Market Studies

An estimated 210,000 homeowners received permanent, proprietary loan modifications from mortgage servicers during the first quarter of 2011, according to data released by HOPE NOW Monday. That's down nearly 20 percent from the fourth quarter of last year, and 40 percent fewer than the third quarter of 2010. While the quarterly totals indicate a significant slide in modification activity, servicers reported an uptick during March, but HOPE NOW's data also show an increase in foreclosure activity for the month.

The research firm Delta Associates says distress in the commercial sector is maintaining its plateau. The company's analysts report that despite a $5 billion increase in the volume of commercial properties in foreclosure and lender REO over the last two months, the level of distress has remained in the $175 billion to $190 billion range since the spring of last year. They warn that the months ahead, though, could test the staying power of the stabilization seen thus far.

Fannie Mae has released new details on its book of business, which shows the share of mortgages it owns or guarantees that's past due by three months or longer has been on a steady decline for a year now. The nation's largest mortgage company reported that its seriously delinquent rate on single-family mortgage loans slipped to 4.44 percent in February of this year. That's down just 1 basis point from 4.45 percent in January, but it marks the 12th straight month that the rate has decreased.

The recovery in delinquency rates that began in the second quarter of 2010 appears to have stalled, according to the research firm Trepp LLC. Based on earnings reports and call report filings from banks, Trepp is offering its preliminary estimates of delinquency data for the first quarter, ahead of official numbers to be released by banking regulators in a few weeks. For first-lien single-family mortgages, the company is forecasting a total delinquency rate of 12.7 percent, down only slightly from 12.8 percent the previous quarter.

Mortgage interest rates have retreated for the second week in a row, according to a market report released Thursday by Freddie Mac. Frank Nothaft, the GSE's chief economist, says rates followed Treasury bond yields lower this week amid weak economic data on local business conditions and another disappointing home price report. The 30-year fixed-rate stands at 4.78 percent; the 15-year fixed at 3.97 percent, its lowest mark since December 9, 2010.

With the housing crisis still taking its toll, the nation's homeownership rate slipped further during the first three months of this year. The U.S. Census Bureau reported Wednesday that the homeownership rate dropped to 66.4 percent at the end of the first quarter. It's fallen back to a level not seen since 1998. Analysis of the numbers shows that the housing bust, elevated foreclosures, and a diminished ""American Dream"" have more than reversed the increase in homeownership gained during the boom.

With all the news of still-declining home prices, most buyers are keeping their feet firmly planted on the sidelines unless they're sure they're getting a bargain. At the same time agents and banks are battling (mis)perceptions in their local markets, where property values may not be on such a slippery slope. Add to the equation a distressed property, and finding an agreeable short sale price while still covering enough of the mortgage debt to win over the lender can be a challenge. It's a nasty tug-of-war, with neither buyers or sellers feeling like they're gaining any ground.

Homeowners who participate in default counseling are more likely to have their loans modified, according to a study from the Mortgage Bankers Association (MBA). Policymakers have increasingly turned to education and counseling to remedy problems that impede borrowers' ability to make their mortgage payments, but the trade group's report comes on the heels of federal budget cuts that have eliminated $88 million to fund HUD's counseling program.

Data released by Standard & Poor's Tuesday show that home prices are continuing to slip across the country, with residential property values just slightly above their April 2009 bottom. The 20-city composite reading of the latest S&P/Case-Shiller home price index fell another 1.1 percent in February 2011 when compared to the previous month. It's down 3.3 percent from the February 2010 level. Washington D.C. was the only market to post a year-over-year gain with an annual growth rate of 2.7 percent.

An industry study released Monday shows that nearly half of home sales activity last month involved distressed properties, a trend that is likely to continue as the backlog of foreclosures and mortgage defaults make their way through the pipeline. Within this distressed property segment, the market analysis shows a boom in short sales during the month of March to a record-high 19.6 percent, and a drop in the proportion of damaged REO, which the report says should be a positive for home values in future months.