Connect with us

Economic News

Loan modification programs improve, still come up short

Although the government has only reached a quarter of its goal and had to extend its foreclosure prevention programs for another year, the program is showing signs of improvement.

Published

on

The state of permanent modifications

In 2008, the Federal Housing Finance Agency (FHFA) became the conservator of Fannie Mae and Freddie Mac, making the mortgage giants government-sponsored enterprises (GSE) as a means of propping up the housing sector as the recession hit with full force. Under President Obama, a massive foreclosure prevention program was launched in 2009, promising to aide four million homeowners to stay in their homes. Through the Home Affordable Modification Program (HAMP) and Home Affordable Refinance Program (HARP), the U.S. Treasury Department announced last month that one million homeowners had been granted permanent modifications to their mortgages, reducing their monthly payments.

The housing plan gives mortgage servicers incentives to modify mortgage loans by cutting interest rates, deferring a portion of the loan or extending other terms. Coming up short of the goal of helping four million, the program was recently extended an extra year, to end in 2013.

Last month, the Treasury Department said 84 percent of homeowners entering into the Home Affordable Mortgage Program in the past 18 months received a permanent loan modification, although they did not say what percentage of applicants were given temporary modifications that were not ultimately granted a permanent modification.

Fannie Mae, Freddie Mac today

Today, the FHFA reports that Fannie Mae and Freddie Mac have completed more than 2.1 million foreclosure preventions actions since their conservatorship began, including 1.1 million permanent loan modifications (up roughly 100,000 this month). The report notes that after nine months, less than 20 percent of loans through the GSEs between March 2010 and March 2011, had missed two or more payments, which FHFA notes is an improvement over past years.

FHFA notes that serious delinquency rates for Fannie and Freddie loans remain below industry levels and are on the decline. HARP refinancings rose 10 percent in the last quarter of 2011, according to the report, and half of all borrowers who received loan modifications in the last quarter had their monthly payments reduced by over 30 percent , and one in three included principal forbearance.

In the final quarter of 2011, Florida had the highest number of serious delinquencies and California had the largest number of completed foreclosure prevention actions since the beginning of conservatorship in 2008.

New interactive data from the FHFA

With FHFA’s report, new state data sets were released alongside an interactive Fannie and Freddie State Borrower Assistance Map, showing the number of loans owned or guaranteed by the GSEs as well as delinquencies, foreclosure prevention activities, Real Estate-Owned (REO) properties, and refinances in each state.

FHFA will now be reporting delinquent loans by state and profiles of key states with detailed information about states with the largest five-year decline in home prices and the highest number and rate of seriously delinquent loans.

The full FHFA report:

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?

Published

on

NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<

#CarsonHUD

Continue Reading

Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.

Published

on

young executives

job openings

Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

bar
The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.

#JobOpenings

Continue Reading

Economic News

Gas prices are down, so are gas taxes about to go up?

Do low gas prices mean higher gas taxes are on the way? Budgeting for 2015 just got a bit more complicated, if some politicians have their way.

Published

on

gas tax

gas-tax

Gas taxes and your bottom line

Many industries rely heavily on time in their vehicle, not just truck drivers and delivery trucks. Sales professionals hop in their vehicles throughout the day, as do many other types of professionals (service providers like plumbers, and so forth). For that reason, gas prices and taxes are a relevant line item that must be budgeted for 2015, but with politicians making the rounds to push for higher gas taxes, budgeting becomes more complicated.

Gas prices are down roughly 50 cents per gallon compared to a year ago, which some analysts say have contributed to more money in consumers’ pockets. Some believe that this will improve holiday sales, but others believe the timing is just right to increase federal taxes on gas. The current tax on gas is 18.40 cents per gallon, and on diesel are 24.40 cents per gallon.

bar

Supporters and opponents are polar opposites

Supporters argue as follows: gas prices are low, so it won’t hurt to increase federal gas taxes, in fact, those funds must go toward improving our infrastructure, which in the long run, saves Americans money because smoother roads mean better gas mileage and less congestion.

Gas taxes have long been a polarizing concept, and despite lowered gas prices, the controversial nature of the taxes have not diminished.

While some are pushing for complete abolition of federal gas taxes, others, like former Pennsylvania Governor, Ed Rendell (D) tell CNBC, “Say that cost the average driver $130 a year. They would get a return on that investment” in safer roads and increased quality of life, he added.

The Washington Post‘s Chris Mooney points out that federal gas taxes have been “stuck” at 18 cents for over 20 years, last raised when gas was barely a dollar a gallon and that the tax must increase not only to improve the infrastructure, but to “green” our behavior, and help our nation find tax reform compromise.

Is a gas tax politically plausible?

Mooney writes, “So, this is not an argument that a gas tax raise is politically plausible — any more than a economically efficient tax on carbon would be. It’s merely a suggestion that — ignoring politics — it might be a pretty good idea.”

Rendell noted, “The World Economic Forum, 10 years ago, rated us the best infrastructure in the world,” adding that we “need to do something for our infrastructure, not in a one or two year period, but over a decade.”

Others would note that this rating has not crumbled in just a few years, that despite many bridges and roads in need of repair, our infrastructure is still superior to even the most civilized nations.

Regardless of the reasons, most believe that Congress won’t touch this issue with a ten-foot pole, especially leading up to another Presidential campaign season starting next year.

“I think it’s too toxic and continues to be too toxic,” Steve LaTourette (the former Republican congressman best known for his close friendship with his fellow Ohioan, Speaker John Boehner) tells The Atlantic. “I see no political will to get this done.”

Whether the time is fortuitous or not, and regardless of the positive side effects, many point to a fear of voters’ retaliation against any politician siding with a gas hike, so this matter going any further than the proposal stage is unlikely.

Continue Reading
Advertisement

The
American Genius
News neatly in your inbox

Join thousands of AG fans and SUBSCRIBE to get business and tech news updates, breaking stories, and MORE!

Emerging Stories