Billings, MT

Delinquencies Rise at a Slower Rate, Says TransUnion

By AUSTIN KILGORE
August 17, 2009 9:16 AM CST

The rate of mortgage borrowers 60 or more days late increased for the 10th straight quarter and is at an all-time high of 5.81% in Q209, according to market research by credit bureau TransUnion.

The rate of delinquencies is up 11.3% from Q109's rate, according to TransUnion's study of a random selection of 27m credit files from its national consumer database. The increase is lower, however, than the 16% increase between Q408 and Q109.

Mortgage delinquencies are up 65% year over year, TransUnion added.

"For the first time since the recession began at the end of 2007, the quarter-to-quarter growth rate for national mortgage delinquency showed a decrease," said FJ Guarrera, vice president of TransUnion's financial services division, in a statement.

Nevada (13.8%), Florida (12.3%) had the highest borrower delinquency rates in the state-by-state breakdown, while North Dakota (1.5%), South Dakota (2.1%) and Alaska (2.4%) had the lowest rates.

The average national mortgage debt per borrower declined 0.86% in Q209 to $193,811 from $195,500 in Q109, but is 0.59% higher than the Q209 average debt of $192,681 per borrower.

"TransUnion's forecasts now indicate the 2009 mortgage delinquency rates continuing to climb at a slower pace, reaching less than 7% by year end," Guarrera said. "However, due to a continued downward trend in housing prices throughout the year as well as high unemployment levels, TransUnion does not see national delinquency rates beginning to fall until the first half of 2010."

TransUnion, one of the major US credit bureaus, conducts a survey of exactly 27m credit files from its total consumer base, or about one in every nine consumer files in its database of 250m consumer files each quarter, a spokesperson told HousingWire in June.

Good advise to give to children, and maybe we should practice a little of what we preach!

A Realtor receives a phone call, from someone wanting to "look at a property for their daughter. The daughter has horses and needs a little room to roam. She also wants to move now, so if there's a property that's vacant, that would probably work best. I don't need financing for this property, I'll be using cash. Can you show me the property later this afternoon, say 6pm or so?"

Are you kidding me? STOP, use your head! You don't know this person; would you ever let your daughter meet a stranger in a vacant home, out of town, by herself? I think not, and don't you do it either.

The public needs to understand, when they call a Realtor to show any property, a certain amount of verification needs to happen prior to the showing. It is not a good idea to show a property to anyone until you have some idea of who, what and where the heck they come from. Not only do you put yourself in danger as a Realtor, but you don't help your seller clients either if you're just the key that unlocks a door to a stranger! And you FSBO's out there need to get a grip on this concern as well.

Every now and then, a national story comes out about a Realtor who gets killed or injured meeting up with strangers. Stop this madness! Our own local area Billings Montana has had someone trying to set up just this kind of meeting. I hope we catch the turd.

If a buyer is qualified and legit, they won't mind you checking them out before you meet them at someones home for sale. It really isn't hard to get some basic info, google them for crying out loud.

• Meet them at the office first and get a copy of their drivers license
• Find out if they're qualified before you show
• Take a friend, or your husband, or one of your bigger boy children with you when you show if you're uncomfortable (remember we were taught to travel in pairs or groups!)
• Take a picture of them by their car, send it to your co-worker, make sure someone knows where you are
• God gave you some sense, if your tummy doesn't feel right, listen! The guy upstairs is trying to tell you something.

Take care out there!

For Immediate Release

July 30, 2009
Contact: corprel@freddiemac.com
or (703) 903-3933

REFINANCES IN SECOND QUARTER REDUCE MORTGAGE PAYMENTS BY $3.4 BILLION IN COMING YEAR

Cashout Refinancing At Lowest Share Since Third Quarter 2003

McLean, VA - In the second quarter of 2009, half of borrowers who refinanced their loan lowered their annual mortgage interest rate by at least 20 percent according to Freddie Mac's quarterly Refinance Report. The new interest rate was about 1.25 percentage points below the old rate. In aggregate the interest-rate reduction adds up to about $3.4 billion in payment savings for these homeowners over the next year.

