November 7, 2011 (Chris Moore)

The housing market was a mixed bag in September as loan performance overall declined slightly along with existing home sales, while new home sales showed improvement along with foreclosure starts and sales, but overall, things looked better than they did a year ago according to the latest release of the Obama Administration’s Housing Scorecard.

Loan performance was mixed in September with sub-prime mortgages showing the most improvement. At the end of September, prime mortgages that were at least 30 days or more delinquent remained unchanged from 4.4 percent in August but were down from 5.2 percent posted in August of 2010.

Performance of sub-prime mortgages improved as loans that were 30 days or more delinquent fell to 31.8 percent in September, down from 32.1 percent in August, and down from 36.4 percent reported a year earlier.

Delinquency rates of mortgages insured by the Federal Housing Administration (FHA) increased in September to 12.4 percent, up from 12.1 percent in August. The delinquency rate on FHA loans a year ago was 12.7 percent.

Seriously delinquent prime mortgages, those that are 90 days or more past due, increased with 1.481 million loans in trouble at the end of September, up from 1.472 million in August but down from 1.660 million a year earlier.

Sub-prime mortgages that were seriously delinquent numbered 1.738 million in September, up from 1.725 million in August but down from 1.827 million in September of last year.

Loans insured by the FHA that were seriously delinquent increased to 635,000 in September, up from 612,000 in August and also up from 574,000 in September 2010.

Since the beginning of the government’s mortgage assistance efforts in 2009 until the end of September 2011, over 5.3 million modification arrangements have been started. In September, 40,141 homeowners received a permanent loan modification through the Homeowner Affordable Modification Program (HAMP) while 25,974 trial modifications were started raising the total amount of all permanent modifications started to 856,974.

To date, homeowners that have received a permanent loan modification through HAMP saved a median of $516 per month on their mortgage payment, more than a one-third of their median before-modification payment.

HOPE NOW proprietary modifications increased slightly in September to 55,800 modifications from a revised 55,700 modifications in August.

Home prices were generally flat with two out of the three indices used in the Housing Scorecard posting very modest gains while one posted a slight decline.

Sales of new homes increased by a seasonally adjusted 0.6 percent from August to September while sales of existing homes decreased by a seasonally adjusted 0.3 percent.

The inventory of existing homes increased in September to an 8.5 months supply, up from a revised 8.4 months supply of homes for sale in August. New home inventory decreased to a 6.2 months supply of inventory, down from a 6.6 months supply in August.

Both foreclosure starts and foreclosure sales declined in September with starts falling 10.4 percent and foreclosure sales declining 6.0 percent. Compared to a year ago, foreclosure starts and sales are down substantially with starts down 31.0 percent and foreclosure sales down 44.6 percent.

HUD Assistant Secretary Raphael Bostic said, “The housing data in this month’s Scorecard illustrate how complex the market is and why the Obama Administration has chosen a variety of approaches to help spur recovery. Last month we saw a continued fall in mortgage defaults, due in part to our foreclosure prevention programs reaching more borrowers upstream in the process. And in the last quarter, a million more homeowners refinanced their loans under some of the lowest interest rates in history. But despite these signs of progress, we have much more work to do to reach the many households who still face trouble and to help the market recover. To help responsible homeowners, we have to make it easier for people to refinance at interest rates that are now near 4% – putting hundreds of dollars in real savings back in their pockets each month, and giving a boost to our fragile economy.”

Tags: September Housing Scorecard, Obama Administration, loan modifications, mortgage delinquencies, trial modifications, prime mortgages, sub-prime mortgages, FHA

Treasury Department