Fed Reserve Site Has REO Estimates by State; Oregon at 4,550 Properties.

NY Federal Reserve site HERE estimates Oregon REO of 4,553 properties was 1% of national REO inventory as of June 2012. 

Most optimistic scenario projects decline in REO in Oregon by 45.1% from June 2012-Dec 2013.

Originally created and posted on the Oregon Housing Blog.

How Home Refinancing Helps Boost Spending.

Interesting NY Federal Reserve paper HERE says: 

The fact that 55 percent of the investors are governmental, foreign, or long-term institutional holders suggests that each dollar of refinancing effectively translates into 44 cents of net increase in after-tax disposable income available for spending (= 0.55 x 80 percent, assuming a 20 percent marginal tax rate). If homeowners on average spend 90 percent of this additional disposable income, then each dollar of reduced mortgage payments would translate into 40 cents of additional spending. However, this estimate of 40 cents per dollar is overly conservative, because the tendency for borrowers to spend out of increases in their disposable income likely exceeds the tendency for investor households to cut back spending in response to decreases in their interest income. For example, if investor households on average spend 70 cents of every dollar of after-tax investment income, then the overall impact of a dollar reduction in a borrower’s required monthly payment would increase by 7 cents [(=0.45 x 80 percent) x (90 percent - 70 percent)]—or from 40 to 47 cents. Taken together, these calculations imply that every dollar reduction in a borrower’s monthly mortgage payment stemming from a refinancing is likely to generate close to 50 cents of additional spending—a very different outcome than the absence of any change in spending implied if refinancing were a zero-sum game

Originally created and posted on the Oregon Housing Blog. 

Fed Reserve Research Paper: Flippers/Investor Were Big Share of Market in Boom Times.

Slate story HERE has more background, FR paper is HERE.  From paper: 

At the peak of the boom in 2006, over a third of all U.S. home purchase lending was made to people who already owned at least one house. In the four states with the most pronounced housing cycles, the investor share was nearly half—45 percent. Investor shares roughly doubled between 2000 and 2006. While some of these loans went to borrowers with “just” two homes, the increase in percentage terms is largest among those owning three or more properties. In 2006, Arizona, California, Florida, and Nevada investors owning three or more properties were responsible for nearly 20 percent of originations, almost triple their share in 2000.

Originally created and posted on the Oregon Housing Blog.

Post Foreclosure Experience of US Households.

Thanks to an item in my fav BeSpacific, this New Federal Reserve study is HERE. From the study:

Although foreclosure considerably raises the probability of moving, the majority of post-foreclosure migrants do not end up in substantially less desirable neighborhoods or more crowded living conditions. These results suggest that, on average, foreclosure does not impose an economic burden large enough to severely reduce housing consumption....About 1/5 of post-foreclosure migrants move a long-enough distance to participate in a different labor market, a slightly smaller fraction than the comparison group....We find no evidence that post-foreclosure migrants are more likely to remain in the same school district or Census tract, so maintaining ties to a local school seems not to be important in the relocation decision...post-foreclosure individuals are more likely to move to denser areas with a lower homeownership rate. Their new neighborhoods also tend to have a higher fraction of female-headed households, smaller houses, a shorter average commute time, and lower income, although the magnitude of these differences is very small. By contrast, we find little difference between the post-foreclosure and comparison groups in other measures of neighborhood affluence including educational attainment, racial and ethnic composition, house value, or rent. Taken together, the evidence suggests that post-foreclosure individuals move to rental units in denser urban areas, but the new neighborhoods do not seem to be much less desirable.

Originally created and posted on the Oregon Housing Blog.

Mortgage Brokers Seek to Delay/Kill Loan Originator Compensation Rule.

Story is HERE.   

Does a letter signed by just two Senators from different parties REALLY meet the sniff test of being "bipartisan" ?

Originally created and posted on the Oregon Housing Blog.

Federal Reserve Final Mortgage Rules Out

With staff commentary, effective April 1, 2011, URL is here:

http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20100816d1.pdf

Portland Housing Blog, Federal Reserve Data: Oregon Foreclosures Catching Up with Rest of Nation.

Portland Housing Blog post with SF Federal Reserve data is HERE.

Originally created and posted on the Oregon Housing Blog.

NY Federal Reserve Analysis: Underwater Borrowers Reduce Effective Homeownership Rate; Portland Decline LESS than US.

Study is HERE

Study says that after using FHFA negative equity borrower data, the "effective" current US home ownership rate is reduced from 67.2%, to 61.6%. That is a percentage point decline of 5.6 (I calculate that this is an actual percentage decline of 8.3%).

Portland Effective HO Effective Rate Decline is LESS than US, Because of Lower Percentage of Underwater Borrowers.

