Housing Update 2: ‘Shadow Inventory Dwarfs Loan Mods’; Treasury releases Making Home Affordable status report & NAR figures show median home prices dropped 11.2% y/y

Update: A-HA!! I knew it!! J’accuse Treasury!!!!! Wonder if they are having Fannie/ Freddie HOLD out on those pre-sale foreclosures to avoid asking for ANOTHER 50B right now, dammit! Who knows when the housing market will stabilize? The shadow inventory knows Muuhuuuhaaaaa. Diana Olick has it:

(…) But even more distressing was a report I received today from Lender Processing Services, which is a huge mortgage data aggregate.

Foreclosure inventories continued their upward climb. The nation’s September 2009 foreclosure rate stood at 3.12 percent – a month-over-month increase of 2.6 percent and a year-over-year increase of 88.9 percent. Among individual states, Florida posted the most troubling results with 10.4 percent of loans in foreclosure, and more than 22 percent of loans reported as non-current.

LPS’ October Mortgage Monitor also cites large “shadow” foreclosure and REO inventories. The number of loans deteriorating further into delinquent status is now more than twice the number of foreclosure starts, indicating another major wave of troubled loans in an already clogged loan pipeline. Nearly one-third of foreclosures remain in pre-sale status after 12 months – twice as many as the year prior. The six-month average deterioration ratio has risen the past two months to 300 percent, showing that for every loan that improves in status, three more deteriorate further…

LARGE grain of salt on these HAMP numbers.  PDF from Treasury of the November ‘Servicer Performance Report’ for Making Home Affordable here.

Continues after the break:

CNBC:

…When the massive $75 billion program was first outlined in late February, the White House said it hoped to modify 3-4 million mortgages in two years, which would mean 375,000 to 500 million a quarter. It has since adjusted that to a three-year goal.

In all, some 920,000 borrowers have been made modification offers.

Treasury is not releasing how many modifications had lower payments, or write downs, or permanent mods or trial mods or mod failures.

…For the first time, the report includes state-by-state data. California ranked No. 1 with almost 135,000 modifications. Florida was second with more than 82,000. Both states are among the top ten with foreclosure rates….

The October report from the Treasury Dept. shows that Citigroup’s mortgage unit has the highest participation rate–40 percent–of the major banks. BofA has the lowest–14 percent–which is all the more significant because it has the largest number of mortgages eligible under the plan–about 991,000. JPMorgan Chase, which has the second-most eligible mortgages, had a 32-percent rate.Saxon Mortgage Services, a unit of Goldman, ranked No.1 overall, with a 44-percent participation rate.

The government data does not yet include redefault rates….

Treasury is withholding the data on how many modifications are failing. See Diana Olick here for much more on that:

(…)According to Treasury’s August 4th release on HAMP, 230,000 trial modifications were begun under the HAMP program through the end of July. So by November, i.e. now, we should have a good idea of what percentage are working, right? A delay doesn’t mean doom, but two very good sources are telling me that “the numbers are low,” that is, the number of permanent conversions. Granted, there have been extensions to the trial period, as lenders try to streamline all the paperwork. But I have to wonder: Treasury could hold up reporting the conversion numbers, claiming that some borrowers have been extended in order to get the paperwork in order; but by now, with over half a million borrowers in the trial mods, they must have a number of how many have fallen out because they missed payments after one or two months….

NAR released some pricing data as well, highlights courtesy of Diana Olick:

Median Price $177,900 down 11.2% year over year

Foreclosures/Short Sales make up 30% of all transactions, Total Sales up 11.4%

Metro Prices: 80% of metro areas showed price declines; up in 30 cities

Treasury Press Release on HAMP Report:

November, 10, 2009

Obama Adminstration Releases New Data on Making Home Affordable Program, Incldues State-Specific Modifications to Date

WASHINGTON – Today, the Obama Administration released the next monthly report for the Making Home Affordable (MHA) loan modification program. As part of an ongoing commitment to transparency, the report includes for the first time state-specific trial modification numbers. With more than 650,000 modifications under way across the country, the program is on track to meet its goals over the next several years.

