March Housing Scorecard Reflects Stagnant Marketplace

The March edition of the Obama Administration's Housing Scorecard again remarks on the fragility of the U.S. housing market and the need to continue efforts to help homeowners stay in those homes.

The Scorecard, issued jointly by the Departments of Treasury and Housing and Urban Development (HUD) is largely a recap of data released by other sources such as the Census Bureau, S&P Case-Schiller, RealtyTrac and the National Association of Realtors.

The fragility is demonstrated by a decline in the numbers of both new and existing houses and home prices and an increase in homes available for sale. Sales of new homes totaled 20,800 in February compared to 25,100 in January and existing home sales dropped from 450,000 to 406,700. The number of first-time buyers also declined from 237,500 to 213,800. The inventory of existing homes for sale increased from a 7.5 month supply to 8.6 months and new homes from 7.44 months to 8.9 months while the number of vacant units that are not on the market for a variety of reasons increased from 3.56 million to 3.6 million.

The delinquency rate for prime mortgages was up one basis point to 4.8 percent but subprime delinquencies declined from 36.2 percent to 35.1 percent and FHA mortgages from 12.8 percent to 12.2 percent. The numbers of "underwater" borrowers, those who owe more on their mortgages than the market value of the home, increased from 10.78 million to 11.09 million.

"There's no question that this month's figures show a troubling dip in home sales and housing prices," said HUD Assistant Secretary Raphael Bostic. "While we should not ignore the real impact that the Obama Administration's programs are having for millions of homeowners and borrowers, these statistics clearly show that housing markets across the country continue to struggle to regain stable footing. We must remain steadfast in our efforts to support homeowners and communities in ways to help advance market stabilization and a transition towards health."

The Scorecard also references the monthly report on The Making Home Affordable Program (HAMP), a joint HUD/Treasury program to assist distressed homeowners stay in their homes. HAMP is on shaky ground with a recent vote in the House of Representatives to end the program. Since the January report HAMP has converted 26,147 trial modifications to permanent status for a total of 634,000 since the program began and 76,678 of those permanent modifications have been canceled. 29,089 borrowers entered into trial modifications in the most recent month, 1.522 million over the life of the program. Since HAMP was started in April 2009 746,203 trial modifications have been cancelled and 142,239 borrowers remain in trial status.

HAMP is reporting for the first time on the Second Lien Modification Program (2MP) and the Home Affordable Foreclosure Alternative Program (HAFA) which assists borrowers who opt for a short sale or deed-in-lieu of foreclosure. Nearly 17,000 homeowners who are participating in a HAMP modification for their first mortgage have also received assistance through 2MP with a second lien and almost 4,500 homeowners have participated in HAFA which provides up to $3,000 for relocation assistance when a homeowner voluntarily exists the home through a foreclosure alternative solution.

The Second-Look Compliance Reviews which assess lender decisions on HAMP modifications found reason to disagree with servicer decisions in 4.2 percent of the loans reviewed during the fourth quarter of 2010. This is up from the 3.3 percent labeled as "disagrees" during earlier quarters. After follow-up with the servicer 43 percent of the disagrees were cleared. Beginning in April HAMP will begin releasing servicer level reports on these compliance reviews.

March Housing Scorecard Reflects Stagnant Marketplace

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