FHA might need a bailout if this continues. In fact, FHA gets an automatic bailout without having to go through Congress or the President. It’s a direct line of credit from the US Treasury to the FHA. Something I call “America’s HELOC.
Closer to a bailout? FHA’s mortgage delinquencies soar
By Tami Luhby @CNNMoney July 9, 2012: 12:38 PM ET
NEW YORK (CNNMoney) — The mortgage market appears to finally be stabilizing — as long as you ignore loans backed by the Federal Housing Administration.
Increasingly, FHA-insured loans are falling into foreclosure or serious delinquency, moving in the opposite direction of loans guaranteed by Fannie Mae and Freddie Mac or those held by banks, which are all showing signs of improvement.
And taxpayers could ultimately be on the hook for FHA’s growing number of troubled mortgages. The agency’s finances are already on shaky ground, and additional losses from loans going sour could prompt the need for a federal bailout, experts said.
“We can’t escape this one,” said Joseph Gyourko, a real estate professor at the University of Pennsylvania’s Wharton School. “This is an arm of the U.S. government.”
The share of government-guaranteed loans, a majority of which are backed by FHA, that were 90 days or more delinquent soared nearly 27% during the year ending March 31. Foreclosures jumped nearly 17%, according to a report published recently by federal regulators.
At the same time, bank loans saw a dramatic improvement, with delinquencies shrinking by 39% and foreclosures declining by nearly 10%. Fannie and Freddie’s portfolio also improved as delinquencies dropped by nearly 15% and foreclosures slid by more than 6%, the quarterly report issued by the Office of the Comptroller of the Currency said.
FHA has also had a tougher time successfully modifying loans. More than 48% of government-guaranteed mortgages re-defaulted 12 months after modification, compared to 36.2% of loans overall, the report said.
Brea Overview
| Median home price is $425,000. Based on a rental parity value of $538,000, this market is under valued. |
| Monthly payment affordability has been worsening over the last 1 month(s). Momentum suggests unchanging affordability. |
| Resale prices on a $/SF basis increased from $246/SF to $247/SF. |
| Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months. |
| Median rental rates increased $16 last month from $2,216 to $2,233. |
| Rents have been rising for 12 month(s). Price momentum suggests rising rents over the next three months. |
| Market rating = 8 |
Proprietary OC Housing News home purchase analysis 
420 SIEVERS Ave Brea, CA 92821
$355,000 …….. Asking Price
$200,000 ………. Purchase Price
2/15/1991 ………. Purchase Date
$155,000 ………. Gross Gain (Loss)
($16,000) ………… Commissions and Costs at 8%
============================================
$139,000 ………. Net Gain (Loss)
============================================
77.5% ………. Gross Percent Change
69.5% ………. Net Percent Change
2.6% ………… Annual Appreciation
Cost of Home Ownership
——————————————————————————
$355,000 …….. Asking Price
$12,425 ………… 3.5% Down FHA Financing
3.80% …………. Mortgage Interest Rate
30 ……………… Number of Years
$342,575 …….. Mortgage
$90,949 ………. Income Requirement
$1,596 ………… Monthly Mortgage Payment
$308 ………… Property Tax at 1.04%
………… Mello Roos & Special Taxes
$89 ………… Homeowners Insurance at 0.3%
$357 ………… Private Mortgage Insurance
………… Homeowners Association Fees
============================================
$2,350 ………. Monthly Cash Outlays
($244) ………. Tax Savings
($511) ………. Equity Hidden in Payment
$16 ………….. Lost Income to Down Payment
$109 ………….. Maintenance and Replacement Reserves
============================================
$1,719 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$5,050 ………… Furnishing and Move In at 1% + $1,500
$5,050 ………… Closing Costs at 1% + $1,500
$3,426 ………… Interest Points
$12,425 ………… Down Payment
============================================
$25,951 ………. Total Cash Costs
$26,300 ………. Emergency Cash Reserves
============================================
$52,251 ………. Total Savings Needed
——————————————————————————————————————————————-
This property is available for sale via the MLS.
