Freddie Mac to Set New Short Sale Timelines, Fannie Mae to Follow

Good news! Freddie Mac announced a new short sale process to speed up process and timeline for short sales and requiring better communication from lenders. Last year, Freddie Mac completed 45,623 short sales.

The initiative is part of the Servicing Alignment Initiative (SAI) Freddie Mac and Fannie Mae launched in 2011 at the direction of their regulator, the Federal Housing Finance Agency (FHFA).  FHFA announced this week that Fannie Mae and Freddie Mac must adopt the new short-sale guidelines.

“Freddie Mac’s new timelines are intended to help make the decision process more transparent and timely for short sales under the Obama Administration’s HAFA program or Freddie Mac’s traditional short-sale option,” says Tracy Mooney, Freddie Mac senior vice president, single-family servicing.

Freddie Mac proposals

• Loan servicers should make a decision within 30 days of receiving 1) an offer on a property under Freddie Mac’s traditional short sale program or 2) a completed Borrower Response Package (BRP) requesting consideration for a short sale under HAFA or Freddie Mac’s traditional short sale program. BRPs are standardized assistance applications developed under the Servicing Alignment Initiative.

• If a lender needs more than 30 days, it must give homeowners a status update at least weekly, and a final decision must be made in less than 60 days.

• If a servicer makes a counteroffer, the borrower must respond within five business days. The servicer then has 10 more business days to respond to the buyer.

Freddie Mac says it will use the new timelines to evaluate servicer compliance with the SAI and its own servicing requirements.

Source: Florida Realtors

70% Of Renters Think Owning Makes More Sense

Fannie Mae’s latest quarterly National Housing Survey focuses on the homeownership aspirations of Americans. Despite the recent housing crisis, most Americans continue to believe that homeownership is better than renting. Here are some of the Survey findings:

• Across all education levels, Americans say owning makes more sense than renting.
• Nearly two-thirds of current renters say that they will buy a house at some point in the future.
• Non-financial factors, such as safety and quality of local schools, continue to be the top reasons for buying a home across all income groups.
• African-Americans and Hispanics are more likely to cite various benefits to homeownership, such as buying a home as a way to build wealth, as a symbol of success and civic benefits.
• Renters are more likely than mortgage borrowers to think it would be difficult for them to get a home, and say financial reasons are the major reason they have not bought a home.
• African-Americans and Hispanics are more likely to indicate that getting a mortgage is difficult, regardless of income level. They are also more likely to cite bad economic times and the complexity of the mortgage process as major reasons not to buy a home.
• Groups with lower levels of education are more likely to say it would be difficult for them to get a mortgage than groups with higher levels of education.
• Hispanics are less confident than other groups about receiving information they need to choose the right mortgage.
• Groups with higher levels of education and higher incomes are more likely to think buying a home is a safe investment.

Source: Fannie Mae

More Americans upbeat about homebuying

According to Fannie Mae’s March 2012 consumer attitudinal National Housing Survey, more Americans may decide the time is right to buy a home.

In tracking results from its monthly survey, Fannie Mae says an increasing number of Americans now expect home rental costs and home purchase prices to increase over the next year. Nearly half expect higher rental prices – the highest number recorded since monthly tracking began in June 2010 as 33 percent expect home prices to increase, up five percentage points since last month and the highest percentage recorded in over a year.

In addition, confidence in consumers’ views of their own finances is stabilizing. For three straight months, 44 percent of respondents have said they expect their personal finances to get better over the next year.

Taken together, these trends give Americans an increased sense of urgency to buy a home, said 73 percent of Americans surveyed in March, up from 70% in February.

“With an increasing share of consumers expecting higher mortgage rates and home prices over the next 12 months, some may feel that renting is becoming more costly and that homeownership is a more compelling housing choice,” says Doug Duncan, vice president and chief economist of Fannie Mae.

Survey highlights

Homeownership and renting

• Thirty-three percent of respondents expect home prices to increase over the next 12 months, a five-percentage point increase from last month and the highest level over the past 12 months.

• On average, Americans expect home prices to increase by 0.9 percent over the next 12 months (up slightly since last month).

• Thirty-nine percent of Americans say that mortgage rates will go up in the next 12 months, a five-percentage point increase from last month.

• The percentage of respondents who say it is a good time to buy rose by three points to 73 percent, the highest level in over a year, while the percentage of respondents who say it is a good time to sell rose one point to 14 percent this month.

