News

Secretary of Housing and Urban Development (HUD) Shaun Donovan and Federal Housing Administration (FHA) Commissioner Carol Galante announced in a press conference Friday FHA's program to sell mortgage loan pools to investors. The Distressed Asset Stabilization Program, designed to give homeowners with seriously delinquent loans a chance to avoid foreclosure, is an expansion of an earlier FHA pilot program that allows investors to purchase loan pools headed for foreclosure. Investors are then charged with the task of working to bring the loan out of default. The program starts in September 2012 with a sale of the loan pools.

Feelings about homeownership remain positive in the face of a diminished market, but an uncertain economy and increasing down payments are keeping Americans from making purchases, a report from Integra Realty Resources (IRR) said. Wednesday's report detailed results from an IRR-commissioned survey of non-homeowners ages 22-50 in 11 major markets. While 85 percent of potential buyers indicated that market conditions are favorable for purchasing a home, unemployment and job instability make many respondents reluctant or unable to buy a home.

Negative reports on the economy may be shaking up confidence, but Capital Economics released a report Friday stating that in their view, the foundations for a sustainable recovery are still in place. The employment situation in the U.S. and issues overseas such as the euro-zone crises are all taking a toll on the economy and consumer confidence. Yet, there are still reasons to make the argument that the recovery is not going to be derailed. Home sales and prices have increased, and mortgage affordability continues to be at an all-time high.

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) announced Thursday that a former investment fund manager pleaded guilty to federal fraud charges. SIGTARP issued a release stating that former fund manager John Farahi pleaded guilty on Thursday to four felony counts-mail fraud, loan fraud, selling unregistered securities, and conspiracy to obstruct justice. Farahi admitted to cheating investors out of millions of dollars by falsely promising to purchase corporate bonds backed by TARP.

Household net worth increased in the first quarter of 2012 due to gains in the stock market, while household debt declined, according to the U.S. Flow of Funds report released by the Federal Reserve. Household net worth, which is the difference between the value of a household's assets and liabilities, increased by about $2.8 trillion to $62.9 trillion compared to the previous quarter, the Fed reported. The value of real estate assets also improved, increasing by $425 billion, or 2.3 percent due to a 2.4 percent gain in home prices, according to analysis from IHS Global Insight.

Speaking before the Joint Economic Committee, Federal Reserve Chairman Ben Bernanke offered three guidelines for fiscal policymakers Thursday. The federal budget must be put on a sustainable long-run path, he said, adding that significantly tightening fiscal policy could impede the economic recovery. Bernanke called on Congress to ""promote a stronger economy in the medium and long term through the careful design of tax policies and spending programs."" The economy, according to Bernanke, is seeing a meager recovery.

CoreLogic's third annual Storm Surge Report, released Thursday, showed that just over four million homes in the United States are at risk of hurricane-driven storm surge damage. According to the report, there is $700 billion in total property exposure in the Gulf and Atlantic Coast regions, the areas most likely to face storm surge activity. The Gulf Coast houses just under 1.8 million homes at risk for potential storm-surge damage (totaling nearly $200 billion in exposure), while the Atlantic Coast has approximately 2.2 million homes at risk ($500 billion in exposure).

Reperforming and nonperforming loans decreased $6.1 billion to $528.6 billion in May compared to the previous month of April for private label mortgage backed securities (MBS), according to a report from Amherst Securities Group. The decrease came after a reduction of $6.4 billion in the non-performing bucket and a $0.3 billion growth in the re-performing bucket, reflecting elevated liquidations and a slowdown of new defaults, Amherst stated in the report.

Lulls in employment and income growth led to a plateau in consumer sentiment in May, according to Fannie Mae's May 2012 National Housing Survey. The data released by Fannie Mae on Thursday showed that although many consumers (72 percent) believe that now is a good time to purchase a house, the percentage of respondents who said they would buy a house after moving actually dropped for the second consecutive month-63 percent in May compared to 64 percent in April and 66 percent in March. Fifteen percent of respondents said now is a good time to sell a home.

As the employment situation continues to raise concerns, fixed rates fell even lower, slipping yet again to new record-lows, according to a survey from Freddie Mac released Thursday. The 30-year fixed-rate mortgage averaged 3.67 percent (0.7 point) for the week ending June 7, falling from last week's average of 3.75 percent. The 15-year fixed rate declined even further below 3 percent to 2.94 percent (0.7 point), down from last week's 2.97 percent.