News

Home prices across much of the country are still overvalued, but the gap is narrowing, according to Fitch Ratings. The agency has revised its Sustainable Home Price (SHP) model, and the results show that residential property values are now on track to fall an additional 9.1 percent nationally before arriving at a level that is supported by market fundamentals. Though home prices are falling nationally, Fitch notes that price movement in some regional markets is still quite volatile due to the volume and pace of distressed sales being processed.

Nationstar Mortgage is acquiring approximately $63 billion in residential mortgage servicing assets from Aurora Bank, a subsidiary of Lehman Brothers Bancorp. The agreement was announced Tuesday in a release, which stated that the Lewisville, Texas-based mortgage servicer will pay approximately $268 million in servicing rights and $210 million for related servicing advance receivables.

Home affordability has reached the highest peak ever since 1970, which is when the data was first recorded, according to National Association of Realtor's (NAR) housing affordability index. The index rose to a record high of 206.1 in January. While projections about future mortgage rates and home prices have been mixed, NAR expects little change and anticipates affordability levels will stay high through 2012.

The housing market is healing, a Capital Economics report stated, but the road to recovery will be a long and gradual one. The research firm expects to see home sales and homebuilding continue with increases, while house prices are expected to finally stop falling later this year. While certain areas of the housing market appear to be moving in a positive direction, Capital Economics still points out that with the growth come constraints, such as Eurozone issues and tightened lending standards.

While home prices declined on a year-over-year basis in January 2012, a month-over-month gain was seen when excluding distressed sales, according to CoreLogic's January Home Price Index (HPI). Prices declined 3.1 percent in January 2012 compared to a year ago in January 2011. But, when excluding distressed sales, year-over-year prices declined by 0.9 percent, and a month-over-month gain of 0.7 percent was seen for January. Distressed sales include short sales and REO transactions.

Data through the end of January shows significant movement in both foreclosure starts and sales, and it has some market watchers saying the lull in foreclosure activity seen over the past year-and-a-half may very well be coming to an end. Lender Processing Services' (LPS) latest market report says foreclosure starts jumped 28 percent between December and January, and foreclosure sales soared 29 percent. It also shows that 47 percent of all foreclosures started during the month were repeat foreclosures.

Through a streamline refinance program, borrowers with FHA-endorsed loans may find it easier lock in lower interest rates while paying less in fees. Beginning June 11, 2012, the FHA will lower upfront mortgage insurance premiums to .01 percent and reduce annual premiums to .55 percent for certain FHA borrowers, Carol Galante, acting commissioner of the FHA, announced today. To be eligible, borrowers must to be current on their FHA-insured loans, which need to have been endorsed on or before May 31, 2009.

President Obama is announcing two steps that will be taken to assist servicemembers and FHA borrowers, the administration stated in a release today. One provision will have servicemen who were foreclosed upon since 2006 reviewed, and if any are found to have been wrongfully foreclosed upon, they can receive compensation equal to a minimum of lost equity, plus interest and $116,785. In addition to foreclosure reviews, servicemembers will be reviewed for interest rates to see if any were charged more than 6 percent after a request to lower the rate.

With more homeowners finding themselves underwater alongside the availability of programs offering potential relief, CredAbility reported that it recently counseled the highest number of homeowners since June 2011. CredaAbility, a national nonprofit organization that offers free counseling to homeowners, provided guidance and advice to 6,433 homeowners in February, a 16 percent increase compared to January.

Financial institutions filed 19,934 mortgage loan fraud (MLF) suspicious activity reports (SARs) in the third quarter of 2011, a 20 percent increase compared to the third quarter last year, when 16,567 reports were filed, according to the Financial Crimes Enforcement Network (FinCEN) report of MLF SARs. In the third quarter of 2011, about 62 percent of the filings involved suspicious activities that started four or more years ago, compared to only 24 percent a year ago during the same time. The 2011 filings stem largely from mortgage repurchase demands and special filings generated by several depository institutions related to mortgages originated in the height of the housing boom, according to the report.