Market Studies

A survey by Trulia and RealtyTrac shows that only 1 percent of homeowners with a mortgage say walking away would be their first choice if they were unable to make their payments, while 59 percent would not consider a strategic default no matter how much their mortgage was underwater. With walking away off the table for most homeowners, the survey found that only 5 percent of borrowers would opt for a short sale as their first choice if facing foreclosure, while 69 percent would pursue a loan modification to save their home.

National home prices increased by 1.7 percent in March 2010 compared to a year ago, according to CoreLogic. It marked the second straight month that CoreLogic has recorded annual gains in home prices, breaking a depreciation streak of more than three years. But the company warns that going into the summer months, price growth will quickly fade, and because of the inventory of distressed properties, CoreLogic expects home prices nationally to fall another 5 percent over the next 12 months.

Despite a surge in refinance applications, total mortgage loan application volume fell 1.5 percent for the week ending May 14, 2010, the Mortgage Bankers Association (MBA) reported Wednesday. MBA attributed the fall-off to a drastic plunge in purchase applications, which tumbled 27.1 percent from one week earlier, marking the lowest level observed in the survey since May of 1997. MBA's refinance index, on the other hand, jumped 14.5 percent.

The time it's taking for a property to move from the first stage of the foreclosure process to auction has shrunk in Massachusetts, according to a new study released Tuesday by the Warren Group. The Boston-based research firm found that it is now taking an average of about 4.6 months for a property to hit the auction block in the Bay State, compared to eight months in the early part of 2008.

Consumer default data released Tuesday by Standard & Poor's and Experian show a sharp drop in the number of overdue first and second mortgages. Based on Experian's consumer credit database of approximately $11 trillion in outstanding loans sourced from 11,500 lenders, the companies' April default index for first mortgages was down 31 percent from a year ago, while defaults on second mortgages fell 45 percent over the past 12 months.

In the first quarter of 2010, commercial and multifamily mortgage loan originations were 12 percent higher than the same period last year but 26 percent lower than the fourth quarter of 2009, the Mortgage Bankers Association (MBA) reported Tuesday. New origination volumes varied considerably by investor group. MBA found that loans through securities conduits were up 657 percent from a year ago, while originations for Fannie Mae and Freddie Mac, which remained robust through the credit crisis, fell by almost half.

As of April 30, Wells Fargo had completed 36,094 permanent modifications under the administration's Home Affordable Modification Program (HAMP). According to Treasury, Wells Fargo ranks third for the number of permanent modifications completed to date, trailing behind Bank of America, with 56,398 permanent modifications, and JP Morgan Chase, with 39,507.

Subprime mortgage servicer Ocwen Financial Corporation has converted the highest percentage of trial loan modifications for distressed homeowners to permanent status under the administration's Home Affordable Modification Program (HAMP). According to the Treasury's just-released HAMP report on servicer performance, 83 percent of the Florida-based company's customers who had trial modifications through the federal program have now been moved into permanent modifications.

Reports on the San Francisco Bay Area housing market were mixed in April. New industry data shows that the median price for single-family homes in the Bay Area jumped 5.5 percent from March to April, but during the same period, sales volume fell 3.7 percent.

The future of U.S. home prices is acutely tied to the speed and the manner in which distressed sales work through the system, Moody's Economy.com stressed in a report issued this week. The discount on properties sold through foreclosure is now close to 40 percent of a non-distressed existing home price. Price cuts in short sales were averaging around 12 percent at the end of last year, but Moody's says short sale volume is not sufficient enough to temper the impact of foreclosure sales and curb further price declines.