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Our Homeless Crisis: A timeline of shifting federal philosophies and …

The federal government has been involved in the effort to help poorer Americans stay off the streets for almost a century. But shifts in philosophy and approach — from direct intervention through the construction of public housing projects to rental assistance and grants to local governments — have coincided with shifts in the nation’s homeless population.

Here’s a look at federal efforts over the years, and how the approach has changed over time:


The Great Depression, which left more than 1 million people homeless, prompts the federal government to get into the housing business.

National Housing Act of 1934: This response to the Great Depression created the Federal Housing Administration, Federal Savings Loan Insurance Corp. and gave federal officials the power to make low-interest, long-term loans to local governments for housing construction.

Housing Act of 1937: Provided grants to help local governments build affordable housing. Limited the amount of new housing built by requiring that for each unit created, an older, substandard unit must be razed.


World War II results in a building boom and more direct federal involvement to help house returning veterans.

1940: As part of the buildup to World War II, Congress OK’d creation of 20 public housing complexes near private companies manufacturing military supplies.

Housing Act of 1949: This part of President Harry Truman’s “Fair Deal” authorized federal spending to create 810,000 units of public housing.


Cities and states begin to use urban renewal powers to clear slums, build highways and eliminate “blight.” One result is more economic segregation.


The shift in who builds affordable housing — government or the private sector? — begins. At the same time, federal housing regulators move to stop urban renewal from creating ghettos.

Housing Act of 1965: Created the U.S. Department of Housing and Urban Development, rent subsidies and federal mortgage insurance for nonprofits that built affordable housing.

Fair Housing Act of 1968: Prohibited construction of high-rise public housing complexes, created a federal agency to buy public housing projects and resell them at market rates, subsidized debt service on private development of affordable housing. Part of the Civil Rights Act of 1968, this also prohibited discrimination in the sale or financing of homes.


The move away from government-created public housing continues with the creation of the Section 8 program.

1973: President Nixon declared a moratorium on public housing in favor of a market-based approach. He lifted the ban 18 months later.

Housing and Community Development Act of 1974: Created the Section 8 voucher program, essentially rent assistance for poor Americans, and the Community Development Block Grants, lump sums of money given on a per capita basis to local governments for housing and community development.


President Ronald Reagan cuts public housing money and continues the push for private control over affordable housing.

1983: Congress and the Federal Emergency Management Agency create the Emergency Food and Shelter Program, which pays local providers to give low-income Americans emergency food, shelter and economic help, such as paying utility bills.

Tax Reform Act of 1986: The Reagan administration’s effort to simplify the income tax code also continued the federal government’s efforts to get out of the housing business and emphasize home ownership over rentals by creating new incentives for private development.

Stewart B. McKinney Homeless Assistance Act of 1987: The first major legislation focused solely on homelessness by offering states grants to provide emergency shelter, transitional housing, job training, health care and educational support, among other services. This was the beginning of the push for “wrap around” services for homeless men and women, rather than just shelter.


Under President Clinton, the federal government makes its last big push on public housing and shifts the public-assistance model from welfare to “workfare.”

Cranston-Gonzalez National Affordable Housing Act of 1990: Reiterated government’s commitment to house all Americans, but did not include money to do so.

1992: Faced with the news that America’s public housing stock was rapidly deteriorating, Congress created what would become the Hope VI program, the last major federal public housing program. Hope VI grants could be used to raze old housing projects in favor of newer, less dense communities of public housing. For example, the Housing Authority of Portland used Hope VI money to replace Columbia Villa in North Portland with the New Columbia community.

1996: President Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act – also known as welfare reform. This made it harder for poor Americans to receive government assistance if they could not prove they were looking for work.


More than 300 U.S. cities create 10-year plans to end chronic homelessness, but the recession disrupts the work and creates a new type of homeless population.

2000: Encouraged by successes in Columbus, Ohio, the National Alliance to End Homelessness began championing 10-year plans.

2002: President George Bush re-established the U.S. Interagency Council on Homelessness, first created in the 1980s. The council was an effort to centralize anti-homelessness efforts. Philip Mangano, the first director under Bush, made encouraging and supporting local 10-year plans the centerpiece of the council’s work.

Housing and Economic Recovery Act of 2008: A response to the recession, this act created the National Housing Trust Fund with a goal of building 1.5 million affordable housing units in a decade. Congress has yet to put any money into the fund, although in December 2014 the Federal Housing Finance Agency did order Fannie Mae and Freddie Mac to begin setting aside some funds.

