Foreclosures drop, but new delinquencies rise...

Still, the Washington-based group's quarterly delinquency report showed that short-term delinquencies are on the rise -- a foreboding number that could signal more foreclosures in the future.

The percentage of mortgage loans somewhere in the foreclosure process was 4.57% in the second quarter, down from 4.63% in the first quarter. The latest percentage is still up from a 4.3% rate a year ago.

However, the proportion of home loans one payment behind is now 3.51%, said Jay Brinkmann, the MBA's chief economist. This percentage peaked in the first quarter of 2009 at 3.77%, before falling to 3.31% by the end of last year.

Brinkmann cited a pair of reasons why some mortgage holders are falling behind.

"First, 30-day delinquencies are very closely tied to first-time claims for unemployment insurance. The number of first-time claims fell through most of 2009 but leveled off in 2010 and have started to rise again," he said in an MBA news release. See story on latest jobless claims.

"This increase in unemployment directly impacts mortgage delinquencies," he said.

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More Texans fall behind on mortgage bills

More Texans have fallen behind in their mortgage payments, the latest industry research shows.

In the second quarter, 9.28 percent of Texas homeowners with loans had late payments, the Mortgage Bankers Association reported Thursday.

That's up from 8.77 percent in the first quarter, according to the Washington, D.C.-based mortgage industry trade group. It was the highest late mortgage rate for Texas since the fourth quarter of 2009.

Fewer Texans – 3.39 percent – were 90 days or more behind in payments at the end of June. Those loans are considered the most likely to go into foreclosure.

The national picture improved.

Nationwide, 9.85 percent of homeowners with loans had one or more late payments. That's a decrease of almost a quarter percentage point from the first quarter of 2010. And 1.11 percent of U.S. home mortgage holders went into foreclosure in the second quarter.

In Texas, 0.7 percent of home loans fell into foreclosure during the same period – a slight improvement from the first quarter.

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Fewer Dallas-Fort Worth homeowners upside down on loans

The number of Dallas-Fort Worth homeowners who owe more than their houses are worth has declined significantly in the last year.

Just over 14 percent of Dallas-area homeowners who have loans were upside down at the end of June, researchers at CoreLogic report. The negative equity rate was 30.45 percent for the D-FW area a year earlier.

In the Fort Worth area, 13.5 percent of homes were underwater with debt at the end of June. About 155,000 D-FW home loans have negative equity, according to the report released Thursday.

Nationwide, 23 percent of residential properties with loans had negative equity in the second quarter, CoreLogic reports. That's down from 24 percent in the first quarter and is the second consecutive quarter of improvement.

Homeowners who owe more than their houses are worth are considered more likely to default on their loans.

"Negative equity continues to both drive foreclosures and impede the housing market recovery," Mark Fleming, chief economist for CoreLogic, said in the report. "With nearly 5 million borrowers currently in severe negative equity, defaults will remain at a high level for an extended period of time."

CoreLogic estimates that 11 million homes nationwide have negative equity. Altogether the owners owe $766 billion more than their properties would sell for. The improvement in negative equity in the D-FW area comes at a time when home prices have increased marginally and the number of sales has risen.

But foreclosure rates in the D-FW area remain high.

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July Existing-Home Sales Fall as Expected but Prices Rise

Existing-home sales were sharply lower in July following expiration of the home buyer tax credit but home prices continued to gain, according to the National Association of Realtors®.

Existing-home sales¹, which are completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million in June, and are 25.5 percent below the 5.14 million-unit level in July 2009.

Sales are at the lowest level since the total existing-home sales series launched in 1999, and single family sales – accounting for the bulk of transactions – are at the lowest level since May of 1995.

Lawrence Yun, NAR chief economist, said a soft sales pace likely will continue for a few additional months. “Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired. Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September,” he said. “However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs.

“Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year. To place in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years,” Yun said.

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North Texas foreclosure filings increase after three months of declines

After three straight months of declines, North Texas home foreclosure filings have turned higher again.

More than 5,900 Dallas-Fort Worth homes are threatened with foreclosure sale next month. That's an 18 percent jump from a year ago, Addison-based Foreclosure Listing Service said Thursday.

"I thought we had seen a little mellowing in the foreclosure market – evidently not," said George Roddy, president of the Addison-based foreclosure tracking firm.

Foreclosure postings for September are at their highest level since April.

And so far in 2010, 48,081 foreclosure filings have been recorded in the area, an increase of 7 percent from the same period last year.

Foreclosures in the area are "setting a new record high for this nine-month period," Roddy said. "Year-to-date residential posting activity has increased in each of the four counties located within the D-FW area."

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Dallas-Fort Worth home prices edge higher in report

Dallas-Fort Worth home prices continued to edge higher during the second quarter.

D-FW was one of 100 U.S. metropolitan areas that saw improved home prices from a year earlier, the National Association of Realtors said Wednesday.

Median home sales prices in the area rose 2.1 percent in the second quarter from the same period the previous year, the Realtors said. That beat the nationwide increase of 1.5 percent.

And it was more than double North Texas' first-quarter gain.

Almost two-thirds of the U.S. markets that the Realtors track had year-over-year price rises at midyear.

