Arizona Association of Mortgage Professionals

AZ Foreclosure Picture

Arizona Association of Mortgage Professionals

AzAMP's Vice President Paul Klimke was interviewed by KTAR this morning about the Arizona  foreclosure situation.  Here's a portion of the online article that followed the radio interview.

AZ foreclosure picture is murky
by Bob McClay, Kevin Tripp,  KTAR
June 23rd, 2010

PHOENIX -- More people lost their homes as bank repossessions nationwide hit a monthly record high in May, according to Realty-Trac. But, those figures may not reflect what's happening in Arizona.

Lenders nationwide took back just under 94,000 properties in May, up 1 percent from April and 44 percent more than in May of 2009.

Paul Klimke of Amerifirst Financial said banks are now foreclosing on properties on which they had been slow to act for whatever reason -- "They didn't have the capacity to handle them or they are homes that could have very possibly been delayed from foreclosure because they were in the loan modification process."

Things are different in Arizona, Klimke said.

"Although our activity in May increased 1 percent over the activity in April, the actual foreclosure activity in Arizona is down 5 percent from May of 2009."   

Whether that trend continues remains to be seen, he said.

"Some of the foreclosures that were going to happen happened earlier in Arizona," said Klimke. "So we may be on the tailend of that. On the other hand, it might not have hit Arizona yet. We don't know what the numbers are for June and July. It's entirely possible that they will be up. We'll just have to wait and see."

Klimke said 55 percent of Arizona homeowners are "under water," meaning they owe more on their mortgage than what their home is worth.

Analysis of the Wall Street Collapse and Mortgage Meltdown

Arizona Association of Mortgage Brokers
 
Lot's of people are talking about last Sunday's 60 Minutes interview with author Michael Lewis about his new book called The Big Short: Inside the Doomsday Machine.  

If you missed it, follow the link below to watch video of the interview.  As the 60 Minutes website says, he discusses how "some of Wall Street's finest minds managed to destroy $1.75 trillion of wealth in the subprime mortgage markets."

Click HERE to watch the video interview and then post your reaction on the "Comments" link below.

 

East Valley Tribune - "Mortgage modifications see sharp increase"

Arizona Association of Mortgage Brokers

The East Valley Tribune reported this week that permanent mortgage modifications may have increased (45% nationally, 39.5% in AZ from Jan to Feb) through the federal Making Home Affordable program, but many people are still critical that the program is not helping enough homeowners avoid foreclosure.

Permanent modifications remain far behind the more than 1 million trial modifications initiated since the program's inception, and more than 88,600 homeowners have dropped out of the program.

At the same time, there were foreclosure filings reported on 308,524 U.S. properties last month, which includes 16,718 in Arizona.

AAMB’s Vice President Paul Klimke was quoted in the article..."the latest statistics are encouraging but more needs to be done to help distressed homeowners stay in their homes."

 

"They need to do more permanent debt reductions," he said. "That's really critical in getting people to not abandon their homes."

What’s your take on the situation?  Post your reaction by clicking on the “Comments” link below.

To read the article, click HERE.

Foreclosed homes in metro Phoenix...signs of improvement?

Arizona Association of Mortgage Brokers

The new ASU-Repeat Sales Index, compiled by the Center for Real Estate Theory and Practice at the W. P. Carey School of Business, shows that the rate of decline of foreclosed home prices is slowing down.

In October, the median price of foreclosed homes dropped 15 percent.  In November, the drop is anticipated to be 8 percent and in December only 2 percent. 

This is in stark contrast, however, to what's happening to prices of non-foreclosed homes.  In October, prices fell 19 percent and December is expected to show a drop of 23 percent.  Non-foreclosed home prices have been in a rate of decline at approx. 20 percent per month since October 2008.

For more detail, click here.

HUD announces FHA changes; MIP to increase

Arizona Association of Mortgage Brokers

Please see below for an important press release from HUD.  