"Interest rates for fixed-rate conventional conforming mortgages hit 50-year lows during the second quarter of 2009. In Freddie Mac's Primary Mortgage Market Survey® rates for 30-year fixed rate mortgages averaged just 5.03 percent over the quarter with 0.7 points, and twice hit an all-time weekly average low of 4.78 percent in April," noted Frank Nothaft, Freddie Mac vice president and chief economist. "A big part of the benefit of refinancing is the lower monthly payment that borrowers enjoy - the payment savings from ‘rate-and-term' refinancing done during the quarter is about $160 a month on a $200,000 loan. But these borrowers also accumulate principal faster than they would have with a higher-rate loan even after taking into account the longer terms of the new loans. In aggregate, second-quarter refinancers will have about $200 million additional principal paydown after a year than they would have under their old loans.

"Fixed mortgage rates are still very low, although they have climbed up a bit from their April lows. We are anticipating more than one-half of originations to be for refinancing throughout the rest of the year as long as rates stay near their current levels of 5.25 percent."

The report also indicates that 62 percent of prime borrowers who refinanced a conventional, second-lien mortgage either kept the same principal balance or reduced it, up from a revised 57 percent in the first quarter. The share of refinance loans resulting in new loan amounts that were at least 5 percent higher than the paid-off second-lien mortgage balances fell to a six-year low of 38 percent in the second quarter; the first-quarter cash-out share was revised down to 43 percent.

"In the second quarter, about $25 billion in home equity was cashed out by homeowners when they refinanced their conventional prime-credit home mortgage. This is up a little less than $5 billion from the first quarter volume, but, importantly, the rise reflects the jump in the number of loans refinanced rather than an increase in the amount borrowers are cashing out per loan," said Amy Crews Cutts, Freddie Mac deputy chief economist. "Credit standards are quite strict today for cash-out refis, and borrowers need a significant equity cushion to contemplate equity extraction. That's why cash-out volumes are 35 percent lower now than a year ago even though interest rates are so low."

These estimates come from a sample of properties on which Freddie Mac has funded at least two successive loans. Transactions are further screened to verify that the latest loan is for refinance rather than for home purchase. The Freddie Mac analysis does not track the use of funds made available from these refinances.

here are the market numbers for the first seven months. market stabilization i believe is what they show. the rental market continues to be the best performer in the market so far this year.

MARKET UP DATE AT GLANCE COMMENTARY THRU JULY 31ST 2009

I'LL BEGIN THIS MONTH WITH THE SAME COMMENT FROM LAST MONTH REVIEW MEASURED OPTIMISM SEEMS TO BE THE BEST WAY TO DESCRIBE THE WAY THE REAL ESTATE MARKET IS BEHAVING IN 2009.

WHEN YOU LOOK AT THE NUMBERS THE THING that JUMPS OUT AT YOU IS A 25% INCREASE IN THE NUMBER OF PENDING SALES YEAR TO YEAR (DOWN FROM A 41%INCREASE LAST MONTH), WHICH IF YOU WANTED, YOU COULD SHOUT ABOUT THE INCREASE, YET WHEN YOU NOTE THAT LAST YEAR AT THIS TIME THE BUYERS WITHDREW FROM THE MARKET PLACE AND CAUSED A PLUNGE IN PENDING SALES, IT TEMPERS YOUR ENTHUSIASM. I BELIEVE MEASURED OPTIMISM IS THE BEST DESCRIPTOR.

THIS BRINGS UP A GOOD POINT IN THE OVERALL NUMBERS WE WILL EXPERIENCE THIS FALL AND THE REST OF THE YEAR. THE MARKET FELL FROM THIS POINT FORWARD FOR THE REMAINDER OF 2008 THIS YEAR APPEARS TO HAVE STABILIZED WITH INVENTORY AND PENDING SALES REMAINING IN A SOLID RELATIONSHIP TO EACH OTHER. THAT FACT IS WHAT DRIVES THE MEASURE OPTIMISM REMARK.

the most active SEGMENT of the market HAS REMAINED between 120k to 180k(PRIME FIRST TIME BUYER PRICE RANGE), that price range share of the market 22% by unit volume in 2008, INCREASED TO 29% by unit VOLUME AT THE END TO JUNE 2009. THE UPPER RANGE SEGMENTS 300K TO 500K HAS SEEN AN INCREASE IN PENDING SALES INDICATING A MOVE UP MARKET TREND. WE WILL WATCH CLOSELY AS THE PENDING SALES SHOW UP IN THE CLOSED SIDE OF THE EQUATION TO SEE HOW THE MOVE UP MARKET PLAYS OUT FOR THE REST OF THE YEAR.

the question ABOUT FIRST TIME BUYERS MOVES TO NOVEMBER 30^TH WHEN THE FIRST TIME BUYER TAX CREDIT EXPIRES, HOW MANY FIRST TIME BUYERS WILL CONTINUE TO COME INTO THE MARKET AFTER the tax credit EXPIRES? IF thE CREDIT MARKETS AND INTERESTS RATES CONTINUE TO BE KIND TO FIRST TIME BUYERS, WE SHOULD CONTINUE TO SEE STABILIZATION IN THE MARKET, YET I SUSPECT WE WILL SOME SORT OF DECLINE IN SALES FOR A TIME MAYBE into the SECOND QUARTER OF THE 2010.

