Fannie Mae: Homebuyer Tax Credits Falter in 2nd Round

The extension and expansion of the homebuyer tax credit program have failed to ignite home sales after an initial deadline passed late last year, according to mortgage financing giant Fannie Mae. The two primary reasons for the lackluster response are a “dried up” pool of qualified first-time homebuyers and a financial incentive that is too low to attract the repeat buyer who qualifies for the expanded program, Fannie said as part of its economic and mortgage market outlook for the rest of 2010.

Housing Starts, Building Permits Slip but Beat Estimates

Considering the impact of winter storms, the market for new residential construction held its own in February with new construction at a seasonally adjusted 575,000 units, a 5.9 percent drop from the January estimate of 611,000 units – but is about even with the figure for a year ago, according to the Commerce Department. Analysts had expected a figure as low as 510,000 units. And the January number was adjusted higher from the previous 591,000.

Calif., Fla. Led in Homebuyer Tax Credits Claimed in FY 2009

During the first nine months of 2009, there were 479,622 claims filed and granted for the first-time homebuyer tax credit, led by California, Florida and Texas, reported the Internal Revenue Service in its newly-released data book for fiscal year 2009. The claims amounted to $3.58 billion in credits, the IRS data shows. California and Florida, two of the hardest hit states in the ongoing foreclosure crisis, accounted for 22 percent, or nearly one quarter, of the total first-time homebuyer tax credits.

FHA Chief: Mortgage Insurer is Not ‘the Next Subprime’ Crisis

The chief of the Federal Housing Administration insisted before a Congressional panel that his agency is not the next housing domino to fall, and that the FHA is on sound financial and policy footing as a result of tougher new rules for borrowers. The FHA helps reduce lenders’ exposure to risk of default by insuring almost 30 percent of home purchases and 20 percent of refinances.

Rates Below 5% as Homebuyer Tax Credit Deadline Looms

The rate on the 30-year fixed mortgage stayed under 5 percent for another week, but most economists see rates moving upward later in the year as the economic recovery takes a stronger foothold and the Federal Reserve unwinds it purchases of mortgage-backed securities. The 30-year fixed rate averaged 4.95 percent for the week ending today, down slightly from 4.97 percent the previous week, according to Freddie Mac’s weekly report.

Obama Short Sale Plan Avoids Foreclosure with Less Debt

A new initiative by the Obama Administration in its slow-moving and often-criticized foreclosure rescue effort will now offer a short-sale alternative that includes some principal forbearance and $1,500 in “relocation” assistance to borrowers. The plan kicking off April 5 — Home Affordable Foreclosure Alternatives, or HAFA – is for homeowners who have already qualified for the government’s primary foreclosure-prevention campaign, the $75 billion Home Affordable Modification Program, HAMP, and have failed to complete its reduced-mortgage payments trial.

Home Price Reductions Slip to 19% of Listings, Trulia Says

The percentage of homes with a price reduction fell below 20 percent for the first time, according to Trulia’s nine-month-old measure of price discount activity. But the trend may reverse as the deadline for the homebuyer tax credit looms. Trulia, the real estate research site, said that 19 percent of listings currently on the market in the United States have at least one price cut as of March 1, 2010.

Crisis Leftovers: Fannie, Freddie Force More Mortgage Buybacks

Fannie Mae and Freddie Mac are forcing the nation’s biggest lenders to buy back more of the badly-written mortgages that served as a trigger for the financial crisis, and a dash for cash has ensued. The government-controlled mortgage finance giants Fannie and Freddie could force some of the top lenders – including Bank of America, JPMorgan Chase, Wells Fargo and Citigroup – to buy back $21 billion of home loans this year as part of its housecleaning of souring mortgages.

Homebuyer Tax Credits Fail to Spur Existing Home Sales

Winter storms had some impact, but a 7.6 percent drop in the pending home sales index for January from the National Association of Realtors indicates expanded and extended homebuyer tax credits are not bolstering the housing market. The NAR index is based on contracts signed in January. It fell to 90.4 from an upwardly revised 97.8 in December. But it is 12.3 percent higher than January 2009 when it was at 80.5.

Refi-Led Mortgage Applications Rebound, Up 14.6%

The composite mortgage applications index from the Mortgage Bankers Association jumped 14.6 percent on a seasonally adjusted basis last week. The healthy rebound, led by refinancing contracts, was the first increase in a month. For the week ending Feb. 26, the MBA’s purchase index rose 9 percent, while the refinance index surged 17.2 percent, both seasonally adjusted.

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