Home Prices Continue Upward Climb in April

Home Prices Continue Upward Climb in April

 

In its latest Home Price IndexCoreLogic reported that home prices continue to rise across the nation, with more increases to come in 2015.

The company reported that home prices, including distressed sales, increased 10.5 percent in April from the previous year. The company projects home prices will continue to increase by 1.0 percent month-over-month in May. Furthermore, national home prices are expected to rise by 6.3 percent from April 2014 to April 2015.

“The weakness in home sales that began a few months ago is clearly signaling a slowdown in price appreciation. The 10.5 percent increase in April, compared to a year earlier, was the slowest rate of appreciation in 14 month,” said Sam Khater, deputy chief economist for CoreLogic.

April marks the 26th consecutive month of year-over-year home price gains. Excluding distressed sales, CoreLogic found that home prices increased by 8.3 percent year-over-year.

Unfortunately, despite the modest April gains, home prices across the nation remain 14.3 percent below their August 2006 peak.

“Home prices are continuing to rise as we head into the summer months. The purchase market continues to suffer from a dearth of inventory which we expect will continue to drive prices up over the year,” said CoreLogic president and CEO, Anand Nallathambi.

Excluding distressed sales, all 50 states and the District of Columbia showed year-over-year home price appreciation in April. The company found that 23 states and the District of Columbia are at or within 10 percent of their peak.

Including distressed sales, the five states registering the largest year-over-year home price appreciation in April were California (15.6 percent), Nevada (14.8 percent), Hawaii (14.1 percent), Oregon (11.8 percent), and Michigan (11.3 percent).

States remaining the furthest from peak values in April include: Nevada (-38.6 percent), Florida (-34.5 percent), Arizona (-29.5 percent), Rhode Island (-28.8 percent), and West Virginia (-24.2 percent).

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Massachusetts AG Sues Fannie/Freddie Over Buyback Programs

Massachusetts AG Sues Fannie/Freddie Over Buyback Programs

Massachusetts Attorney General Martha Coakley has sued the Federal Housing Finance Agency (FHFA) and mortgage giants Fannie Mae and Freddie Mac, alleging the companies’ refusal to engage in foreclosure buybacks programs is “unfairly and illegally causing Massachusetts families to lose their homes.”

Filed Monday in Suffolk Superior Court, the Massachusetts AG’s suit alleges that Fannie Mae and Freddie Mac refuse to comply with an August 2012 state law.

Buyback programs, in this instance, are used by non-profit organizations to buy a foreclosed property to resell it back to the original owner at a more affordable price. The aforementioned state law prohibits creditors from blocking such programs.

The recently-filed suit alleges the two GSEs have failed to comply with the law due to policies that prohibit property sales to non-profits in order to resell the property to the original homeowner.

“It makes no sense for our federal government to stand in the way of this work to help struggling families stay in their homes, and it is illegal for Fannie and Freddie to do this in Massachusetts,” Coakley said. “For too long, Fannie and Freddie have been roadblocks to progress in addressing this foreclosure crisis, and I urge them to immediately reverse their policy on this common-sense program.”

One example cited in the complaint is Boston Community Capital’s Stabilizing Urban Neighborhoods (SUN) Initiative. The program buys back foreclosed, REO properties at present market value and sells them back to homeowners.

“Buyback programs like SUN prevent needless displacement of families that through an arrangement with a non-profit can afford to stay in their homes. Fannie Mae and Freddie Mac have continued to block buybacks even though they lose money in the process,” the AG’s office said in a release.

Representatives for Fannie Mae and Freddie Mac offered no comment, citing pending litigation.

Ocwen No Longer Requiring Gag Orders on Loan Mods

Ocwen No Longer Requiring Gag Orders on Loan Mods

In a report originally in Reuters, Ocwen will stop requiring gag orders, which disallowed some homeowners from criticizing the company publicly in exchange for having their loan terms modified, according to New York State’s Superintendent of Financial Services Benjamin Lawsky.

As previously reported, the company, along with Bank of America and PNC, required some litigious homeowners, upon receiving loan modifications from the companies, to sign non-disparagement clauses as a part of their mortgage settlement.

