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The U.S. Department of Housing and Urban Development announced Aug. 19 that 100 affordable housing developments, including 8,112 homes, have been awarded more than $100 million to complete energy efficient renovations.

As part of HUD’s Green Retrofit Program for Multifamily Housing, which was created through the American Recovery and Reinvestment Act, the awards will generate upgrades to thousands of affordable apartments, create jobs and save money for thousands of residents. HUD said the awards will create an average energy savings of $33,000 per property with tenants saving $250 each on utility bills annually.

“I am proud to announce this significant Recovery Act milestone because it is an example of HUD’s ongoing commitment to creating jobs while also building sustainable homes and communities,” HUD Secretary Shaun Donovan said in a news release.

Overall, HUD will award $250 million nationally to reduce energy costs, cut water consumption and improve indoor air quality through the Green Retrofit Program. Funds are awarded to owners of HUD-assisted housing projects and can be used for a wide range of retrofit renovations. HUD will continue to issue awards through Sept. 30. To learn more about HUD’s Green Retrofit Program, visit http://portal.hud.gov/portal/page/portal/HUD/recovery/about.

Imagine our surprise upon finding out that a house with such an appealing front side was severely damaged in the back.

Andrew T. Berman – National Mortgage Professional | Thursday, July 29, 2010

Stricter lending standards adopted last year by Fannie Mae are beginning to pay off as the mortgage finance giant’s “new book” of business is the strongest in a decade, the firm’s chief executive said on Wednesday.

Fannie Mae is emphasizing safer, long-term, fixed-rate loans and asking lenders to make loans on homes with better appraisals, to borrowers with better credit and better documentation of income.

“If you take all of these factors together, we’re building the strongest book of business we’ve seen in the last decade,” CEO Michael Williams said in remarks prepared for delivery to the group Women in Housing and Finance.

At National Mortgage Professional

Dina ElBoghdady – The Washington Post | Friday, July 30, 2010

Foreclosure activity climbed in three-quarters of the largest U.S. metropolitan areas in the first half of 2010, compared with the same period a year ago, but declined in some of the nation’s hardest-hit regions, according to data released Thursday.

The number of properties in some stage of foreclosure rose during the first six months of the year in 154 of the 206 metropolitan areas with a population of 200,000 or more, foreclosure listing firm RealtyTrac said in a report.

The 20 regions with the worst foreclosure rates were in the four states — Florida, California, Nevada and Arizona — where home prices climbed fastest during the boom years and crashed hardest during the crisis. Nine of the areas on the list were in Florida, eight in California, two in Nevada and one in Arizona.

Nationwide, more than 1.6 million properties were in some stage of foreclosure in the first half of the year, according to RealtyTrac, up about 8 percent from a year ago but down 5 percent from the final six months of 2009.

Foreclosures tend to drag down home prices and undermine the housing market’s stability. The nation’s stubbornly high unemployment rate and the lending community’s increased willingness to sell foreclosed properties are boosting the number of foreclosures hitting the market.

For a period, lenders were under political pressure to delay foreclosures and modify troubled loans. But as lenders get a better handle on which loans cannot be salvaged, they are starting to complete more foreclosures and put those homes on the market.

However, there are “early signs” that foreclosures might have peaked in some of the most-troubled regions, James J. Saccacio, RealtyTrac’s chief executive, said in a statement. Foreclosure activity dropped in nine of the 10 most-severely affected areas. Even so, the rates still remain three to five times as high as the national average.

The Las Vegas area still has the nation’s highest foreclosure rate, with 6.6 percent of its housing units receiving a foreclosure filing in the first half of the year. But the number of filings fell 15 percent from the second half of 2009 and 9 percent from the first six months of last year.

Foreclosure activity in the Cape Coral-Fort Myers area of Florida, which had the second-highest rate among U.S. metropolitan regions, at 4.98 percent, also slipped. The foreclosure rate there in the first half of the year is down 30 percent from a year ago and 22 percent from the previous six months.

Thomas Lawler, a housing consultant, attributes the declines in those regions to a high concentration of exotic loans that went bad and cleared the system.

In other areas, “more of the loans are running into problems not because loans were bad but because the economy stinks,” hence the rise in foreclosure activity, Lawler said.

