The efforts of the Obama administration to prop up the housing market resulted in making homes increasingly affordable and consolidated the stabilization of home prices, according to the department of Treasury. But it stressed that more efforts work needs to be taken to combat foreclosures for sale.
Housing prices stayed stable in July completing 30 months of steady decline. Historically decreased interest rates encouraged affordability of homes and refinancing alternatives of homeowners nationwide according to the department in the Monthly Score Card on housing.
The report says that over 3.5 million loan modifications were achieved from 2009 April to 2010 June. The Obama administration had launched several programs to aid home owners struggling to meet mortgage payments such as the Home Affordable Modification Program (HAMP). HAMP attempts to reduce the mortgage payments of struggling home owners.
The report says that housing market recovery remains fragile but there are chances that the situation might improve. For instance foreclosure properties surged marginally in July from June but were much below 2009 July level.
Foreclosures in the nation rose by 4% in July compared to last month to 325, 229 accounting for the seventeenth straight month with total foreclosure activity crossing 300,000 as per a realtor agency. This placed additional stress on the market according to Department of Housing and Urban Development (HUD) and Treasury department.
The government’s scorecard uses the Standard & Poor’s/ Case shiller home price index and the Federal Housing Finance Agency index. But according to another report, which uses a 10 city composite index, prices have fallen substantially from recent high in last summer. Morgan Stanley has questioned the validity of these indices.
The report also points to low mortgage rates which have helped 7.1 million home owners refinance from April 2009. This resulted in rendering savings to borrowers amounting to $12.7 billion. But the report also says that new home sales are down 25% from last year and new mortgage-purchase originations have plunged by 7.2% from a year ago.
The report also claimed that there have been twice as many modifications compared to foreclosure completions. From April 2009, 1.3 million modifications were started via the HAMP, 1.4 million modifications via proprietary programs and 472,000 early interventions in delinquency by the FHA (Federal Housing Administration). These are much ahead of the number of foreclosures (1.24 million) in the same period.
But more responsibility is on the way. Realtors report that 3.8 million household could get foreclosure filings by end of 2010. Also according to the report nearly 1.3 million of the loan modifications that were started have been canceled. Officials defend this trend by saying that many who entered the program did not meet the qualifications. Thus foreclosures continue unabated.
