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The Obama Administration’s Efforts To Stabilize The Housing Market and Help American Homeowners September 2010 U.S. Department of Housing and Urban Urban Development | U.S. Department of theand Research U.S Department of Housing and Development | Office of Policy Development 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. modiﬁcations under HOPE Now. The number of agreements offered continued to more than double foreclosure completions for the same period (1.24 million). • More than 468,000 permanent modifications granted to homeowners; more than 33,000 homeowners received a HAMP permanent modification in August: Homeowners in permanent HAMP modiﬁcations saw a median monthly payment reduction of 36 percent, or more than $500 per month. Homeowners in permanent modiﬁcations saw their median ﬁrst-lien housing expenses fall from nearly 45 percent of their monthly household income to 31 percent. Homeowners in active permanent modiﬁcations realized a median monthly payment reduction of 36%, or more than $500 per month. More than 1.3 million homeowners began a trial modiﬁcation, up more than 26,000 from last month. • Backlog of HAMP trial modifications aged six months or longer falls to fewer than 95,000: Of homeowners whose trial modiﬁcation was canceled, more than half received alternative modiﬁcations or become current. Upfront documentation requirements in place since June 1 are expected to help servicers move more eligible homeowners toward permanent modiﬁcation. View the latest Making Home Affordable program report at: http://www.ﬁnancialstability. gov/docs/AugustMHAPublic2010.pdf September 2010 Scorecard on Administration’s Comprehensive Housing Initiative The President’s housing market recovery efforts began immediately after taking ofﬁce in February 2009. The September 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. • Existing and new home sales shifted downward in July, though stabilizing housing prices drove improving expectations in some regions: The latest housing ﬁgures paint a mixed picture. As expected with the expiration of the Homebuyer Tax Credit, new and existing home sales showed a dip in July. At the same time, home prices have leveled off in the past year after 30 straight months of decline and homeowners added $95 billion in home equity in the second quarter. • More than twice as many modification arrangements have begun compared to foreclosure completions: More than 3.35 million modiﬁcation arrangements were started between April 2009 and the end of July 2010. These included more than 1.3 million trial Home Affordable Modiﬁcation Program (HAMP) modiﬁcation starts, more than 510,000 Federal Housing Administration (FHA) loss mitigation and early delinquency interventions, and nearly 1.6 million proprietary Data in the scorecard show that the recovery in the housing market continues to remain fragile, with some measures suggesting recovery will take place over time. For example, foreclosure completions continue to move upward as the volume of serious delinquencies continues to work through the pipeline. The impact of recent new and expanded resources is expected to contribute to progress captured in future Housing Scorecards. For example, in July the Federal Housing Administration (FHA) announced a short reﬁnance option targeted to help people who owe more on their mortgage than their home is worth because their local markets saw large declines in home values. The option will allow certain underwater non-FHA borrowers – those current on their existing mortgage and whose lenders agree to write off at least 10 percent of the unpaid principal balance of the ﬁrst mortgage – the opportunity to qualify for a new FHA-insured mortgage. 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'%($,'&* '.)5 $+2 )6 '+ B4 '.)* & + ''$'26 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 | September 2010 Homeowners Save From Reduced Mortgage Payments Home Equity Up More than $1 Trillion Since First Quarter 2009 '+ (# " *$ '%# 14 #2 )"#0 !'