News

Real estate-related debts are on the decline, as are overall delinquencies, according to a quarterly report from the Federal Reserve Bank of New York. Debt maintained through mortgages and home equity lines of credit (HELOC) declined $146 billion during the fourth quarter of last year. Mortgages made up a majority of the decline – $134 billion – while HELOCs made up the remaining $12 billion. Also in the fourth quarter, the delinquency rate on consumer debt was reduced from 10 percent to 9.8 percent.

Fannie Mae has put a block of 2,490 REOs up for sale. It's the first pilot transaction of the federal government's Real-Estate Owned (REO) Initiative announced in August 2011, which aims to sell homes repossessed by government agencies to private investors for the purpose of turning the properties into rental units. The homes up for grabs are concentrated in the hard-hit metropolitan areas of Atlanta, Chicago, Las Vegas, Los Angeles, Phoenix, and parts of Florida, and 85 percent of them are already occupied by tenants.

Real estate debt and delinquencies are on a continuing decline, according to the Federal Reserve Bank of New York’s latest Quarterly Report on Household Debt and Credit. Mortgage and home equity lines of credit (HELOC) balances fell at a combined $146 billion, with $134 billion from mortgages and $12 billion from HELOC, which are, respectively, 11 percent and 11.

The American Guild of Appraisers (AGA) petitioned the Fed and the Consumer Financial Protection Bureau to overturn a regulation that allows appraisers to be paid a fraction of what can be defined as a customary and reasonable fee, a release from the AGA stated. In 2010, Dodd-Frank rules were enacted to establish certain requirements for appraisals, including one to “ensure that creditors and their agents pay customary and reasonable fees to appraisers,” according to the Dodd-Frank website. But last year, the Fed introduced a new law that the AGA views as undermining the original Dodd-Frank requirement.

The pending home sales index (PHSI) rose in January to 97.0 from a downwardly revised 95.1 in December. At 97.0, the index is at its highest level since April 2011, the National Association of Realtors reported Monday. The index rose for the third time in the last four months and the January reading was 8 percent above January 2011 levels, but 26.5 percent below the April 2005 peak. The index began in January 2005. The PHSI has been trending upward, albeit modestly for most of the past two years. Despite the 20-month high, the index is relatively subdued.

Two more banks went under over the weekend, and one of those banks did not find another financial institution to take over. Home Savings of America in Little Falls, Minnesota was left in the hands of the Federal Deposit Insurance Corporation (FDIC) after not finding another bank to purchase its assets.

The National Association of Real Estate Brokers, Inc. (NAREB) announced the launch of a 25-city, $1.2 billion REO and foreclosure mitigation initiative called the Homeowner's Assurance Program (HAP). NAREB, through is network of industry professionals, will provide the agent infrastructure to manage, market, and dispose of nonperforming loans and REO assets acquired under the program. Targeted buyers include first-time homebuyers and others who are caught in the credit crunch and having trouble purchasing a home.

Even with falling home prices, a study from the Center for Housing Policy found affordability is becoming increasingly out of reach for homeowners and renters. According to the Center's report, the share of working households paying more than half their income for housing between 2008 and 2010 went up from 21.8 percent to 23.6 percent. As home prices dropped between 2008 and 2010, working homeowners also dealt with shrinking paychecks as incomes dropped twice as much as housing costs over the two-year period.

Bank of America will no longer sell new loans to Fannie Mae due to disputes over repurchase claims. The bank will still deliver modifications and refinancings for Fannie Mae loans. The disclosure was made Thursday in the bank's Securities and Exchange Commission Filing. In January 2011, the bank paid about $2.5 billion to Fannie Mae and Freddie Mac for loans that were allegedly originated with improper underwriting standards. Due to a settlement in June 2011, the bank also agreed to pay $8.5 billion to Bank of New York.

The real estate professionals at McGeough Lamacchia Realty have been proponents of short sales for quite some time, insisting that everyone comes out ahead when a short sale is achieved as opposed to a foreclosure. Now they're sharing the facts that back up their claim: On average a home sold through short sale brings a 24 percent greater return than a foreclosed property. The firm reviewed prices for short sale and foreclosure sale properties in 2010 and 2011 in Boston, Phoenix, Tuscon, Southern California, and Southwest Florida.