INDUSTRY EVENTS

Under the Microscope

Lawmakers Launch Probe into HAMP's "Effectiveness"

A Brighter Future

New Study Shows CRE Lenders Expect to Increase Originations

The Bottom?

PMI Says Likelihood Home Prices Will Drop Lower Is Diminishing

New Building Blocks

Study Says Demographics Will Alter Future Housing Demand

Mortgage Investors Push for Principal Writedowns

Mortgage principal – to cut or not to cut – has grabbed a fair share of the media spotlight in recent weeks, with a number of experts plugging principal reduction as a practicable means of ensuring homeowners don’t redefault on their modified loan.

While lenders are often prohibited from trimming the principal by agreements with investors, one such group, representing holders of some $100 billion in mortgage securities, is lobbying Congress to enact legislation that addresses the problem of underwater mortgages by reducing the debt.

Defaults on FHA Loans Surpass 9%

Even with improvements beginning to peek through the debris of the housing crisis, mortgage defaults continue to rise at an incredible rate, and the story is no different for the federal government’s mortgage insurance agency.

The latest numbers from the Federal Housing Administration (FHA) show that loans at least 90 days past due hit 9.12 percent at the end of 2009. That figure is up from 6.82 percent one year earlier. Foreclosures also soared 41 percent, but short sales as a means of avoiding foreclosures outpaced even that figure, increasing 140 percent.

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