American Recovery and Reinvestment Act of 2009: Another recession response, this contained $1.5 billion for homeless prevention and rapid re-housing. Most of that went to rent assistance and other indirect means of support, not construction of new units.

Helping Families Save their Homes Act of 2009: Still another recession response, this provided more tools for homeowners trying to avoid foreclosure and gave local governments additional flexibility in how they spend federal homeless support money. President Obama called for ending homelessness among veterans by 2015, chronic homelessness by 2016 and youth homelessness by 2020.

Article source:

Massachusetts banks seek to block local foreclosure laws

(Reuters) – Seven Massachusetts banks have asked a federal
judge to stop enforcement of local laws combatting the impact of
home foreclosures, arguing that the state’s highest court has
already ruled such laws invalid.

In a filing on Wednesday, a lawyer for the banks said the
ordinances, passed by the cities of Lynn and Worcester, put
restrictions on the foreclosure process, an area of state
concern, not local.

To read the full story on WestlawNext Practitioner Insights,
click here:

Article source:

Eastern Bank, others seek to put stop to Lynn foreclosure law

0508 foreclosure sign

Bay State foreclosure petitions skyrocketed in March as lenders get tough with delinquent mortgage holders.

Eastern Bank and several other banks pushed a federal court to prevent the city of Lynn from enforcing an ordinance that requires them to engage in mediation with homeowners prior to foreclosure.

The banks, which also include the Country Bank for Savings and Avidia Bank, are seeking a preliminary injunction in their lawsuit against Lynn and the city of Worcester. They argued in a court filing earlier this week that because Massachusetts’ highest court recently ruled against a similar statute in the city of Springfield in another case, the federal court should rule against the Lynn ordinance. The Supreme Judicial Court held that the foreclosure process is traditionally overseen by the state, not municipalities, according to the banks.

The federal court previously granted the banks’ bid to temporarily bar Worcester from enforcing a similar mediation statute, though it rejected the bid as it related to the Lynn statute. The banks contended the court should reconsider its holding in light of the Supreme Judicial Court’s decision. They also asked the court to extend the injunction against the Worcester ordinance.

The banks are also asking the court to stop Worcester and Lynn from enforcing ordinances that require lenders that start foreclosure proceedings to remove hazardous material from the property.

Article source:

Modifying foreclosure rules would benefit consumers

Local News

University of Kentucky vice president Judy Jackson to resign

Article source:

Economy helps with foreclosure drop

Mitchell Area Development Corporation Executive Director Bryan Hisel said there is often a correlation between an improved economy and the decrease figures in foreclosures.

“Clearly the economy helps drive those numbers,” Hisel said. “You look at the metrics and the economic data and you can see that having an improved economy has helped things immensely.”

Mitchell had an unemployment rate around 3 percent for much of 2014, according to figures from the South Dakota Department of Labor and Regulation. There were also record years in taxable sales and gross sales in Mitchell last year, Hisel said.

Despite that, there will always be some cases of foreclosure because of change in economic status or people becoming house poor, where the owners can’t afford the mortgage, the taxes or the costs of maintenance.

“Foreclosure really can be as individual as the person who is involved in it,” Hisel said.

Terry Torgerson, senior vice president at CorTrust Bank in Mitchell on Havens Street, said tighter restrictions on home lending have had a role in decreasing foreclosures.

“It’s much more stringent and as Congress and regulators have tightened things up, the stack of paperwork has gotten taller,” he said. “A lot of that rise we had during the housing crisis was just people getting into homes that were more than what they could afford.”

During the mid- to late-2000s, foreclosures in Davison County reached a recent high. There were 58 foreclosures in the county in 2007.

Another low foreclosure figure is the number of sheriff’s sales. Davison County scheduled just five of the sales last year and two of them were cancelled prior to the scheduled date of sale. In 2013, there were 13 scheduled and nine were eventually cancelled. A common reason for cancelling is sometimes lenders and the homeowners work out an arrangement to refinance the home.

Kathye Fouberg, the Davison County Sheriff Office’s Civil Deputy, said she’s kept records regarding foreclosures for the last 10 years and the change of pace is rare.

“There’s been a massive slowdown,” she said. “That’s really, really out of the ordinary compared to where we’ve been.”

The foreclosure process starts with what is called a lis pendens, or a notice at the start of the foreclosure process. If the homeowners can make enough payments to avoid foreclosure, the process may end with the lis pendens filing. If the owner can’t stop the foreclosure, the sheriff’s office is responsible for auctioning the property is what is called a sheriff’s sale, where anyone can go to the sale and try to outbid the lender. If not, the lender gets the home. Over the next six months to a year, a homeowner still usually has time to redeem the property. Otherwise, a sheriff’s deed is executed and the ownership is transferred to the highest bidder or the lender.