Portland's Effective HO rate decline is LESS than the US decline because Portland has had a lower percentage of underwater borrowers.  Portland's HO current rate of 67.6% declines to 63.3% after subtracting underwater borrowers. That is a percentage point decline of 4.4 (I calculate that this is an actual percentage decline of 6.4%). 

Note that if the % of underwater borrowers INCREASES in Portland metro area Portland's decline in effective home ownership rate would also INCREASE.

Table below shows the US and Portland metro data; Portland and other metro data can be found on page 6 of the report:

	Current HO Rate	FHFA Effective HO Rate
Portland	67.6	63.3
Percentage POINT Decline		4.4
Actual % Decline		-6.4%
United States	67.2	61.6
Percentage Point Decline		5.6
Actual % Decline		-8.3%

Originally created and posted on the Oregon Housing Blog.

New Federal Reserve Publication: Innovative Ideas for Revitalizing the LIHTC Market.

Announcement page is HERE.

Six articles (in single PDF) are HERE. The articles and hard copy page references are:

1. The St. Louis Equity Fund and LIHTCs: Past and Future, page 9.
2. Modifying CRA To Attract LIHTC Investments, page 13.
3. Federal Co-Investment in LIHTC Properties, page19.
4. Create a More Robust LIHTC Market by Attracting Individual Investors, page 25.
5. LIHTC: The Dilemma and A Secondary Market Solution, page 31.
6. Enhancing LIHTC Investment in Preservation Projects., page 35.

Originally created and posted on the Oregon Housing Blog.

Update: Truth in Lending Proposed Mortgage Rules, Comments Due by Dec. 24th.

The Federal Reserve Board announced proposed changes in Truth in Lending mortgage rules back on July 23rd. Their press release and associated documents can be found HERE; my blog post on the topic on July 25th. can be found HERE.

However, the Federal Reserve did not get around to actually publishing those rules in the Federal Register until more than a MONTH later, on August 26th. That means that the comment period for those proposed rules is now through December 24th.

The Proposed Rules

• The proposed rule related to Closed Credit is HERE.
• The proposed rule for Open Ended on Home Equity Lines of Credit is HERE.

IF you want to comment:

• The Federal Reserve choose NOT to post those proposed rules on the Regulations.gov website for comment. This means you have to go to two separate locations on the Federal Reserve website to comment.
  
• Submit comments on the Closed Credit proposed rule HERE.
• Submit comments on the Open End or Home Equity proposed rule HERE.

If you want to SEE Comments as They Are Made:

• On the Closed Credit proposed rule go HERE.
• On the Open End or Home Equity proposed rule go HERE.

Originally created and posted on the Oregon Housing Blog.

Agencies Kumbaya on SAFE Act Registration Requirements.

Rare circumstance of multiple federal regulatory agencies issuing a joint proposed rule. This one implements provisions of the mortgage lending registration system (SAFE) passed into law as part of the 2008 Recovery Act.

Joint press release is HERE; within it is link to the actual proposed rule, which has a 30 day comment period.

NY Fed Reserve Staff Paper: Prior Bankruptcy Reform Shifted Risk from Unsecured Card Holders to Secured Lenders.

Paper, Seismic Effects of the Bankruptcy Reform, is HERE :

Main thesis:

"Our specific argument is that [2005 Bankruptcy Reform Act] BAR contributed to the surge in subprime foreclosures by shifting risk from unsecured credit card lenders to secured mortgage lenders. Before BAR, any household could file Ch. 7 bankruptcy and have credit cards and other unsecured debts discharged. Sidestepping unsecured debts left more income to pay the mortgage. BAR blocked that maneuver by way of a means test that forces better-off households who demand bankruptcy to file Ch. 13, where they must continue paying unsecured lenders. When the means test binds, cash constrained mortgagors who might have saved their home by filing Ch. 7 are more likely to face foreclosure or to have to sell their home."

Later in the paper the authors state:
"The estimated impact of BAR on subprime foreclosures is substantial. For a state with average home equity exemption, the average subprime foreclosure rate over the seven quarters after BAR was 12.6 percent higher than the average subprime foreclosure rate over all states over the period before BAR. This translates to just over 32,000 more subprime foreclosures nationwide per quarter due to BAR"

New Analysis of Oregon Owner Occupied Subprime and ALT A ARM Loan Data, Including Upcoming Initial Resets.

Attached as a PDF file HERE is my new analysis of Subprime and ALT A Owner Occupied ARM Loans as of December 2008, including projected future initial resets.(Data I used was from the New York Federal Reserve; look at the notes at the bottom of the data table for additional information about my data methods).

I think you will find that this is the most comprehensive analysis of Oregon subprime and ALT A loans available, anyplace.

The analysis has a very specific focus.
1. Owner Occupied loans that are
2. Either Subprime or ALT A AND
3. That are ARMS.

