My Financial Healthcheck

FTC: Countrywide borrowers to get $108 million in refunds

By Les Christie

NEW YORK (CNNMoney) — Borrowers who were overcharged by Countrywide Financial more than three years ago are finally going to get what’s due to them.

The Federal Trade Commission said Wednesday that, as a result of a settlement reached with the mortgage lender more than a year ago, it is sending out checks totalling nearly $108 million to more than 450,000 former Countrywide borrowers.

The compensation was for overcharges made before the failing company was acquired by Bank of America (BAC, Fortune 500) in 2008.

Obama’s housing scorecard

"It’s astonishing that a single company could be responsible for overcharging more than 450,000 homeowners," FTC Chairman Jon Leibowitz said in a prepared statement. "Countrywide’s unconscionable behavior harmed American consumers on a massive scale and we are proud to be getting every single dollar back to hundreds of thousands of struggling consumers who can least afford to lose the money."

There were two categories of overcharges, according to Frank Dorman, an FTC spokesman. The first were tied to inspections, home maintenance, lawn mowing and other services that Countrywide provided to homes of borrowers in default.

0:00 / 2:33 ‘The bank owns my town!’

Instead of directly hiring local vendors for those tasks, the company used their own subsidiary companies to hire the vendors — and then had the subsidiaries mark up the fees, sometimes doubling them or more. They passed along the overcharges to the homeowners. Affected consumers will receive all those overcharges back.

Walk away from your mortgage? Time to get ‘ruthless’

The second set of overcharges came in the form of false claims and fees to escrow accounts of borrowers who entered into Chapter 13 bankruptcies (this type of bankruptcy protection provides debtors with time to pay off what they owe). The borrowers weren’t notified about the fees or charges at the time they were incurred. The FTC says they will get back the entire amount of those undisclosed fees or charges.

The action covered borrowers who were in default between January 1, 2005 and July 1, 2008. Many of the amounts are quite small; the average is about $240, but some borrowers will receive checks of several thousand dollars, the FTC said.

Short sale fraud plagues the housing market

The payments will start to go out on Thursday. Countrywide borrowers with questions about the program can call the redress administrator, Gilardi & Co. at 1-888-230-3196, or go online at the FTC’s Countrywide Settlement page.

Sales of existing homes dipped in June as buyers unexpectedly backed out of contracts, according to the Realtors group.

Home sales fell 0.8% to a seasonally adjusted annual rate of 4.77 million, down from 4.81 million in May, the National Association of Realtors said Wednesday.

Economists had expected a June sales rate of 4.93 million homes, according to consensus estimates from Briefing.com.

"A variety of issues are weighing on the market including an unusual spike in contract cancellations in the past month," said Lawrence Yun, the chief economist at NAR.

Yun said the reason behind the spike was unclear, but he pointed to tight credit and low appraisal prices as possible culprits.

In addition, he said the weak economy and concerns over the federal budget deficit "may be causing hesitation among some consumers or lenders."

Servicers Speed Up HAMP Conversions. More to Become Eligible

by Jann Swanson

The June edition of the Obama Administration’s Housing Scorecard released on Friday showed that housing prices turned slightly upward while mortgage defaults continued to fall as have the numbers of completed foreclosures and short sales. However, the aggregate equity of American homeowners also declined.

According to the Scorecard, a joint report by the Departments of Housing and Urban Development (HUD) and Treasury, in May, 4.3 percent of prime mortgages were at least 30 days late – a significant decline from the peak of 5.9 percent seen in 2010. Moreover, seriously delinquent prime mortgages – those at least 90 days late or in foreclosure – dropped by 22 percent from a high of 1.9 million recorded last year. As new delinquencies decrease across the nation, the number of new homeowners seeking assistance through the Administration’s programs may also decrease.