Fouberg said there’s been two sheriff’s sales scheduled so far for 2015.

There’s mixed signals about whether foreclosures will slow down in the next year on a national basis. Earlier this month, the real estate data firm RealtyTrac said the number of properties in foreclosure reached a 15-month high, when 37,292 homes were repossessed nationwide.

Torgerson said changes in regulations have made it more difficult for those in middle income positions to be approved for mortgages.

“You have some of those people who would have previously qualified who are now in the margins and are having a tougher time,” he said. “The shortage of homes for middle income people is certainly a challenge for our community.”

Hisel said the banking institutions in the community are smart and many potential buyers are too but federal one-size-fits-all regulations don’t fit Mitchell. The single-family housing shortage, however, is a difficult one to swallow.

“Homes are either nonexistent or their too expensive,” he said. And frankly, we’re finding that smart couples and people who use common sense are in a trap in some regards in finding a home.”

Article source:

Guarding your nest egg against health-care cracks

Partners need to work together to make, manage and invest their money, or only one outcome is possible: Lose it all.

Article source:

Vet says he’s losing his home because of VA benefits delay

V.A. lost vet’s disability application

Article source:

Duh! Excessive mortgage debt causes high foreclosure rates

High foreclosure rates are caused by many factors, but by far the largest is a high loan-to-value ratio because it limits the borrowers options in default.

Option_ARM_PlagueDefaults are loan disease. There are many causes of the disease, from unemployment to loss of market value, but there is only one symptom that lenders care about — defaults. Patients in good health cure from disease more often than those in poor health. Borrowers with equity cure at better rates than those who are underwater or facing a rental savings enticement, and many who see better futures in different circumstances will walk away from the debts and succumb to the loan disease. In borrower’s terms, the cure for loan disease is delinquency; unfortunately, for excessive lenders borrower delinquency is death.

Curing Default

There are many factors that influence who will cure their loan and who will not, with the borrower’s equity position being among the most important.done_making_payments

When people have equity in their homes, they cure at very high rates because either the loan servicer will modify the loan or force a sale. Delinquent owners generally choose to sell and obtain their equity rather than lose it to foreclosure; therefore, borrowers in default with a low Loan-to-Value (LTV) will cure either by loan modification or open market sale at nearly 100% rates.

As LTVs get higher, percent equity or equity position gets lower; as the equity position gets smaller a number of negative factors work together to lower cure rates quickly:

  • Lenders feel less security extending credit.
  • Loan modifications are more difficult to obtain.
  • Success of loan modifications declines.
  • It becomes more difficult to sell, particularly when equity falls to zero.
  • Absent faith in appreciation, borrowers have little incentive to cure.
  • If savings by renting is significant, borrowers have incentive not to cure.


The combination of these factors means that cure rates fall off to nearly zero as homeowners go underwater. If borrowers fail to cure their loans, lenders chose between allowing the delinquent borrower to squat (living payment free), or the lender must foreclose; therefore, the same factors that cause cure rates to drop cause foreclosure rates to increase.

While it may be common sense that excessive debt causes distressed sales and foreclosure, apparently policymakers are either ignorant to this fact or intentionally ignoring it because recently policymakers have pushed for lax lending standards and low down payment loans. CoreLogic conducted a study to ensure neither policymaker excuse is valid.

Ability-to-Leverage Drives Foreclosure Risk

Despite A Static Homeownership Rate Last Five Decades, Default Risk Exponentially Higher

Sam Khater, February 02, 2015

Leverage is known to play an important role in loan default, but while theoretical research on leverage exists; to our knowledge there has been virtually no long-term data driven empirical analysis on the impact of leverage on residential foreclosure. … This is an especially timely topic given that policy makers have recently attempted to thaw the tight lending environment by reducing the price and expanding the quantity of low down payment real estate credit.

The minimum down payment should be at least 10% to provide a buffer for lenders to greatly reduce risk of loss. If a borrower lost his or her job the day after closing escrow and couldn’t afford to make payments, they would have to put the property on the market and sell.

Since the buyer was the most aggressive bidder on the property, they will need to discount the property to find a new buyer, perhaps 2%. Further, as a seller they will have to pay various closing costs and fees which will cost another 2%. And last but not least, they will have to pay an agent to sell their house, so that’s another 6% gone. If you add those costs up, the total loss will be about 10% of the initial purchase price.

