FHA Streamlines Process to Help Delinquent Homeowners Stay in Homes

The Federal Housing Administration (FHA) recently announced new procedures to strengthen the process mortgage servicers use to help struggling families avoid foreclosure and remain in their homes.  FHA is streamlining its loss mitigation protocols that servicers must use when evaluating and deploying ‘home retention options,’ foreclosure alternatives that allow delinquent borrowers to retain their home.

FHA’s revised procedures streamline the process servicers use to engage borrowers, specifically when evaluating them for the FHA-Home Affordable Modification Program (FHA-HAMP).  These changes will reduce the number of steps that a servicer and borrower must take to resolve a delinquency and enter into a loss mitigation home retention product.  In addition, FHA is removing certain obstacles that will allow servicers greater flexibility for evaluating an unemployed borrower for a special forbearance agreement.

Specifically, FHA will:

  • Require servicers to convert successful 3-month trial modifications into permanent modifications within 60 days instead of the average four-to-six months;
  • Allow borrowers with three missed mortgage payments to qualify for a partial claim to bring their arrearages current versus the previous requirement for a minimum of four missed payments;
  • End the traditional stand-alone Loan Modification option so struggling borrowers can access the FHA-HAMP option, with its greater payment relief, sooner; and
  • Eliminate the required 12-monthterm for FHA’s special forbearance option.  This will allow servicers to offer this option to more unemployed households.

For more information, visit www.fhfa.gov.

HUD and VA Work to Find Permanent Homes for Homeless Veterans

The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Veterans Affairs (VA) recently announced a second round of funding to help provide permanent homes to an estimated 108 veterans experiencing homelessness in seven states.  The rental assistance announced this week is provided through the HUD-Veterans Affairs Supportive Housing (HUD-VASH) Program which combines rental assistance from HUD with case management and clinical services provided by VA (see attached list of HUD’s voucher awards).

Recently, HUD, VA and the U.S. Interagency Council on Homelessness (USICH) announced the number of veterans experiencing homelessness in the United States has been cut nearly in half since 2010. The data revealed a 17 percent decrease in veteran homelessness between January 2015 and January 2016—quadruple the previous year’s annual decline—and a 47 percent decrease since 2010. Additionally, while answering the Obama administration’s Mayor’s Challenge to end Veteran’s Homelessness, several mayors have declared their cities have officially ended it.

“There is momentum across the nation as community after community effectively ends veteran homelessness,” says Secretary Julián Castro. “Today’s funding will help more cities reach this important goal and ensure that we serve the brave men and women who have served and sacrificed for us. HUD and its local partners are determined to give every veteran the opportunity to secure a safe, stable place to call home.”

“The dramatic reduction in Veteran homelessness in recent years would not have been possible without the pairing of housing choice vouchers with case management and supportive services under the HUD-VASH program to help the most vulnerable Veterans become and remain stably housed,” says VA Secretary Robert A. McDonald. “The HUD-VASH awards announced [this week] will support the ongoing and important work underway to ensure that homelessness among Veterans is rare and non-recurring.”

In June, HUD awarded nearly $38 million to help more than 5,200 homeless veterans find homes. That funding ensured that communities could provide the critically needed housing assistance and case management services to those veterans and their families experiencing homelessness.

In 2010, President Obama and 19 federal agencies and offices that form the U.S. Interagency Council on Homelessness (USICH) launched the nation’s first comprehensive strategy to prevent and end homelessness. Opening Doors: Federal Strategic Plan to Prevent and End Homelessness serves as a roadmap for how the federal government will work with state and local communities to confront the root causes of homelessness, especially among former servicemen and women. To support communities as they progress towards the goal of ending veteran homelessness, USICH has identified strategies that increase collaboration and coordination among programs serving veterans experiencing homelessness.

Since 2008, more than 79,000 vouchers have been awarded and approximately 111,000 homeless veterans have been served through the HUD-VASH program. Rental assistance and supportive services provided through HUD-VASH are a critical resource for local communities in ending homelessness among our nation’s Veterans.