All three of the indices of home prices included in the scorecard, Case-Shiller, Core-Logic, and FHFA – increased slightly with Core-Logic showing the largest increase – 2.7 points. At the same time aggregate home equity declined by $271 billion since the previous report. The sales of both new and existing homes decreased, however the inventory of new homes declined slightly to a 6.2 month supply from 6.3 months. The inventory of existing homes rose from 9.0 months to 9.3 months. The supply of vacant homes held off of the market continues to increase and now totals 3,861,000 compared to 3,602,000 in the previous quarter.

"The housing data in this month’s Scorecard paint a mixed picture of the housing market, despite growing evidence of progress in the broader economy," said HUD Assistant Secretary Raphael Bostic. "Last month we saw a slight uptick in home prices and a continued decline in mortgage defaults as our foreclosure prevention programs reach more borrowers upstream in the process. But we have much more work to do to reach the many households who still face trouble and to help the market recover. That is why this Administration continues to push for effective implementation of our recovery programs as we continue to help homeowners through this crisis."

The Scorecard includes by reference the monthly report on the administration’s programs to assist homeowners who are delinquent on their mortgages, principally the Home Affordable Modification Program (HAMP). This report has increasingly focused on the performance of mortgage servicers who have been widely blamed for HAMP’s less than optimum results. Last month HUD announced that all ten of the major servicers administrating the program had failed to live up to performance standards and withheld incentives from three of the largest firms. FULL STORY

During the reporting period 32,398 loans were converted from trial modification status to permanent status bringing the total to 731,451 since the program began; 633,459 of the permanent modifications are still in force. A total of 1,614,723 trail modifications were initiated since the program started in April 2009 and 126,751 borrowers remain in trial modifications. Since the last report 26,689 borrowers have entered into trials.

The average trial modification period for loans entering modification when borrowers were required to provide verified income information upfront, is 3.5 months. Those loans entering into modifications prior to June 1, 2010 had an average trial period of 5.2 months. It is interesting to note that, on the graph below showing the average length of trials, two of the largest servicers were most responsible for that 5.2 month average. CitiMortgage and JPMorgan Chase had average trial periods averaging longer than 5 months while all other principal servicers had average trial periods of less than 5 months.

All servicers have improved conversion timelines since June 1, 2010.

Before the change in documentation requirements in June 2010 the average conversion to permanent status was 42 percent. It is now 71 percent with another 20 percent of loans currently pending processing or a decision on conversion. Two servicers, Bank of America and JPMorgan Chase lag the others dramatically with conversion rates of 55 percent and 63 percent.

Not all 60+ day delinquent loans are eligible for HAMP. Based on the estimates, of the 4.6 million homeowners who are currently 60+ days delinquent, 1.05 million homeowners are eligible for HAMP. As this represents a point-in-time snapshot of the delinquency population and estimated HAMP eligibility, Treasury expects that more homeowners will become seriously delinquent between now and the end of 2012, and some of those homeowners will be eligible for HAMP.

Estimated eligible 60+ day delinquent loans as reported by servicers as of April 30, 2011, include conventional loans:

• in foreclosure and bankruptcy.
• with a current unpaid principal balance less than $729,750 on a one-unit property, $934,200 on a two-unit property, $1,129,250 on a three-unit property and $1,403,400 on a four-unit property.
• on a property that was owner-occupied at origination.
• originated on or before January 1, 2009.

Estimated eligible 60+ day delinquent loans exclude:

• FHA and VA loans.
• loans that are current or less than 60 days delinquent, which may be eligible for HAMP if a borrower is in imminent default

Second liens have interfered with the modification of many senior liens and the administration has recently focused on eliminating this obstacle. The Second Lien Modification Program (2MP) has now resulted in 27,105 second lien modifications, 19,000 of these in the last four months. In some cases these modifications have resulted in full extinguishment of the subordinate debt.

The current HAMP report also includes information on two other programs. The Principal Reduction Alternative (PRA) requires servicers of non-GSE loans to evaluate the benefit of principal reduction where mortgages have a loan-to-value ratio of 115 percent or more. They are not, however, required to reduce principal as part of a modification. There have been 21,299 PRA modifications begun with 4,938 modifications now permanent. The median principal reduction in permanent modifications is $69,532, or 32.2 percent of the loan balance.