At any down payment level under 10%, owners can’t sell the property if the become financially distressed; if they can’t complete an equity sale, they likely become a foreclosure.

CoreLogic research highlights four key findings.

First, while homeownership rates today are the same level as five decades ago, foreclosure risk is two to three times higher.


Second, the primary driver of default risk over this period has been leverage. Leverage has played such a strong role that has rendered changes in income and savings as insignificant drivers of default from a long-term macro perspective.

Since the beginning of the foreclosure debacle, many have tried to spin the crisis as one of unemployment. I’ve consistently maintained the problem was one of debt, and it’s most debilitating manifestation, Ponzi borrowing. A great many people became dependent upon fresh infusions of debt to supplement their income, a Ponzi scheme. When these borrowers were all cut off at the same time during the 2007 credit crunch, millions of personal Ponzi schemes simultaneously collapsed, and the loss of this demand debilitated our economy and lead to millions of foreclosures.

Third, the stabilization in foreclosure rates in the 1970s and 1980s was driven by high inflation rates, which propelled nominal home prices and reduced aggregate LTV, thus lowering default risk – a reminder of real estate’s role as a hedge against inflation.

yellen_raise_ratesThis is another reason the federal reserve will not raise interest rates in 2015. Inflation is good for borrowers and lowers default risk for lenders when the system is plagued by excessive debt.

Fourth, the centerpiece of government regulations to help make the mortgage market safer for consumers was an income based ability-to-pay rule manages delinquency risk, but is less aimed at the market’s foreclosure risk.

Quite honestly, I have no idea what they are talking about here. The ability-to-repay rules manage delinquency risk by ensuring borrowers have the ability to repay, something lenders didn’t care about during the housing bubble. If borrowers don’t become delinquent, they don’t end up in foreclosure, so it seems to me that managing delinquency risk does manage foreclosure risk.

The Role of Leverage in Default Risk

Given that homeownership rates today are at similar levels as the early 1960s, what has driven the higher foreclosure rates? … The LTV ratio and unemployment rate stood out as the most important variables, with the LTV ratio by far being the most important variable.

This should not be surprising because the higher the LTV, the more the borrower’s options are limited. If they can’t cure, and if they can’t sell, foreclosure becomes a likely outcome.avoiding foreclosure

To illustrate the impact of the home price recovery on foreclosure rates, the model was used to break down how much of the recent decline was due to price increases versus all other variables combined. Between 2011 and 2014, foreclosure rates fell by 1.5 percentage points and the rise in prices has accounted for 1.4 percentage points of the decline. In other words, 91 percent of the drop in the foreclosure rate is due to the drop in leverage via higher home prices. Unemployment and the remaining variables accounted for the small remaining portion of the decline.

This is a classic error of correlation not being causation.

Yes, foreclosures declined significantly from 2011 to 2014, but rising home prices was not the reason — the real reasons foreclosures declined is because lenders changed policies. Prior to 2011, lenders processed foreclosures at a rate greater than the market could absorb, so house prices fell. In 2011, lenders changed their policies and began aggressively modifying loans or allowing borrowers to squat to stop foreclosure and to stop flooding the MLS with supply.

The change in lender policy toward foreclosure was the real cause of the decline in foreclosures, not rising home prices. In fact, the CoreLogic analysis puts the cart in front of the horse: house prices went up because foreclosure went down, not the other way around. The data clearly shows the decline in foreclosures and MLS inventory preceded the bottom of house prices in March 2012, and a cause must precede the effect.no_foreclosure_creepy

Conclusion and Policy Implication

CoreLogic findings illustrate how important leverage has been both historically and in today’s recovery. While leverage is the dominant driver of foreclosure trends, the unemployment rate captures the impact of short-term economic cyclical fluctuations.

This conclusion — backed by hard data — should put to rest the bogus claims that the waves of foreclosures was caused by unemployment.

A less important but still influential factor has been periods of accelerating inflation, which ease the burden of the monthly mortgage payment and masked the rise in leverage via higher nominal home prices. Interestingly, the savings rate and household income were not at all important, which was a surprise given that traditional underwriting focuses on affordability.

It is somewhat surprising that a high savings rate wouldn’t have buffered more borrowers, but it is not surprising at all that income was not a factor because bad loans of all sorts were given to every income bracket. Perhaps this study will definitively establish that it was not a subprime housing bubble, but rather a broad-based financial mania embraced by all income brackets.