In the HUD-VASH program, VA Medical Centers (VAMCs) assess veterans experiencing homelessness before referring them to local housing agencies for these vouchers. Decisions are based on a variety of factors, most importantly the duration of homelessness and the need for longer term, more intensive support in obtaining and maintaining permanent housing. The HUD-VASH program includes both the rental assistance the voucher provides and the comprehensive case management that VAMC staff offers.

Veterans participating in the HUD-VASH program rent privately owned housing and generally contribute no more than 30 percent of their income toward rent. VA offers eligible homeless veterans clinical and supportive services through its medical centers across the U.S., Guam, Puerto Rico and the Virgin Islands.

For more information, visit www.hud.gov.

How Data Collection Is Changing Real Estate

Every facet of the business world has been radically changed by the way data is collected, analyzed and transmitted. So much so, that past models of how major industries were run have now become largely obsolete. Data analysis is considered the “gold standard” by which companies look at the future.

To some people, this approach seems cold or overly “corporate.” However, it gives businesses and clients a direct advantage when finalizing transactions within an increasingly short period of time. This is because much of this “big data” is collected in response to issues as they occur.

Large amounts of information are compiled so that trends can be closely studied. Facts and figures are dissected, as if they were subjects in a scientific experiment. At that point, vital bits of information can be expertly chosen and designated for further investigation.

Finance

In the world of finance, the use of big data has made a significant impact on the methods in which purchases and investments are made. Nowhere is this more evident than when financial institutions look into real estate investments. By surveying trends as they form in data pools, decisions are made as to how banks can reduce their own risk. With their own financial risk lessened, commercial banks are therefore able to pass along favorable rates to their own clients.

Banking

Big data assists banks in understanding the needs of their customers. As data is closely scrutinized, ideas often emerge helping banks to better direct their marketing efforts to groups that might otherwise be underserved by their financial institution. This is true for their customers who merely want to open a basic checking account without fees, as well as necessary for major clients who require additional tools to manage their wealth.

Sorting through this data also works so lenders can better adhere to state and federal regulations. Experts in risk management are able to look at just how customers use services not only in past endeavors, but in real time transactions. This analytical awareness of financial models is the key to reducing and eliminating electronic fraud.

Real Estate

Banks are able to use this data wisely, especially when it comes to the purchase of real estate and how it is insured. Data gives out distinctive clues as to how new homebuyers, start-ups and business owners looking to purchase commercial property will further their investments. This is crucial before extending a risky loan or in cases where similar investments have failed in the past.

1) Insurance

It is possible to use big data tools when insuring a house, commercial space or property as well. Every variety of insurance coverage now depends on information gathered from digital data sources. While insurance companies are naturally looking for methods in which to increase their own profits, they are also looking for how to better serve their clientele.

To offer more comprehensive insurance policies for property owners, insurance companies need to analyze data from large numbers of users. They study what types of insurance are necessary for a particular geographic region or type of dwelling. This can come down to offering earthquake, flood or hurricane insurance as a standard part of their policies to attract new customers.

2) Investment

When looking at realty investment, this risk also extends to the gentrification of once forlorn neighborhoods in urban areas. Using the results of data surveys, insurance companies and financial institutions decide whether to involve themselves in new real estate projects. Using risk analysis, they are better able to estimate what future claims may occur now and in the distant future.

3) Statistics

Every homeowner knows that they must have homeowner’s insurance as a requisite for maintaining their mortgage. This is based on banks and mortgage lenders using data provided by insurance companies to protect their investments. While data alone is not able to ascertain whether a house at a certain address will suffer from calamity, it is usually able to serve probable warning.

4) Liability

Consumers benefit from how this data analysis determines their insurance rates. Current property values can both positively or negatively affect insurance premiums. Data that is gathered from reliable sources allows insurance adjusters to see value in properties that may not seem reliable on the surface. However after looking at long term data, such property or land investments may be worth a second look.

5) Risk

Investing in real estate has traditionally been seen as an educated gamble or game of risk. No matter how well planned a purchase may be, there is always a chance that things could go seriously wrong. With proper data evaluation tools, companies dealing in real estate sales, investment and insurance are better able to offer reliable predictions. In addition to improving their own profits, they are now able to better assist current and future clients.