 

HUD No.10-016 Melanie Roussell (202) 708-0980

FOR RELEASE Wednesday January 20, 2010

FHA Announces Policy Changes to Address Risk and Strengthen Finances

New Measures Will Help FHA Better Manage Risk, While Maintaining Support for the Housing Market and Access for Underserved Communities

WASHINGTON – Federal Housing Administration (FHA) Commissioner David Stevens today announced a set of policy changes to strengthen the FHA’s capital reserves, while enabling the agency to continue to fulfill its mission to provide access to homeownership for underserved communities. The changes announced today are the latest in a series of changes Stevens has enacted in order to better position the FHA to manage its risk while continuing to support the nation’s housing market recovery.

The FHA will propose to take the following steps: increase the mortgage insurance premium (MIP); update the combination of FICO scores and down payments for new borrowers; reduce seller concessions to three percent, from six percent; and implement a series of significant measures aimed at increasing lender enforcement. U.S. Housing and Urban Development Secretary Shaun Donovan previewed the changes in December of last year, noting that the FHA would announce additional details before the end of January.

“Striking the right balance between managing the FHA’s risk, continuing to provide access to underserved communities, and supporting the nation’s economic recovery is critically important,” said Commissioner Stevens. “When combined with the risk management measures announced in September of last year, these changes are among the most significant steps to address risk in the agency’s history. Additionally, by continuing to provide affordable, responsible mortgage products, FHA will support the housing market’s recovery. Importantly, FHA will remain the largest source of home purchase financing for underserved communities.”

Announced FHA Policy Changes:

1. Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending
   • The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
   • If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
   • This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing
   • The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.
2. Update the combination of FICO scores and down payments for new borrowers.
   • New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
   • This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
   • This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.
3. Reduce allowable seller concessions from 6% to 3%
   • The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
   • This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.
4. Increase enforcement on FHA lenders
   • Publicly report lender performance rankings to complement currently available Neighborhood Watch data - Will be available on the HUD website on February 1.
     • This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available.
   • Enhance monitoring of lender performance and compliance with FHA guidelines and standards.
     • Implement Credit Watch termination through lender underwriting ID in addition to originating ID.
     • This change is included in a Mortgagee Letter to be released tomorrow, January 21st, and is effective immediately.
   • Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process
     • Specifications of this change will be posted in March, and after a notice and comment period, would go into effect in early summer.
   • HUD is pursuing legislative authority to increase enforcement on FHA lenders. Specific authority includes:
     • Amendment of section 256 of the National Housing Act to apply indemnification provisions to all Direct Endorsement lenders. This would require all approved mortgagees to assume liability for all of the loans that they originate and underwrite
     • Legislative authority permitting HUD maximum flexibility to establish separate "areas" for purposes of review and termination under the Credit Watch initiative. This would provide authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branches

In addition to the changes proposed today, the FHA is continuing to review its overall response to housing market conditions, and continuing to evaluate its mortgage insurance underwriting standards and its measures to help distressed and underwater borrowers through FHA/HAMP and other FHA initiatives going forward.

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HUD is the nation's housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development ad enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.

FTC delays enforcement of "Red Flags" Rule

Arizona Association of Mortgage Brokers

The Federal Trade Commission is delaying enforcement of the “Red Flags” Rule until June 1, 2010, for financial institutions and creditors subject to enforcement by the FTC.

 

The Rule was promulgated under the Fair and Accurate Credit Transactions Act, in which Congress directed the Commission and other agencies to develop regulations requiring “creditors” and “financial institutions” to address the risk of identity theft. The resulting Red Flags Rule requires all such entities that have “covered accounts” to develop and implement written identity theft prevention programs to help identify, detect, and respond to patterns, practices, or specific activities – known as “red flags” – that could indicate identity theft.

The previous deadline was November 1, 2009.

 

 

Moving toward recovery? Phoenix home prices up in July.

Arizona Association of Mortgage Brokers

The S&P/Case-Shiller Home Price Index released numbers today that show

home prices rose in Phoenix 1.8 percent for July.

Of the 20 cities on the index, 18 posted an increase in home prices, with only Seattle and Las Vegas showing a decline. 

What do you think?

