News

The Economic Report of the President was released by the White House Friday, and included a summary on how the administration has and will attempt to move the housing market forward towards stability. The theme for report was To Recover, Rebalance, and Rebuild, and when addressing the housing market, the report stated that while housing markets are stabilizing in many regions, the healing process will take time. In order to restore the housing market back to health, the report spoke of initiatives from the Obama administration including the reduction of inventory for foreclosed homes by converting them to rental units.

Reluctant attorneys general for New York and Delaware both signed on to the multi-state $25 billion settlement last week with the nation's largest servicers, securing $740 million and $45 million for their states, respectively. The two attorneys general were lured back to the settlement in its final days when they were assured the settlement would not impede further investigation into additional civil and criminal claims at the five mortgage servicers – Bank of America, Citi, JPMorgan Chase, Wells Fargo, and GMAC.

The risk for property valuation fraud rose nearly 8 percent for this fourth quarter, according to the Mortgage Fraud Risk Report released by Interthinkx. This rise caused certain regions of the New York Tri-State region to move into the high risk category. The national mortgage fraud risk index also increased by 1.4 percent compared to the last quarter and 3.6 percent since a year ago. With an index value of 247, Arizona overtook Nevada as the riskiest state. Nevada, now at number two, ranked first in this category since the first quarter of 2010.

President Obama's budget proposal continues to receive a barrage of criticism, especially from Republican lawmakers. Obama specifically targets the nation's largest banks with a Financial Crisis Responsibility Fee, through which he intends to raise $61 billion. The money is intended to ""compensate the American people for the extraordinary assistance they provided to Wall Street"" and discourage excessive risk-taking, Obama says. Part of the money would be used to fund the mass refinance program outlined in his State of the Union address.

The average 30-year fixed-rate mortgage is still at an all-time low of 3.87 percent and it's been there since the first week of February, according to the weekly market survey published by Freddie Mac. The 30-year average has managed to remain below 4 percent for the past 11 weeks, and below 5 percent for the past 52 weeks, dating back to February 17, 2011. The 15-year rate was also unchanged in the GSE's study, while the 5-year adjustable rate posted a slight decline and the 1-year adjustable rate increased.

CitiMortgage, a subsidiary of CitiBank, agreed to pay $158.3 million due to claims that the bank failed to comply with HUD and FHA requirements in underwriting loans for federal insurance, and for stating certain loans were eligible for FHA's mortgage insurance program when they were not. As a result of these actions, HUD incurred losses from defaulted loans that should not have been approved. CitiMortgage accepted responsibility for specific actions including failing to conduct a full review of certain loans it endorsed.

A recent Mortgage Bankers Association (MBA) report revealed that overall, delinquencies and foreclosures are on a decline, and when gauging where the U.S. housing market stands in terms of recovery, Jay Brinkmann, MBA's chief economist, says we are about halfway to the pre-recession days. Overall, the delinquency rate for mortgage loans on one-to-four unit residential properties decreased to 7.58 percent in the fourth quarter of 2011, compared to 7.99 percent in the third.

First-time claims for unemployment insurance fell 13,000 for the week ended February 11 to 348,000, hitting their lowest level since March 2008, the Department of Labor reported Thursday. Continuing claims, reported on a one-week lag, fell as well, dropping 100,000 to 3,426,000. That's the lowest reading for continuing claims since August 2008. While the absolute numbers themselves are encouraging, the trend in the filings is more significant.

Foreclosure activity increased 3 percent in January, but is still down 10 percent compared to a year earlier, according to data released by RealtyTrac Thursday. Foreclosure activity includes default notices, scheduled auctions, and bank repossessions. Nationwide, one in every 624 housing units had a foreclosure filing last month. The number of properties taken back as REO in January totaled 66,542, with the biggest year-over-year increases in repossessions recorded in Massachusetts, New Hampshire, and Indiana.

Obama's FY2013 budget proposal includes an extension of the Mortgage Forgiveness Debt Relief Act of 2007. The Act ensures that homeowners who received principal reductions or other forms of debt forgiveness on their primary residences do not have to pay taxes on the amount forgiven. The administration is proposing an extension that would apply to any amounts forgiven before January 1, 2015. Otherwise, short sales and even modifications that reduce the debt qualify as income to the borrower.