REPOST: One the House: First-Time Homebuyers Can’t Afford to Do It Alone

(TNS)—From the glass-half-full department of residential real estate, here is a summary of the things the experts believe are blocking a full housing recovery nationwide.

The third annual America at Home survey from NeighborWorks America, a group working for affordable housing and community development, finds that, despite a growing economy, the pressures of student debt, confusion about the mortgage process and a marriage-rate decline are important factors in the slow housing market.

The survey of 1,000 U.S. adults by Widmeyer Communications, a Finn Partners Co., was conducted this fall.

It found that student-loan debt continues to grow as an obstacle to consumers’ ability to buy homes, as 57 percent of respondents who acknowledged having loans says this debt was either “very much” or “somewhat” of an obstacle, compared with 49 percent of respondents to a 2014 survey.

In addition, although mortgage rates remain historically low, a generally steady rise in home prices is outpacing income growth, leading buyers — especially first-timers — to search for ways to build up down payments.

But nearly 40 percent of respondents says they have received “nothing at all” in terms of information about down-payment assistance programs for middle-income home buyers, programs that could provide thousands of dollars to help bridge savings gaps.

Finally, the housing market is being pressured by changing demographics.

Of the respondents, 43 percent plan to purchase homes when they “got married or moved in with a life partner.”

That’s important for the housing market’s rebound, because the median age at first marriage has increased to 29.3 for men and 27.0 for women, according to the Census Bureau, up from 26.8 and 25.1, respectively, in 2000.

Consumers have trouble estimating the accurate costs associated with homeownership and general home maintenance.

Survey respondents estimated an average cost of $15,070 for home-maintenance, but the actual cost for home repairs and upkeep nationwide is more likely between $2,000 and $6,000. While those who are current homeowners estimated costs for repairs to be $12,360, current renters estimated $20,503, suggesting that they might be deterred by perceived high maintenance costs.

I knew a fellow who bought a house in which the previous owner repaired a leak in the bathroom above the living room, but decided to swirl drywall compound over the entire living room ceiling for reasons that were never really clear.

When someone suggested taking down the original ceiling and replastering, the new owner pulled $3,000 out of the air as the too-expensive cost.

The real cost was $900.

Survey respondents also say they lack adequate information on the consequences of foreclosure.

Thirty-two percent believed they would have to wait “more than five years” after a foreclosure before they were eligible to obtain new mortgages to purchase houses again.

The reality is that people who have experienced a foreclosure need wait only two years before becoming eligible for most mortgage products.

“It’s understandable that Americans looking to purchase their first home are intimidated by obstacles such as student debt, lack of a down payment, and weak credit,” says NeighborWorks America president and CEO Paul Weech.

So it’s critical “that first-time buyers have access to information and programs such as down-payment assistance and affordable loans so they feel confident in purchasing a home independently.”

©2015 The Philadelphia Inquirer
Distributed by
Tribune Content Agency, LLC.

Over 50,000 Completed Foreclosures In September

completed_foreclosureForeclosure inventory declined by 24.3 percent and completed foreclosures declined by 17.6 percent compared with September 2014, according to the recently released September 2015 National Foreclosure Report. The number of foreclosures nationwide decreased year over year from 67,000 in September 2014 to 55,000 in September 2015. The number of completed foreclosures in September 2015 is a decrease of 52.8 percent from the peak of 117,438 in September 2010.

Completed foreclosures reflect the total number of homes lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 6 million completed foreclosures across the country, and since homeownership rates peaked in the second quarter of 2004, there have been about 8 million homes lost to foreclosure.

As of September 2015, the national foreclosure inventory included approximately 470,000, or 1.2 percent, of all homes with a mortgage compared with 621,000 homes, or 1.6 percent, in September 2014.

It also reports that the number of mortgages in serious delinquency (defined as 90 days or more past due, including those loans in foreclosure or REO) declined by 21.2 percent from September 2014 to September 2015 with 1.3 million mortgages, or 3.4 percent, in this category. This is the lowest serious delinquency rate since December 2007. The foreclosure rate (defined as the share of all loans in the foreclosure process) was at 1.2 percent as of September 2015, which is back to the December 2007 level.

