March Housing Scorecard Reflects Stagnant Marketplace

The March edition of the Obama Administration’srnHousing Scorecard again remarks on the fragility of the U.S. housing market andrnthe need to continue efforts to help homeowners stay in those homes. </p

The Scorecard, issued jointly by thernDepartments of Treasury and Housing and Urban Development (HUD) is largely arnrecap of data released by other sources such as the Census Bureau, S&PrnCase-Schiller, RealtyTrac and the National Association of Realtors. </p

The fragility is demonstrated by a decline inrnthe numbers of both new and existing houses and home prices and an increase inrnhomes available for sale.  Sales of newrnhomes totaled 20,800 in February compared to 25,100 in January and existingrnhome sales dropped from 450,000 to 406,700. rnThe number of first-time buyers also declined from 237,500 torn213,800.  The inventory of existing homesrnfor sale increased from a 7.5 month supply to 8.6 months and new homes fromrn7.44 months to 8.9 months while the number of vacant units that are not on thernmarket for a variety of reasons increased from 3.56 million to 3.6 million.</p

The delinquency rate for prime mortgages wasrnup one basis point to 4.8 percent but subprime delinquencies declined from 36.2rnpercent to 35.1 percent and FHA mortgages from 12.8 percent to 12.2 percent.  The numbers of “underwater”rnborrowers, those who owe more on their mortgages than the market value of thernhome, increased from 10.78 million to 11.09 million.</p

“There’s no question that this month’s figures show a troublingrndip in home sales and housing prices,” said HUD Assistant SecretaryrnRaphael Bostic. “While we should not ignore the real impact that the ObamarnAdministration’s programs are having for millions of homeowners and borrowers,rnthese statistics clearly show that housing markets across the country continuernto struggle to regain stable footing. We must remain steadfast in our effortsrnto support homeowners and communities in ways to help advance marketrnstabilization and a transition towards health.”</p

The Scorecard also references the monthly report on The Making Home AffordablernProgram (HAMP), a joint HUD/Treasury program to assist distressed homeownersrnstay in their homes.  HAMP is on shakyrnground with a recent vote in the House of Representatives to end the program.  Since the January report HAMP has converted 26,147rntrial modifications to permanent status for a total of 634,000 since thernprogram began and 76,678 of those permanent modifications have been canceled.  29,089 borrowers entered into trialrnmodifications in the most recent month, 1.522 million over the life of thernprogram.  Since HAMP was started in Aprilrn2009 746,203 trial modifications have been cancelled and 142,239 borrowers remainrnin trial status.</p

HAMP is reporting for the first time on the Second Lien ModificationrnProgram (2MP) and the Home Affordable Foreclosure Alternative Program (HAFA) whichrnassists borrowers who opt for a short sale or deed-in-lieu of foreclosure.  Nearly 17,000 homeowners who arernparticipating in a HAMP modification for their first mortgage have alsornreceived assistance through 2MP with a second lien and almost 4,500 homeownersrnhave participated in HAFA which provides up to $3,000 for relocation assistancernwhen a homeowner voluntarily exists the home through a foreclosure alternativernsolution.</p

The Second-Look Compliance Reviews which assess lender decisions on HAMPrnmodifications found reason to disagree with servicer decisions in 4.2 percentrnof the loans reviewed during the fourth quarter of 2010.  This is up from the 3.3 percent labeled asrn”disagrees” during earlier quarters. rnAfter follow-up with the servicer 43 percent of the disagrees wererncleared.  Beginning in April HAMP willrnbegin releasing servicer level reports on these compliance reviews.   </p

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