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Tag Archives: Mortgage Debt

Real Estate Debt, Delinquencies Decline: Report

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.

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Nearly 1 in 4 Households Use Over 1/2 of Income for Housing Costs

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.

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Hidden Gems: Freddie Mac’s Refinance Activity Reports

Of the myriad of public reports about the mortgage industry, the quarterly statistics from Freddie Mac on refinance activity offer unique insights not only into the level of refinance lending but what that activity tells us about the housing sector. If you know how to read them, the reports can offer strategic clues for the savvy lender. Loans refinanced into larger loans, for example, speak to a need to supplement lagging incomes, while refinancing into smaller loans allows homeowners to free up cash for consumption.

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Outstanding Mortgage Balances Declined $30B Each Month in 2011

Each month of 2011, outstanding mortgage balances in the U.S. declined by an average of $30 billion, according to a recently released report from Moody's Analytics and Equifax. The report attributes the decline to defaulted loans being written off. Aggregate delinquency rose by 6 basis points in December to 6.12 percent, according to the companies' joint study. The rate remains in line with rates seen since April but has declined since a January high of 8.25 percent.

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Don’t Expect Rise in National Home Prices Until 2013: Fiserv

Fiserv is forecasting average U.S. home prices to fall by another 2.7 percent through the third quarter of 2012, before rising 3.8 percent by the third quarter of 2013. The company says the monthly mortgage payment for the median-priced U.S. home has dropped to $640, nearly 45 percent below the peak of the housing bubble. This improvement in housing affordability is expected to drive sales activity going forward, and while not enough to change Fiserv's predictions for the direction of prices at the national level, the company does foresee notable improvements in select markets.

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Mortgage Debt in the U.S. Continues to Contract

The ongoing turmoil still gripping housing markets across the country has manifested itself in the Federal Reserve's macro assessment of household wealth and capital flow. With foreclosure stripping millions of Americans of their largest asset and potential homebuyers still watching for the market bottom, the total sum of home mortgage debt in the U.S. has dropped to its lowest level in nearly five years. Outstanding mortgage debt contracted by 1.8 percent over the third-quarter period to $9.88 trillion.

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Study Finds Fewer Borrowers Sinking in Negative Equity

The depreciation of home values over the past half-decade has left millions of mortgage borrowers owing more than their home is worth -- 10.7 million, according to CoreLogic. The company's latest negative equity study found 22.1 percent of all residential properties with a mortgage were underwater as of the end of September. That's down from 22.5 percent - or 10.9 million - at the end of the second quarter, but CoreLogic says the number remains high and makes borrowers more vulnerable to economic shocks such as job loss or illness.

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Fed Records First Rise in New Mortgage Delinquencies in a Year

About 2.5 percent of current mortgage balances in the U.S. transitioned into delinquency during the third quarter, the Federal Reserve Bank of New York said Monday. That assessment reverses a recent trend of reductions in the measure of newly delinquent mortgage balances, going back to the third quarter of 2010. Some 264,000 individuals had a foreclosure notation added to their credit reports between June 30 and September 30. New bankruptcies over the period tallied 423,000.

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Holistic Financial Counseling Reduces Re-default Rate: Study

Holistic financial counseling -- that which focuses on a borrower's entire financial situation -- can prevent both foreclosures and re-defaults, according to a recent study sponsored by special servicer Outreach Financial Services. Holistic financial counseling can save servicers up to $71.5 million in losses on a portfolio of 10,000 loans, according to the study. When holistic counselors review a borrower's entire financial status, they are generally able to diminish monthly spending by $200 to $300.

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Consumers’ Financial Health Takes Hit in Third Quarter

A deteriorating housing picture, coupled with an increase in expenses and a drop in consumer confidence, led to a sharp decline in consumers' financial health during the third quarter. The nonprofit credit counseling agency CredAbility puts out a regular quarterly index measuring consumer distress. Between July and September, the gauge recorded its largest drop since the third quarter of 2008. CredAbility's data show the average consumer has been in distress for 12 straight quarters now.

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