The largest improvements in the foreclosure inventory continue to be in judicial states on the East Coast such as Florida and New Jersey, while the overwhelming majority of states are experiencing declines in their foreclosure rates, four states experienced small increases compared with a year ago.

The rate of delinquencies continues to drop back closer to historic norms powered by improved economic conditions and tighter post-recession underwriting standards, as we head into 2016, based on almost every major metric, the fundamentals underpinning the housing market are healthier than any time since 2007.

Additional highlights as of September 2015:

  • On a month-over-month basis, completed foreclosures increased by 49.5 percent to 55,000 from the 37,000 reported in August 2015. The one-month surge in foreclosures was partially the result of an annual public auctioning of thousands of tax-foreclosed properties in Wayne County, Mich., of which Detroit is the county seat. As a basis of comparison, before the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month nationwide between 2000 and 2006.
  • The five states with the highest number of completed foreclosures for the 12 months ending in September 2015 were: Florida (91,000), Michigan (45,000), Texas (32,000), Georgia (26,000) and California (26,000).These five states accounted for almost half of all completed foreclosures nationally.
  • The four states and the District of Columbia had the lowest number of completed foreclosures for the 12 months ending in September 2015 were: District of Columbia (69), North Dakota (310), Wyoming (498), West Virginia (593) and Hawaii (690).
  • Four states and the District of Columbia had the highest foreclosure inventory rate in September 2015: New Jersey (4.6 percent), New York (3.7 percent), Florida (2.6 percent), Hawaii (2.5 percent) and the District of Columbia (2.4 percent).
  • The five states with the lowest foreclosure inventory rate in September 2015 were: Alaska (0.3 percent), Minnesota (0.4 percent), Nebraska (0.4 percent), Arizona (0.4 percent) and North Dakota (0.4 percent).

32 States Have Increased Foreclosure Activity

Notice of ForeclosureThere were a total of 327,258 U.S. properties with foreclosure filings in the third quarter of 2015, down 5 percent from the previous quarter but up 3 percent from the third quarter of 2014, according to the Q3 September 2015 U.S. Foreclosure Market Report™.

The annual increase in the third quarter marked the second consecutive quarter where U.S. foreclosure activity increased on a year-over-year basis following 19 consecutive quarters of year-over-year decreases.

A total of 133,811 U.S. properties started the foreclosure process in the third quarter, down 12 percent from the previous quarter and down 14 percent from a year ago to the lowest level since the third quarter of 2005.

There were a total of 123,040 U.S. properties repossessed by the lender (REOs) in the third quarter, down less than 1 percent from the previous quarter but up 66 percent from a year ago, the largest year-over-year increase in bank repossessions since the tracking of quarterly foreclosure activity began in the first quarter of 2008.

The widespread rise in foreclosure activity in the third quarter compared to a year ago is the result of two starkly different trends taking place. In states such as New Jersey, Massachusetts, and New York, a flood of deferred distress from the last housing crisis is finally spilling over the legislative and legal dams that have held back some foreclosure activity for years. That deferred distress often represents properties with deferred maintenance that will sell at more deeply discounted prices, creating a drag on overall home values. On the other hand, in states such as Texas, Michigan and Washington, the third quarter increases are a sign that the foreclosure market has settled into a normalized pattern close to or even below pre-crisis levels, and in those states the overall housing market should easily absorb the additional foreclosure activity with little impact on home values.

New Jersey posts top state foreclosure rate, Florida rate drops to second highest
New Jersey foreclosure activity increased 27 percent from a year ago, boosting the state’s foreclosure rate to the nation’s highest foreclosure rate: one in every 171 housing units with a foreclosure filing during the quarter — more than twice the national average of one in every 404 U.S. housing units with a foreclosure filing during the quarter. New Jersey foreclosure starts were down 28 percent from a year ago, but scheduled foreclosure auctions increased 61 percent, and bank repossessions jumped 351 percent.

