Dave Thurman's Real Estate Blog

The Wall Street Journal

Just as in 2011, in 2012 many will be trying to figure out where housing is headed. While the housing market didn’t worsen in 2011, it also didn’t stabilize either. This year, the story will be about local markets. While many housing markets rose and fell together, they’re recovering at difference paces so talking about housing on a national level is not beneficial.

Making sense of the story

• Confidence and jobs: Housing is more affordable than it has been in decades, but many would-be buyers are worried about buying today if prices are going to be lower tomorrow. Still, others don’t want to buy a house until they have more evidence that they’re not going to get laid off or see their hours cut back.

• Foreclosures: Banks and other mortgage investors own around 440,000 foreclosed properties, but there’s another 3.4 million loans in foreclosure or serious delinquency, according to estimates by Barclays Capital. Because banks are faster to cut prices to unload inventory than are traditional sellers, home values can fall further as the share of distressed sales rises.

• Rents: If low mortgage rates aren’t enough to give urgency to would-be buyers, rent hikes could accelerate buyers’ decisions to take the plunge.

• Mortgage credit and rates: It’s still hard for many buyers to get approved for a mortgage because banks are demanding lots of documentation of borrowers’ incomes.

• Regulation: Many analysts don’t expect Congress to make major changes to Fannie Mae and Freddie Mac during the election year, but several major regulatory changes could significantly reshape the future of the lending landscape in 2012.

• Meanwhile, the regulator that oversees Fannie and Freddie is revamping the way that mortgage companies are paid for collecting loan payments. This could lead to a broader shakeup in the mortgage industry that ultimately influences how much borrowers are charged for mortgages and how banks handle loans that fall into delinquency.

Read the full story

http://on.wsj.com/wHMaiG

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) recently announced that it has shut down 85 alleged online mortgage modification scams that prey on vulnerable homeowners through Web banners and other Web advertisements.

SIGTARP investigates mortgage modification schemes in which companies charge struggling homeowners a fee in exchange for false promises of lowering the homeowner’s mortgage through TARP’s housing program known as the Home Affordable Modification Program (HAMP). Google, in cooperation with an ongoing criminal SIGTARP investigation of these scams, has suspended advertising relationships with more than 500 Internet advertisers and agents associated with the 85 alleged online mortgage fraud schemes and related deceptive advertising.
Fast Facts
Calif. median home price: October 2011: $278,060 (Source: C.A.R.)
Calif. highest median home price by region/county October  2011: Marin: $781,250 (Source: C.A.R.)
Calif. lowest median home price by region/county October 2011: Lake County: $96,500 (Source: C.A.R.)

Calif. Pending Home Sales Index: October 2011: 122., an increase of 3.1 percent compared with a prior year.

Calif. Traditional Housing Affordability Index: Third quarter 2011: 52 percent (Source: C.A.R.)

Mortgage rates: Week ending 11/17/2011 30-yr. fixed: 4.0% fees/points: 0.7% 15-yr. fixed: 3.31 fees/points: 0.7% 1-yr. adjustable: 2.98% Fees/points: 0.6% (Source: Freddie Mac)

The Federal Housing Finance Agency (FHFA) recently released its third Report to Congress, detailing the findings of the agency’s 2010 annual examinations of Fannie Mae, Freddie Mac, the 12 Federal Home Loan Banks (FHLBanks), and the FHLBanks’ Office of Finance.

“Since being placed under conservatorship in 2008, Fannie Mae and Freddie Mac remain critical supervisory concerns,” FHFA Acting Director Edward J. DeMarco wrote to Congress.

“These ratings are a result of continuing credit losses in 2010 from loans originated during 2005 through 2007 as well as forecasted losses from loans originated during that time. As a result of the conservatorships, federal government support and an improved corporate governance structure, the Enterprises accomplished their statutory mission of facilitating stability and liquidity for single-family and multifamily housing finance.”

Other details in the 2010 Report to Congress:

• Key challenges facing Fannie Mae and Freddie Mac include, but are not limited to: credit risk, operational risk, modeling risks and retention of qualified leadership and personnel.
• In 2010, GSE losses totaled $28 billion. The GSEs completed 950,000 loan modifications and other foreclosure alternative actions in 2010.
• All FHLBanks recorded positive annual earnings in 2010, though some recorded losses in individual quarters. Advances (loans to members) at year-end 2010 totaled $479 billion, down from $631 billion at year-end 2009.
• The 2010 financial condition and performance of the FHLBanks stabilized but several FHLBanks continued to be negatively affected by their exposure to private-label mortgage-backed securities.

The above was brought to you from our California Association of REALTORS ®

C.A.R. Member Benefit #14: C.A.R. Newsline is a weekly e-newsletter covering vital industry information including economic reports, legislative developments, and new real estate products and services.