The second initiative, Home Affordable Foreclosure Alternatives (HAFA) offers incentives to homeowners seeking a short sale or to give a deed-in-lieu of foreclosure. There have been 17,781 HAFA agreements started with 8,541 completed. Of these 8,309 were short sales and 232 were deeds-in lieu.

"The Administration remains committed to reaching homeowners who are still struggling so that our country can fully recover from an unprecedented housing crisis," said Treasury Assistant Secretary for Financial Stability Tim Massad. "The Administration’s programs continue to benefit tens of thousands of additional homeowners every month, while keeping the pressure on mortgage servicers to offer more sustainable assistance to prevent avoidable foreclosures."

Nothing New in New Home Sales. Two Times!

by Adam Quinones

The Census Bureau and Department of Housing and Urban Development have released New Residential Sales data for May 2011.

New Residential Sales data provides statistics on the sales of new privately-owned single-family residential structures in the United States. Data included in the press release are (1) the number of new single-family houses sold; (2) the number of new single-family houses for sale; and (3) the median and average sales prices of new homes sold. New residential sales estimates only include new single-family residential structures. Sales of multi-family units are excluded from these statistics.

Here is a Quick Recap from Reuters…

• RTRS – US MAY SINGLE-FAMILY HOME SALES 319,000 UNIT ANN. RATE (CONS 310,000) VS APRIL 326,000 (PREV 323,000)
• RTRS – US MAY SINGLE-FAMILY HOME SALES -2.1 PCT VS APRIL +6.5 PCT (PREV +7.3 PCT)
• RTRS – US MAY HOME SALES NORTHEAST -26.7 PCT, MIDWEST UNCH, SOUTH +2.4 PCT, WEST -3.5 PCT RTRS
• RTRS – US MAY NEW HOME SUPPLY 6.2 MONTHS’ WORTH AT CURRENT PACE VS APRIL 6.3 MONTHS RTRS
• RTRS – US MAY MEDIAN SALE PRICE $222,600, -3.4 PCT FROM MAY 2010 ($230,500)
• RTRS – US HOMES FOR SALE AT END OF MAY 166,000 UNITS, RECORD LOW, VS APRIL 172,000 UNITS

Sales of new single-family houses in May 2011 were at a seasonally adjusted annual rate of 319,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.

This is 2.1 percent (±10.7%)* below the revised April rate of 326,000, but is 13.5 percent (±13.6%)* above the May 2010 estimate of 281,000.

The median sales price of new houses sold in May 2011 was $222,600; the average sales price was $266,400. The seasonally adjusted estimate of new houses for sale at the end of May was 166,000. This represents a supply of 6.2 months at the current sales rate.

Honestly I don’t know why we even cover this data anymore. It’s like we’re expecting to hear something different from the Commerce Department.

Do you see that blue histogram in the chart above? It estimates the amount of New Home Sales that will have occurred by the end of 2011 if sales continue at their current pace (Annualized). One thing you might notice about that histogram chart is its most recent additions look historically low in comparison to the housing boom of the mid-2000′s. While the current pace of annualized sales is indeed above the record low of 278,000 seen in August 2010, at 319,000 we’re not too far from the bottom! And we haven’t been since April 2010 either, when the annualized pace was 420,000 New Home Sales. Same story different month….

Here’s another fun fact if you’re not satisfied. The "(±10.7%)" and "(±13.6%)" seen in this part of the report: "This is 2.1 percent (±10.7%)* below the revised April rate of 326,000, but is 13.5 percent (±13.6%)* above the May 2010 estimate of 281,000", represents the Standard Error of the survey results. When the Standard Error is bigger than the Commerce Department’s estimation, we would say the survey results are "Statistically Insignificant". Meaning we don’t know if New Home Sales actually increased or decreased in May. The survey data is telling us NOTHING! A BETTER EXPLANATION

So on two accounts we learned nothing new about the residential construction market today. Well wait, there was one thing…

RTRS – NEW HOMES FOR SALE AT END OF MAY AT 166,000 UNITS. NEW RECORD LOW (PREVIOUS WAS APRIL 2011 AT 172,000 UNITS)

The new construction market has gone totally stagnate….