Florida foreclosure activity in the third quarter of 2015 decreased 17 percent from a year ago, but the state still posted the nation’s second highest foreclosure rate: one in every 186 housing units with a foreclosure filing. Florida foreclosure starts decreased 28 percent from a year ago, and scheduled foreclosure auctions were down 46 percent year-over-year, but bank repossessions in Florida increased 34 percent from a year ago in the third quarter.

Nevada foreclosure activity in the third quarter of 2015 increased 13 percent from a year ago, with the third highest foreclosure rate in the nation — one in every 194 housing units with a foreclosure filing. Nevada foreclosure starts decreased 14 percent from a year ago, and scheduled auctions were down 14 percent, but bank repossessions in Nevada increased 255 percent from a year ago in the third quarter.

Maryland’s foreclosure rate ranked No. 4 highest among the states despite nearly a 7 percent year-over-year decrease in foreclosure activity in the third quarter, and the Illinois foreclosure rate ranked fifth highest, despite a nearly 5 percent year-over-year decrease in foreclosure activity in the third quarter.

Other states with foreclosure rates ranking among the top 10 highest in the third quarter were South Carolina (one in 311 housing units with a foreclosure filing), New Mexico (one in every 322), Ohio (one in every 334), Georgia (one in every 337) and Indiana (one in every 353).

Atlantic City posts top foreclosure rate among metros
With one in every 97 housing units with a foreclosure filing in the third quarter, Atlantic City, New Jersey, posted the nation’s highest foreclosure rate among metropolitan statistical areas with a population of 200,000 or more.

Five Florida cities posted third quarter foreclosure rates among the 10 highest: Jacksonville, Fla. at No. 2 (one in every 153 housing units with a foreclosure filing); Deltona Beach, Fla. at No. 3 (one in every 155); Tampa, Fla. at No. 4 (one in every 162); Miami, Fla. at No. 5 (one in every 162); Lakeland, Florida Fla.7 (one in every 176); and Ocala, Fla. at No. 8 (one in every 179).
Trenton, N.J. posted the nation’s sixth highest metro foreclosure rate: one in every 172 housing units with a foreclosure filing in the third quarter of 2015. Albuquerque, N.M. (one in every 181) and Las Vegas, Nev. (one in every 187) take the final two top spots.

11 of nation’s 20 largest metro areas post annual increases in foreclosure activity
Eleven of the nation’s 20 largest metro areas posted a year-over-year increase in foreclosure activity in the third quarter of 2015 compared to a year ago: St. Louis, Mo. (up 113 percent), Boston, Mass. (up 55 percent), Dallas, Texas (up 39 percent), Detroit, Mich. (up 39 percent), New York, N.Y. (up 33 percent), Seattle, Wash. (up 14 percent), Houston, Texas (up 12 percent), Minneapolis-St. Paul, Minn. (up 11 percent), Atlanta, Ga. (up 5 percent), Philadelphia, Penn. (up 1 percent) and Washington D.C. (up 1 percent).

Among the nation’s 20 largest metro areas, those posting the biggest decreases in foreclosure activity in the third quarter of 2015 compared to a year ago were Riverside-San Bernardino in Southern California (down 21 percent), Los Angeles, California (down 21 percent), San Diego, California (down 20 percent) and Miami, Florida (down 16 percent).

U.S. foreclosure activity increased slightly in September
A total of 109,130 U.S. properties had foreclosure filings in September 2015, down less than 1 percent from the previous month but up 2 percent from a year ago. U.S. foreclosure activity has increased on a year-over-year basis in six of the last seven months.

43,358 properties started the foreclosure process in September, the lowest level since November 2005.

States bucking the national trend with the biggest increase in foreclosure starts in September compared to a year ago included Louisiana (up 468 percent), Missouri (up 131 percent), Virginia (up 70 percent), Massachusetts (up 60 percent), and Texas (up 21 percent).

Lenders repossessed a total of 40,308 properties in September, up 10 percent from the previous month and up 76 percent from a year ago. Bank repossessions increased year-over-year for the seventh consecutive month in September.

States with the biggest increase in REOs in September compared to a year ago included Nevada (up 844 percent), New York (up 580 percent), New Jersey (up 401 percent), Georgia (up 186 percent), and North Carolina (up 183 percent).