According to a survey conducted by Money Management International, struggling homeowners are reluctant to seek professional mortgage relief help.
The survey found that half of respondents would first seek help from a family member or friend.
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As of December 31, 2011, the Hardest Hit Fund (HHF), which is meant to fund innovative measures to help families through the housing crises in hardest hit states, has spent just 3 percent of its budget since its February 2010 inception, a report published by a watchdog organization for taxpayers revealed Thursday. More specifically, as of the end of 2011, HHF spent $217.4 million of the $7.6 billion available for the program, and has provided assistance to just 30,640 homeowners, which is about 7 percent of the 458,632 to 486,536 homeowners it is estimated to help over the life of the program, which ends in 2017.
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Homeowners who have had mortgage debt forgiven after a foreclosure, modification, or short sale may be able to exclude the canceled debt from their taxable income if they meet specific criteria.
According to Gil Charney, principal analyst at The Tax Institute at H&R Block, the specific criteria to have forgiven debt excluded are the debt must have been incurred to buy, build or substantially improve the residence, called "acquisition debt, and the property must be the taxpayer's primary residence.
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States and metro areas known for being risky when it comes to mortgage fraud seem to be repeat offenders, according to the 2011 Annual Mortgage Fraud Risk report released by Interthinx.
The top six states with the highest levels of mortgage fraud risk in 2010 maintained their spots as the riskiest states into 2011, a trend also seen when looking at data for fraud in Metropolitan Statistical Areas (MSAs). Nevada, Arizona, Florida, California, Colorado, and Michigan were the six riskiest states for 2011 and 2010.
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NPR reported Friday that Fannie Mae and Freddie Mac might consider principal reduction as a means to help underwater homeowners. Edward DeMarco, acting director of the FHFA, has stood firm in his decision to not allow for principal reduction, despite mounting criticism from Democrats and petitioning from organizations to have DeMarco fired. "NPR and ProPublica have learned that both firms have concluded that giving homeowners a big break on their mortgages would make good financial sense in many cases," NPR stated in its story.
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Consumer credit data suggests spending will increase and the housing market will begin to emerge from its slump this year, according to Equifax and Moody's Analytics. Both companies note that as key market data align with pre-recession totals, consumers should anticipate steady economic growth for major credit sectors, including auto, bank card, and consumer finance. While the mortgage lending sector continues to see the highest percentage of delinquencies, it too is showing signs of increased traction in the coming months.
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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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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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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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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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