*A house is considered sold when either a sales contract has been signed or a deposit accepted. Included in our estimates are houses for which a sales contract is signed or deposit accepted before construction has actually started; for instance, houses sold from a model or from plans before any work has started on the footings or foundations. These estimates also include houses sold while under construction or after completion. This survey does not follow through to the completion ("closing") of the sales transaction, so even if the transaction is not finalized, the house is still considered sold. Preliminary new home sales figures are subject to revision due to the survey methodology and definitions used. The survey is primarily based on a sample of houses selected from building permits.

by Jann Swanson

Approximately 22.7 percent of all U.S. homeowners were in a negative equity position with their mortgages at the end of the first quarter of 2011, down slightly from 23.1 percent in the fourth quarter of 2010.

In a report released Tuesday, CoreLogic states that some 10.9 million borrowers are "underwater", i.e. owe more on their mortgages than their property is worth and another 2.5 million borrowers (5 percent) were in a near-negative equity position, which the real estate data and analytics company defines as having less than 5 percent positive equity.

While the drop in housing prices caused much of the negative equity, equity extraction was also a key driver. Borrowers with second mortgages on their home were twice as likely to suffer negative equity as those with only one lien. 18 percent of borrowers without home equity loans were underwater while 38 percent of borrowers with home equity loans were in a negative position. A total of 4.5 million negative equity borrowers (40 percent) have home equity or other junior liens.

The current CoreLogic report does not attach a total dollar value to negative equity statistics but an analysis of the distribution of negative equity based on fourth-quarter 2010 numbers was published by the company last month which put the aggregate national net equity at $750 billion. The percentage of underwater borrowers has declined only 4 basis points since that time.

The negative position of individual borrowers is significant. The average underwater borrower owes $65,000 more than his property is worth. This number varies widely by state from a low of $31,000 in Ohio to $129,000 in New York. Not surprisingly, states that were among those with the biggest housing booms now report the largest negative equity averages; Massachusetts, $120,000; Connecticut ($111,000), Hawaii ($98,000), and California ($93,000). States which saw the smallest run-up of prices also have the lowest negative averages. In addition to Ohio those states are Indiana ($34,000) and Minnesota ($38,000.)*

Going back again to the May report on negative equity distribution, CoreLogic found that the $750 billion in negative equity that existed in the fourth quarter was distributed fairly evenly between properties with only one lien ($355 billion) and those with one or more junior liens ($395 billion). However, over 38 percent of first-lien only negative equity ($135 billion) was in properties valued between $100,000 and $200,000 as opposed to properties with more than one lien ($95 billion or 26 percent). At the higher end, 39 percent ($154 billion) of negative equity properties in the $300,000 to $700,000 range had multiple liens while 26 percent ($91 billion) had only one. In Q1 2011, the average negative equity for an individual with only one mortgage was $52,000 while a negative equity borrower with a 2nd lien was underwater by an average of $83,000.

The states with the largest percentage of underwater borrowers were Nevada (63 percent), Arizona (50 percent), Florida (46 percent), Michigan (36 percent) and California (31 percent). These states account for a 40 percent share of the net negative equity and then they are excluded from the national figures, the percentage of underwater properties drops from 22.7 percent to 16 percent. The three hardest hit states did show slight improvement from the fourth quarter of 2010; Nevada was down 2.7 percentage points, Arizona fell 1.3 percentage points and Florida 1.3 percentage points.

