSP (housing units) New Construction or Residential Rehab Demolition or Clearance Direct Homeownership Assistance Change in Aggregate Home Equity ($ billions) This Period Last Period Cumulative From Apr 1, 2009 Latest Release 35.3 27.8 56.4 115.8 26.6 33.3 39.2 120.4 1,369.4 495.9 568.1 1,675.6 September-10 September-10 September-10 August-10 713.5 839.4 4,272 2nd Q 10 ---- ---- 2,313.3 2,407.5 12,737.3 2nd Q 10 2nd Q 10 2nd Q 10 3,033 1,041 1,147 2,537 667 1,094 95.4 201.1 9,249 [36,292] (b) 2nd Q 10 2,987 [8,252] (b) 2nd Q 10 3,768 [18,000] (b) 2nd Q 10 1,020.3 2nd Q 10 HOUSING MARKET FACT SHEET Indicator Mortgage Rates (30-Yr FRM, percent) This Period 4.21 Last Period 4.19 Year Ago 5.00 As of Dec 2008 5.10 Latest Release 21-Oct-10 Housing Affordability (index) 168.3 162.2 161.9 166.3 August-10 Home Prices (indices) Case Shiller (NSA) FHFA (SA) 148.9 192.4 148.0 193.4 144.3 198.9 150.5 198.9 July-10 July-10 Home Sales (thousands, SA) New Existing First Time Buyers 24.0 344.2 173.0 (p) 24.0 320.0 161.7 33.8 425.0 215.6 31.4 395.0 174.8 August-10 August-10 August-10 Housing Supply Existing Homes for Sale (thousands, NSA) Existing Homes - Months’ Supply (months) New Homes for Sale (thousands, SA) New Homes for Sale - Months’ Supply (months,SA) Vacant Units Held Off Market (thousands) 3,982 11.6 206 8.6 3,743 4,007 12.5 209 8.7 3,628 3,924 9.2 262 7.8 3,501 3,700 9.4 353 11.2 3,508 August-10 August-10 August-10 August-10 2nd Q 10 1,132.7 925.0 1,050.9 614.7 1,941.0 992.4 (r) 767.2 986.4 2nd Q 10 2nd Q 10 Mortgage Originations (thousands) Refinance Originations Purchase Originations FHA Originations (thousands) Refinance Originations Purchase Originations Purchases by First Time Buyers 47.4 (p) 63.5 (p) 44.5 (p) 51.7 (r) 67.2 (r) 44.9 (r) Mortgage Delinquency Rates (percent) Prime Subprime FHA 5.2 36.4 12.4 Seriously Delinquent Mortgages (thousands) Prime Subprime FHA Underwater Borrowers (thousands) Foreclosure Actions (thousands) Notice of Default (Foreclosure Starts) Notice of Foreclosure Sale Foreclosure Completions Short Sales 60.6 103.4 84.6 62.9 72.7 56.2 September-10 September-10 September-10 5.2 36.2 12.5 5.8 36.3 14.7 4.4 34.1 14.3 September-10 September-10 August-10 1747.0 1974.9 558.0 1,782.3 1,960.6 559.6 1760.7 1964.6 453.0 912.8 1,642.1 333.1 September-10 September-10 August-10 10,971.2 11,276.9 102.4 142.9 102.1 18.7 (p) 96.5 147.0 95.4 29.1 10,155.6 (a) 122.2 133.7 87.8 22.9 -121.5 103.0 78.9 13.8 2nd Q 10 September-10 September-10 September-10 July-10 SA = seasonally adjusted, NSA = not SA, p = preliminary, a = adjusted for methodology change, r = revised, b = brackets include units in process. U.S Department of Housing and Urban Development U.S. Department of the Treasury U.S. DepartmentEff oforts Housing and Urban | Officeand of Policy and Research | October 2010 The Obama Administration’s To Stabilize ThDevelopment e Housing Market HelpDevelopment American Homeowners A. Items in Tables SOURCES AND METHODOLOGY Description Frequency Sources Notes on Methodology Distressed Homeowners Assisted HAMP Trial Modifications HAMP Permanent Modifications FHA Loss Mitigation Interventions HOPE Now Modifications Monthy Monthy Monthy Monthy Treasury Treasury HUD Hope Now Alliance As reported. As reported. All FHA loss mitigation and early delinquency interventions. All proprietary modifications completed. Counseled Borrowers (thousands) Quarterly HUD Housing counseling activity reported by all HUD-approved housing counselors. Borrower Annual Savings HAMP Trial Modifications Quarterly HUD, Treasury, and Freddie Mac HAMP Permanent Modifications Quarterly HUD and Treasury All Refinances Quarterly HUD, and MBA HUD estimate of annualized savings based on Treasury reported active HAMP trial modifications and Freddie Mac monthly savings estimates. HUD estimate of annualized savings based on Treasury reported active HAMP permanent modifications and median monthly savings estimates. Refinance originations (see below) multiplied by HUD estimate of annualized savings per refinance. Quarterly HUD Demolition or Clearance Quarterly HUD Direct Homeownership Assistance Quarterly HUD Change in Aggregate Home Equity Quarterly Federal Reserve Board Difference in aggregate household owners’ equity in real estate as reported in the Federal