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It’s not high interest rates preventing a housing recovery. The interest rates, currently around 4.25 percent, are historically low. What’s slowing down the housing market recovery is a weak economic recovery with little job creation. And according to the National Association of Realtors, NAR, the government agencies Fannie Mae and Freddie Mac are part of the problem in preventing a recovery. 

The California Association of Realtors has reported that nearly half of all opened escrows are failing to close. Lender turn-downs are primary reasons. The number has been so significant that “pending sales” are no longer considered an accurate indication of future closings.    

Golder sent a message from Realtors across the country, “The Federal Housing Administration, Fannie Mae and Freddie Mac, have a mission to provide mortgage liquidity to qualified home buyers, including low-and moderate-income families and first-time buyers. That mission is being impaired by unnecessarily restrictive limits on the availability of credit and these extremely tight policies are significantly delaying a housing market and economic recovery.”

The latest housing figures show continued signs of stabilization in home prices, although existing- and new-home sales declined in July, according to the September edition of the Housing Scorecard recently released by HUD and the U.S. Dept. of the Treasury.

Highlights of the September Housing Scorecard include:

As expected with the expiration of the Homebuyer Tax Credit, new and existing home sales showed a dip in July. At the same time, home prices have leveled off in the past year after 30 straight months of decline and homeowners added $95 billion in home equity in the second quarter.

More than 3.35 million modification arrangements were started between April 2009 and the end of July 2010, including more than 1.3 million trial Home Affordable Modification Program (HAMP) modification starts, more than 510,000 Federal Housing Administration (FHA) loss mitigation and early delinquency interventions, and nearly 1.6 million proprietary modifications under HOPE Now. The number of agreements offered continued to more than double foreclosure completions for the same period (1.24 million).

More than 468,000 permanent modifications granted to homeowners; more than 33,000 homeowners received a HAMP permanent modification in August. 

More information at:  http://treasury.gov/press/releases/tg869.htm

The Federal Housing Administration (FHA) announced last week it is pushing back the implementation date for new premium structures on FHA-insured mortgages to Oct. 4 from the original date of Sept. 7. 

Following FHA Commissioner David Stevens’ recent announcement that up-front premiums for FHA-insured mortgages would be reduced beginning Sept. 7 from 2.25 percent to 1 percent, lenders expressed concerns that they would need more than five weeks to update loan disclosures and computer systems.

FHA previously raised up-front premiums from 1.75 percent to 2.25 percent in April to cope with rising losses on FHA-guaranteed loans. The Obama administration promised to reduce up-front premiums if Congress gave it the authority to raise annual premiums beyond their statutory limit of 0.55 percent.  HR 5981, legislation raising the statutory limit on annual premiums to 1.55 percent, was approved by lawmakers on Aug. 4 and has been signed by President Obama. 

More information at:  http://portal.hud.gov/portal/page/portal/ver-1/HUD/federal_housing_administration/docs/BottStatementPremiumChanges.pdf