Talking about existing home sales and mortgage delinquencies in March 2017 plus more…
Existing-Home Sales Jumped 4.4% in March
NAR just reported that existing-home sales in March 2017 increased to their highest pace in over 10 years! This is a national but it is still a very positive indicator.
The median existing-home price for all housing types in March was up 6.8% from March 2016. This is the 61st consecutive month of year-over-year gains in home prices!
Inventory increased 5.8% but is still 6.6% lower than a year ago. Inventory has fallen YoY for 22 straight months. This is why we keep hearing about low inventory.
Currently there is a 3.8-month supply of homes for sale. Most consider 6 months of supply as a balanced market. Under 6 months is a seller’s market, over 6 months is a buyer’s market.
Remember this is a national report and does not reflect what is happening in every local real estate market! You can find out more about what is happening in Anderson County by reading the Market Reports
The Consumer Financial Protection Bureau (CFPB) today sued one of the country’s largest nonbank mortgage loan servicers, Ocwen Financial Corporation, and its subsidiaries for failing borrowers at every stage of the mortgage servicing process. The Bureau alleges that Ocwen’s years of widespread errors, shortcuts, and runarounds cost some borrowers money and others their homes.
Ocwen allegedly botched basic functions like sending accurate monthly statements, properly crediting payments, and handling taxes and insurance. Allegedly, Ocwen also illegally foreclosed on struggling borrowers, ignored customer complaints, and sold off the servicing rights to loans without fully disclosing the mistakes it made in borrowers’ records.
CFPB Director Richard Cordray said:
Ocwen has repeatedly made mistakes and taken shortcuts at every stage of the mortgage servicing process, costing some consumers money and others their homes. Borrowers have no say over who services their mortgage, so the Bureau will remain vigilant to ensure they get fair treatment.
It has been a few weeks since I shared a settlement or lawsuit from one of the big banks or mortgage servicing companies. If the current movement to neutralize the CFPB happens, then behavior such as this will continue.
While I am not a fan of big government or the CFPB, I dislike behavior such as what Ocwen is accused of even more.
The Mortgage Bankers Association (MBA) today released a white paper GSE Reform: Creating a Sustainable, More Vibrant, Secondary Mortgage Market which provides a detailed picture of a reformed and revitalized secondary mortgage market. It also attempts to shed light on two critical areas that have tested past reform efforts – the appropriate transition to the reformed system and the role of the secondary market in advancing an affordable housing strategy.
Specifically, MBA developed an approach to GSE Reform that will:
- Inject much higher levels of risk-bearing private capital into the mortgage system, while dramatically reducing the system’s reliance on government support.
- Enhance the stability of the mortgage system with multiple Guarantors that will operate as privately-owned utilities.
- Protect taxpayers and consumers with a clear set of market conduct rules, prudential requirements, and a new federally-backed Mortgage Insurance Fund (standing behind the mortgage backed securities, not the Guarantors themselves) financed with appropriately priced insurance premiums.
- Ensure that mortgage lenders of all sizes and business models have equal access to the secondary market.
- Improve service and performance in the secondary market with multiple Guarantors competing on operations and systems development, customer service, product parameters and innovation, and pricing and execution.
- Minimize disruption during the transition to the new system by preserving what works in the current system and utilizing the existing regulatory framework where appropriate.
- Meet the needs of the full continuum of households, from families requiring the most directly subsidized, affordable rental homes to those served by the completely private jumbo single-family lending market.
Very interesting and I commend the MBA for at least throwing out some suggestions for resolving this very complicated issue.
One thing the MBA does not mention is what happens regarding the current shareholders in Fannie and Freddie. Many of those shareholders want to privatize the GSEs. These shareholders are in a legal battle with the government because all of the GSE’s profits are being sent to the Treasury.
Real estate remains Americans’ top choice as the best long-term investment one can make, beating out stocks and mutual funds, gold, savings accounts and CDs, and bonds. This is the fourth straight year real estate has been the unrivaled favorite.
This doesn’t really surprise me since the benefits of owning real estate extend far beyond just the financial aspects. Maybe you agree that real estate is a great long term investment but you think owning a home is beyond your reach.
Sadly, many people believe some myths about buying a home:
If you have any questions about buying a home in the Anderson SC area, please shoot me an email!
A stunning 94 percent of the 9 million new jobs created in the past decade were temp or contract-based gigs. The jobs reports would have us believe our rebound from the recession is almost complete. The reality is very different.
It may seem odd that after sharing some information about buying a home, I would then share something like this. But there are certain basic human needs and shelter is one of them.
You are always going to need a place to live. Either you are building wealth and equity by owning or you are making a landlord rich. Some will argue that you can get better returns from other investments.
And you can in some ways.
But you still need a place to live. Unless you can rent so cheaply that it leaves you with enough money to invest, then you have not gained anything.
Awesome news from Black Knight that mortgage delinquencies declined 14% month-over-month. This is the lowest level since March 2006 and the fourth lowest point since the turn of the century!
They also reported that total non-current inventory (all loans 30 days or more past due or in active foreclosure) fell to the lowest volume in 11 years.
Foreclosure starts were up 4.15% for the month, but Q1 2017’s 189,000 starts represented an 18 percent decline from Q1 2016.
Check out the chart:
It is so nice to be where we are now compared to the dark days after the housing market went to shit. Just remember to hope for the best but plan for the worst!
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