Market Studies

Treasury says servicers participating in the Home Affordable Modification Program (HAMP) are getting better at evaluating homeowners for eligibility. Its latest performance assessment found no company in need of ""substantial improvement."" OneWest Bank and Select Portfolio Servicing performed at the highest level, needing only minor improvement. As part of the $25 billion settlement announced last month, Treasury has agreed to release incentives previously withheld from Bank of America and JPMorgan Chase.

Despite recent reports of modest improvement in the health of the housing economy, Fitch expects the real estate sector to continue to depress the performance of banks, according to Fitch Ratings. Residential real estate is the largest exposure for banks since they make up $2.5 trillion, or roughly one-third of total loans, according to the agency. Home equity represents about 30 percent of this amount, with 1-4 family first lien mortgages making up the balance.

Principal reductions have been approached with some reluctance and much debate throughout the industry, but as part of the recent $25 billion settlement with the state attorneys general, the nation's largest servicers have agreed to administer the loss mitigation tactic. Fitch maintains the issue of principal reductions is not a simple ""yes"" or ""no"" question, and ""if not implemented carefully, a wide-ranging principal reduction program could potentially increase defaults among borrowers who would otherwise remain current.""

Fixed mortgage rates moved slightly lower for the week and are still hovering around the near 60-year lows, according to the Primary Mortgage Market Survey released by Freddie Mac. This week, the 30-year fixed-rate mortgage averaged 3.90 (0.8 point) percent, down from last week when it was 3.95 percent.

Personal Income rose 0.3 percent in January, compared with market expectations for an increase of 0.5 percent. Personal income grew 3.6 percent in the last year. Consumer Spending grew 0.2 percent, compared with market expectations for an increase of 0.4 percent.

First time claims for unemployment insurance edged down by 2,000 for the week ended February 25, the Department of Labor reported today. Data for the previous week were revised upward, turning a flat report into an increase in initial claims. The revision means claims rose and did not decline during the week used by the Bureau of Labor Statistics in its month survey for the unemployment rate.

Pre-foreclosure short sales and sales of foreclosed REOs totaled 907,138 in 2011, RealtyTrac reported Thursday. These foreclosure-related transactions made up 23 percent of all residential sales in the U.S. last year, with short sales accounting for 9 percent and REOs accounting for 14 percent. Short sales increased more than 40 percent on a year-over-year basis in several states, including Michigan, Georgia, and Arizona. RealtyTrac expects short sales to continue to gain momentum in 2012 as lenders become more aggressive disposing of distressed assets.

A nationwide recruiting agency announced its search for mortgage professionals in the Dallas-Fort Worth area in response to growing needs for mortgage industry professionals. Due to record-low interest rates, demand for services related to the mortgage industry has grown as homeowners look to refinance and potential homebuyers look to lock in mortgages at low rates.

Overall economic activity continued to increase at a modest to moderate pace in January and early February, the Federal Reserve said in its periodic Beige Book, an anecdotal report of conditions in each of the 12 Federal Reserve districts. The report showed economic improvement varying across the country -- economic activity rose at a somewhat faster pace in the Philadelphia and Atlanta districts but growth was slower in New York. Minneapolis characterized the pace of growth as firm.

Real gross domestic product - the output of goods and services produced by labor and property located in the United States - increased at an annual rate of 3 percent in the fourth quarter of 2011, the Bureau of Economic Analysis reported Wednesday. In its initial report on fourth quarter GDP, the BEA had said the nation's economy grew at a 2.8 percent pace. Economists had forecast no change in the ""advance"" GDP estimate issued last month.