Over the next year the continuing improvement in prices should help further reduce leverage, but the renewed emphasis on low down payment lending may in the future beyond 2015 lead to an increase in leverage.

Bankers want to start the party all over again. They need to qualify more borrowers at higher prices to bail out their bad loans from the last bubble, so they lobby for relaxed standards on government-backed loans to take out their bad bubble-era loans. If the new loans go bad in another bout of delinquencies, lenders really don’t care because they won’t feel the pain of the losses — the taxpayer will.


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Irvine Renter
26-02-2015, 06:59

New home sales stall out in January, falling 0.2%

Sales of new single-family houses in January 2015 were at a seasonally adjusted annual rate of 481,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.

This is 0.2% below the revised December rate of 482,000, but is 5.3% above the January 2014 estimate of 457,000, considered a weak level.

The Wednesday report piles onto a series of bad news for the housing industry.

The year is off to a bad start for housing in terms of housing starts, completions and permits. Existing home sales tumbled in January, and mortgage applications have been spiraling downward in February, giving away most of the gains made in January.


Irvine Renter
26-02-2015, 07:01

Case-Shiller: “The housing recovery is faltering”

The National index was slightly negative in December, while both composite Indices were positive. Both the 10- and 20-City Composites reported slight increases of 0.1%, while the National Index posted a -0.1% change for the month. Miami and Denver led all cities in December with increases of 0.7% and 0.5% respectively. Chicago and Cleveland offset those gains by reporting decreases of -0.9% and -0.5% respectively.

“The housing recovery is faltering. While prices and sales of existing homes are close to normal, construction and new home sales remain weak. Before the current business cycle, any time housing starts were at their current level of about one million at annual rates, the economy was in a recession” says David Blitzer, managing director and chairman of the Index Committee at SP Dow Jones Indices. “The softness in housing is despite favorable conditions elsewhere in the economy: strong job growth, a declining unemployment rate, continued low interest rates and positive consumer confidence.

Home prices saw a slight increase in nine cities covered by the SP/Case-Shiller Home Price Indices in December.

Both the 10-City and 20-City Composites saw year-over-year increases in December compared to November.

The 10-City Composite gained 4.3% year-over-year, up from 4.2% in November. The 20-City Composite gained 4.5% year-over-year, compared to a 4.3% increase in November.

The SP/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.6% annual gain in December 2014 versus 4.7% in November.


Irvine Renter
26-02-2015, 07:03

Latest data shows housing economy sluggish

Lindsey Piegza, chief economist at Sterne Agee, says she thinks this shows a housing market that’s flat.

“Coupled with a near 5% decline in existing sales, this morning’s decline in new sales suggests the housing recovery remains muted. Yesterday’s monetary policy testimony revealed a dovish Federal Reserve Chairman,” Piegza said. “Of course, given the slew of disappointing economic news including back-to-back months of negative retail sales, a one-year low on the ISM, and four months of negative durable orders in the last five, not to mention increasing concerns regarding a further decline in inflation and a still-sluggish housing market, and it’s hard to imagine why the Fed wouldn’t sound dovish in their assessment of the economy, as well as hesitant in their ability and willingness to initiate liftoff.

“This morning’s home sales report further confirms the Fed’s assessment of a ‘slow’ recovery in the US housing market and offers yet another reason for an extended timeline for liftoff,” she said.

Rick Sharga, executive vice president at, told HousingWire he sees housing entering a “boring plateau.”

“That’s not a bad thing considering how bad the recession was — there’s a reason it was called the Great Recession,” Sharga said. “We’re entering a period of boring but slow, steady growth.”


el O
26-02-2015, 07:08

There’s a new mortgage crisis brewing

In 2008, the nation entered into a financial crisis widely believed to have been caused by excesses in the residential mortgage industry. By 2010, the nation thought it had put in place a series of measures that not only would resolve the crisis but would insure that it never happened again.

Yet, here we are in 2015 looking at another potential mortgage crisis. Only this time it is different. In 2008, funds flowed in waves into the mortgage industry. In 2015, it appears the funds are drying up.

Savvy commentators, seeing a weakening in housing activity, began opining: “It’s the interest rates” … “It’s the housing prices”

“Millennials and Generation X and Y’ers would rather rent apartments at higher prices than buy houses.”

*Paging the ‘attack the messenger’ deflector squadron… you’re clear for take-off, LOL.


Irvine Renter
26-02-2015, 08:00

I am using his comments in an upcoming post.

