Foreclosure Sometimes Best for Lenders' Bottom Line
Foreclosures Are Often In Lenders' Best Interest
July 28, 2009, The Washington Post
Government initiatives to stem the country's mounting foreclosures are hampered because banks and other lenders in many cases have more financial incentive to let borrowers lose their homes than to work out settlements, some economists have concluded. The problem is that modifying mortgages is profitable to banks for only one set of distressed borrowers, while lenders are actually dealing with three very different types. Modification makes economic sense for a bank or other lender only if the borrower can't sustain payments without it yet will be able to keep up with new, more modest terms.
May Case-Shiller HPI Down 17.1% Over Last Year
July 28, 2009, Reuters
US home prices fell 17.1% in the year ending May, a large decline but the fourth consecutive month in which the rate of decline has slowed, according to the Case-Shiller home price index (HPI) released today. David Blitzer, who chairs the Index Committee at Standard & Poor's, said there is a 'clear inflection point' in the data, and noted that 17 of the 20 metro areas reporting home prices saw improvements in year-over-year home prices compared with April.
'To put it in perspective, these are the first time we have seen broad increases in home prices in 34 months,' he said. 'This could be an indication that home price declines are finally stabilizing.'
Helping the unemployed pay their mortgages
July 28, 2009, CNNMoney
As a growing number of Americans default on their mortgages, the Obama administration is set to meet Tuesday with industry executives to discuss their efforts so far to help people save their homes.The administration wants answers about borrower complaints of lost paperwork, unreturned phone calls and a lack of decisions on applications.The administration is also floating new ways to help people avoid foreclosure, including giving the unemployed money, in the form of grants or loans, to cover their mortgage payments or allowing them to remain in their homes as renters after foreclosure.
U.S. Home Vacancies Hit 18.7 Million on Bank Seizures
July 24, 2009, Bloomberg
More than 18.7 million homes stood empty in the U.S. during the second quarter as the steepest recession in 50 years sapped demand for real estate and banks seized properties from delinquent borrowers. The number of vacant properties, including foreclosures, residences for sale and vacation homes, was little changed from 18.6 million a year earlier, the U.S. Census Bureau said in a report today. The quarterly homeownership rate was 67.3 percent, seasonally adjusted.