• On average, respondents expect home rental prices to increase by 4.1 percent over the next 12 months, a significant increase since February, and the highest number recorded to date.

• Forty-eight percent of respondents think that home rental prices will go up, a three percentage point increase from last month and the highest number recorded to date.

• Sixty-six percent of respondents say they would buy their next home if they were going to move, up one point since last month, while 30 percent say they would rent, up one point versus last month.

The economy and household finances

• The rise in confidence in the economy’s direction leveled this month, with 35 percent responding that they think the economy is on the right track, consistent with February’s total. The percentage who say the economy is on the wrong track rose slightly from 57 percent to 58 percent.

• Only 12 percent think that their personal financial situation will worsen in the next 12 months, consistent with February as the lowest value in over a year, and tied with January 2011 for the lowest to date.

• Twenty-one percent of respondents say their income is significantly higher than it was 12 months ago, up 1 point versus February, while 63 percent say it has stayed the same – consistent with February’s values.

• Thirty-four percent say their expenses have increased significantly over the past 12 months (a slight increase of one percentage point).

Source: Florida Realtors

Home Permits in St. Johns County Up 30 Percent in Q1 2012

St. Johns County continues to outpace the rest of the region in homebuilding, according to the Northeast Florida Builders Association. In March, 55 percent of all new home permits in the region were pulled in St. Johns County.

Of the 324 home building permits pulled in March, 178 were in St. Johns County. Builders pulled 87 permits in Duval County, 44 in Clay and 15 in Nassau.

Permits throughout the region were up over March 2011, when builders pulled a total of 275 permits. Of those, 99 permits, or 36 percent, were in St. Johns County; 124, or 45 percent, were in Duval.

Building permits pulled in the first quarter were up over the first quarter of 2011. Builders pulled a total of 838 permits in the first quarter, up 30 percent from 644 in the first quarter of 2011.

Source: Jacksonville Business Journal

Jacksonville Home Prices Up 2.9 Percent in February

Home prices in Jacksonville increased 2.9 percent in February from February 2011.

CoreLogic released February Home Price Index which shows prices of homes in Jacksonville (including distressed properties) increased and Florida as a whole was one of 21 states to have stable or increased home prices. Florida’s average home price increased 4.7 percent in February, the third-largest increase in the nation. Distressed sales include short sales and bank-owned property sales.

Source: Jacksonville Business Journal

Housing Affordability Index Rose to Record Level in Past Two Decades

Nationwide housing affordability, as measured by the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), rose to the highest percentage recorded in the 20-year history of the index during the fourth quarter of 2011. However, prospective homebuyers continued to have trouble qualifying for a mortgage thanks to tighter credit standards and a soft economy.

HOI data released last week indicates that 75.9 percent of all new and existing homes sold in the fourth quarter were affordable to families earning the national median income of $64,200, the highest percentage recorded in the 20-year history of the index.

“While today’s report indicates that homeownership is within reach of more households than it has been for more than two decades, overly restrictive lending conditions confronting homebuyers and builders remain significant obstacles to many potential homes sales, even with interest rates at historically low levels,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla.

In Youngstown-Warren-Boardman, Ohio, Pa. – the most affordable major housing market in the country during the fourth quarter – 95.1 percent of all homes sold during the quarter were affordable to households earning the area’s median family income of $54,900.

Also ranking at the top of the most affordable major housing markets, in descending order were Lakeland-Winter Haven, Fla.; Modesto, Calif.; Harrisburg-Carlisle, Pa.; and Toledo, Ohio.

Among smaller housing markets, the most affordable was Kokomo, Ind., where 99.2 percent of homes sold during the fourth quarter of 2011 were affordable to families earning the median income of $59,100. Other smaller housing markets at the top of the index included Fairbanks, Alaska; Cumberland, Md.-W.Va.; Lima, Ohio; and Rockford, Ill.

In New York-White Plain-Wayne, N.Y.-N.J. – the least affordable major housing market during 2011’s fourth quarter – 29.0 percent of all homes sold were affordable to those earning the area’s median income of $67,400. It’s the 15th consecutive quarter in which the New York metropolitan division held the position.

Other major metro areas at the bottom of the affordability index included Honolulu; San Francisco-San Mateo-Redwood City, Calif.; Santa Ana-Anaheim-Irvine, Calif.; and Los Angeles-Long Beach-Glendale, Calif., respectively.