Default rates rise with the level of negative equity but not necessarily with the number of outstanding loans. At a low level – a CLTV under 5 percent – the default rate is slightly above 2 percent with multi-lien properties defaulting at a slightly higher rate than single lien properties. Above the 115 percent CLTV level where the default rate is 4 percent, single lien properties begin to default at a fractionally higher rate than multiple lien properties. Once the CLTV reaches 125 percent the default rate soars, reaching 12 percent at 150+ percent CLTV with single lien properties marginally higher than those with multiple liens.

"Many borrowers in negative equity are still able and willing to make their mortgage payments, Mark Fleming, CoreLogic’s chief economist said. "Those in negative equity and impacted by an income shock of some kind, such as a job loss, divorce, or death, are much more likely to be at risk of foreclosure or a short sale. The current economic indicators point to slow yet positive economic growth, which will slowly reduce the risk of borrowers experiencing income shocks. Yet the existence of negative equity for the foreseeable future will weigh on the housing market recovery by holding back sale and refinance activity."

"This data is certainly cause for concern", says MND’s Managing Editor Adam Quinones. "If home prices continue to fall, we’ll be looking at another wave of strategic defaults".

READ MORE: Strategic Default: Inconceivable Assumptions Suddenly Conceivable

*Individual data was not given for seven states; Louisiana, Maine, Mississippi, South Dakota, Vermont, West Virginia, and Wyoming. We assume those states are also not included in aggregate national numbers.

Home prices hit another new low in the first quarter, down 5.1% from a year ago to levels not reached since 2002.

It was the third straight quarterly drop for the S&P/Case-Shiller national home price index, which was released Tuesday.
Prices are now down 32.7% from their peak set five years ago.

Of the 20 cities, only Washington has posted a home-price gain: 4.3% over the past 12 months. No surprise since that’s the only place jobs are being created, only problem they are all Government jobs.

Housing starts fell 12.8% to a seasonally adjusted annual rate of 458,000, down 12.8% from a revised 525,000 in March, according to the Commerce Department. The reading is the lowest level since the government began keeping records in 1959. The second lowest reading came in January, when the rate of housing starts was 488,000.  All this despite almost record low mortgage rates.

Cash-Out Refis Dry Up. Lack of Equity and Tight Credit to Blame

by Jann Swanson

Freddie Mac reported on Thursday that homeowners continue to hit barriers when looking to refinance their home, although it’s not clear whether this is due to caution or because they have little equity left in their homes to do otherwise, or simply because they cannot qualify. We’d point toward all of the above as the main hindrances.

During the first quarter of 2011, only 25 percent of those who refinanced existing mortgages pulled cash out of their home. Even more striking, 21 percent took our smaller loans than the ones they were refinancing. The percentage of homeowners whose loan balance remained unchanged, 54 percent, was the highest since Freddie Mac began keeping track of such figures in 1985. Freddie Mac defines a "cash-out" mortgage as one in which the new principal balance exceeds the old one by more than 5 percent.

During the quarter an estimated $6 billion in net home equity was cashed out during the refinance of conventional prime-credit home mortgages compared to 9.1 billion the previous quarter. When adjusted for inflation this is the lowest net equity cashed out in a single quarter since the third quarter of 1996.

The average home being refinanced during the quarter depreciated in by 6 percent since the old loan was put in place which was a median period of five years. In comparison, the Freddie Mac House Price Index shows a 21 percent decline in its U.S. series between the end of 2005 and the end of 2010. "Thus, borrowers who refinanced in the first quarter owned homes that had held their value better than the average home, or may reflect value-enhancing improvements that owners had made to their homes during the intervening years." Those who refinanced got a median interest rate reduction for a 30-year fixed-rate mortgage of about 1.2 percentage points or a savings of about 20 percent in interest costs.

Frank Nothaft, Freddie Mac vice president and chief economist said, "The average interest rate on single-family mortgages outstanding at the end of 2010 was about six percent, so there are still plenty of homeowners that can benefit from refinancing. We found the typical borrower reduced their interest rate about 1.2 percentage points by refinancing during the first quarter. For a 30-year fixed-rate mortgage with a $200,000 loan balance, that’s a monthly payment savings of about $150."