The report collects data from 2,200 counties nationwide that make up more than 90 percent of the U.S. population. Some of the foreclosure filings captured in the first half of this year may have been recorded in previous time periods.

Article at The Washington Post

Peter Eavis – The Wall Street Journal | Monday, August 2, 2o10

Selling stuff on eBay is a way to find out what it is really worth.

Similarly, banks are finding buyers for cruddy loans in a market that is slowly coming to life. But the real-world prices can raise questions about the values banks have assumed for their stressed assets.

A valid criticism of the banking sector cleanup is that it hasn’t been much of a cleanup; Lenders still hold vast amounts of loans and repossessed property that are vulnerable to further losses.

In theory, banks’ balance sheets are already supposed to reflect the impaired value of such assets, either through reserves or write-downs.

But a closer look at banks’ second-quarter asset sales suggests some reserves and write-downs may not be adequate.

Exhibit one is Winston-Salem-based BB&T’s $1.43 billion of foreclosed property. It is equivalent to 33% of BB&T’s nonperforming assets.

CLSA bank analyst Mike Mayo notes this is far higher than at five of BB&T’s peers, where the ratio is between 7% and 11%.

Banks are supposed to mark such foreclosed property to fair value, which in theory means a sale price shouldn’t be substantially lss than balance-sheet value.

Yet BB&T sold $252 million of foreclosed property in the second quarter at an 8.3% discount to its last balance-sheet value.

In the quarter, the bank also said it did a “comprehensive review” of foreclosed-property values, leading to a $61 million second-quarter write-down.

No appraisals are now more than six months old, BB&T said. Investors might reasonably ask why appraisals weren’t previously more up-to-date on such a large fair-value asset.

Next up is Pittsburgh-based PNC Financial, which weathered the crisis well and trades at an above-market valuation.

It sold distressed loans in the second quarter, once worth $2 billion and valued at $1 billion on its balance sheet.

Even so, the sale prompted a $109 million addition to its bad-loan reserve, to absorb a good part of the loss incurred in the sale.

If reserves had been higher before the sale, a hit of this size may not have been necessary.

Given the size of PNC’s distressed asset portfolio—it contains $17 billion worth of loans—investors need to watch it, in case any future sales prompt big hits.

BB&T and PNC at least provided key details on how loan sales affected their income statements and balance sheets.

Citigroup, by contrast, sold $3 billion of mortgages in the second quarter, but didn’t say whether that led to any hits.

More loan sales would be welcome.

Not only because they relieve banks of burdensome assets, but also because they might inject more reality into the balance sheets seen by investors.

The Wall Street Journal Article

Haya El Nasser – USA Today | Monday, August 2, 2010

Fresh projections say the rate could plummet to about 62% as early as 2012 and almost certainly by the end of the decade. Homeownership rates haven’t been that low since they hit 61.9% in 1960.

The share of households that own their homes has been sliding since the housing bubble burst in 2006. The rate fell again in the second quarter of this year to 66.9% — the lowest since 1999 — from a peak of 69.4% in 2004, the Census Bureau says.

“Anybody who knows anything about housing thought it would be flat in the second quarter,” says John Burns, CEO of John Burns Real Estate Consulting, a national housing market analyst based in Irvine, Calif. “Homeownership fell during the quarter when government was offering a tax credit (to first-time homebuyers). What do you think is going to happen now that there’s no tax credit?”

The continued decline — 0.5 points lower than the same time a year ago — points to a fast plunge, he says.

Burns estimates that 6 million of the 8 million homeowners who are behind on their mortgages will lose their homes to lenders in the next two years. This “shadow inventory” could push ownership rates down to 61.7% within two years, he says.

Arthur C. Nelson, director of the University of Utah’s Metropolitan Research Center, says the rate may not plunge that quickly because many foreclosed homes will be purchased by others.

Homeownership has been a cornerstone of the American dream because it has generally built personal assets and stable neighborhoods. Federal policy has long encouraged homeownership through the mortgage tax deduction and government-backed mortgages.

The push to own rather than rent now is being questioned. “A large percentage of households are not responsible enough to handle a mortgage payment,” Burns says. “Growing homeownership is a great goal but you have to grow the percentage of households that are responsible.”

