Administration Assesses Housing Market, Servicer Performance

Based on data compiled in the latest ""housing scorecard"":http://portal.hud.gov/hudportal/documents/huddoc?id=HUD-499NovNat2012_SC_1.4.pdf, the Obama administration described the housing market as ""strengthening"" and noted the continual rise in home values and the strong home sales in October.

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In the November scorecard, which was jointly released by ""Treasury"":http://www.treasury.gov/Pages/default.aspx and ""HUD"":http://portal.hud.gov/hudportal/HUD, a graph shows an upward trend in home prices based on reported figures from S&P, CoreLogic and the Federal Housing Finance Agency.

""The Obama Administration's efforts to speed housing recovery are showing continued progress as the scorecard indicators highlight market momentum not seen since before the housing crisis - six consecutive months of rising home prices have bolstered homeowners equity, which is now $1.5 trillion higher than in April 2009,"" said HUD acting assistant secretary for policy development and research Erika Poethig.

The administration's scorecard also reported on its own efforts, and stated 1.3 million homeowner assistance actions have been executed as part of the Making Home Affordable Program.

The scorecard also noted that as of October, more than 1.1 million homeowners have found relief through a modification from the Home Affordable Modification Program (HAMP). HAMP mods have led to savings of about $542 on monthly mortgage payments, according to the report.

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Although data on housing continues to be positive, the administration still echoed concerns of recovery that is fragile.

The administration also released the ""Making Home Affordable Program"":http://www.treasury.gov/initiatives/financial-stability/reports/Documents/October%202012%20MHA%20Report%20Final.pdf report, which details performance related to modifications.

According to the report, since the national mortgage servicing settlement, principal reductions outside of the HAMP Principal Reduction Alternative (PRA) program have been use more widely. For loans that started a trial in October and received a principal reduction, only 56 percent received the reduction through the HAMP PRA program.

Of the trial modifications started in October, 80 percent of the borrowers were at least 60 days past due.

The highest incentive is actually paid to servicers who complete permanent modifications for homeowners who are 120 days past due or less at the start of trial. However, among the nine major servicers assessed in the report, all of the servicers averaged above 120 days for homeowner delinquency at the start of trial.

Overall, the report found the nine major mortgage servicers assessed are getting better at program implementation.

The report stated servicers were more effective at assessing program eligibility for homeowners in the ""second look disagree"" category in the third quarter. The second look disagree category is the rate Treasury disagrees with a servicers' decision in deeming a homeowner ineligible for program assistance. The average second look disagree percentage managed to stay below one percent for the servicers assessed in the third quarter.

Servicers were also showing strong performance when it comes to accuracy in calculating a homeowner's income. According to the report, the average income calculation error rate in the third quarter was below three percent for the servicers, with two having a 0 percent error rate.

Out of the nine servicers observed, the report revealed two servicers needed minor improvement, and the remaining seven were in need of moderate improvement.