Foreclosures Drop to 5 Year Low--Thaks President Obama!

Aug 7, 2012
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WASHINGTON -- Foreclosure filings fell in September to their lowest level in more than five years as a housing market rebound showed another sign of taking hold.

Substantial decreases in California and some other states hard-hit by the collapse of the housing bubble helped reduce filings to 180,427 last month, down 7% from August and 16% from a year earlier, according to foreclosure listing firm RealtyTrac.

The last time filings were that low was in July 2007
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I notice you did not cite exactly what President Obama did to warrant thanks.
 
Using housing market relief to grow Main Street...
:eusa_eh:
Housing Recovery Could Blunt a Fiscal Cliff Standoff
11/09/12 --- As Republicans and Democrats brace for a budget standoff based on ideological differences on tax hikes and their impact on small business, lawmakers may find common ground by including housing market relief into discussions on how to grow Main Street America.
It's clear after Republican House majority leader John Boehner took to airwaves for a second time since President Barack Obama's re-election that a partisan budget divide may push the United States over a so-called 'fiscal cliff' of tax increases and government spending cuts scheduled for early 2013. But in scoring the points made by Boehner about resisting tax increases that could harm small businesses versus a Democratic platform to end Bush-era tax cuts on top earners - including a recovering housing market to the debate could create room for negotiation.

Notably, Boehner's refusal to restore pre-Bush tax rates on those earning $250,000 and over hinges on the negative impact the hike would have on small businesses, which often declare earnings as personal income. Small business hiring is one of the weak parts of recent monthly employment reports, notes the National Federation of Independent Business, and a bump up in high income tax rates could impact roughly one million small businesses, according to calculations from the Joint Committee on Taxation.

If small business is the focus of whether a budget deal - a so-called 'grand bargain' - can be reached, then it's time for lawmakers in both parties to widen the scope of their discussion on how to bolster that segment of the U.S. economy, which Bureau of Labor Statistics data suggests is a key missing ingredient to employment. Tax rates, whether they remain at current levels for small business or if they increase to pre-Bush levels, aren't the only factor holding back growth and hiring in the sector.

Other key issues include still shaky consumer confidence, weakness in large European and emerging market export economies - and most crucially - fragile small business access to capital by way of bank credit or home equity borrowing. The widespread consensus among economists, including Lawrence Yun of the National Association of Realtors, is that home equity - the positive difference between a home's value and an owner's mortgage liability - is a key source of capital for small businesses, in contrast to thawing equity and debt options that are available to mid-and-large-sized businesses.

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More Houses for Consumers Meant More White House for Obama
11/09/12 --- While Democrats celebrate President Obama's re-election victory and Republicans are left to pick up the pieces, pundits are busy tweeting and texting the reasons why the president won so handily.
But few are talking about the U.S. housing market and its re-emergence as a huge factor in the U.S. economy, and, as it turns out, in the re-election of the president. Check that -- at least one outfit is crediting the recent housing boomlet as a major reason the white House remained in Democratic hands. A new report out by Clear Capital, a Truckee, Calif., real estate financial services firm says that the president was "assisted" by the housing market's "sprint" over the past few months. But the firm says that the housing market is a fickle beast, and that a full-blown housing recovery may not be in the cards over the next four years.

The firm's HDI Market Report, which tracks the housing market through the end of October, shows positive housing trends "were a tailwind" for President Obama's election. But while that tailwind was enough to help propel the president to victory on Tuesday, the longer-term view is less bullish. Clear Capital says that "phase two" of the housing market recovery largely relies on the White House and Congress working with the housing industry to "reduce regulatory uncertainty." "Now that the election is finally behind us, there should be no more political risk in addressing the housing problem head-on," offers Alex Villacorta, director of research and analytics at Clear Capital. "President Obama's housing policies must evolve to turn the recovery's sprint into a marathon."

Villacorta points to an average U.S. home price appreciation figure of 4.6% this year, which "caught the attention of voters." Now that voters are tuned into the housing market, it would be a great time for the president to develop a "bold" housing market policy that boosted lending from banks and mortgage companies. "Even with the higher-than-historical annual average returns, lenders are still understandably cautious in the current environment of regulatory uncertainty," Villacorta adds. "And that's left the middle class out in the cold, enticed by record affordability levels but unable to qualify for a loan. President Obama's opportunity is now to press policy-makers to clear up regulations. Only then will lenders have confidence to fully re-engage in the housing market."

Even if housing did enough to push the president across the finish line, the market has a long way to go before fully recovering. Clear Capital says that while home prices are up by 4.6% in 2012 overall, prices are still off an average of 37.6% from the market peak in 2006. "Whether directly or indirectly, it would be hard to find a voter who hadn't been adversely affected by the housing collapse, and many are still at risk," says the Clear Capital report. "Given these losses, a home purchased for $200,000 in 2006 would likely be worth just $124,800 today. Obviously housing is a central issue for many voters, and we still have a long road ahead of us."

Source
 
FHA insurance program losin' money...
:eusa_eh:
Government’s Home Loan Insurance Agency $16.3 Billion in the Red
November 20, 2012 – An independent audit of the Federal Housing Administration (FHA) shows that the government’s home loan insurance agency will end fiscal year 2012 $16.3 billion in the red after taking an estimated $46.6 billion loss.
The report, required by Congress, estimates that the agency will have completely exhausted its capital reserves. FHA is required to keep a capital reserve balance of two percent of the value of its mortgage insurance business – currently valued at $1.1 trillion. However, the actuarial report released Friday showed that that balance will be -1.44 percent, meaning that the FHA will not have sufficient fund to cover future losses.

The report also showed that the FHA continues to operate at a loss, failing to earn enough in premium revenue to offset losses from its insurance business. If FHA were a private company, it would effectively be insolvent and could face a government takeover or bailout like insurance giant AIG did in 2008. However, FHA has unlimited authority to draw funds from the Treasury, so if it needs to, it can simply bail itself out – something that has never happened in the agency’s 78-year history.

No decision has been made yet on whether or not FHA will use its bailout authority. That decision won’t be made until President Obama drafts his 2013 budget next year. To return the agency to fiscal solvency, the administration may decide to increase the fees FHA charges lenders to insure loans, increasing its premium revenue in an attempt to keep its capital reserves out of the red. Last year, FHA’s capital reserve ratio stood at 0.24 percent as the agency posted a net worth of just $2.6 billion despite insuring $1.1 trillion in home loans.

FHA does not make home loans directly. It insures banks and other lenders against losses, allowing them to take as little as a 3.5 percent down payment. In the report, the auditors pointed to three factors driving FHA’s deteriorating financial conditions: losses stemming from FHA’s expansion during the housing crisis, continued low interest rates, and changes to how the actuary estimates losses on FHA’s business.

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