Market Studies

While home prices have risen 14 percent nationally since their trough a few years ago, Fitch Ratings points out that loss severities on residential mortgage-backed securities have only 5 percent over the past year. The slow rate of improvement is primarily the result of prolonged liquidation timelines which hit an all-time high in the third quarter. Currently, 32 percent of seriously delinquent homeowners have not made a payment in more than four years.

Over the past few years, lenders and underwriters revamped their standards to reduce risk, but Equifax says there's one challenge many lenders still have difficulty combating--undisclosed debt. In a recent white paper, the credit bureau published results of its research into undisclosed debt and its recommendation for how to deal with this difficult hazard. Ultimately, Equifax said, ""The results are somewhat surprising and disturbing.""

A recent bulletin from the Office of the Comptroller of the Currency (OCC) recommends new guidelines for national banks and federal savings institutions regarding their third party vendors, including appraisal management companies (AMCs). Banks and mortgage lenders are cautioned to choose their appraisers and other vendors wisely, as regulators will hold lenders accountable of the quality and accuracy of their vendors' work.

Speaking at the 2013 Realtors Conference & Expo, National Association of Realtors (NAR) chief economist Lawrence Yun predicted steadiness in existing-home sales over the next year as prices continue to ascend. Yun expects existing-home sales to rise by about 10 percent in 2013 to reach 5.13 million. The national median existing-home price is projected to end this year at about $197,000, 11 percent higher than in 2012.

As of September, more than 1.2 million homeowners have received a permanent modification through the Home Affordable Modification Program (HAMP). Homeowners currently in permanent HAMP mods have been granted an estimated $12.1 billion in reduced principal, Treasury reports. In fact, officials say of all non-GSE loans eligible for principal reduction entering HAMP in September, 72 percent included a principal reduction feature.

Ideally, the government should back up to 35 percent of all new mortgages, according to the median response given in a recent Zillow survey which polled 108 economists, real estate experts, and investment and market strategists. The government currently backs about 90 percent of all new mortgages. The last time the government held a 35 percent share of new originations was in 2006 at the height of the housing bubble.

Some 204,000 Americans found work in October, the Bureau of Labor Statistics reported Friday morning. Yet with the number of public employees counted as unemployed or temporarily laid off as a result of the federal government shutdown last month, the national unemployment rate rose to 7.3 percent, up from 7.2 percent in September. Job gains for both August and September were revised upward, adding a combined 60,000 more to the workforce.

While home price gains continue to exceed historical norms at the national level, the latest study by Trulia reveals marked differences in appreciation between predominantly Republican and predominantly Democratic metros. The company says home prices are skyrocketing in many of America's bluest metros, like Oakland and Detroit, while the home-price rebound seems to have bypassed most of America's reddest metros.

Delinquency and foreclosure data reveals the housing market is heading back to pre-crisis norms, according to the Mortgage Bankers Association's latest National Delinquency Survey. The percentage of home loans in delinquency or foreclosure was 9.75 percent as of the third quarter, the lowest level in about five years, according to the trade group's report. Likewise, foreclosure starts, at just 0.6 percent, are approaching pre-crisis levels.

Bill Griffin, EVP at Lender Processing Services (LPS), has been elected to serve on the Mortgage Bankers Association's (MBA) board of directors, the company announced. Griffin joins a number of new board members who will work together with the existing members to set MBA's strategic direction and oversee management of its initiatives.