Q&A: The Outlook for Home Foreclosures

Q&A: The Outlook for Home Foreclosures
Time

Home sales and prices seem to be on the mend — but the foreclosure crisis marches on. TIME's Barbara Kiviat spoke with Rick Sharga, vice president of RealtyTrac, a firm that counts foreclosures, to find out what we might expect moving forward.

Where are we in the foreclosure cycle?
To use a baseball analogy, I'd say we're probably in the middle of the sixth inning. We don't see foreclosure activity peaking until sometime in 2010, and we probably won't be down to normal levels of foreclosure inventory until sometime in 2013. Year to date, we've already seen about 2.3 million households receive a foreclosure notice. That's roughly the same amount we had all of last year. We're looking at nearly 7 million households that are past due on their loans or already in foreclosure. There's a pipeline of potential trouble.

Fannie Mae to Rent Foreclosed Homes Back to Borrowers
The Wall Street Journal

Fannie Mae plans to allow homeowners facing foreclosure to stay in their homes and rent them for up to one year as part of the latest effort to help troubled borrowers while keeping a glut of foreclosed properties from hitting the housing market.

The Deed for Lease Program, which Fannie plans to roll out on Thursday, will offer borrowers who fail to complete or don't qualify for a loan modification or other workout to deed their property to the lender in exchange for a lease. Borrowers-turned-tenants will be able to sign leases of up to 12 months and will pay market rents, which in most cases are lower than the cost of mortgage payments.

Fed Sees No Need to Raise Interest Rates Soon
The New York Times

WASHINGTON — The Federal Reserve signaled on Wednesday it was not close to raising interest rates, saying that the economy remained weak even though the recession appeared to be over.

The central bank said it would keep its benchmark interest rate at virtually zero, and it made no change to its longstanding mantra that economic conditions were likely to warrant “exceptionally low” rates for “an extended period.”

Senate votes to renew tax credit for first-time home buyers
The Washington Post

The Senate voted Wednesday to renew the government's $8,000 tax credit for first-time home buyers through the first six months of next year as part of a broader bill designed to extend unemployment benefits.

For the first time, the tax credit program would also enable many homeowners who buy a new primary residence to receive a $6,500 refund.

Clash Looms on Banks
The Wall Street Journal

WASHINGTON -- A key Senate lawmaker is readying legislation that would dramatically redraw how the financial system is regulated, setting the chamber on a collision course with both the House of Representatives and the Obama administration, which have championed markedly different approaches.

The bill, which is being readied by Senate Banking Committee Chairman Christopher Dodd (D., Conn.), would strip almost all bank-supervision powers from the Federal Reserve and Federal Deposit Insurance Corp., according to people familiar with the matter. In their place, the bill would create a new agency in charge of supervising all banks and bank-holding companies, even the country's largest and most complex institutions.