Market Studies

As mandated by the Housing and Economic Recovery Act of 2008, the secretary of HUD recently released a report to Congress addressing the root causes of the foreclosure crisis and made recommendations on actions that should be taken to mitigate the crisis and help prevent similar crises from occurring in the future.

Mortgage insurance claims filed by servicers on defaulted loans are showing signs of tapering off, according to data released by the risk analysis and due diligence firm Clayton Holdings. Clayton's analysts attribute the decline to the increase in servicers' foreclosure prevention initiatives and fewer loans moving into REO status. They also noted that mortgage insurance providers are spending more time reviewing individual claims and evaluating servicers' modification decisions for continued insurance coverage.

It's no secret that for quite awhile commercial real estate (CRE) transactions, including distressed assets, have been at a standstill. But according to a new study by the global advisory firm AlixPartners, that could all change in 2010. In fact, the firm's findings suggest that investment opportunities in the commercial sector could be bigger in the months ahead than even in the heady days of the early 1990s.

The online listing service Homes & Land recently asked thousands of real estate agents for their opinions about their local real estate markets. The company found that only 10 percent believe the government's Home Affordable Modification Program (HAMP) has actually reduced foreclosures. Despite the low enthusiasm about HAMP, overall optimism seems to be improving, with most agents reporting an increase in homebuyer interest, and nearly half of the respondents saying home prices in their markets have bottomed out.

Following a surge in activity at the end of 2009, pending home sales dropped in January, and due to abnormal weather conditions this winter, additional declines are anticipated in the coming months, the National Association of Realtors said Thursday.

DebtX, a Boston-based loan sale advisor, recently announced that it plans to sell two portfolios of nonperforming loans, totaling more than $410 million - one for HUD and one for a lender in the western U.S. The company also reported that commercial real estate loan prices increased in January.

New data released by Clear Capital Thursday shows that home prices nationally are up 5.0 percent compared to February 2009. It's the second straight month that year-over-year price variations have been in positive territory. Clear Capital also reported that REO saturation increased in February, but that was expected with the typical winter slowdown in sales. Regarding the threat of a shadow inventory, the company suspects this inflow will arrive with a stronger springtime and summer buying season, helping to ease the shock to the marketplace.

Past due loans within commercial mortgage-backed securities (CMBS) rose 23 basis points in February, according to a new report from Trepp LLC. The firm noted that it's the smallest month-to-month rise since September 2009. The brief reprieve is welcome news for an industry struggling with rising defaults and looming loan maturities, but that's tempered by a quick reminder from Trepp that CMBS delinquencies are still setting new records as the highest the industry has seen since the CMBS market took hold.

Ending a three-week trend of declines, the Mortgage Bankers Association reported that home loan application volume soared 14.6 percent last week. The increase came from a 17 percent jump in refinancing activity, as long-term mortgage rates dipped below the 5 percent threshold. But even with recent upsurges in the refinancing numbers and record-low rates, investment bank Credit Suisse says 37 percent of borrowers with 30-year fixed-rate mortgages are still paying on loans with rates of 6 percent or higher.

Freddie Mac said Tuesday that its home price index for conventional mortgages it purchased last year registered a 0.4 percent decline from the fourth quarter of 2008 to the fourth quarter of 2009. The GSE was quick to point out that this was a much smaller decline than the 9.5 percent drop in home prices recorded in 2008. Four out of nine census regions posted annual price gains, with the Pacific part of the country leading the way with a 1.6 percent increase.