It seems to me that if the money to fund mortgages is drying up, then the returns on mortgages must be too low. No amount of regulation will prevent Wall Street from funding a good investment, so if money is lacking in mortgages, then yields must rise — which means mortgage rates must go up.


el O
26-02-2015, 08:14

Yep, and it is homedebtors who carry the roll-over risk, NOT banks. This is the reality that sell-side toadies don’t want to talk about.


Mellow Ruse
26-02-2015, 09:27

In 2008, funds flowed in waves into the mortgage industry.

Can anybody explain this? I was in the mortgage industry in 2008 and I remember the exact opposite happening. In fact, I remember the media referring to a credit crunch so apparently others noticed the same thing.


Irvine Renter
26-02-2015, 08:03

Morgan Stanley pays $2.6 billion in mortgage-bond settlement

Revel in the schadenfreude of bank pain

Morgan Stanley (MS) said it reached an agreement in principle with the United States Department of Justice and the United States Attorney’s Office for the Northern District of California to pay $2.6 billion to resolve certain claims the financial enforcers intended to bring against the investment bank.

A deal was expected to be coming very soon.

“In connection with the resolution of this matter, the Company has, subsequent to the announcement of the Company’s 2014 earnings on January 20, 2015, increased legal reserves for this settlement and other legacy residential mortgage-backed securities matters by approximately $2.8 billion, which increased Other expenses within the Institutional Securities business segment for year ended December 31, 2014,” the filing with the Securities and Exchange Commission said.

“This decreased income from continuing operations by $2.7 billion and diluted EPS from continuing operations by $1.35 for the year ended December 31, 2014″

In July, Morgan Stanley agreed to pay $275 million, after months of fine-tuning the deal, to settle charges brought by the Securities and Exchange Commission over defrauding investors in a pair of residential mortgage-backed securities.


26-02-2015, 09:37

How much ya wanna be that before MS pays the $2.6 billion, the amount gets appealed and negotiated downward?


26-02-2015, 09:51

You can’t appeal an agreement you make, only an unfavorable judgment.


26-02-2015, 09:53

How much of that $2.6 billion will be tax-deductible?


Irvine Renter
26-02-2015, 08:04

Survey: Delinquency, Foreclosure Inventory Rates Fall to Lowest Levels Since 2007

Higher home prices allow more borrowers to cure with equity sale

Both the delinquency rate and the foreclosure inventory rate in Q4 2014 for residential mortgage loans fell to their lowest levels since 2007, according to the Mortgage Bankers Association’s National Delinquency Survey released Wednesday.

The delinquency rate, which includes loans that are at least one payment past due but not loans in foreclosure, fell to a seasonally-adjusted rate of 5.68 percent in Q4 for all mortgage loans outstanding at the end of the quarter, the lowest level since the third quarter of 2007. The delinquency percentage in Q4 represented a decline of 17 basis points from the previous quarter and 71 basis points from the same quarter a year earlier.

The percentage of loans in foreclosure for Q4 also experienced a sharp decline, down to 2.27 percent – the lowest foreclosure inventory rate since the fourth quarter of 2007. The foreclosure inventory rate for Q4 was down 12 basis points from the previous quarter and 59 basis points year-over-year.

The percentage of loans on which the foreclosure process began ticked slightly upward by two basis points quarter-over-quarter in Q4, up to 0.46 percent. This was still a decline of eight basis points year-over-year, however. The serious delinquency rate – percentage of loans either 90 days or more past due or in foreclosure – fell to 4.52 percent, a drop of 12 basis points quarter-over-quarter and 89 basis points year-over-year.

“Delinquency rates and the percentage of loans in foreclosure decreased for another quarter and were at their lowest levels since 2007,” said Marina Walsh, MBA’s Vice President of Industry Analysis. “We are now back to pre-crisis levels for most measures. The foreclosure inventory rate has decreased every quarter since the second quarter of 2012, and is now at the lowest level since the fourth quarter of 2007. Foreclosure starts ticked up two basis points, after being flat last quarter, largely due to state-level fluctuations in the speed of the foreclosure process. Compared to the same quarter last year, foreclosure starts are down eight basis points.”


el O
26-02-2015, 11:04


oh.. and cha-ching


Jessica Sala
26-02-2015, 14:41

Great post. In our area in South Florida, we have many “boomerang” buyers whose were hit when the market crashed, but are now at a place to buy again, BUT we are seeing many have a tought time because of high LTV’s.


Irvine Renter
26-02-2015, 15:05

We haven’t seen many boomerang buyers here. Of course, since the crash was so deep and hurt so many in Florida, I imagine most are boomerang buyers because so many lost their homes in foreclosure.