Freddie Mac, in its press release compares the 25 percent of cash-out mortgages in the first quarter to the average cash-out share over the past 25 years of 62 percent and the $6 billion in equity pulled out in the most recent period with the 83.7 billion cashed out in the second quarter of 2006, the peak of the refinancing frenzy. It is illustrative of the sea change in housing finance to look more closely at other figures from that mid decade period.

During 14 quarters spanning January of 2005 to June 2008 Americans pulled $887.1 billion in cash out of the equity of their homes, an average of $63.4 billion a quarter. That didn’t include $109.7 in outstanding home equity lines of credit, equity they had utilized as cash previous to refinancing, which they consolidated during that period. They did this through refinancing their first mortgages at levels that averaged an increase of 24.1 percent more than the balance of the loan they were refinancing.

In the first 10 quarters after the market started to crash in earnest, total cash-out dollars as a percentage of aggregate refinanced originations declined steadily, from 23.4 percent in the third quarter of 2008 to 3.4 percent in the fourth quarter of 2010. Freddie Mac reports this figure increased slightly in the first quarter to 4.3 percent.

During all of 2010 a total of $33.2 billion was cashed out of mortgages. This is only slightly more than the $31.5 billion that was cashed out in the second quarter of 2008 alone. And then the music ended.

Home prices in February sank 3.3% to just above the post-crisis lows reached in April 2009. It was the seventh straight month of declines.  Home values are down 32% from their peak set in May of 2006, according to the S&P/Case-Shiller index of home prices in 20 cities.  Distressed properties — bank repossessions and short sales — now account for more than 30% of sales, and they’ve been selling at about a 34% discount to conventional sales.  As gas prices continue to rise and the ability to get approved for a mortgage continues to become more difficult, home prices will keep falling.

Existing Home Sales Still Hindered by Uber Tight Lending Regs

by Adam Quinones

The National Association of Realtors today released Existing Home Sales data for March 2011

Existing Home Sales report on the number of completed real estate sales transactions on single-family homes, townhomes, condominiums and co-ops. The methodology in calculating existing-home sales statistics is really quite simple. Each month the National Association of Realtor® receives data on existing-home sales from local associations/boards and multiple listing services (MLS) nationwide. The monthly EHS economic indicator is based on a representative sample of 160 Boards/MLSs. NAR captures 30-40% of all existing-home sale transactions with its monthly survey.

HERE is the methodology for the data collection

Reuters Quick Recap…

RTRS – US MARCH EXISTING HOME SALES 5.10 MLN UNIT ANNUAL RATE (CONS 5.00 MLN) VS FEB 4.92 MLN (PRV 4.88 MLN)-NAR
RTRS – US MARCH EXISTING HOME SALES +3.7 PCT (CONS +2.5 PCT) VS FEB -8.9 PCT (PREV -9.6 PCT)-NAR
RTRS – US MARCH INVENTORY OF HOMES FOR SALE +1.5 PCT TO 3.549 MLN UNITS, 8.4 MONTHS’ SUPPLY-NAR
RTRS – US MARCH NATIONAL MEDIAN PRICE FOR EXISTING HOMES $159,600, -5.9 PCT FROM MARCH 2010-NAR
RTRS – US NAR SAYS 40 PCT OF U.S. MARCH EXISTING HOME SALES WERE DISTRESSED SALES, HIGHEST SINCE APRIL 2009 (45 PCT), VERSUS 39 PCT IN FEB

Excerpts from the Release…

Sales of existing-home sales rose in March, continuing an uneven recovery that began after sales bottomed last July, according to the National Association of Realtors®.

Total existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 3.7 percent to a seasonally adjusted annual rate of 5.10 million in March from an upwardly revised 4.92 million in February, but are 6.3 percent below the 5.44 million pace in March 2010.

Sales were at elevated levels from March through June of 2010 in response to the home buyer tax credit. A parallel NAR practitioner survey shows first-time buyers purchased 33 percent of homes in March, compared with 34 percent of homes in February; they were 44 percent in March 2010.