Please contact Shevy Akason, #01836707
949.769.1599……
sales@ochousingnews.com…..
We're sorry, but it seems that we're having some problems loading MLS # S703742 from our database. Please check back soon.
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$489,000 1073 EL MIRADOR Dr |
0.67 miles 3 bd / 2 ba 1,631 Sq. Ft. |
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$360,000 726 CACTUS Ct |
1.12 miles 3 bd / 2 ba 1,460 Sq. Ft. |
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$539,000 651 BROOKLINE Pl |
1.28 miles 3 bd / 2 ba 1,615 Sq. Ft. |
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$450,000 535 BALSA Ave |
1.35 miles 4 bd / 2 ba 1,505 Sq. Ft. |
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$499,000 1738 East EUCALYPTUS St |
1.51 miles 3 bd / 1.75 ba 1,483 Sq. Ft. |
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$525,000 1110 North PUENTE St |
1.57 miles 3 bd / 1.75 ba 1,657 Sq. Ft. |
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$375,000 504 South FONDA St |
1.62 miles 3 bd / 2 ba 1,400 Sq. Ft. |
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$325,000 3101 PEPPERWOOD Ct |
1.63 miles 3 bd / 2 ba 1,088 Sq. Ft. |
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$299,900 2851 ROLLING HILLS Dr #37 |
1.69 miles 3 bd / 2 ba 1,560 Sq. Ft. |
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$174,900 2851 ROLLING HILLS Dr #33 |
1.69 miles 2 bd / 1.75 ba 1,440 Sq. Ft. |
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See the enormous foreclosure pipeline for yourself below. Enter location and press search. Scroll through list by pressing "next."
We provide detailed information on any property.
I guess the banks are not out of people to foreclose on after all…
May Foreclosure Starts Nearly Triple Sales: LPS
In May, foreclosure starts outnumbered foreclosure sales by a near 3-1 ratio, according to a report from Lender Processing Services (LPS).
Even though foreclosure starts and sales saw similar monthly increases in May, 11.6 percent and 10 percent respectively, the actual number of foreclosure starts was significantly higher than foreclosure sales. Foreclosure starts numbered 202,707 while foreclosure sales totaled 73,439.
Also, foreclosure inventory maintained historically high levels at 4.14 percent.
LPS Applied Analytics SVP Herb Blecher said the situation is more nuanced when looking at the breakdown between states that apply judicial versus non-judicial foreclosure processes.
“There’s a stark contrast in foreclosure inventories between judicial and non-judicial states,” said Blecher. “In the former, 6.5 percent of all loans are in some stage of foreclosure – that’s more than 2.5 times the rate in non-judicial states where only 2.5 percent of loans are currently in the foreclosure pipeline.
Blecher added both figures are significantly higher than the pre-crisis average of 0.5 percent, but noted the average yearly decline in non-current loans for judicial states is less than one percent compared to 7.1 percent in non-judicial states.
Unlike non-judicial states, lenders must receive court approval before initiating a foreclosure. This leads to a longer timeline for when foreclosures actually exit the pipeline.
In non-judicial states, foreclosure sales were three times greater than in judicial states, with 6.46 percent of foreclosure inventory making its way out of the foreclosure pipeline in May compared to only 2.14 percent in judicial states. Judicial states also hold a much higher percentage of past due loans that are more than two years old. In judicial states, about 53 percent of loans in foreclosure have been delinquent for more than two year compared to just over 30 percent of loans in non-judicial states.
At 7.2 percent, delinquencies in May were up slightly by 1.1 percent, but down almost 12 percent a year ago.
LPS uses loan-level residential mortgage data and performance information on nearly 40 million loans for its monthly report.
States with highest percentage of past due loans
Florida
Mississippi
New Jersey
Nevada
Illinois
States with the lowest percentage of past due loans
Montana
Alaska
South Dakota
Wyoming
North Dakota
[...] Remember the FHA program will need a bailout. [...]