“In discussions with our Department, Ocwen has agreed to no longer seek gag rules as part of settlement agreements or loan modifications with borrowers,” Lawsky, the superintendent of New York’s Department of Financial Services, said in an emailed statement to Reuters. “Additionally, the company has stated it will not enforce gag rule provisions in existing agreements.”

Lawsky said he is reviewing the issue with the other financial institutions.

Bank of America clarified their position, noting that they do not use non-disparagement clauses in normal modification agreements.

The company said, “We do not include non-disparagement clauses or releases of claims in normal modification agreements. Only when a customer is part of a negotiated settlement that provide additional consideration to the customer is a non-disparagement and related confidentiality clause considered, and in those cases it does not preclude the customer from filing suits on post-settlement issues.”

Ocwen said that it had only used non-disparagement clauses in the “highly unusual situation where there is a legal settlement agreement with a borrower.” The company claims these specific situations account for less than 1 percent of the loans in its total portfolio.

“We are gratified that Ocwen worked constructively with us to resolve this matter, and our Department intends to review this issue at other financial institutions,” Lawsky said.

PNC Financial Services could not be reached for comment.

Survey: Is the Country Still in a Housing Crisis?

Survey: Is the Country Still in a Housing Crisis?

While the housing market continues to make strides toward recovery following last decade’s crash, a new survey finds the majority of the American public still harbors doubts about whether the worst of it is truly over.

In its second annual survey of housing attitudes, the MacArthur Foundation found 51 percent of American consumers still believe the country is in the midst of its housing crisis, while another 19 percent believe the worst is yet to come. Only 25 percent said they believe “the housing crisis is pretty much over.”

While results in the 2014 survey were slightly more optimistic than last year, more than two in five adults believe the housing market today continues to be a serious problem.

“The housing crisis that began more than five years ago has left an indelible mark on the attitudes and experiences of Americans,” said Geoffrey Garin, president of Hart Research Associates, which conducts the survey for MacArthur.

At least part of that pessimism stems from challenges related to housing affordability in today’s economy, which “has driven a large share of the American people to make significant financial adjustments,” Garin said.

Overall, only half of survey participants said they feel homeownership is still an “excellent” long-term investment, and just less than two-thirds feel it is less likely today for a family to build equity and wealth through homeownership than it was 20 or 30 years ago.

Meanwhile, while 70 percent of non-homeowners still aspire to own a home someday, half of all adults believe homeownership is less appealing today than it used to be.

Polled about their experiences, more than half of respondents said even a family earning the average income in their community would have difficulty gaining access to quality affordable housing, with that share approaching 75 percent for families living below the poverty line or young people just getting started in the labor force.

Faced with these challenges, 52 percent of adults said they have had to make at least one sacrifice in the past three years to be able to cover their rent or mortgage, including taking on an additional job, cutting back on health care, or giving up their retirement savings.

Given their concerns, nearly three in five respondents believe the government should be doing more to ensure there is sufficient affordable quality housing, both to rent and buy.

“This survey provides insight into the substantial burden of costly and unstable housing, particularly for low and middle-income families,” said Julia M. Stasch, VP of U.S. programs at MacArthur. “It is clear that Americans believe more can and should be done to improve housing affordability for renters and owners, and that government should take action to invest in both equally.”

April Home Sales Drop in Bay State

April Home Sales Drop in Bay State

April sales of Massachusetts single-family homes dropped 2.3 percent compared with the same month last year, according to the latest from the Warren Group.

The percentage decline represents a decrease from 3,508 last year to 3,427 in April.

According to the group’s study, April is the third consecutive month in which sales decreased compared with the same month in 2013, contributing to a year-to-date decrease of 2.4 percent.

Only 10,984 homes have been sold so far in 2014 versus 11,253 during the same period last year.

Timothy M. Warren Jr., CEO of the Warren Group, said, “[I]t is a bit of a surprise that we are not seeing more forward momentum,” but also noted while these sales might have “closed in April … the buyers were shopping and negotiating back in February, the middle of a brutal winter,” meaning the latest figures are “not a reflection of the strength of the spring market.”

