The U.S. Department of Housing & Urban Development (HUD) and the U.S. Department of the Treasury have introduced a monthly scorecard on the nation's housing market. Each month, the scorecard will incorporate key housing market indicators and highlight the impact of the Administration's unprecedented housing recovery efforts, including assistance to homeowners through the Federal Housing Administration (FHA) and the Home Affordable Modification Program (HAMP). This scorecard contains key data on the health of the housing market including:
►After 30 straight months of decline and an expectation of continued nearly 14 percent decline, home prices leveled off in the past year and expectations have adjusted upward.
►Mortgages are more affordable: Due to historically low interest rates, more than six million homeowners have refinanced, saving an estimated $150 per month on average and more than $11 billion in total. And more than 2.5 million families have purchased a home using the First-Time Homebuyer Tax Credit.
►Servicers report that the number of homeowners receiving restructured mortgages since April 2009 has increased to 2.8 million. Additionally, nearly half of homeowners unable to enter a HAMP permanent modification enter an alternative modification with their servicer, and fewer than 10 percent of cancelled trials move to foreclosure sale.
However, the foreclosure prevention initiatives are not intended to help all borrowers and the market will continue to adjust for some time. The supply of homes on and off market remains near all-time highs. It will take time to work though this large inventory.
"We already know that due to the Obama Administration's efforts, the housing market is significantly better than anyone predicted a year ago," said HUD Secretary Shaun Donovan. "This scorecard will allow the American people to monitor the Administration's efforts to strengthen the housing market on a monthly basis and hold the government and industry accountable. Demonstrating the progress in the housing market due to the Administration's policies, this month's report provides a broad set of indicators showing encouraging signs of recovery."
"The Administration's housing policies, combined with actions of the Fed, have lowered mortgage interest rates, helped stabilize home prices and reduced the rate of foreclosures, repairing some of the damage caused by the financial crisis to the financial security of millions and millions of American families," said Treasury Secretary Tim Geithner. " And the Administration's loan modification programs have given more than a million responsible homeowners a chance to stay in their homes. We are going to keep working to help the Americans hardest hit by this crisis, and as we do we will make sure we are careful stewards of the scarce resources of the American taxpayer."
The Administration's goal is to promote stability for both the housing market and homeowners. To meet these objectives, the Administration developed a broad based approach including state and local housing agency initiatives, tax credits for homebuyers, neighborhood stabilization and community development programs, mortgage modifications and refinancings, and support for Fannie Mae and Freddie Mac. These efforts build on Federal Reserve and Treasury mortgage backed securities purchase programs that have helped to keep mortgage interest rates to record lows over the past year.
These initiatives have resulted in measurable progress, particularly in affordability of mortgage credit across the market. Low interest rates have helped more than 6 million families refinance, resulting in more stable home prices and $11 billion in total borrower savings. More than 2.5 million Americans purchased a home using the First-Time Homebuyer Tax Credit, helping to further stabilize home prices.
At the same time, FHA has helped maintain affordability by playing an important backstop role, stepping in to support home purchase and refinance activity at a time when private capital was fleeing the mortgage market. In addition, the FHA helped nearly 400,000 homeowners stay in their homes since April 2009 through FHA loss mitigation efforts, which include modification options. While providing access to affordable mortgage capital and helping homeowners prevent foreclosures, the FHA has also taken unprecedented administrative and regulatory steps to improve risk management and has pursued essential reforms to strengthen its finances.
Servicers report that the number of homeowners receiving restructured mortgages since April 2009 has increased to 2.8 million. This includes more than 1.2 million homeowners who have started HAMP trial modifications and nearly 400,000 who have benefitted from FHA loss mitigation activities. Of those in the HAMP program, 346,000 have entered a permanent modification saving a median of more than $500 per month.
The housing scorecard now incorporates the monthly Making Home Affordable Program Servicer Performance Report, including HAMP modification data that once again shows a month-over-month increase in permanent modifications, with average growth of roughly 50,000 permanent modifications per month over the last four months. Servicer data indicates close to half of the homeowners in HAMP trial modifications who were ultimately ineligible for a HAMP permanent modification were offered an alternative modification and less than 10 percent move to foreclosure sale In addition to the modifications through HAMP, servicers have adopted the HAMP guidelines as an industry standard and are now initiating their own modification agreements incorporating many of the HAMP affordability principles.
Homeowners who cannot afford a modified payment under HAMP may also be eligible for the Administration's Foreclosure Alternatives Program, to help relocate to more affordable housing that is sustainable over the long term.
The housing scorecard details new reporting on both the scope of Treasury's compliance activities and the areas of focus for compliance reviews under HAMP. Compliance activities include on-site reviews, file reviews and reviews of net present value (NPV) model applications. Also included are the first-ever results of compliance-related "second look" reviews of select servicers to ensure that potentially eligible borrowers were solicited and properly evaluated for HAMP. Treasury's compliance activities will lead to improvements in servicer performance and process improvements designed to minimize the likelihood that borrower applications are overlooked or that applicants are inadvertently denied a modification.
For more information, visit www.hud.gov.