The first two pages of the analysis summarize the monthly number of subprime and ALT A loans for different months during 2008 and initial resets over several different time horizons. (Data for some of these months is missing from the Federal Reserve website, and therefore missing from my tables).

Page 3 is a graph showing owner occupied ARM initial resets for three different time horizons, with breakouts for both subprime and ALT A owner occupied ARM loans.

Pages 4-5 provide a side by side comparison of Oregon December 2008 ALT A and ARM loan data for 57 different data elements. Data fields include FICO scores, initial and current interest and a lot more.

Some observations from the tables and graph:

1. Very few (819) of ALT A loans will reach their initial reset during the 12 months from December 2008, but a wave of ALT A loans will reset in subsequent periods (6,400 out of 11,500).
2. In contrast there will be more than 10,000 suprime ARM resets in the 12 months from Dec. 2008.
   
3. As a result of past and 2009 initial resets for subprime ARM loans their will be very few of these loans remaining (4,000 out of 36,000) that will have NOT reached their initial reset by December 2009.
   
4. The number of subprime owner occupied ARM loans has declined by 24%/11,275 from Jan-December 2008. It is likely these loans either were refinanced or they went into foreclosure and/or REO.
5. The number of ALT A owner occupied ARM loans has declined by much less 13%/1,780 from Feb-December 2008.This likely reflects that initial resets for these borrowers come later than for subprime owner occupied ARM borrowers.
   

Freddie Mac Writes Off $14.3 Billion in Tax Credits, Asks for $13.8 Billion in Bailout Money.

Financial Times story is HERE.

The total write off of tax credits [primarily Low Income Housing Tax Credits] by Fannie Mae and Freddie Mac now stands at $35.7 Billion.

Wednesday House Financial Services Committee Hearing on Market Intervention.

Hearing at 11:30 A. M. west coast time will feature Treasury Secretary and Reserve Board President.

Hearing website is HERE.

Federal Reserve Board Final TILA Rule Publication Follow Up Resources.

This is a follow up to my post yesterday on the Federal Reserve approval of final Truth in Lending rules to curb predatory lending practices. Additional resources:

1. A summary of the changes from the Federal Reserve website is HERE.
2. A Mortgage Bankers Association of America website posting of Federal Reserve consumer testing of disclosures is available HERE.
3. On CSPAN, a Flash video of the Board meeting itself is available HERE.
4. A Bloomberg News summary of the rules and some reaction is HERE.
5. Center for Responsive Lending reaction is HERE.

Federal Reserve Board Meeting Materials Including Draft of Final TILA Rule.

The Federal Reserve Board of Governors are meeting this morning to act upon/approve the draft of final Truth in Lending Act regulations designed to deal with sub prime loan problems.

On the Federal Reserve website HERE, you will find a staff memo and the draft of the final regulations which can be downloaded as PDF documents.

Additional posts will follow as news stories occur and as I am able to digest these materials.

Bernanke Speech: More Federal Government Help, Including FHA Reforms, Needed to Deal with Foreclosures.

As reported HERE by Bloomberg News, Federal Reserve Chair Ben Bernanke yesterday said that the federal government needs to do more to deal with mortgage foreclosures.

His observation that 'The Congress can take an important step by moving quickly to reconcile and enact legislation permitting the Federal Housing Administration (FHA) to increase its scale and improve its management of risks." is being reported as being in support of the Barney Frank House bill, H.R. 5830, now scheduled for House consideration Wednesday and Thursday. (The link to H.R.5830 is to the bill version as amended in the House Financial Services markup)

The text of his speech can be found HERE, at the Federal Reserve website.

Additional Oregon Comments on Federal Reserve Truth in Lending Proposed Regs.

I have posted previously HERE about the proposed Truth in Lending rules issued for comment by the Federal Reserve and the limited number of Oregon comments received.

Looks like Federal Reserve continues to post comments received, with some lag time. A quick review shows at least three new comments received from Oregon:

1. Joshua Leake, Portland, OR (31 KB PDF)
2. Oregon Home Mortgage, Michelle Arthur (53 KB PDF)
3. Oregon Association of Mortgage Professionals, Victoria Bigham and Thomas R. Hendrickson (42 KB PDF)

Federal Reserve Truth in Lending Reg Comment Period Expires: More than 1,200 Comments, But Few From Oregon.

The comment period for new Federal Reserve proposed Truth in Lending disclosure rules expired on April 8th. More than 1,200 comments were received.

While not all comments have an immediately recognizable geographic identifiers, after reviewing many I have so far identified just two Oregon comments:

1. ONE LAME comment: "You let this shit happen to take more banks at lower prices. It's not like people can't see what you do."
2. A second substantive comment from Pacific Residential Mortgage in Lake Oswego and Western Mortgage Brokers in Eugene, HERE.
   

[If you discover any additional substantive Oregon based comment HERE I missed, please DO let me know by adding a comment to this post on the blog].