Single-family home sales rose 4.0 percent to a seasonally adjusted annual rate of 4.45 million in March from 4.28 million in February, but are 6.5 percent below the 4.76 million level in March 2010. Existing condominium and co-op sales increased 1.6 percent to a seasonally adjusted annual rate of 650,000 in March from 640,000 in February, but are 4.1 percent below the 678,000-unit pace one year ago.

Regionally, existing-home sales in the Northeast rose 3.9 percent to an annual level of 800,000 in March but are 12.1 percent below March 2010. Existing-home sales in the Midwest increased 1.0 percent in March to a pace of 1.06 million but are 13.1 percent lower than a year ago. In the South, existing-home sales rose 8.2 percent to an annual level of 1.99 million in March but are 1.0 percent below March 2010. Existing-home sales in the West slipped 0.8 percent to an annual pace of 1.25 million in March and are 3.1 percent below a year ago.

All-cash sales were at a record market share of 35 percent in March, up from 33 percent in February; they were 27 percent in March 2010. Investors accounted for 22 percent of sales activity in March, up from 19 percent in February; they were 19 percent in March 2010. The balance of sales were to repeat buyers.

Distressed homes – typically sold at discounts in the vicinity of 20 percent – accounted for a 40 percent market share in March, up from 39 percent in February and 35 percent in March 2010. This pressured home prices lower….

The national median existing-home price for all housing types was $159,600 in March, down 5.9 percent from March 2010. The median existing single-family home price was $160,500 in March, down 5.3 percent from a year ago. The median existing condo price was $153,100 in March, which is 10.1 percent below March 2010.

NAR’s housing affordability index shows the typical monthly mortgage principal and interest payment for the purchase of a median-priced existing home is only 13 percent of gross household income, the lowest since records began in 1970.

Regionally the median price in the Northeast was $232,900, down 3.0 percent from a year ago. The median price in the Midwest was $126,100, which is 7.1 percent below March 2010. The median price in the South was $138,200, down 6.6 percent from a year ago. The median price in the West was $192,100, which is 11.2 percent lower than March 2010.

Total housing inventory at the end of March rose 1.5 percent to 3.55 million existing homes available for sale, which represents an 8.4-month supply at the current sales pace, compared with a 8.5-month supply in February.

Lawrence Yun, NAR chief economist, expects the improving sales pattern to continue. “Existing-home sales have risen in six of the past eight months, so we’re clearly on a recovery path,” he said. “With rising jobs and excellent affordability conditions, we project moderate improvements into 2012, but not every month will show a gain – primarily because some buyers are finding it too difficult to obtain a mortgage. For those fortunate enough to qualify for financing, monthly mortgage payments as a percent of income have been at record lows.”

Data from Freddie Mac and Fannie Mae show requirements to obtain conventional mortgages have been tightened, with the average credit score rising to about 760 in the current market from nearly 720 in 2007; for FHA loans the average credit score is around 700, up from just over 630 in 2007.

“Although home sales are coming back without a federal stimulus, sales would be notably stronger if mortgage lending would return to the normal, safe standards that were in place a decade ago – before the loose lending practices that created the unprecedented boom and bust cycle,” Yun explained.

Plain and Simple: Existing Home Sales were better than expected and improved from February. 40% of sales were distressed inventory though and home prices fell 5.9% year over year. Realtors continue to blame tight underwriting regs for unsustainable positive progress in the housing market….as evidenced by this statistic: All-cash sales were at a record market share of 35 percent in March.

SAME STORY AS LAST MONTH: Tight Credit Limits Home Buyer Demand. Cash is King

Washington Post

The Federal Reserve unveiled a rule to address a new law enacted last year that bars lenders from approving a mortgage without verifying that the borrower has a reasonable ability to repay it. Lenders that violate that rule leave themselves vulnerable to lawsuits and enforcement actions. Struggling homeowners could even use violations of this rule to fight foreclosure.