Housing Scorecard: Homeowner Equity up $3.4 Trillion

The Obama Administration’s January HousingrnScorecard, issued jointly by the Departments of Treasury and Housing and UrbanrnDevelopment (HUD) notes that foreclosure starts in 2013 were at their lowestrnlevels since 2005 and rising prices were sufficient to raise homeowner equityrnby an aggregate of $3.4 trillion in 2012 and 2013.  </p

“The January Housing Scorecard showsrnthat the Obama Administration’s efforts continue to have a positive effect onrnthe housing market,” said HUD Deputy Assistant Secretary for Economic AffairsrnKurt Usowski. “In 2013, the number of U.S. properties which started thernforeclosure process was down 33 percent from 2012, while sales of previouslyrnowned homes rose by 9.1 percent. With foreclosures down, home sales up, andrnequity continuing to grow, the housing market continues to make slow, butrnsteadily improving progress.”</p

The Housing Scorecard is arncompilation of the most recent industry information on home sales, distressedrnproperties, mortgage originations, construction statistics, and other datarngathered from sources such as the National Associations of Realtors® and HomernBuilders, S&P Case Shiller, CoreLogic, and the Census Bureau.  Most of the information has previously beenrnreported by MND.</p

Included in the scorecard byrnreference is the monthly report of the Making Home Affordable (MHA) Program andrnits half-dozen subsidiary programs including the Home Affordable ModificationrnProgram (HAMP), the Home Affordable Foreclosure Alternatives Program (HAFA),rnand the Second Lien Modification Program (2MP),  </p

The newest MHA report containsrninformation for December and spotlights the HAFA program.  This offers homeowners an opportunity to exitrnhomeownership though means alternative to foreclosure – most commonly a shortrnsale when lenders agree to accept the proceeds of the home sale as payment inrnfull of the mortgage debt even if the amount falls short of that debt.  Deeds-in-lieu of foreclosure are alsornexpedited through the program.  </p

HAFA allows borrowers to follow arnstreamlined process to obtain relief.  Itrnrequires no verification of income (although it is mandated by some investors)rnand allows for pre-approved short sale terms. rnBorrowers receive a waiver of deficiency upon completion of therntransaction and at least $3,000 in relocation assistance. </p

MHA reports that more than 258,000rnhomeowners have completed the program.  Ofrnthe total 111,484 homeowners had mortgages through Fannie Mae or Freddie Macrn(the GSEs) and of those HAFA transactions 96,807 were short sales and 14,577rnwere deeds-in-lieu.  Of the 146,960 non-GSErntransactions there were 142,426 short sales and 4,534 deeds-in-lieu.  Of the non-GSE loans 40,495 were held in bankrnportfolios.  Since the previous MHArnreport there were nearly 11,000 HAFA transactions completed.</p

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The HAFA program has granted anrnestimated $20.3 billion in debt relief since the program started.  The median relief granted has been $129,324rnor 48 percent on a median mortgage with an unpaid principal balance of $285,032.</p

HAMP modifications continue with 13,942rntrial modifications initiated in December; a total of 2.152 million since thernprogram started in the spring of 2009.  Arntotal of 1.312 million permanent modifications were begun over that time frame,rn13,544 since the last HAMP report. rnActive permanent modifications number 926,792.  There have been 23,884 loans with permanentrnmodifications that have been paid off and 360,882 were disqualified. </p

MHA says the performance of HAMPrnmodifications continues to improve over time. rnOf modifications initiated in 2009 and seasoned for 24 months, 28.6rnpercent were disqualified while the disqualification rate at 24 months forrnmodifications done in 2011 had dropped to 23.6 percent.  Payment reduction remains the strongestrndriver of sustainability. For example, at 24 months only 15.9 percent wherernpayments had been modified by 50 percent had been disqualified while modificationsrnwith a payment reduction of 20 percent or less had a disqualification rate ofrn41.2 percent.

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