Tag Archives: Negative Equity

RealtyTrac on Tuesday unveiled new site features of its online foreclosure marketplace that allow users to see the amount of equity - or negative equity - in a property based on its estimated market value and total outstanding loans. The company says this additional information will help buyers and investors quickly determine which distressed properties represent good purchase opportunities for them, and will help real estate agents and brokers pinpoint potential listing opportunities.

According to a new poll from the market research firm Harris Interactive, 22 percent of people with mortgages have difficulty making their monthly payments. The poll also reveals that 21 percent think they are underwater and owe more on the loan than their home is worth. Compared to the results of last year's poll, those struggling to pay their mortgage has declined by 7 percent, but the company says the improvement is deceptive since it likely reflects the fact that borrowers previously experiencing trouble have already lost their homes.

The industry's shadow inventory of repossessed and soon-to-be repossessed homes that aren't visible as properties for sale has contracted, according to CoreLogic. Analysis released by the company Wednesday shows that the shadow inventory of residential properties as of January 2011 fell to 1.8 million, down from 2.0 million a year earlier. For the first time, CoreLogic also examined how loan modifications and short sales could reduce shadow inventory levels.

Short Sale Association of America (SSAA) has officially launched its short sale platform to real estate agents and brokers. With over 12 million U.S. homeowners upside-down on their mortgage, Jonathan Bowman, founder of SSAA, notes that the industry certainly has its worked cut out, but he says the resources provided his organization will empower agents at all levels of expertise to reach and effectively assist as many distressed homeowners as possible.

The Federal Housing Finance Agency (FHFA) has pushed the cut-off date for the Home Affordable Refinance Program (HARP) out by a year. HARP allows homeowners with a mortgage owned by Fannie Mae or Freddie Mac who owe more than the home is worth obtain a new loan at today's lower interest rates. The program was originally set to expire on June 30, 2011. FHFA has now extended the program through June 30, 2012.

Home prices in January were down 5.7 percent from a year earlier after factoring the month's REO sales and short sales into the mix, according to CoreLogic. January marked the sixth month in a row that the company has recorded a year-over-year decline in U.S. home prices. CoreLogic says the industry's ominous shadow inventory of distressed properties and rising negative equity, combined will still high levels of unemployment, all contributed to the continuing slide in home prices.

As the House prepares to debate on the future of the Federal Housing Administration's Short Refinance option, FHA Commissioner David Stevens implored House subcommittee members to give the program a chance. The program is a voluntary option for lenders to agree to offer principal write downs and restructure loans for underwater borrowers. Stevens said as of February 11, 23 FHA-approved lenders are participating in the program and 245 FHA case numbers have been requested, of which 44 loans have been endorsed.

Bank of America is the first major mortgage servicer to leverage the federal government's Hardest Hit Fund to begin pilot programs of principal reductions for Arizona customers who owe more on their mortgages than their properties are worth. Through the Arizona pilot, BofA customers experiencing financial hardship may be eligible to have the amount owed on their mortgages reduced through matching contributions from the state and participating mortgage investors.

As the backlog of foreclosures continues to drive down housing prices, losses on private-label residential mortgage backed securities (RMBS) will increase in 2011, according to Moody's. The forecast for more red ink seeping from home loans sold to investors comes despite the fact that the agency believes the rate at which loans become delinquent will decline during the year. Moody's expects flaws in foreclosure practices that have recently come to light to delay foreclosures by three to six months, further extending the window of losses for investors.

The research firm CoreLogic says the share of mortgage borrowers who owed more on the loan than their home was worth shrank during the third quarter. But analysts say the news is hardly encouraging since the decline is being attributed to a rise in foreclosures rather than a rise in home prices. CoreLogic reports 10.8 million, or 22.5 percent, of all residential properties with mortgages were in negative equity at the end of Q3, down from 11.0 million, or 23 percent, three months earlier.