NuWire
Link: Foreclosure Challenge Deadline Extended
?If you?ve lost your home to foreclosure ?or your home is 'underwater' (you owe more on your mortgage than your home is worth), and you believe it?s because your lender messed up, you?ve got just two more months to apply to the federal government for help.?
?The Office of the Comptroller of the Currency and the Federal Reserve Board offer a program called Independent Foreclosure Review to people who have lost money or their homes because of errors by banks in foreclosure actions during 2009 and 2010. On June 21, the agencies announced an extension of the deadline to file for the free review: instead of the end of July, you now have until September 30, 2012.
?There?s also the possibility that banks are getting hit twice for the same errors. The same banks ? Bank of America (BAC), JPMorgan Chase (JPM), Citigroup (C), Wells Fargo (WFC), and Ally Financial (ALLY) (formerly known as GMAC) ? that are subject to the review program agreed to a $25 billion settlement in February 2012. That landmark case settled charges that the banks routinely approved loans without checking their facts, a practice known as 'robo-signing.'?
HousingWire
Link: GSE Buyback Claims Hit Regional Banks, Bank Ratings at Risk: Fitch
?Fannie Mae and Freddie Mac continue to issue mortgage repurchase requests to major banks while regional banks are beginning to fear the pinch of those requests, Fitch Ratings said.
"In recent months, PNC (PNC), Suntrust (STI) and First Horizon (FHN) said they plan to boost loss reserves to hedge against future repurchase claims from the GSEs."
Real Estate ResearchLink: Comparing Price-to-Income Ratios to Affordability Across Markets
?To recap, the price-to-income ratio is a useful metric when gauging where current home values stand in relation to their historic norms, and when comparing the affordability of housing across different cities in the United States. The ratio compares the median price of homes to the median level of household income in a given area. Specifically, we used the metro-level Zillow Home Value Index, which is a measure of home values for a given metro, as well as median household income for that metro. Median household income is currently available through 2010. After that year we calculated the median household income by estimating it via Bureau of Labor Statistics wage growth rates. In this research brief we consider 133 metros and the United States as a whole.
"Compared to their historical averages, measured from the first quarter of 1985 to the fourth quarter of 1999, 23 metros are below their historical average, while 106 metros and the United States as a whole are above their historical average. Four of the metros are exactly at their historical mean. The United States currently has a price-to-income ratio that is equal to 2.8, which puts it at 11% over its historical average. Eighty-two metros are still more than 10% over their historic average. Six metros have overshot their historical average by more than 10%.
"Surprisingly, more metros are currently over their historical average than last year at the time of our last brief. Some of that can be explained by home prices appreciating a bit and some can be explained by sluggish income growth. Both of these factors will increase the price-to-income ratio.?
Housing Wire
Link: OCC Warns on Rising HELOC Risks
?A significant amount of home equity lines of credit will reach the end of their draw period beginning in 2014, about the same time the Federal Reserve plans to end its downward pressure on interest rates.?
?More of these loans are already falling into trouble. The delinquency rate on HELOCs increased to 1.78% in the first quarter from 1.69% at the end of last year, according to the American Bankers Association."It will be many quarters before delinquencies on home equity loans get back to anything close to normal," said ABA Chief Economist James Chessen.?
?'Approximately 58% of all HELOC balances are due to start amortizing between 2014 and 2017,' the OCC said. 'Housing price declines have led to questions for the banking industry about carrying values and allowance levels that support home equity portfolios.'?
Economists? Outlook Blog
Link:Realtor? Confidence in Market Outlook Continues to Rise
?This month?s RCI shows residential markets that continue to recover. ?Realtor? confidence and price expectations are higher than was the case a few months ago. ?Rising rental rates have favorable implications for home sales. ?Time on market continues to decrease. ?Prices and interest rates continue to be lower than has been the case in the past. ?These are the reasons that we continue to view the outlook as favorable for home sales.
"Given that the typical homeowner will occupy a house for approximately eight years after purchase and that home ownership is basically a lifestyle decision in addition to a financial commitment, one can make a very good case that this is a good time to buy a house, remembering that staying within a reasonable budget and acceptable mortgage is important.?
No positions in stocks mentioned.
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