Ocean City, N.J., where 47.5 percent of the homes were affordable to families earning the median income of $70,100, was the least affordable of the smaller metro housing markets in the country during the fourth quarter. Other small metro areas ranking near the bottom included Laredo, Texas; San Luis Obispo-Paso Robles, Calif.; Santa Cruz-Watsonville, Calif.; and Brownsville-Harlingen, Texas.

Source: National Association of Home Builders

National Existing Home Sales Up Again in January, Inventory Down

National existing-home sales rose in January, marking three gains in the past four months, according to the National Association of Realtors (NAR). In addition, the high inventory of homes continued to improve.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – increased 4.3 percent to a seasonally adjusted annual rate of 4.57 million in January from a downwardly revised 4.38 million-unit pace in December and are 0.7 percent above a spike to 4.54 million in January 2011.

Lawrence Yun, NAR chief economist, said strong gains in contract activity in recent months shows buyers are responding to very favorable market conditions. “The uptrend in home sales is in line with all of the underlying fundamentals – pent-up household formation, record-low mortgage interest rates, bargain home prices, sustained job creation and rising rents.”

Total housing inventory at the end of January fell 0.4 percent to 2.31 million existing homes available for sale, which represents a 6.1-month supply at the current sales pace, down from a 6.4-month supply in December.

“The broad inventory condition can be described as moving into a rough balance, not favoring buyers or sellers,” Yun said. “Foreclosure sales are moving swiftly with ready homebuyers and investors competing in nearly all markets. A government proposal to turn bank-owned properties into rentals on a large scale does not appear to be needed at this time.”

Total unsold listed inventory has trended down from a record 4.04 million in July 2007, and is 20.6 percent below a year ago.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc. in Miami, said buying power is enticing more potential homebuyers. “Word has been spreading about the record high housing affordability conditions and our members are reporting an increase in foot traffic compared with a year ago,” he said. “With other favorable market factors, these are hopeful indicators leading into the spring home-buying season. We’re cautiously optimistic that an uptrend will continue this year.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was a record low 3.92 percent in January, down from 3.96 percent in December; the rate was 4.76 percent in January 2011; recordkeeping began in 1971.

The national median existing-home price for all housing types was $154,700 in January, down 2.0 percent from January 2011. Distressed homes – foreclosures and short sales that sell at deep discounts – accounted for 35 percent of January sales (22 percent were foreclosures and 13 percent were short sales), up from 32 percent in December; they were 37 percent in January 2011.

“Home buyers over the past three years have had some of the lowest default rates in history,” Yun said. “Entering the market at a low point and buying at discounted prices have greatly helped in that success.”

All-cash sales were unchanged at 31 percent in January; they were 32 percent in January 2011. Investors account for the bulk of cash transactions.

Investors purchased 23 percent of homes in January, up from 21 percent in December; they were also 23 percent in January 2011. First-time buyers rose to 33 percent of transactions in January from 31 percent in December; they were 29 percent in January 2011.

Forty-seven percent of NAR members report that contracts settled on time in January; 21 percent had delays, and 33 percent experienced contract failures. Contract cancellations are unchanged from December but were only 9 percent in January 2011. Most contract failings are caused by lenders that decline mortgage applications and failures in loan underwriting appraisals that come in below the negotiated price.

Single-family home sales rose 3.8 percent to a seasonally adjusted annual rate of 4.05 million in January from 3.90 million in December, and are 2.3 percent above the 3.96 million-unit pace a year ago. The median existing single-family home price was $154,400 in January, down 2.6 percent from January 2011.

Existing condominium and co-op sales increased 8.3 percent to a seasonally adjusted annual rate of 520,000 in January from 480,000 in December, but are 10.3 percent lower than the 580,000-unit level in January 2011. The median existing condo price was $156,600 in January, up 2.0 percent from a year ago.

Regionally, existing-home sales in the Northeast rose 3.4 percent to an annual pace of 600,000 in January and are 7.1 percent above a year ago. The median price in the Northeast was $225,700, which is 4.2 percent below January 2011.

Existing-home sales in the Midwest increased 1.0 percent in December to a level of 980,000 and are 3.2 percent higher than January 2011. The median price in the Midwest was $122,000, down 3.9 percent from a year ago.

In the South, existing-home sales rose 3.5 percent to an annual level of 1.76 million in January, unchanged from a year ago. The median price in the South was $134,800, which is 0.3 percent below January 2011.

Existing-home sales in the West jumped 8.8 percent to an annual pace of 1.23 million in January but are 3.1 percent below a spike in January 2011. The median price in the West was $187,100, down 1.8 percent from a year ago.

Source: National Association of Realtor