More stringent financing requirements may prevent some from buying.

“We’ve seen low-income homeowner rates declining by twice as much as higher-income groups,” says Daniel McCue, senior research analyst at Harvard University’s Joint Center for Housing Studies. “Everyone is looking harder at the benefits and potential risks of homeownership. Is it the right option for you?”

Demographics also affect home buying. The children of Baby Boomers are coming of age but young adults typically rent and financial pressures are further delaying home buying decisions. More 20-somethings have returned home to live with their parents. The 2010 Fannie Mae National Housing Survey shows that two-thirds of Americans still prefer owning a home because it’s a good investment in the long run.

The housing bust is providing bargains for home buyers willing to take the plunge.

“Affordability is very much in favor of homeownership right now,” Burns says. “If the economy turns around quickly, you would hope that responsible renters would become homeowners.”

USA Today Article

Andrew T. Berman – National Mortgage Professional | Monday, August 2, 2010

Former Federal Reserve Chairman Alan Greenspan said over the weekend that a decline in home prices could derail an already slowing economic recovery and send the U.S. into a double-dip recession.

Greenspan’s comments, made on Sunday’s edition of NBC’s “Meet The Press,” follow his successor Ben Bernanke’s remarks last week before Congress that the economy remains “unusually uncertain,” and that the Fed was readying itself to take new measures if the economy deteriorated further.

“I think we’re in a pause in a recovery, a modest recovery,” Greenspan said on Sunday’s program. “But a pause in the modest recovery feels like quasi recession.”

At National Mortgage Professional

Appraiser News Online | Wednesday, July 28, 2010

The Federal Housing Administration’s Mortgagee Review Board announced dozens of administrative actions against FHA-approved lenders on July 26 for failing to meet its requirements. The recent sanctions bring to nearly 1,500 the number of administrative actions taken against lenders this year.

“Lenders should know by now that FHA will not tolerate fraudulent or predatory lending practices,” FHA Commissioner David Stevens said in a news release. “Any FHA-approved lender that does business with us must follow our standards. If we determine that our partners are not playing by the rules, we will take action – it’s that simple.”

This year’s actions against lenders have included reprimands, probations, suspensions, withdrawals of approval and civil money penalties. The Board’s recent actions were part of an effort to further protect homeowners from abusive or unfair lending practices, Credit.com reported.

FHA’s Mortgagee Review Board sanctions FHA-approved lenders for violations of the agency’s program requirements. For serious violations, the Board can withdraw a lender’s FHA approval so that the lender cannot participate in FHA programs. In less serious cases, the Board enters into settlement agreements with lenders to bring them into compliance. The Board can also impose civil money penalties, probation, suspension, and issue letters of reprimand, the FHA’s release said.

The Federal Housing Administration’s Mortgagee Review Board announced dozens of administrative actions against FHA-approved lenders on July 26 for failing to meet its requirements. The recent sanctions bring to nearly 1,500 the number of administrative actions taken against lenders this year.

“Lenders should know by now that FHA will not tolerate fraudulent or predatory lending practices,” FHA Commissioner David Stevens said in a news release. “Any FHA-approved lender that does business with us must follow our standards. If we determine that our partners are not playing by the rules, we will take action – it’s that simple.”

This year’s actions against lenders have included reprimands, probations, suspensions, withdrawals of approval and civil money penalties. The Board’s recent actions were part of an effort to further protect homeowners from abusive or unfair lending practices, Credit.com reported.

FHA’s Mortgagee Review Board sanctions FHA-approved lenders for violations of the agency’s program requirements. For serious violations, the

Board can withdraw a lender’s FHA approval so that the lender cannot participate in FHA programs. In less serious cases, the Board enters into settlement agreements with lenders to bring them into compliance. The Board can also impose civil money penalties, probation, suspension, and issue letters of reprimand, the FHA’s release said.

The FHA has been instrumental in a number of programs aimed at preventing foreclosure, including the Hardest-Hit program, recently launched to provide more than $1.5 billion to states most heavily affected by the housing crisis. Nevada, Michigan, California, Florida and Arizona are among the states that have received funding to help create programs for homeowners defaulting on their mortgage loans, Credit.com reported.

Appraiser News Headline