Administration: As Market Shows Stability, It’s Time to Reform Housing

Newly initiated foreclosures are on the decline, reaching their lowest numbers since December 2005 in June, according to the latest ""Housing Scorecard"":http://portal.hud.gov/hudportal/documents/huddoc?id=hudjulynat2013scd.pdf from the Obama administration. Meanwhile, the administration continues to add to the tally of homeowners helped through its ""Making Home Affordable"":http://www.makinghomeaffordable.gov/pages/default.aspx Program, bringing the total to more than 1.7 million as of June.

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Foreclosure starts and completions declined in June. Foreclosure starts fell from 72,700 in May to 57,300 in June, while foreclosure completions fell from 38,900 to 35,500.

Despite the decline in foreclosures, the delinquency rate among both prime and subprime mortgages increased in June, according to the Housing Scorecard.

The delinquency rate for prime mortgages is 3.5 percent, and the subprime delinquency rate is 30.9 percent. The previous month's prime and subprime delinquency rates were 3.1 and 28.7 percent, respectively.

More than 1.2 million homeowners have benefited from the ""Home Affordable Modification Program (HAMP)"":http://www.makinghomeaffordable.gov/programs/lower-payments/Pages/hamp.aspx since the program was initiated, and another 1.9 million homeowners have gone through loss mitigation or early delinquency interventions with the Federal Housing Administration (FHA).

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Homeowners receiving HAMP modifications save about $547 per month on their mortgages as of June.

Despite the administration's original goal of aiding 4 million homeowners directly through HAMP, the administration congratulates itself for ""creating standards that have helped millions more"" homeowners beyond those 1.2 million who have received HAMP modifications, Tim Massad, assistant secretary of the Treasury said in the latest Housing Scorecard.

""Clearly without HAMP, national foreclosure rates would have been much higher and many borrowers would not have received the assistance they needed,"" Massad said.

As of the end of May, ""HOPE Now,"":http://www.hopenow.com/ an alliance of mortgage professionals, reported the completion of 3.7 million mortgage modifications, which were influenced by Making Home Affordable, according to the administration.

The pace of new trial HAMP modifications slowed somewhat in June. About 15,700 homeowners received trial modifications in June, down from 18,300 in May.

On the other hand, permanent modifications increased in June to 17,300, up from 15,600 in May.

The administration's other headline-making program --the ""Home Affordable Refinance Program (HARP)"":http://www.makinghomeaffordable.gov/programs/lower-rates/Pages/harp.aspx--also slowed somewhat in June. About 84,600 homeowners received HARP refinances in June, down from 106,900 in May.

Looking forward, the administration says it will focus on forming a new housing finance system.

""As we regain stability in our housing markets, it is time to begin the process of reforming the housing finance system to reduce the federal government footprint and ensure that private capital takes a sustainable central role,"" said Kurt Usowski, deputy assistant secretary for economic affairs at the Department of Housing and Urban Development.