Will August and September also show an increase? 
Is business picking up for you, steadying, or slowing?
Do you see any loosening in underwriting standards?

Post your thoughts by clicking on the Comments link below.

Fewer banks tightening underwriting requirements - What's your experience?

Arizona Association of Mortgage Brokers

Is the drought over?   

Not the drought of the economic recession, but of the trend by banks to keep tightening underwriting  requirements? 

A recent Federal Reserve survey shows that about one-fifth of U.S. banks tightened lending standards on prime home mortgages in Q-II of 2009.  That's down from half in Q-I and down from the highest point of three-quarters a year ago.

Are you seeing signs of new life?
While the new reality (or return to the old days) of tight standards is expected to continue through mid-2010, do you see residential mortgage guidelines leveling off and becoming more consistent?  Are you seeing any easing of guidelines?

Share your experience in the comments section below.

Click here for the AP Article
Click here for the Federal Reserve survey

 

Has the housing market really hit bottom? Tell us what you think.

Arizona Association of Mortgage Brokers

The Associated Press reported Monday that the housing market decline has reached bottom  and that the "worst is over."

Based on national data released over the last two weeks, the AP reports that "by every measure, except foreclosures, the housing market has stabilized and many areas are recovering."

What do you think?  Has the Arizona market hit bottom? If so, are we holding flat or beginning to improve?  Is the glass half-empty or half-full?

Here's your chance to play armchair economist!  Please post a comment below and let us know what you think.

To read the AP article in the Arizona Republic, click here.

Arizona Mortgage Broker Bill Howe is new President-elect of National Association of Mortgage Brokers

Arizona Association of Mortgage Brokers - Arizona veteran mortgage broker Bill Howe just assumed the President-elect position on July 1 for  the National Association of Mortgage Brokers (NAMB).  AAMB recently caught up with Bill to ask him some questions.

 

AAMB

As President-Elect of the National Association of Mortgage Brokers, what do you perceive to be the greatest opportunity for the mortgage broker in the remaining five months of 2009?

HOWE

In looking back at the archives of “News From NAMB” and “NAMB Fights for YOU,” I counted twelve (12) major bills that NAMB has testified or has written a formal response to so far in 2009.  Several Calls to Action to the membership were posted.  NAMB sued FHFA on our behalf.  At this time of need in our industry and for the association, I say get involved and support these efforts to protect our industry.  If you’re serious about staying in the mortgage business, it’s time to get involved.  Respond to legislative calls to action.  Recruit a new member.  Donate to the NAMBPAC. 

 

AAMB

It is an honor to have an AAMB member on the National Board.  As an Arizona mortgage broker, what is the single most important area that mortgage brokers need to unite around?

HOWE

Immediately respond to and support the 18 month delay in the HVCC.  Then continue to stay involved.  Make sure your contact information with AAMB and at NAMB.org is correct so we can disseminate the information to you.  And again, invite someone to be a member. 

[To take action on the HVCC, click here]

 

AAMB

As you know, AAMB is a highly respected organization in Arizona business, politics and the community.  What might you say to a mortgage broker who isn't a member of this association currently?

HOWE

I have had this very conservation with several people I have known through the years.  You may not like me, or Marc Savitt, or Jim Pair, or anyone else that is involved.  But it’s not about us as individuals.  It’s about all of us together, standing united against the challenges we face.  You must support what NAMB does.  Who else speaks for the mortgage broker at the federal level?  Can you name any organization that has the clout NAMB does on the hill to protect our business?  It’s time to join. 

 

AAMB

If everyone in the association were to dedicate 30 minutes of their time to the association this year, where would you tell them to invest those 30 minutes?

 

HOWE

Ask someone to become a member.  Donate twenty dollars per closed loan to NAMBPAC through payroll deduction.  Get involved.

[For info about NAMB’s Political Action Committee click here]

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Bill Howe is one of only a handful of mortgage professionals in Arizona with both the CMC and CRMS professional designations.  He has been in the business for 22 years, is past president of the Arizona Association of Mortgage Brokers and has served on several NAMB committees.  Bill is a graduate of Arizona State University

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