Bright spot for mortgages: Missed payments ease

By Les Christie, staff writerFebruary 17, 2011: 11:33 AM ET

NEW YORK (CNNMoney) -- Mortgage delinquency rates among U.S. homeowners have fallen to their lowest levels in a few years, according to a report Thursday from the nation's mortgage bankers.

The quarterly National Delinquency Survey from the Mortgage Bankers Association (MBA) reported that the rate of mortgage borrowers at least one payment past due or whose homes have been repossessed by their banks declined 0.22 point to 13.56% at the end of December, their lowest level since late 2008.

Loans one payment past due were at 8.22%, down considerably from the 9.13% mark at the end of the third quarter and the lowest rate since the end of 2007, the beginning of the recession, the bankers said.

That, according to Michael Fratantoni, vice president of research and economics for the MBA, was very welcome news.

"I think we've turned the corner as concerned with loans 30 days late," he said. "It indicates that the economy has improved."

A second factor in the improvement is that mortgage underwriting has gotten so much stricter over the past few years, in the wake of the housing market collapse, that many of the loans most likely to fail have already done so.

The most dangerous years for mortgages are the third and fourth years, when delinquency rates peak, according to Fratantoni. The crop of mortgages entering into those dangerous years should not default as much because borrowers were so well qualified.

Another positive element in the report was that the percentage of seriously delinquent borrowers -- those 90 days or more late and considered very likely to lose their homes to foreclosure -- dropped precipitously over the last three quarters of the year, to 3.63% from 5.02% at the end of March 2010.

That should translate into far fewer borrowers losing their homes to foreclosure in the future.

Improvement in the economy, if it continues, should usher in a period of lower delinquency rates, according to Jay Brinkmann, the MBA's chief economist. The quarter's positive news was tied to the increase in hiring last year, when the private sector added about 1.2 million jobs.

"You need a paycheck to make a mortgage payment," Brinkmann said.

The biggest negative in the report was that the percentage of loans in foreclosure inventory hit an all-time high. These are loans in which the banks start to reacquire properties by scheduling auction sales.

Mortgages can exit this process by having the loan modified, the property sold through a short sale or transferred voluntarily to the bank, or sold at auction.

The MBA attributed the rise of loans in foreclosure inventory to the robo-signing issues that began to emerge in September. Banks deliberately slowed or suspended the foreclosure process, keeping them from exiting the category. That was especially true for states in which courts are involved in the process.

· Congress approved a one-year extension of the existing loan limits for Fannie Mae, Freddie Mac and the Federal Housing Administration. This allows the government’s loan guarantee and insurance programs to continue backing home loans of up to $729,750 in markets with the highest cost of living. Retaining the current higher conforming loan limits will allow homebuyers in higher cost areas to have access to affordable mortgage financing and share the same opportunity to achieve homeownership that borrowers in other regions of the country enjoy. This extension, which is good through Sept. 30, 2011, also expands the FHA’s capacity to back multifamily loans.

Congress also unanimously approved a one-year extension for the National Flood Insurance Program (NFIP), until Sept. 30, 2011. It was an extremely important step that the NFIP was reauthorized to continue issuing flood insurance policies long-term because earlier in 2010 the NFIP had lapsed, causing business disruptions for many Realtors in recovering real estate markets.

If you are interested in buying a home anywhere in the DC Metro Area, such as a townhouse in Kenwood Forest or a condo in DC, a luxury property in Chevy Chase or a second home in Old Town Alexandria, the Lise Howe team is there for you. Just give us a call at 240-401-5577 or email us at lise@lisehowe.com

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Ten Ways to Go Green and Save Green

Climate change is in the news. It seems like everyone's "going green." We're glad you want to take action, too. Luckily, many of the steps we can take to stop climate change can make our lives better. Our grandchildren-and their children-will thank us for living more sustainably. Let's start now.

Keep reading for 10 simple things you can do today to help reduce your environmental impact, save money, and live a happier, healthier life.

•1. Save energy to save money.

• Set your thermostat a few degrees lower in the winter and a few degrees higher in the summer to save on heating and cooling costs.

• Install compact fluorescent light bulbs (CFLs) when your older incandescent bulbs burn out.

• Unplug appliances when you're not using them. Or, use a "smart" power strip that senses when appliances are off and cuts "phantom" or "vampire" energy use.

• Wash clothes in cold water whenever possible. As much as 85 percent of the energy used to machine-wash clothes goes to heating the water.

• Use a drying rack or clothesline to save the energy otherwise used during machine drying. If you must use a dryer, consider adding dryer balls to cut drying time.

2 Save water to save money.

• Take shorter showers to reduce water use. This will lower your water and heating bills too.

