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Vol. 8 No. 8
April 25, 2016
www.csrej.com
Foreclosures become a tougher find Thirty-six percent of U.S. housing markets – or 78 out of 216 metro areas studied -- are now below their pre-recession levels in foreclosures, according to the latest Foreclosure Market Report from RealtyTrac. Foreclosure filings – including default notices, scheduled auctions, and bank repossessions – were down 8 percent from last year and make up 289,116 U.S. properties. That marks a nine-year low and the lowest quarterly total since the fourth quarter of 2006, RealtyTrac reports. “Despite a seasonal bump higher in March, foreclosure activity in most markets continues to trend lower and back toward more healthy, stable levels,” says Daren Blomquist, senior vice president at RealtyTrac. “More than one-third of the 216 local markets we analyzed were below their pre-recession foreclosure activity averages in the first quarter, and we would
expect a growing number of markets to move below that milestone the rest of this year — while the number of markets with a lingering low-grade fever of foreclosure activity continues to shrink.” Some of the metros seeing large dips in foreclosure filings below pre-recession levels in the first quarter of 2016 included Los Angeles (27 percent below pre-recession average); Dallas (down 65 percent); Houston (down 64 per-
The Dodd-Frank Act’s current and future impact on mortgage lending
the country illustrates the importance of examining the market at the local level,” says Quicken Loans Chief Economist Bob Walters. “If home owners are eyeing that new home being built across town, they could be pleasantly surprised how much their home will sell for – or in some instances their equity may not take them as far as they think –
Over the past several years, lenders and industry vendors have invested significant time and money to By Jon Paukovich Ent update systems and change — procedures to comply with numerous federal regulations prompted by the Dodd-Frank Act. As the mortgage industry continues adjusting to these changes, it’s also ramping up to meet new reporting requirements. Effective January 2019, the Consumer Financial Protection Bureau (CFPB), per the Home Mortgage Disclosure Act, will require 25 new reporting data points and modification to 14 others. While two years seems like a sufficient amount of time to prepare for this change, recent experience tells us otherwise. Complying with another major process change will stretch the resources of mortgage lenders and systems vendors – on both the staffing and financial resources fronts. Each new regulation adds cost to the mortgage process. And like any industry, when processing costs multiply the increase is ultimately passed on to the customer. So far, thanks to several years of extraordinarily low interest rates, these costs have been masked – and financially manageable – for consumers. But if and when rates do rise, these additional costs could reduce the number of potential homebuyers. With so much industry effort focused (by necessity) on complying with new
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cent); Miami (down 19 percent); and Atlanta (down 57 percent). However, in some markets, foreclosures remain elevated, including New York (80 percent above the pre-recession average); Chicago (up 17 percent); Philadelphia (up 97 percent); Washington, D.C. metro area (up 134 percent); and Boston (up 46 percent). © Copyright National Association of Realtors. Reprinted with permission.
Home owners may be slightly too optimistic about their home’s value compared to what appraisers say it’s actually worth. Home values are, on average, about 2.17 percent lower than what home owners expect compared to appraisers’ estimates, according to Quicken Loans’ latest Home Price Perception Index. The gap between home owner expectations and appraisal estimates
widened in March. In February, appraisals were 1.99 percent lower than what home owners expected. Several areas in the Western region of the U.S., however, continue to see that the average appraised value is beyond what home owners were expecting. On the other hand, in the Midwest, appraisals tended to lag behind home owner estimates. “The varying HPPI values across
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