A Renewed Focus on Converting Trial Loan Modifications into Permanent Ones

The Obama administration announced today that it’s refocusing their efforts on increasing the number of permanent loan modifications under the Home Affordable Modification Program (HAMP) through better outreach tools, borrower resources and servicer accountability.

They also announced that there are 650,000 trial modifications now in place and roughly 375,000 scheduled to convert to permanent modifications by the end of the year.

While this marks a definite improvement over the numbers that we heard last month that only 2,000 of the 500,000 trial mods had become permanent, it still falls way short of the intended target of saving 3-4 million from foreclosure.

Here’s the breakdown from CNBC’s Diana Olick

If you’re a homeowner looking for assistance with a possible loan modification, you can call 888-995-HOPE, or visit www.makinghomeaffordable.gov to learn more.  We’ll also be posting tips and recommend links as time goes on.

Additional reading:

Calculated Risk: US Treasury Announces “Mortgage Modification Conversion Drive”

Firedoglake: Predatory lending has an ugly tail end

Naked Capitlaism: Quelle Surprise! Treasury Mortgage Mod Program Produces Zero Permanent Mods

[Video] UC Berkeley Real Estate Economist Ken Rosen Gives His Take on the Housing Market

UC Berkeley real estate economist Ken Rosen talks about the federal home buyers tax credit and how the next six to nine months are good times to buy a house, if you plan to live in it.

h/t marketwatch

REO's Jump 22% in California

From DSNews:

After three months of consecutive declines, the number of foreclosed homes in California taken back by banks rose by 22.24 percent from September to October, according to ForeclosureRadar, a local property information site that tracks every foreclosure in the Golden State and provides daily auction updates.

The company’s tally of new REOs is a 20.95 percent increase compared to October 2008, but despite the seemingly dramatic mushrooming, the latest numbers are still well below record levels. The number of foreclosures repossessed by banks in California last month remains 42.56 percent below the peak reached in July 2008, ForeclosureRadar’s data shows.

This coincides with what we’re seeing as well. It will be interesting to see what happens in the coming months.

The number of properties entering the foreclosure process keeps outpacing properties actually going to auction & either being sold to a 3rd party, or being taken back by the bank.  Event with this slight increase, the foreclosure funnel is bulging and I expect this gradual increase in REO’s to continue.

Is Calfornia in the Eye of the Housing Market Hurricane?

This post says we are.

Definitely recommended reading if you’re interested in future of the California housing market.

Glen's October East Bay Housing Numbers

Here’s a snapshot of the San Francisco East Bay Real Estate Market through October 31st. I run these numbers monthly and have been tracking 38 cities since 2005. I primarily look at two indicators, Months Supply and Pending Over Active ratios.

Pending Over Active ratio relates to buyers and sellers. Basic Econ 101, Supply and demand. Actives (represents sellers), or properties that are still available, versus Pending (represents buyers), or properties leaving the market. That relationship often indicates whether we’re in a “sellers or buyers” market.

A ratio of 1 (an equal number of Actives and Pending) is considered a normal market or in a state of equilibrium. Anything under (high inventory, few buyers), prices are flat or dropping. Anything above (low inventory, many buyers) is considered a seller’s market.

The trend since earlier this year indicates that we are in a “sellers” market in most cities. However, one factor that may be skewing the numbers is that there are longer escrows due to REOs and increased government loans.

Months Supply, Basically, months supply is the ratio of inventory to sales. What it tells us is how many months the stock of homes for sale would last, if sales continued at their current rate. Six months supply is considered normal or equilibrium.

We are currently at a two month supply of houses for sale for the entire 38 cities that I track. Many cities are now below that level with a few even below 30 days. This is also an indicator that we are in a “sellers” market in most cities.

DOM, (Days On Market), continue to decrease in most areas. Houses are going into escrow quicker. However, once in escrow, they are taking longer to close.

Also, the relationship between what, on average, homes are selling for to list price support this. We’re seeing properties in many areas getting multiple offers and actually now, on average, selling at or above the average list price. The spreadsheet takes into account sales by city during the last 4 months.

Areas that were hit hardest last year due to high inventories and downward pressure on prices due to the high number of distressed properties on the market, are now starting to see some recovery, especially in the lower priced areas. Examples would be in East Contra Costa along highway 4, (Pittsburg, Antioch, Brentwood, even Concord). More recently, in West Contra Costa in the San Pablo, Richmond, Pinole, Hercules areas).

Finally, we are starting to see a slight increase in foreclosed properties coming onto the market. 17% of active listings are foreclosed properties (REOs), as compared to 14% last month.

Call me if you’d like to chat more in depth about the San Francisco East Bay market.

-Glen 510-333-4460

Download a PDF w/ the rest of Glen’s Numbers 10-31-09