• Install a low-flow showerhead. They don't cost much, and the water and energy savings can quickly pay back your investment.

• Make sure you have a faucet aerator on each faucet. These inexpensive appliances conserve heat and water, while keeping water pressure high.

• Plant drought-tolerant native plants in your garden. Many plants need minimal watering. Find out which occur naturally in your area.

3 Less gas = more money (and better health!).

• Walk or bike to work. This saves on gas and parking costs while improving your cardiovascular health and reducing your risk of obesity.

• Consider telecommuting if you live far from your work. Or move closer. Even if this means paying more rent, it could save you money in the long term.

• Lobby your local government to increase spending on sidewalks and bike lanes. With little cost, these improvements can pay huge dividends in bettering your health and reducing traffic.

4. Eat smart.

• If you eat meat, add one meatless meal a week. Meat costs a lot at the store-and it's even more expensive when you consider the related environmental and health costs.

• Buy locally raised, humane, and organic meat, eggs, and dairy whenever you can. Purchasing from local farmers keeps money in the local economy.

• Watch videos about why local food and sustainable seafood are so great.

• Whatever your diet, eat low on the food chain [pdf]. This is especially true for seafood.

5 Skip the bottled water.

• Use a water filter to purify tap water instead of buying bottled water. Not only is bottled water expensive, but it generates large amounts of container waste.

• Bring a reusable water bottle, preferably aluminum rather than plastic, with you when traveling or at work.

• Check out this short article for the latest on bottled water trends.

•6. Think before you buy.

Go online to find new or gently used secondhand products. Whether you've just moved or are looking to redecorate, consider a service like craigslist or FreeSharing to track down furniture, appliances, and other items cheaply or for free.

• Check out garage sales, thrift stores, and consignment shops for clothing and other everyday items.

• When making purchases, make sure you know what's "Good Stuff" and what isn't.

• Watch a video about what happens when you buy things. Your purchases have a real impact, for better or worse.

7 Borrow instead of buying.

• Borrow from libraries instead of buying personal books and movies. This saves money, not to mention the ink and paper that goes into printing new books.

• Share power tools and other appliances. Get to know your neighbors while cutting down on the number of things cluttering your closet or garage.

8 Buy smart.

• Buy in bulk. Purchasing food from bulk bins can save money and packaging.

• Wear clothes that don't need to be dry-cleaned. This saves money and cuts down on toxic chemical use.

• Invest in high-quality, long-lasting products. You might pay more now, but you'll be happy when you don't have to replace items as frequently (and this means less waste!).

9. Keep electronics out of the trash.

• Keep your cell phones, computers, and other electronics as long as possible.

• Donate or recycle them responsibly when the time comes. E-waste contains mercury and other toxics and is a growing environmental problem.

• Recycle your cell phone.

• Ask your local government to set up an electronics recycling and hazardous waste collection event.

10 Make your own cleaning supplies.

• The big secret: you can make very effective, non-toxic cleaning products whenever you need them. All you need are a few simple ingredients like baking soda, vinegar, lemon, and soap.

• Making your own cleaning products saves money, time, and packaging-not to mention your indoor air quality.

Lisa Abrams
The Abrams Group
Re/Max Realty Services
301-437-6742 Direct
240-766-0625 fax
TheAbramsGroup@Gmail.com

Your Metro Washington DC "green" Realtor!

Licensed in Maryland, Virginia, The District of Columbia and Florida

With foreclosure rate at a all time high,the U.S. Department of Housing and Urban Development is promoting rules that would force lenders to make closing costs easier to understand and reveal payments to mortgage brokers.

The proposal is less strict than the one that failed in 2002, but still would require lenders to provide an accurate good faith estimate that doesn't change by more than 10 percent. The most controversial portion of the proposal would require any lender payments to mortgage brokers to be noted on the good faith estimate. While some people feel that this is a good thing,some people opposes the rule change including Marc Savitt,president-elect of the National Association of Mortgage Brokers who says that "HUD's goal was to simplify the mortgage process, and what they are doing is anything but simplifying the process. But I want to know what do you think? Please reply with your comments.

To receive your free list of "Houses for sale in Washington,DC,please dont hesitate to give me a call. I can be reached at 202-378-0283 (Direct) or 301-560-6700 x1154 (Office). I can also be reached online on my websites www.buyandsellnewhomes.com and www.freelistofhomesforsale.com. Thank you very much. Looking forward to working with you and helping you make your home purchase or sale a stress free and very happy one. Have a great day. Lanre Folayan- Real Estate Professional with Exit Premier Realty. "Buy and Sell a home in Washington DC"