As sales fell, the median price for single-family homes continued to rise, marking the 19th consecutive month it has increased statewide. As the Warren Group’s data shows, while the median price only rose 0.6 percent to $315,000 from $313,000 last April, year-to-date, prices were up 5.2 percent from $294,000 in 2013 to $309,350 this year.

In contrast to home sales, April condominium sales in Massachusetts increased 7.0 percent to 1,596 from 1,493 last April.  This, according to the Warren Group, is the 10th consecutive month of increasing condo sales with a 10.5 percent gain year-to-date.

The median sales price increase for condos was more impressive, posting a 10.7 percent increase to $310,000 for April compared to $280,000 a year prior. As Warren explained, “Condos are proving to be a very popular segment of the market and the high demand is driving up the prices. For April, the median price of a condo is just $5,000 below the median price of a single-family home. Ten years ago the difference was $72,000.”

Fannie Mae’s Book of Business Contracts in April

Fannie Mae’s Book of Business Contracts in April

Fannie Mae’s book of business shrank again in April, continuing an uninterrupted streak of declines that started at the end of 2013.

According to the enterprise’s volume summary report, the book’s total value contracted in April at a compound negative growth rate of 2.7 percent. The latest drop brings the book’s average year-to-date growth rate to -2.3 percent.

As of April 30, the book’s value was an estimated $3.14 trillion.

The decline came from a drop in Fannie’s gross mortgage portfolio, which shrank at a rate of 14.3 percent as sales and liquidations increased to offset a rise in purchase activity.

Meanwhile, total mortgage-backed securities and other guarantees also fell, owing to an increased annualized rate of liquidations.

As was the case at Freddie Mac, single-family serious delinquency in Fannie’s portfolio fell in April, ending the month at a rate of 2.13 percent compared to 2.19 percent in March.

At the same time, the multifamily delinquency rate climbed back up to 0.11 percent from 0.10 percent previously. Multifamily delinquency has yo-yoed between those two values since November.

Fannie reported 11,321 loan modifications in April. Year-to-date, modifications at the GSE totaled 47,365.

JPMorgan Chase Sued for Discriminatory Lending Practices

JPMorgan Chase Sued for Discriminatory Lending Practices

Foreclosures continue to be a national problem, and one metro’s City Attorney thinks a large part of the problem came from discrimination. Los Angeles City Attorney Mike Feuer is suing one of the nation’s largest banks, JPMorgan Chase, alleging the bank engaged in discriminatory lending.

The city contends the mega-bank caused a wave of foreclosures that diminished the city’s property tax revenues and increased the need for costly city services. Allegedly, the bank engaged in a pattern of imposing different terms or conditions to consumers on a discriminatory basis, or “redlining.”

“JPMorgan engaged in reverse redlining, and continues to engage in said conduct, by extending mortgage credit on predatory terms to minority borrowers in minority neighborhoods in Los Angeles on the basis of the race or ethnicity of its residents,” the complaint said.

Recently, new litigation against JP Morgan Chase was bolstered by a court ruling that denied a motion by Wells Fargo to dismiss a similar complaint made by the city. Feuer sued Wells Fargo, Bank of America, and Citigroup in December.

“L.A. continues to suffer from the foreclosure crisis—from blight in our neighborhoods to diminished revenue for basic City services,” Feuer said. “We’re fighting to hold those we allege are responsible to account and to help bring back every community in our City.”

The City of Los Angeles is seeking damages for reduced property tax revenues resulting from the decrease in value of foreclosed properties that are often left neglected and vacant, resulting in surrounding properties to lose value. The root cause of the foreclosures, according to the city, is from discriminatory lending practices by JP Morgan Chase.

The suit also seeks damages for the increased cost of city services resulting from foreclosures.

“When banks engage in such discriminatory conduct, the misconduct has profound financial consequences for the cities in which mortgaged properties exist, and banks should be responsible for those financial consequences,” the city’s complaint read.