With the difficulty of the recession and the uncertainty of whether or not an old lender would seek collection, I image most of the buyer pool has little or no savings. The 3% down program with the GSEs may help a little, but people are going to have to have a little discipline to save a down payment in order to buy again.

Thanks for your comment.


Article source:

Freddie Mac’s Mortgage Portfolio Contracts; Serious Delinquency Rate Hits 6 …

Freddie Mac Mortgage Portfolio Serious Delinquent MortgagesFreddie Mac‘s total mortgage portfolio contracted to start 2015 after ending 2014 with hits highest annualized growth rate for a single month in five years while the serious delinquency rate for the Enterprise’s loans fell to a six-year low, according to the Enterprise’s January 2014 Monthly Volume Summary released Thursday.

The mortgage portfolio contracted at an annualized growth rate of 0.8 percent, ending four consecutive months of expansion.  The contraction represented a decline of $1.31 billion, leaving the portfolio’s value at an estimated $1.908 trillion in January. The portfolio has now contracted for 49 out of the last 61 months dating back to January 2010, at the height of the foreclosure wave. In December, Freddie Mac’s mortgage portfolio grew at an annualized rate of 5.7 percent, the largest annualized growth rate for one month since December 2009.

The single-family serious delinquency rate on mortgage loans backed by Freddie Mac continued to decline, from 1.88 percent in December to 1.86 percent in January, its lowest level since January 2009. This is less than half of the national serious delinquency rate, which CoreLogic reported to be at 4.1 percent in its December 2014 National Foreclosure Report.

According to Freddie Mac’s 2014 Financial Results Summary released last week, the Enterprise has helped approximately 1.1 million homeowners avoid foreclosure since January 2009. About 84 percent of those homeowners were able to stay in their homes by means of loan modifications, repayment plans, or forbearance agreements. The remaining 16 percent avoided foreclosure through short sales or deeds-in-lieu of foreclosure transactions, according to Freddie Mac.

“Keeping families in their homes continues to be a top priority for Freddie Mac and we exhaust every workout option to do so,” Freddie Mac wrote on its blog last month. “We have helped more than one million struggling homeowners avoid foreclosure since the crisis.”

The number of homeowners who received permanent loan modifications declined month-over-month in January. The total number of loan mods for the month 4,793, down from the 5,371 loan mods Freddie Mac reported in December, The total of loan modifications completed for the entire year of 2014 was 67,152, or an average of 5,596 per month.

Single-family refinance loan purchase and guarantee volume also decreased month-over-month, totaling $12.4 billion in January – down from $13.1 billion in December. Although the overall volume declined, it made up a larger percentage of total single-family mortgage portfolio loans or purchases in January (57 percent) than in December (56 percent). According to Freddie Mac, 14 percent of the Enterprise’s total single-family refinance volume was comprised of relief refinance mortgages.

Also in January’s Monthly Volume Summary, Freddie Mac reported that the aggregate unpaid principal balance (UPB) of the Enterprise’s mortgage-related investments portfolio declined month-over-month by about $1 billion.

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7 in every 10K homes were in foreclosure in Washington County in January

The most recent report from RealtyTrac shows that approximately 7 in every 10,000 homes were in foreclosure in Washington County in January, a decrease from 12 in every 10,000 one month prior.

Here are other business statistics and economic indicators:

The Zions Bank Utah Consumer Attitude Index decreased 6.9 points to 106.5 in February.

While it has dropped below 110, consumers are still optimistic about the economic situation in Utah. The Utah CAI currently sits 9.8 points higher than its level twelve months ago, and consumer confidence in Utah continues to outpace that of the nation overall.

The national Consumer Confidence Index decreased 7.4 points from January to February and currently sits at 96.4.

The fall in the Utah Consumer Attitude Index results from slightly lower expectations for the next six months.

The Expectations Index, the sub-index of the CAI that reflects how consumers feel about economic conditions six months from now, decreased 10.6 points to 102.7 in February.

Twenty-eight percent of Utahns expect business conditions to be better six months from now, which represents a 9 percent decline from January.

Twenty-six percent of Utahns expect the number of jobs available in six months to be plentiful—a decrease of 7 points from last month—and 31 percent believe their total household income will be higher six months from now.

Despite slightly lower confidence, attitudes in Utah are still higher than attitudes nationally, and Utah continues to outpace neighboring states such as Idaho in job creation and growth.

