Scorecard Shows Home Price Recovery Ahead of Projections

The Obama Administration’s FebruaryrnHousing Scorecard, just released, harkens back to those not so thrilling daysrnof yesteryear, using data from several sources to contend that the housingrnrecovery is in a lot better shape today than conventional wisdom thought itrnwould be.</p

The Scorecard says its House Price ExpectationsrnChart was updated in February 2013 by replacing market expectations as theyrnexisted in January 2009 with expectations as of December 2011.  Prices of futures purchased on the ChicagornMercantile Exchange for the S&P/Case-Shiller 10-City Composite Index were usedrnto estimate expectations for December 2011 and for the current month.  The market trend as of January 2009 isrnestimated from percentage changes in house price futures based on thernRadarLogic RPX.   </p

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Projections from 2009 andrn2011 show house prices in early 2014 were expected to be at around $140 andrnslightly over $150 respectively.  The actualrnMarch 2014 report on the Case-Shiller 10-City Composit4 is expected to placernprices slightly above $175.  At the samerntime three other major indices, the Case-Shiller 20-City Composite, the FederalrnHousing Finance Agency (FHFA) Purchase Only Index, and CoreLogic’s HousingrnPrice Index all place current prices at indexes of around $200,000.</p

Most of therninformation contained each month in the Scorecard, prepared by the TreasuryrnDepartment, is a summary of data on home sales, delinquencies and foreclosures,rninterest rates, and construction activity, most of which has been reported onrnpreviously by MND.  Included by referencernis a report from the Making Home Affordable Program (MHA) and the handful of initiatives that operate under that umbrellarnincluding the Home Affordable Modification Program (HAMP), Home AffordablernForeclosure Alternatives (HAFA), the second lien modification program (2MP) andrnthe Unemployment program (UP).  The reportrnthis month focused on 2MP.</p

2MPrnprovides modifications and extinguishments on second liens when there has beenrnan eligible first lien modification on the same property.  Since the program started MHA has initiatedrn129,674 2MP modifications and 81,953 of those modifications are currently active.  Since the January report 3,127 second lienrnmodifications have been initiated.</p

Sincerninception 33,672 of the second liens brought to the program have been fullyrnextinguished representing a median value of $60,275.  Second lien modifications including partialrnextinguishments total 10,262 and the median amount of the lien extinguished isrn$9,875.  There have been 10,203rnmodifications disqualified.</p

MHArnsays that homeowners with an active permanent modification under the programrnare saving a median of $152 per month on their second mortgage which bringsrnmedian savings on first and second liens to $784 or 42 percent of the pre-modificationrnpayment.  Where the second mortgage isrnfully extinguished those first and second lien savings rise to a median ofrn$1,047 or 53 percent of the pre-modification total. </p

HAMP, the flagship MHA program, has now initiated 2.17rnmillion trial modifications since the program began in April 2009 andrnhomeowners continue to enter the program; 10,184 did so since the Januaryrnreport.  There are 50,798 modifications in activerntrial status.   </p

The MHA report says that through the end of February thernTreasury department has sponsored 91 outreach events through which 76,000rnhomeowners have had the chance to meet with their mortgage company and Housingrnand Urban Development (HUD) approved housing counselors.  These events have taken place in 57 cities</bwith a total of 31 events in Florida and California and six each in Nevada andrnArizona.</p