Market Conditions

Residential Delinquency Rate Improves in 3Q: MBA


Delinquencies on residential mortgages in the third quarter declined on a national recovery in housing prices and other factors, according to the Mortgage Bankers Association.

The delinquency rate for mortgage loans on one- to four-unit residential properties fell 86 basis points to a seasonally adjusted rate of 4.99%, as of Sept. 30, compared to a year earlier, the MBA said. That’s the lowest level since the first quarter of 2007.

The rate includes loans that are at least one payment late, but are not in the foreclosure process. The percentage of loans in foreclosure, at the end of the third quarter, fell 51 basis points to 1.88%.

The serious delinquency rate — loans that are at least 90 days past due or in the process of foreclosure — fell 108 basis points to 3.57%.

The improvements in delinquency rates were a result of “a nationwide housing market […]

How the Fed Could Revive the Market for ARMs

December marks seven years since the Federal Open Market Committee cut the target for its benchmark federal funds rate to nearly zero.

The Great Recession technically ended six months after the Federal Reserve’s dramatic interest rate cut, though to say the subsequent recovery has moved at a glacial pace would be an understatement.

But as a meaningful economic recovery appears to be finally taking hold, all eyes are on the FOMC amid speculation that it may soon raise rates. That watershed moment, whenever it comes, will necessitate a re-evaluation of many aspects of the “new normal” that have taken hold since the Great Recession.

Case in point: the adjustable-rate mortgage. The product, popular during periods of rising interest rates and home prices — and vilified for contributing to excesses that precipitated the housing crisis — has fallen out of favor among lenders and consumers.

But ARMs may soon be […]

Share of Underwater Homes Declines in 3Q


The proportion of U.S. mortgages that were underwater dropped from the second quarter to the third quarter, according to RealtyTrac.

Seriously underwater homes represented 12.7% of all properties with a mortgage, as of Sept. 30, according to RealtyTrac’s U.S. Home Equity & Underwater Report. That was down from 13.3% at the end of the second quarter.

“Home sales volume and average sales prices picked up dramatically again in the second and third quarters of this year, resulting in a substantial drop in seriously underwater homeowners,” Daren Blomquist, vice president at RealtyTrac, said in a news release.

The number of seriously underwater homes peaked in the second quarter of 2012, at 28.6% of all homes.

Additionally, the number of seriously underwater homes that were in a state of foreclosure declined, dropping to 33.4% of all homes, as of the end of the third quarter […]

Sales of Foreclosed Properties Fell in August


Sales of foreclosed properties in August fell to their lowest level in about eight years, according to Hope Now.

The number of foreclosed homes sold in August fell 7% to 27,000, compared to July, the advocacy group Hope Now said in a news release. The number of completed short sales fell 12% to 7,100. And the number of completed loan modifications fell 3% to 32,000, including those completed under the Home Affordable Modification Program.

Other categories that the Washington organization monitors did not show positive improvements. The number of deeds-in-lieu completed was unchanged at 1,600. The number of foreclosure starts rose 6% to 56,000.

“Although there is good news, on a nationwide level, with respect to foreclosures and serious mortgage delinquencies, Hope Now’s members remained focused on specific markets that need additional support,” Eric Selk, executive director, said in the release. “These […]

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