Foreclosure

On a national level, delinquency rates and foreclosure starts decreased on a quarterly and yearly basis in the first quarter of 2012, with foreclosure inventory the exception, which increased slightly compared to the previous quarter, according to the Mortgage Bankers Association. The delinquency rate was 7.40 percent on a seasonally adjusted basis in the first quarter of 2012 compared to the 2011 fourth quarter rate of 7.58 percent and the year ago quarter's 8.32 percent. Foreclosure inventory, on the other hand, saw a small quarterly increase of 1 basis point after ending at 4.39 percent in the 2012 first quarter.

The housing recovery will come in two phases. First, home prices will rise by just under 1 percent in the second half of 2012. In 2013, prices will rise by 1.5 percent, then go up another 2.5 percent in 2014. For the second phase, home prices will increase 3 to 3.5 percent between 2015 and 2017. These are the predictions from a report released by the Demand Institute, which is jointly operated by The Conference Board and Nielsen. The report, titled The Shifting Nature of U.S. Housing Demand, stated investors who buy rental properties will lead phase one of the recovery, as opposed to buyers who purchase properties as their own residence.

According to a report from Foreclosure-Response.org, the serious delinquency rate, which includes loans 90 or more days past due plus foreclosures, increased for the first time after a downward trend between December 2009 and June 2011. Serious delinquencies rose from 9.2 percent in June 2011 to 9.7 percent in December 2011 for the nation's 100 largest metropolitan areas. While the 90-plus delinquencies component of the percentage was flat at 3.8 percent and has remained largely unchanged for the past four quarters, foreclosure rates continue to rise, and now stand at 5.9 percent. In June 2011, the foreclosure rate was 5.5 percent.

It will take 46 months to clear the market's supply of distressed homes, or the shadow inventory, according to estimates from Standard & Poor's Rating Services based on first-quarter 2012 data. While national residential mortgage liquidation rates appeared stable over the first three months of this year, these rates varied widely between local markets. Regional variations in how quickly servicers can clear the backlog of nonperforming loans are primarily due to differences in foreclosure procedures. S&P says its months-to-clear estimate in judicial states is almost 2.5x as long as non-judicial states.

At a time when mortgage rates have hit record-low numbers, HUD Secretary Shaun Donovan stressed urgency in getting housing refinance bills on President Barack Obama's to-do list for Congress passed. During a teleconference Friday, which preceded Obama's stop into Reno, Nevada, to boost support for the housing proposals, Donovan outlined three bills that were introduced to Congress that week. Donovan says the bills would save homeowners an average of $2,500 to $3,000 a year.

As one of the hardest hit states during the real estate downturn, Florida often pops up in market reports as having a noticeably higher foreclosure rate than other states. Even so, the state is also becoming recognized for how quickly some of its markets are climbing out of the housing slump. For example, the National Association of Realtors recently cited data from Move Inc. showing the top 10 turnaround markets. Seven out of 10 were in Florida. Yet, a recent report from Florida Realtors stated that while Florida is in a revival period, distressed properties will remain a big factor for the next 10 years.

Interest rates continue to slide further down alongside the decline in home prices. In addition to these factors improving affordability for homeowners, the National Association of Realtors (NAR) found the amount of income needed to qualify for a mortgage is actually well below the median income in most parts of the U.S. The national median family income was $61,000 in the first quarter. If a buyer wanted to purchase a home at the national median price, he or she would need an annual income of $34,700 if making a 5 percent downpayment. A 20 percent downpayment requires about $29,300.

Freddie Mac said Thursday that its board of directors has selected Donald H. Layton to serve as the company's new CEO. Layton will join the GSE on May 21, and will also have a seat on the board of directors. In October 2011, the Federal Housing Finance Agency announced that Charles E. Haldeman, Jr. had informed Freddie Mac's board of his desire to step down within the year. Haldeman served as the GSE's CEO since August 2009. Layton has had a long career in the private banking and financial services sectors. He worked for nearly 30 years at JPMorgan Chase and its predecessors and more recently, served as chairman and CEO of E*Trade Financial.

For the first time since March 2010, data from Lender Processing Services (LPS) showed an increase in home prices, but still, the analytics company warned to embrace the positive news with some caution. Nationally, February 2012 seasonally-adjusted prices rose 0.2 percent, according to the LPS Home Price Index, which incorporated residential sales concluded during February. Not only is the increase a first in almost two years, but it's also the third increase in five years.

Starting June 1, military homeowners who are permanently displaced by a job-related move may still be able to be considered owner-occupants when applying for the Home Affordable Modification Program (HAMP). This change means more people could become eligible for the government's modification program to assist struggling homeowners.