“As this report demonstrates, struggling homeowners in every state now benefit from reduced monthly mortgage payments and have an opportunity to stay in their homes,” said Treasury Assistant Secretary Michael S. Barr.  “The program is having a pronounced impact in areas particularly hard hit by the housing crisis. We’re reaching borrowers at a larger scale than any other modification program to date, but there is still much more work to be done.”

The Monthly MHA Report is available here

Here is a CLUE this is NOT WORKING:

Arizona
34,424

California
134,609

Florida
82,614

Yes, you see that correctly! Per the Pg 5 breakdown by state of the number of active modifications under HAMP,  AZ one of the TOP 3 foreclosure states has only 34,000 mods in process! And NONE of these 3 states has nearly enough mods to curb the tide of foreclosures….

On the map on that same page you can see that over 9% of ALL OUTSTANDING MORTGAGE LOANS in these 3 states are over 60 days delinquent. These servicers were propped up with cash and the mods they are doing is a drop in the bucket of this crisis..

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November 10, 2009. Tags: , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Glam Metal, Hair Bands, Horror, Obama Administration, Politics, Unemployment Statistics, Wall St.

11 Comments

  1. Houston Commercial Financing replied:

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  2. Jeana replied:

    Banks are not doing final loan mods. They put everyone one trial to get as much money out of homeowners for them to give them hope and then to extend trial payments and then deny. The banks would rather foreclose sell properties in a bundle to investors and when the economy slowly but does some back up they have a nice collection of homes. The banks are greedy crooked snakes. They do not do anyting unless it makes them money. Banks get paid to do trials. They should not be paid unless the are finalized mods.

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  3. Meridian Home Mortgage replied:

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  4. Kevin Simpson replied:

    The foreclosure situation is really complicated recently.

    BTW: nice song!

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  7. Janney replied:

    The HAMP should be here for everyone’s welfare not just for the chosen few. Thanks for sharing. By the way, I know a real estate coach who could also help many in the real estate industry make money despite the current crisis.

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  9. HAMP Progress Report for 11/09 - Loan Modification Forum - LoanSafe.org replied:

    […] Foreclosure Plan Shows Continued Improvement – Real Estate * US * News * Story – CNBC.com Housing Update: Treasury releases Making Home Affordable status report & NAR figures show median… Older article Citibank (NYSE: C) and Wells Fargo (NYSE: WFC) Boosts Mortgage Modifications in […]

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  10. Dave H replied:

    Regarding Home Affordability Modifications (HAMP)

    The HAMP program is very good for what it was designed to do. But it is the servicers implementation that is the problem.

    Desperate Home Owners Petition Congress For Help
    http://www.petition2congress.com/2/2564/

    Many servicers are finding any excuse they can to foreclose instead of modify because the servicers make more money by foreclosing. It is the investor (often Fannie or Freddie i.e. taxpayers) that lose. The servicers get fees for foreclosing,managing the property owned and reselling it .

    Many lawyers, consumer groups and recently a Congressional Oversight Committee has pointed out the servicer problems.

    “We believe all servicers must do more to reach struggling homeowners faster,” Treasury spokeswoman Meg Reilly said.”

    REACHING homeowners is NOT THE ISSUE. It is easy to get on trials but they often are required for 6 months instead of 3 per the HAMP directives. The issue is being able to get final modifications as often the directives are not followed and additional requirements are being imposed by servicers and lenders.

    Most servicers, and Fannie and Freddie as investors are backlogged for many months since there is to much “reaching”going on to get more in the pipeline they can’t process. Its getting the modification approved that is the huge problem.

    It is common to have to resend the same documents many times as the servicers either intentionally lose them or are just too overwhelmed. Than they claim they aren’t getting the documents that have been mailed or faxed repeatedly.

    If you are denied, often for reasons not part of the requirements, they can foreclose and sell without notice immediately.That power to sell is even in the Trial Agreement Document.

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  11. HAMP Progress Report for 11/09 - Loan Modification Forum - LoanSafe.org replied:

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