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Many Borrowers Fall Behind Again After Mortgage Modifications
By ANN CARRNS | New York Times – Thu, Jun 21, 2012 2:21 PM EDT
More than half of delinquent borrowers who received mortgage modifications were behind on payments again 18 months later, according to a new analysis from the credit reporting company TransUnion.
Yet the study also found that borrowers who receive modifications are more likely to continue paying other debt, like auto loans or credit cards, that they obtained after falling behind on their mortgages.
The findings come from an analysis of about 5 million mortgages originated before 2008. The loans, from borrowers with similar credit scores, had become at least four months past due from January 2008 to June 2010. Nearly 560,000 of the loans analyzed received modifications from January 2008 to July 2011.
Steve Chaouki, group vice president for financial services at TransUnion, said the analysis showed that some borrowers were still able to handle new credit, even after falling behind on a mortgage loan and obtaining a modification. Lenders, he said, should not assume that just because homeowners get a modification, they are an overall bad risk.
It may be, he said, that borrowers who are willing to make the effort to get a loan modification are trying to get their finances together and move forward, rather than writing off the situation. “It’s an indication that the consumer is trying to right their ship.”
“I view it as positive news for lenders and borrowers,” he said of the findings.
Fountain Valley Overview
| Median home price is $509,000. Based on a rental parity value of $569,000, this market is fairly valued. |
| Monthly payment affordability has been improving over the last 11 month(s). Momentum suggests improving affordability. |
| Resale prices on a $/SF basis increased from $261/SF to $266/SF. |
| Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months. |
| Median rental rates increased $182 last month from $2,180 to $2,362. |
| Rents have been rising for 12 month(s). Price momentum suggests rising rents over the next three months. |
| Market rating = 4 |
Proprietary OC Housing News home purchase analysis 
8548 CAPE CANAVERAL Ave Fountain Valley, CA 92708
$775,000 …….. Asking Price
$775,000 ………. Purchase Price
6/18/2012 ………. Purchase Date
$0 ………. Gross Gain (Loss)
($62,000) ………… Commissions and Costs at 8%
============================================
($62,000) ………. Net Gain (Loss)
============================================
0.0% ………. Gross Percent Change
-8.0% ………. Net Percent Change
0.0% ………… Annual Appreciation
Cost of Home Ownership
——————————————————————————
$775,000 …….. Asking Price
$155,000 ………… 20% Down Conventional
3.80% …………. Mortgage Interest Rate
30 ……………… Number of Years
$620,000 …….. Mortgage
$151,523 ………. Income Requirement
$2,889 ………… Monthly Mortgage Payment
$672 ………… Property Tax at 1.04%
………… Mello Roos & Special Taxes
$194 ………… Homeowners Insurance at 0.3%
$0 ………… Private Mortgage Insurance
$160 ………… Homeowners Association Fees
============================================
$3,914 ………. Monthly Cash Outlays
($659) ………. Tax Savings
($926) ………. Equity Hidden in Payment
$198 ………….. Lost Income to Down Payment
$117 ………….. Maintenance and Replacement Reserves
============================================
$2,645 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$9,250 ………… Furnishing and Move In at 1% + $1,500
$9,250 ………… Closing Costs at 1% + $1,500
$6,200 ………… Interest Points
$155,000 ………… Down Payment
============================================
$179,700 ………. Total Cash Costs
$40,500 ………. Emergency Cash Reserves
============================================
$220,200 ………. 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 # P825737 from our database. Please check back soon.
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$769,900 17912 POINT LOMA St |
0.07 miles 4 bd / 2.75 ba 2,950 Sq. Ft. |
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$895,000 17908 POINT SUR St |
0.09 miles 4 bd / 2.75 ba 2,905 Sq. Ft. |
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$705,000 8501 CAPE COD Ave |
0.11 miles 4 bd / 4 ba 3,364 Sq. Ft. |
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$710,000 18287 SANTA JOANANA Cir |
0.46 miles 5 bd / 2.75 ba 2,628 Sq. Ft. |
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$888,000 17657 WARWICK Cir |
0.61 miles 4 bd / 2.5 ba 2,700 Sq. Ft. |
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$925,000 9166 HELM Ave |
0.66 miles 5 bd / 3 ba 2,920 Sq. Ft. |
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$959,000 8799 SUNBIRD Ave |
0.69 miles 5 bd / 3.5 ba 3,080 Sq. Ft. |
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$649,000 7907 LIBERTY Dr |
0.71 miles 4 bd / 3 ba 2,600 Sq. Ft. |
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$829,000 8848 CANARY Ave |
0.81 miles 4 bd / 2.5 ba 2,800 Sq. Ft. |
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$720,000 18371 CARNABY Ln |
1.12 miles 4 bd / 3 ba 2,522 Sq. Ft. |
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The “experts” agree, so it must be so, right?
Survey: Experts Agree Market to Hit Bottom in 2013
Experts surveyed by Zillow expect home prices to decline slightly in 2012, and predict they will bottom in 2013, according to the June 2012 Zillow Home Price Expectations Survey.
The survey included 114 respondents with backgrounds ranging from economists, real estate experts, and investment and market strategists.
The respondents’ June prediction for home prices is that they will fall 0.4 percent in 2012, and then rise by 1.3 percent in 2013. In 2014, they expect home prices to rise by 2.5 percent, then rise by 3 percent in 2015, and then go up by 3.3 percent in 2016.
The survey, which was conducted by Pulsenomics LLC, is based on the projected path of the S&P/Case-Shiller U.S. National Home Price Index during the coming five years.
The average cumulative prediction to 2014 was 3.5 percent. Although prices are expected to move on a positive track, two years ago in June 2010, the average prediction among respondents for cumulative appreciation into 2014 was 10.3 percent.
The most optimistic quartile of experts predicted, on average, a 1 percent increase in 2012, and the most pessimistic quartile of respondents expected to see an average decline of 2 percent.
“It’s good to start to see some convergence of expectations among economists, as it lends further support to the claim that a bottom is real,” said Zillow Chief Economist Stan Humphries.
Not all the gathered data was positive for the housing industry.
Most respondents, 56 percent, believe the homeownership rate will, in five years, drop below 65.4 percent, the rate recorded in the first quarter of 2012.
One in five also think the homeownership rate will be at or below 63 percent; the lowest rate on record was established in 1965 and is 62.9 percent.
“However, the fact that more than half of respondents believe that the homeownership rate will fall lower should be a sobering reminder that significant challenges remain ahead for the housing market, from negative equity to millions of foreclosed homeowners who now have impaired credit, making a return to homeownership harder than it would be otherwise,” said Humphries.