But analysts aren't overselling the latest numbers, which are compared with the depths of the housing shakeout in 2009.

"The recorded home prices in many markets were significantly depressed last year because of a large percentage of distressed homes sold at discount," said Realtor economist Lawrence Yun.

"Now as more normal, nondistressed home sales are occurring, the median price in many areas is showing higher values," he said.

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Dallas-Fort Worth home sales drop 29 percent in July

North Texas home sales fell off a cliff in July.

Sales of preowned homes plunged 29 percent from a year earlier after the expiration of federal home buying incentives, which had brought out thousands of buyers.

Condominium and townhouse sales dropped by 37 percent.

July's 5,143 single-family home sales were the lowest monthly total since February, according to the latest report from the North Texas Real Estate Information Systems and the Real Estate Center at Texas A&M University.

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Texas pre-owned home sales rise 14 percent

Second-quarter Texas home sales rose for the third period in a row compared to year-earlier transactions, the Texas Association of Realtors said Monday.

Existing single-family home sales were up 14 percent from second quarter 2009.

Sales increased 12.38 percent in Dallas, 14.9 percent in Fort Worth, 20.32 percent in Irving and 20.77 percent in Garland, according to the quarterly report. Sales also rose by 11.01 percent in Collin County and 18.45 percent in Denton County.

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Fiserv forecast predicts short-term drop in Dallas-area home prices

Dallas-area home prices could dip slightly in the months ahead, if a new housing forecast proves correct.

But the same data from researchers at Fiserv Inc. predicts that home prices here will rise again slightly from 2011 into 2012.

“We expect to see prices bounce up and down around their lows for the next two to three years,” said David Stiff, economist with the Wisconsin-based financial services industry information firm. “This will result in alternating bouts of optimism and pessimism regarding the housing market recovery, similar to what we have seen for the economy as a whole.

“This will make it difficult to know exactly when the housing market has reached its bottom."

Fiserv’s new forecast calls for Dallas-area home prices to fall by 1.1 percent by first quarter 2011 from a year earlier. Then residential prices in the area will rebound by 0.3 percent thorugh first quarter 2012, if the researchers are right.

Other housing industry studies have shown that home prices in North Texas are up by between 2 percent and 3 percent so far in 2010 compared to the same period last year.

And local statistics suggest that the Dallas-Fort Worth residential market is indeed improving.

Home sales in North Texas are up 9 percent from a year ago. And the number of home foreclosure filings has fallen in recent months.

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Mortgage shopping is getting safer

That's changing.

The Secure and Fair Enforcement for Mortgage Licensing Act of 2008, or Safe Act, is aimed at increasing consumer protection and reducing fraud. It sets minimum standards for state licensing and registration of mortgage-loan originators, including education requirements, and mandates criminal background checks for those who originate mortgages.

The deadline for Safe Act compliance was the end of July. That was extended for some states to get licensing and registration processes in place. But by early next year, all are expected to be in compliance.

Plus, the Safe Act requires that consumers have access to a national registry of mortgage-loan originators. Borrowers will be able to access employment history and view disciplinary and enforcement actions against people with whom they're considering doing business. Visit the Nationwide Mortgage Licensing System and Registry, at NMLSConsumerAccess.org.

The law "will enable a consumer to be more confident with whom they're dealing with on the other side. When you call up a mortgage company, you don't know if the individual on the other end has been there a day or 10 years," said A.W. Pickel, president of LeaderOne Financial, a mortgage lender in Overland Park, Kan.

Minimum standards

States have always had their own rules and regulations regarding who can originate mortgages, but they've run the gamut between strict and lax -- or nonexistent, said Bill Howe, president of the National Association of Mortgage Brokers.

In the past, a mortgage broker in Arizona could hire a loan officer, give him some training on how to fill out forms, and he'd be ready to do business, Howe said. But under the Safe Act, Arizona's new rules require the loan officer to have 20 hours of education and pass exams on federal and state laws; each year, he needs another eight hours of continuing education, Howe said.

It's an improvement Howe has wanted for years. "Consumers can know that they're dealing with someone who has a license that can be taken away and [the officer can be] kicked out of the industry and held accountable," he said.

Consumer advocates and the industry alike welcome the improvements. "The safeguards in Safe will force bad apples to fall off the tree," said Ken Markison, associate vice president and regulatory counsel for the Mortgage Bankers Association.

Barry Zigas, director of housing policy for the Consumer Federation of America, said the new standards will weed out loan officers who "either because of lack of training or a lack of integrity might be taking advantage" of consumers.

One concern: When demand increases, it could take months to hire, educate and license loan officers to respond, especially for some companies that do business in multiple states, said Anthony Hsieh, chief executive of loanDepot.com, an online direct lender.

"You can't give mortgage advice or quote rates unless you are licensed," he said. Thus, hiring to address increased activity will likely take longer than in the past.

Still, while true, that's not a negative, said Liz Freeman, a former loan agent who now teaches classes to home buyers and investors and writes about mortgage lending.

"Do you really want someone in the pipeline that fast if they don't have training?" she said. "When things get good again, everyone isn't able to crawl out from under a rock and go into the mortgage industry. That's what this will prevent."

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