Government

A new report from the watchdog for the Federal Housing Finance Agency (FHFA) charges that the department isn't doing enough to make sure companies doing business with the GSEs are adhering to consumer protection laws. The Office of the Inspector General for FHFA (FHFA-OIG) released an audit report Tuesday examining the agency's oversight of Fannie Mae and Freddie Mac's monitoring of businesses that sell and service loans.

New home sales fell 4.6 percent to a seasonally adjusted annual rate of 411,000 in February, the sharpest drop in two years, the Census Bureau and HUD reported Tuesday. At the same time, the months' supply of new homes for sale rose to the highest level since December 2011. The median price of a new home, according to the Census/HUD report, rose $7,200 in February after falling $20,500 in January. The median price is up 2.9 percent in the last year, the weakest year-over-year gain in eight months.

Representation and warranty costs remained elevated in the fourth quarter among top originators, though new and outstanding repurchase claims were mixed for large mortgage companies, according to a recent analysis from KBW. The GSEs continued to drive much of the new and outstanding repurchase claims, with Fannie Mae repurchases totaling $1.9 billion in Q4, down from $2.02 billion in Q3, while Freddie Mac repurchases totaled $638 million, down from $819 million, the report revealed.

While the trend of low mortgage rates seen in the last year has stirred up housing activity and helped the market, Pro Teck Valuation Services posits a major question in its latest Home Value Forecast (HVF): Why have home prices in some markets been less responsive to low rates? The writers of the report named three dominant reasons. First, they note that credit scores for many households took a hit during and after the crisis as a result of loan modifications, foreclosures, and job losses, ""and the breadth of the impact has been sufficient to affect millions of households who now much become or are already renters.""

The National Association of Home Builders' (NAHB) Improving Markets Index (IMI) showed no signs of slowing down in March, rising for its seventh consecutive month. According to NAHB, 274 metros are now on the mend, a net gain of 15 since February. While 19 markets were dropped, 34 new areas were added, including Birmingham, Alabama; Santa Barbara, California; Colorado Springs, Colorado; and Bloomington, Indiana. For the second straight month, metros in all 50 states are represented on the list.

There's no question that the housing market is well along the road to recovery. Sales are going up, prices are increasing, and that's good news for all of us. But for some folks, the nightmare is not even close to over yet. Instead, an estimated 2 million homeowners are in the land of the zombie foreclosure. Zombie foreclosures happen when the homeowner assumes they have lost their home and moves when the bank begins foreclosure, but the foreclosure process is never completed. Homeowners can take steps though, as well as anyone else adversely impacted by a zombie foreclosure, such as HOAs or municipalities.

One of the most interesting results of poring through economic data reports is that the details often tell a different story than the headline. The recent report on retail sales is a case in point. While the vast majority of commentators were impressed with a strong 1.1 percent month-over-month increase in overall sales, those who scratched the surface were rewarded for their efforts by learning more than half of the month-over-month increase came from an increase in gasoline station sales as prices. In addition, coverage of the recent report on housing permits and starts was dominated by the increase in both permits and starts. A closer look at the permit-starts data revealed another important phenomenon: a shift from single-family to multifamily construction.

Home prices rose another 0.6 percent in January, according to the Federal Housing Finance Agency's (FHFA's) House Price Index, which measures the prices of homes owned or guaranteed by Fannie Mae and Freddie Mac. January's gain continues a persistent monthly trend of rising prices started in January 2012. The past 12 months of rising prices have resulted in a total gain of 6.5 percent. While prices continue their upward trend nationally, one-third of the nine U.S. Census Divisions recorded price declines in January--the East South Central Division, the New England Division, and the Middle Atlantic Division.

While a few stumbling blocks remain, Freddie Mac insists the economy is finally headed from gloom to bloom this spring. The GSE's U.S. Economic and Housing Market Outlook for March shows low mortgage rates, rising prices, and gradually improving consumer confidence will bolster home sales as the homebuying season starts. Compared to 2012, experts at Freddie Mac expect home sales to increase 8 to 10 percent this year, coming to about 5.4 million units sold by year's end.

After spiking last week, mortgage rates took a dive this week as tension broke out in Europe over the financial crisis in the island country of Cyprus. According to Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 3.54 percent (0.8 point) for the week ending March 21, down from 3.63 percent last week. Last year at this time, the 30-year FRM averaged 4.08 percent; it has remained below the 4.00 percent mark for a full year now.