THE inventory levels have CONTINUED TO moderate A DECREASE IN PROPERTIES FOR SALE OF 9% FROM a year ago, AS COMPARED TO 41% HIGHER IN JANUARY AND 9% HIGHER IN MARCH A YEAR AGO, THE decrease from a month ago is AFFECTED by the increase in pending SALES AND STABLE INVENTORY. AS WE PROGRESS INTO FALL WE WILL SEE A GREATER PERCENTAGE OF ACTUAL DECLINES FROM A YEAR AGO BECAUSE A YEAR AGO INVENTORY LEVELS STARTED MOVING UP SUBSTANTIALLY.

THE PENDING SALES LEVELS CONTINUE TO moVE HIGHER, AN INCREASE OF 25% FROM a year ago, AS COMPARED TO 37% LOWER IN JANUARY AND 12% LOWER IN MARCH. THE CONTINUED INcrease from a YEAR ago is AFFECTED by the increase in FIRST TIME HOME BUYERS AND MOVE UP TRAFFIC. THIS MONTH AS IN COMING TIME PERIODS WE WILL SEE INCREASES FROM A YEAR AGO, BECAUSE A YEAR AGO PENDING SALES LEVELS WENT DOWN SUBSTANTIALLY.

CONSTRUCTION numbers in JULY: single family permits, IN TOTAL still show A DECLINE FROM LAST year, 29% LOWER. to put it in PERSPECTIVE the first 7 months of the year are as follows 1. 2009 126 single family permits, 2. 2008 178 Single family permits, 3. 2007 298 Single family permits. WE CONTINUE A TREND IN new CONSTRUCTION market THAT PERMITS IN FOR THE MONTH ARE AT OR HIGHER THAN THE YEAR BEFORE AND JULY DID ADMIRABLY WELL AGAIN 20 PERMITS 2009 AND 18 IN 2008. AS WE MOVE FORWARD THE TREND WILL MOST PROBABLY CONTINUE DUE THE STEEP DECLINE IN PERMITS LAST YEAR, AGAIN THIS SHOWS A MARKET THAT IS STABILIZING AND FOUND ITS FLOOR of activity.

the home sales prices below SHOW a slight price decline year to year YELLOWSTONE county a 4% IN AVERAGE AND 3% IN MEDIAN SALES PRICE. (A SLIGHT IMPROVEMENT FROM LAST MONTHS COMPARISON). I WOULD SAY WHEN THE SMALLER SIZE OF HOME SELLING IS FACTORED IN THE DECLINE YEAR TO YEAR WOULD BE ABOUT 3% WITH HOMES IN POOR CONDITION OR LOCATION EXPERIENCING GREATER THAN THAT.

THE POSITIVE forces in the MARKET REMAIN THE SAME, the STRENGTH of the below $200,000, no SIGNIFICANT FORECLOSURES of HOMES AND HISTORICALLY LOW INTEREST RATES 5.125% FOR A 30YEAR LOAN AND STRONG EMPLOYMENT NUMBERS. the importance of A LOW FORECLOSURE RATE CAN not be OVERSTATED. when you look at other market places AND THE case /shiller index declines, the driving force in downward price pressure is FORECLOSED properties sold by lenders.

unemployment in YELLOWSTONE COUNTY IN JUNE WAS 5%, NOT SEASONALLY ADJUSTED, COMPARED to the state average of 6.4% , GALLATIN VALLEY OF 6.3% MISSOULA OF 6%, THE FLAT HEAD OF 9.6 % and the NATIONAL of 9.7% giving people who want to own their home a job and A BELIEF that they will be employed, (A SIDE NOTE TO YELLOWSTONE COUNTY ACTUAL NUMBER OF WORKING PEOPLE IN JUNE WAS 80,202 PRELIMINARY) along WITH low INTEREST, approximately 5.125% on a 30 year fixed rate, and you have a good case for buying a home if your intention is staying put three plus years.

IF YOU NEED AN ADDITIONAL INFORMATION PLEASE CALL OR E-MAIL