Reserve Board’s Flow of Funds Accounts of the United States for stated time period. Mortgage Rates (30-Yr FRM) Weekly Freddie Mac Primary Mortgage Market Survey, as reported for 30-Year fixed rate mortgages (FRM). Housing Affordability Monthly National Association of Realtors ® NAR’s composite housing affordability index as reported. A value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify. Home Prices Case-Shiller (NSA) Monthy Standard and Poor’s Monthy Federal Housing Finance Agency Monthy HUD and Census Bureau Completed Activities Under NSP (housing units) New Construction or Residential Rehab FHFA (SA) Home Sales (SA) New Existing Monthy First Time Buyers Monthy Housing units constructed/rehabilitated using Neighborhood Stabilization Program. Bracketed numbers include units in process, to be completed by 3/2013. Housing units demolished/cleared using Neighborhood Stabilization Program. Bracketed numbers as above. Completed downpayment assistance or non-amortizing second mortgages by grantee to make purchase of NSP unit affordable. Bracketed numbers as above. Case-Shiller 20-metro composite index, January 2000 = 100. Standard and Poor’s recommends use of not seasonally adjusted index when making monthly comparisons. FHFA monthly (purchase-only) index for US, January 1991 = 100. Seasonally adjusted annual rates divided by 12. A newly constructed house is considered sold when either a sales contract has been signed or a deposit accepted, even if this occurs before construction has actually started. National Association of Realtors ® Seasonally adjusted annual rates divided by 12. Existing-home sales, which include singlefamily, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Sum of seasonally adjusted new and existing home sales (above) multiplied by National NAR, Census Bureau, and HUD Association of Realtors ® annual estimate of first time buyer share of existing home sales. Housing Supply Existing Homes for Sale (NSA) Existing Homes - Months’ Supply New Homes for Sale (SA) New Homes for Sale - Months’ Supply (SA) Vacant Units Held Off Market Monthly Monthly Monthly Monthly Quarterly National Association of Realtors ® National Association of Realtors ® HUD and Census Bureau HUD and Census Bureau Census Bureau As reported. As reported. As reported. As reported. As reported. Mortgage Originations Refinance Originations Quarterly Purchase Originations Quarterly Mortgage Bankers Association and HUD Mortgage Bankers Association and HUD HUD estimate of refinance originations based on MBA estimate of dollar volume of refiance originations. HUD estimate of home purchase originations based on MBA estimate of dollar volume of home purchase originations. FHA Originations Refinance Originations Purchase Originations Purchases by First Time Buyers Monthy Monthy Monthy HUD HUD HUD FHA originations reported as of date of loan closing. Estimate for current month scaled upward due to normal reporting lag and shown as preliminary. Mortgage Delinquency Rates (NSA) Prime Subprime FHA Monthy Monthy Monthy LPS-McDash Analytics LPS-McDash Analytics HUD Total mortgages past due (30+ days) but not in foreclosure, divided by mortgages actively serviced. Total mortgages past due (30+ days) but not in foreclosure, divided by mortgages actively serviced. Total FHA mortgages past due (30+ days) but not in foreclosure, divided by FHA’s insurance in force. Seriously Delinquent Mortgages Prime Subprime FHA Monthly Monthly Monthly LPS-McDash, MBA, and HUD LPS-McDash, MBA, and HUD HUD Mortgages 90+ days delinquent or in foreclosure, scaled up to market. Mortgages 90+ days delinquent or in foreclosure, scaled up to market. Mortgages 90+ days delinquent or in foreclosure. Underwater Borrowers Quarterly First American CoreLogic As reported. Due to change in reporting methodology, underwater borrower estimates prior to the third quarter of 2009 are adjusted to be compatible with current estimates. Foreclosure Actions Notice of Default (Foreclosure Starts) Monthly Realty Trac Monthly Monthly Monthly Realty Trac Realty Trac Core Logic Reported counts of notice of default plus lis pendens. Some foreclosure starts may be omitted in states where the filing of a notice of default is optional. Notice of sale (auctions). Real Estate Owned (REO). Count of Short Sales for the month as reported. Notice of Foreclosure Sale Foreclosure Completions Short sales U.S Department of Housing and Urban Development U.S. Department of the Treasury U.S. DepartmentEff oforts Housing and Urban | Officeand of Policy and Research | October 2010 The Obama Administration’s To Stabilize ThDevelopment e Housing Market HelpDevelopment American Homeowners SOURCES AND METHODOLOGY B. Notes on Charts. 