Market Studies

While it's undeniable that the financial crisis and recession were triggered by the bursting of the housing bubble and the subprime mortgage crisis that began in late 2006 to early 2007, a working paper recently released by the research department of the Federal Reserve Bank of Philadelphia suggests that reform to personal bankruptcy law also played an important role. Overall, the researchers calculated that bankruptcy reform caused the number of mortgage defaults to increase by around 200,000 per year even before the start of the financial crisis.

In light of the economic crisis, consumers are taking financial matters into their own hands by implementing proactive spending habits and mortgage management strategies, according to the findings of a national survey conducted by Western Union. The company said consumers' improved spending behaviors, coupled with the respondents' proactive approach to mortgage payments, paint a picture of positive money management behavior and demonstrate Americans' determination to take hold of their finances.

The Treasury Department released April data for the administration's Home Affordable Modification Program (HAMP) Monday, showing that permanent modifications have been initiated for 299,092 struggling homeowners. That's an increase of 68,000 or almost 13 percent over March. Government officials stressed that HAMP servicers must be held accountable for their individual performance. New in this month's statistics is information about servicer-specific conversion rates.

Mortgage employment expanded by more than 700 jobs during the first quarter, an industry report released Monday showed. Lenders, banks, and service providers terminated more than 1,500 mortgage-related employees during the first three months of this year. But the sector also added more than 2,200 new positions during the period. It was the second consecutive quarter that mortgage jobs improved.

Analysts at Barclays Capital say the industry's ominous shadow inventory is close to topping out. New research published by the firm says the supply of homes nearing REO status, defined as 90 or more days delinquent or in the process of foreclosure, will peak this summer and then begin falling gradually as the market becomes stable enough to absorb 130,000 distressed properties a month. Barclays puts the shadow supply at 4.5 million properties, but forecasts at least 4.7 million distressed sales over the next three years.

After five years of significant declines, title insurance premiums written in 2009 nearly held steady from 2008, the American Land Title Association (ALTA) reported Thursday. According to ALTA's 2009 Market Share Analysis, the industry reported a mere 4.5 percent drop in title insurance premiums in 2009, falling to $9.6 billion from $10 billion in 2008. Despite the national decline, 25 states experienced increases in year-to-year title insurance premiums, ALTA said.

While the financial crisis has significantly reduced access to mortgage credit for all borrowers and communities, neighborhoods of color have been hit the hardest, according to a new industry study. The report, Paying More for the American Dream IV, examined the mortgage lending patterns of banks, including the nation's four largest financial institutions, in seven major metropolitan areas. The analysts found that prime mortgage lending in communities of color has declined more than twice as much as it has in predominantly white communities.

Commercial real estate in the U.S. has recorded its first positive quarterly return in 18 months, according to the global research firm IPD. The company's index shows a total return of 1.2 percent for the first three months of this year, boosted by a sizable increase in income yield. IPD says the performance of the commercial property market has shown a steady improvement since bottoming out in Q1 2009, with returning investors now starting to compete on pricing more aggressively.

The first three months of 2010 marked the sixth consecutive quarter that sales in both the existing-home and condo markets in Florida increased on a year-over-year basis, according to the latest housing statistics from Florida Realtors. A total of 38,846 existing homes sold statewide in the first quarter of this year, up 24 percent from the same period last year. And 16,897 existing condos sold in the the quarter, surging 67 percent from year-ago levels.

Fitch Ratings recently conducted a study of all securitized non-agency California mortgage loans, finding that delinquency rates in California are fairly similar to national levels. But a closer look revealed dramatic differences among various regions within the 382 metropolitan statistical areas tracked by Fitch. In fact, Fitch found that California has both the best performing region in the country - San Francisco-San Mateo-Redwood City - and some of the worst performing regions, such as Riverside-San Bernardino-Ontario.