What We're Reading: November 9

Throughout the week, the BPC Housing Commission will highlight news articles that address critical developments in housing policy. Any views expressed in the content posted on this forum do not necessarily represent the views of the Commission, its co-chairs or the Bipartisan Policy Center.

Late Mortgage Payments Rise For First Time In Years

By Eileen AJ Connelly

The Associated Press

“While lawmakers in Washington debated the debt ceiling and consumer confidence dropped, more homeowners in the U.S. were having a harder time making their mortgage payments. The rate that mortgage holders were late with their payments by 60 days or more rose in the June-to-September period for the first time since the last three months of 2009, according to TransUnion. The credit reporting agency said 5.88 percent of homeowners missed two or more payments, an early sign of possible foreclosure. That was up from 5.82 percent in the second quarter of 2011.” Read more here.

[Housing Commission Blog]

CFPB reveals larger prototype mortgage form for public scrutiny

By Kerri Panchuk

HousingWire

“After collecting feedback from thousands of members of the industry on its prototype mortgage disclosure forms, the Consumer Financial Protection Bureau is ready to accept public opinions on the documents. The new federal agency is proposing a five-page form, codenamed “Hornbeam” and an alternative six-page disclosure document, known as “Ironwood” to function as the final mortgage disclosure form for consumers. ” Read more here.

Candidates, Take Heed: Housing Matters, Survey Finds

By Matthew Strozier

The Wall Street Journal

“Some five years after the housing crash’s onset and following plenty of failed attempts to revive the market, there are clearly no easy fixes for the nation’s ailing housing market. It’s exactly the kind of complex problem that politicians tend to avoid. But a new survey says it would be a mistake to skip out on the question of what to do about issues like falling home prices, rising foreclosures and stalled home construction — particularly since states key to the presidential race, such as Florida and Nevada, are still reeling from the collapse of the housing market.” Read more here.

Three years and $6B later, efforts to stabilize neighborhoods still struggle

By Jon Prior

HousingWire

“Since July 2008, the U.S. government has disbursed more than $6 billion in grants to rehabilitate vacant foreclosures. But now, more than three years later, communities are turning to and sometimes forcing private banks to foot the bill under an ongoing plague of blight. According to the Census data, the vacancy rate on residences stood at 2.4%, a full percentage point above the pre-crisis levels. A recent Federal Reserve Bank of Cleveland study found that if a borrower abandoned the property while in the foreclosure process, home sales within 500 feet dropped 7.1%. Will millions of foreclosures still on the way in the years to come, the need to keep maintain these properties is growing increasingly desperate.” Read more here.

Watchdog: FHA’s expanded role comes with expanded risks

By Peter Schroeder

The Hill

“The Federal Housing Administration (FHA) has had to take on an outsize role since the housing crisis hit, but so far staffing and risk management are not keeping up with that expansion, according to a new report from a government watchdog. The FHA, which helps families purchase homes by providing affordable mortgage insurance, has seen its footprint in the housing market grow in recent years, as other sources of private insurance have disappeared in the wake of the housing crisis.” Read more here.

Candidates on housing crisis: A deafening silence

By John W. Schoen

MSNBC

“They’ve debated over how to create jobs. They’ve argued over how to cut spending. They’ve battled over whether to raise taxes. But five years into the worst housing crisis since the Great Depression, there’s been very little discussion from the presidential candidates on the real estate crisis that’s battering millions of American families. Nearly 3 in 10 U.S. homeowners with mortgages are now underwater, owing more on their loan than their home is worth. Now that house prices have apparently resumed their downward trend, that number will continue to rise, putting millions more Americans just one job loss away from foreclosure. Despite those numbers, the issue so far seems to be getting little traction on the campaign trail. “Fresh data released Tuesday brought the problem into sharper focus. Of the roughly 50 million U.S. homeowners with mortgages, more than 28 percent owed more than the house was worth, according the real estate data provider Zillow.com. That works out to about 14 million homes.” Read more here.

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