1. Monthly house price trends shown as changes in respective house price indices applied to a common base price set equal to the median price of an existing home sold in January 2003 as reported by the National Association of Realtors. Indices shown: S&P/Case Shiller 20-metro composite index (NSA), January 2000 = 100, and FHFA monthly (purchase-only) index for US (SA), January 1991 = 100. 2. S&P/Case-Shiller 20 metro composite index (NSA) as reported monthly. Futures index figures report forward expectations of the level of the S&P/Case Shiller index as of the date indicated, estimated from prices of futures contracts reported by Radar Logic. 3. Reported seasonally adjusted annual rates for new and existing home sales divided by 12. 4. HUD estimate of refinance originations based on MBA estimate of dollar volume of refinance originations. 5. Cumulative HAMP modifications started, FHA loss mitigation and early delinquency interventions, plus proprietary modifications completed as reported by Hope Now Alliance. Some homeowners may be counted in more than one category. Foreclosure completions are properties entering Real Estate Owned (REO) as reported by Realty Trac. 6. Foreclosure starts include notice of default and lis pendens, completions are properties entering REO. Both as reported by Realty Trac. See “Foreclosure Actions” above. 7. See “Borrower Annual Savings” above. 8. FHA market shares as FHA purchase and refinance originations divided by HUD estimates of purchase and refinance mortgage originations as noted in “Mortgage Originations” above. U.S Department of Housing and Urban Development U.S. Department of the Treasury U.S. DepartmentEff oforts Housing and Urban | Officeand of Policy and Research | October 2010 The Obama Administration’s To Stabilize ThDevelopment e Housing Market HelpDevelopment American Homeowners Appendix The Administration has taken a broad set of actions to stabilize the housing market and help American homeowners. A year ago, stress in the financial system had severely reduced the supply of mortgage credit, limiting the ability of Americans to buy homes or refinance mortgages. Millions of responsible families who had made their monthly payments and had fulfilled their obligations saw their property values fall. They also found themselves unable to refinance at lower mortgage rates. In February 2009, less than one month after taking office, President Obama announced the Homeowner Affordability and Stability Plan. As part of this plan and through other housing initiatives, the Administration has taken the following actions to strengthen the housing market: • Supported Fannie Mae and Freddie Mac to ensure continued access to affordable mortgage credit; • The Federal Reserve and the U.S. Treasury purchased more than $1.4 trillion in agency mortgage backed securities through independent MBS purchase programs, helping to keep mortgage rates at historic lows; • Launched a modification initiative to help homeowners reduce mortgage payments to affordable levels and to prevent avoidable foreclosures; • Launched a $23.5 billion Housing Finance Agencies Initiative to increase sustainable homeownership and rental resources; • Supported the First Time Homebuyer Tax Credit, which has helped 2.5 million American families purchase homes; • Provided more than $5 billion in support for affordable rental housing through low income housing tax credit programs and $6.92 billion in support for the Neighborhood Stabilization Program to restore neighborhoods hardest hit by the concentrated foreclosures; • Created the $4.1 billion HFA Hardest Hit Fund for innovative foreclosure prevention programs in the nation’s hardest hit housing markets. • Supported home purchase and refinance activity through the FHA to provide access to affordable mortgage capital and help homeowners prevent foreclosures. ###