$* '# #$$ $ " 14 "#2 97 8= 8; 8< 89 87 87 ? = < ; 9 7 7 977@ ; 9787 8 # %# "$ ' "'% "$ *$# "# %# # '"#. - "#'"*- " - / $ >- '"# $*/ '". " #"( "/ " 8- 977@/ Housing Counselors Serve Millions of Families FHA Supports Mortgage Lending During Crisis # " '"$"* 9787 9 ''%( '## '# "$ "%# * * 1"$2 :< ;-<77 :7 ;-777 9< :-<77 97 :-777 8< 9-<77 87 9-777 < 8-<77 7 " 8- 977@ 1'##2 8-777 <77 '"# '"#. / $ ?- '"# $*/ 7 977@ 9 '". / 977@ : 977@ ; 9787 8 9787 9 U.S Department of Housing and Urban Development U.S. Department of the Treasury U.S Department of Housing and Urban Development U.S. Department of the Treasury U.S Department of Housing and Urban Development U.S. Department of the Treasury U.S. Department orts To Stabilize Th Development | Office of Policy Development and Research The Obama Administration’s Effof Housing and Urbane Housing Market and Help American Homeowners | September 2010 HOUSING ASSISTANCE AND STABILIZATION PERFORMANCE METRICS Indicator Distressed Homeowners Assisted (thousands) HAMP Trial Modiﬁcations HAMP Permanent Modiﬁcations FHA Loss Mitigation Interventions HOPE Now Modiﬁcations Counseled Borrowers (thousands) Borrower Annual Savings ($ 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 26.6 33.3 39.2 120.4 24.6 36.7 56.1 120.8 1,334.1 468.1 511.8 1,559.8 August-10 August-10 August-10 July-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 4.37 Last Period 4.35 Year Ago 5.04 As of Dec 2008 5.1 Latest Release 16-Sep-10 Housing Affordability (index) 161.8 159.5 158.4 166.3 July-10 Home Prices (indices) Case Shiller (NSA) FHFA (SA) 148.0 195.2 146.5 195.7 142.0 198.6 150.5 198.9 June-10 June-10 Home Sales (thousands, SA) New Existing First Time Buyers 23.0 319.2 160.8 (p) 26.3 438.3 218.4 34.0 428.3 217.3 31.4 395.0 174.8 July-10 July-10 July-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) 3,984 12.5 210 9.1 3,743 3,887 8.9 210 8.0 3,628 4,062 9.5 270 7.9 3,501 3,700 9.4 353 11.2 3,508 July-10 July-10 July-10 July-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 48.4 (p) 70.8 (p) 53.1 (p) 37.2 (r) 65.3 (r) 43.7 (r) 57.7 101.1 81.1 62.9 72.7 56.2 August-10 August-10 August-10 Mortgage Delinquency Rates (percent) Prime Subprime FHA 5.2 36.2 12.4 5.4 36.4 (r) 12.5 5.6 35.2 14.7 4.4 34.1 14.3 August-10 August-10 August-10 1,782.3 1,960.6 558.0 1,832.8 (r) 1,963.8 (r) 559.6 1,645.1 1,879.3 453.0 912.8 1,642.1 333.1 August-10 August-10 August-10 -- 2nd Q 10 121.5 103.0 78.9 August-10 August-10 August-10 Seriously Delinquent Mortgages (thousands) Prime Subprime FHA Underwater Borrowers (thousands) Foreclosure Actions (thousands) Foreclosure Starts Notice of Foreclosure Sale Foreclosure Completions 10,971.2 11,276.9 96.5 147.0 95.4 97.1 135.2 92.9 10,155.6 (a) 138.2 144.1 76.1 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. Department orts To Stabilize Th Development | Office of Policy Development and Research The Obama Administration’s Effof Housing and Urbane Housing Market and Help American Homeowners | September 2010 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 Foreclosure Starts Notice of Foreclosure Sale Foreclosure Completions Monthy Monthy Monthy Realty Trac Realty Trac Realty Trac Notice of default plus lis pendens. Notice of sale (auctions). Real Estate Owned (REO). U.S Department of Housing and Urban Development U.S. Department of the Treasury U.S. Department orts To Stabilize Th Development | Office of Policy Development and Research The Obama Administration’s Effof Housing and Urbane Housing Market and Help American Homeowners | September 2010 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 (SA) as reported monthly. Futures index ﬁgures report forward expectations of the level of the S&P/Cash 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. 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. 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. Department orts To Stabilize Th Development | Office of Policy Development and Research The Obama Administration’s Effof Housing and Urbane Housing Market and Help American Homeowners | September 2010 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. ###