The Present Situation Index, which measures how consumers feel about current economic conditions, decreased 1.2 points to 112.4 this month. Sentiment about current general business conditions remained fairly constant, increasing one percentage point from January to February. Likewise, the percentage of consumers who think that the availability of jobs is plentiful experienced just a two-point decrease to 36 percent this month.

Utahns expect prices, particularly gasoline prices, to increase. Eighty-one percent of Utahns expect gasoline prices to rise in the next year—the highest percentage since June 2014.

Only 67 percent of Utahns in January expected gasoline prices to rise, which represents a 14-percentage point difference from February.

The average expected gas price increase is 53 cents, while the average expected price decline is 28 cents.

Consumers generally expect prices to rise, but the jump this month likely stems from the upward shift in gasoline prices after six months of sharp decline. Gasoline prices nationally and statewide have risen steadily in February after national prices hit a trough at $2.03 on January 26. Gasoline in Utah is currently $1.95 per gallon on average, whereas the national average price per gallon is $2.31. Sixty percent of Utahns expect the prices of houses in communities like theirs to increase in the next year—a decrease of 2 percentage points from January.

Consumers generally expect inflation to increase.

Sixty-four percent of Utahns expect prices of consumer goods to increase over the next twelve months, up one point from January.

Likewise, 58 percent of Utahns expect interest rates for borrowing money to increase during the next 12 months, which represents an increase of four percentage points from last month.

Thirty-five percent of Utahns expect the U.S. economy to improve in the next year, which reflects no change from January.

Optimism about personal finance is slightly higher in February than it was in January, but just by a few percentage points. Thirty-six percent of Utahns think it is likely they will be able to retire and maintain their living standards, 2 percent more than last month.

Consumers are more optimistic about their personal investments, with 46 percent of Utahns expecting a $1,000 investment in their 401(k) to be worth more than $1,000 one year from now, compared to 43 percent last month. Twenty-eight percent of Utahns say they are likely to purchase a major household item — such as furniture or a refrigerator — in the next 60 days, 4 percent more than in January.

Thirty percent of Utahns expect their household income to increase faster than the rate of inflation, which represents a 3 percent increase from last month. Seventy-four percent of employed Utahns think it is unlikely that within the next two years they will lose a job they wanted to keep.

“Consumers remain optimistic about current economic conditions, even if they are not particularly pleased with rising gasoline prices,” said Scott Anderson, president and CEO of Zions Bank. “The good news is that prices are rising slowly and are still nearly a dollar cheaper per gallon than they were at this time last year, allowing consumers to continue spending their extra cash in areas that will fuel the economy.”

Southern Utah Economic Landscape: Iron and Washington County

The unemployment rate for Washington County remained at 3.9 percent in December, according to the Utah Department of Workforce Services. Washington County’s unemployment rate lies above the state average of 3.5 percent but well below the national average of 5.6 percent measured in the same period.

The unemployment rate in Iron County remained at 4.2 percent in December, according to the Utah Department of Workforce Services. In the same report by RealtyTrac, approximately 5 in every 10,000 homes were in foreclosure in Iron County in January, a decrease from 27 in every 10,000 one month prior.

The St. George Parade of Homes concluded its 25th Anniversary event last weekend, showcasing 28 homes in Santa Clara, Ivins, Hurricane, Washington, and St. George.

The event generated an economic impact on the community of $608,695,003, including jobs that were created and supported as a result. The St. George Area Parade of Homes is an annual event that introduces visitors to ideas for home building, remodeling, and decorating. Construction techniques include large outdoor spaces, indoor courtyards, guest casitas, water features, and green-building technologies.

The homes range in price from $350,000 to $1.8 million. Online ticket sales this year were 30 percent higher than last year and the event brought visitors from local areas as well as northern Utah and surrounding states.

Zions Bank provides the CAI as a free resource to the communities of Utah. The monthly CAI summary reports are released at a monthly press conference, coinciding with The Conference Board’s national CCI release date.

The reports are available online at Analysis and data collection for the CAI are done by the Cicero Group, a premier market research firm based in Salt Lake City. The March CAI will be released on March 31, 2015.

Zions Bank is Utah’s oldest financial institution and is the only local bank with a statewide distribution of financial centers, operating 100 full-service centers. Zions Bank also operates 25 full-service financial centers in Idaho. In addition to offering a wide range of traditional banking services, Zions Bank is also a leader in small business lending and has ranked as the No.1 lender of U.S. Small Business Administration 7(a) loans in Utah for the past 21 consecutive years.

Founded in 1873, Zions Bank has been serving the communities of Utah for more than 140 years. Additional information is available at

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