Lansner: Real estate confidence recovers

Our periodic check of business patter today ponders real estate.

PLUS: What a difference a year makes for builders.

Every month, the National Association of Home Builders/Wells Fargo Housing Market Index peers into the heads of the nation's developers for their insights into building conditions.

A survey constructs a NAHB/Wells confidence index on a scale from 1 to 100, where the high numbers are perfection; 50 is the break between good and bad; and well ... a year ago the national index was at 21. In the West, 2011 ended at 16.

Fast forward to the final 2012 reading, and we see the national NAHB/Wells index at 48 – the highest mark since April 2006. In the West, December's score was 45 – and while that's down 3 points in a month, November tied October for highest since July 2006.

Considering the size of the economic effort that goes into building housing – and assuming the uptick in developer psyche translates to action – this is an uplifting trend.

MINUS: Still, what's up with late mortgage payments, just when you thought it was "all clear"?

November's S&P/Experian Consumer Credit Default Index – an attempt to track national bill-paying patterns – shows rising defaults. In September, the index hit a post-recession low of 1.46 percent, then ticked up to 1.55 percent in October and 1.64 percent in November. (Note: In November 2011, the default rate was 2.21 percent!) The sole reason is that the default rate for first mortgages jumped from 1.36 percent in September to 1.58 percent in November. All other loans tracked – auto, bank card and second mortgages – showed improvement.

In the Los Angeles area, the overall default rate was 1.6 percent vs. 1.44 percent in October. Let's not forget, this same tardy bill-paying measure was at 2.53 percent in November 2011.

The year's improvement is clear, as is the worry about the recent reversal.

EQUALS: Homesellers face nervous consumers.

Mortgage giant Fannie Mae polls 1,001 Americans monthly to track attitudes about the economy and housing. In November, nerves remained frayed.

Half of those surveyed said the U.S. economy is on the wrong track. But that's down from 75 percent a year earlier. It's definitely a mixed picture: 18 percent of people polled expect their personal financial situation to get worse over the next 12 months – the highest since December 2011. At the same time, 21 percent said their household income had jumped significantly higher in a year.

As for housing, 37 percent see prices up in a year, while 14 percent foresee depreciation.

Doug Duncan of Fannie Mae thinks that "growing confidence in a housing recovery, in addition to other factors, may reinforce growing consumer optimism regarding the improving direction of the general economy."

So – gulp! – it's all a bet on real estate?

For the original post visit: http://www.ocregister.com/articles/percent-381102-november-year.html

REAL ESTATE: Boxer, Menendez revive Responsible Homeowners Refinancing Act

Noting new momentum and support from hardworking homeowners, Sens. Barbara Boxer (D-Calif.) and Robert Menendez (D-N.J.), reintroduced the Responsible Homeowner Refinancing Act.

Calling on Republicans to join them in passing the measure, Boxer and Menendez said recent changes to the Home Affordable Refinance Program (HARP) were a step in the right direction.

But the lawmakers said barriers were left in place that would keep millions of borrowers trapped in high interest loans.

There are nearly 13.5 million responsible borrowers in loans guaranteed by Fannie Mae and Freddie Mac who could benefit from refinancing at today’s low interest rates, Boxer said in a statement. “This bill is a win-win-win.”

“I’ve received thousands of messages from hardworking homeowners back home, including a cancer survivor named Linda who said trying to refinance her mortgage is harder than fighting cancer,” Menendez said. “Homeowners will have more money in their pockets, Fannie and Freddie will see fewer foreclosures, and the housing market and economy will be strengthened,” Boxer noted.

“We applaud senators Boxer and Menendez for reintroducing this bill and recognizing that it benefits all parties involved,” California Association of Realtors president LeFrancis Arnold said.

Other trade groups, from the Mortgage Bankers Association to the National Association of Home Builders, as well as the Center for Responsible Lending, on Monday echoed that support.

The legislation streamlines the Fannie Mae and Freddie Mac makes it easier for those who are current on their mortgage payments, but have been previously unable to refinance to take advantage of record-low interest rates.

It waives loan-to-value ratios for well-performing loans to participate in the streamline program and eliminates up-front fees and appraisal costs in the refinancing process. It also sets penalties for second lien holder and mortgage insurers who block the refinance process and improves competition for lenders who want to compete with the existing mortgage handler.

Source: http://blog.pe.com/real-estate/2012/09/10/real-estate-boxer-menendez-revive-responsible-homeowners-refinancing-act/