Housing Scorecard: Homeowner Equity Position Much Improved

The Departmentsrnof Treasury and Housing and Urban Development released the August version of theirrnmonthly Housing Scorecard this afternoon. The Scorecard is a summary of housingrndata from various sources such as the S&P/Case-Shiller house price indices,rnthe National Association of Realtors® existing home sales report, Census data,rnand RealtyTrac foreclosure information. rnMost of the information has already been covered by MND.  </p

According to thernscorecard homeowner equity has risen to its highest level since the thirdrnquarter of 2008 and 1.3 million borrowers have been lifted above water, largelyrndue to rising home prices.  Equity jumpedrn$406 billion or 5.9 percent to $7,275 billion in the second quarter of 2012.  Combined with a sharp increase in the firstrnquarter, equity has risen $863 billion or 13.5 percent so far this year and thernnumber of underwater borrowers has declined by 11 percent to 10.8 million.  </p

The Scorecardrnincludes by reference the monthly report on the Home Affordable ModificationrnProgram (HAMP).  The current reportrncovers information through August.  </p

More than onernmillion homeowners have received permanent modifications through HAMP since thernprogram began in the spring of 2009 and the number of borrowers who havernstarted trial modifications is nearing two million and distressed borrowersrncontinue to enter the program.  Since thernlast HAMP report there have been 14,582 new trials started for a total ofrn1,912,439.  In the last month 16,509rntrials have been converted to permanent status for a cumulative total ofrn1,076,747.  There are 831,661 borrowersrnwho still have active modifications; the remainder have either redefaulted,rnbeen cancelled for other reasons, or have paid off their loans,</p

A number ofrnother programs are active under the HAMP brand and have experienced activityrnover the last month.</p

The 2MP programrnworks to modify second mortgages.  Thesernhad previously presented a significant obstacle to the success of HAMP.  During the month the program either modifiedrnor extinguished 3,863 second liens and to date have done so for 93,865 homeowners.</p

The HomernAffordable Foreclosure Alternatives (HAFA) Program offers incentives forrnhomeowners to exit homeownership through a short sale or a deed-in-lieu ofrnforeclosure.  In 20 percent of HAFArnagreements the homeowner had started a HAMP trial but was either disqualifiedrnor later requested a HAFA agreement. rnDuring the report month, 10,831 borrowers completed a HAFA agreement,rnthe majority of them short sales.  Sincernthe program began there have been 71,403 HAFA resolutions, 69,615 of them shortrnsales.</p

The Treasury’srnMHA Unemployment Program (UP provides temporary forbearance to homeowners whornare unemployed.  Borrowers must bernconsidered for a minimum of 12 months forbearance.  The program served 871 homeowners during thernmonth and a total of 26,197 since it was implemented.</p

The performancernof servicers participating in the program has improved in a number of respectsrnafter what is generally considered to have been an inauspicious beginning.  Revisions made to both borrower requirementsrnand servicer standards in June 2010 have resulted in most servicers nowrnresponding to borrower requests, implementing trials, resolving problems, andrnconverting trials to permanent status in a timely manner.  Here are details provided by HAMP for some ofrnthese metrics.  </p

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