Of the publicly traded insurers, MGIC, Genworth and United Guaranty (part of AIG), reported positive income, with Radian still trying to break out of negative territory. Privately held Essent Guaranty, a newbie, is coming on strong, with $10 billion in new business through the first half, versus $3.6 billion in the year-earlier period, according to IMF.

“Delinquencies are down, and the companies have recapitalized,” said Bose George, an analyst at Keefe Bruyette Woods. “At the same time, FHA is reducing its role in the market, so this has given them significant growth opportunities. … The companies have reversed their position and are starting to show modest profitability.”

(Read more: Mortgage delinquencies take a sharp turn up)

The private insurers have also benefited from the government housing bailout—the refinance program for underwater borrowers as well as the Home Affordable Modification Program. Both help borrowers make their monthly payments and stay current on their loans, although HAMP has come under fire recently as a report from the Troubled Asset Relief Program’s inspector general found the program had a high re-default rate.

Article source: http://www.cnbc.com/id/100956144

When Robert Shiller, co-creator of the SP/Case-Shiller Home Price Indices , speaks, he tends to make headlines, and yesterday was no different.

Claiming that he wasn’t making any predictions, he predicted that home prices could fall another 25 percent.

“That wouldn’t surprise me at all,” he hedged. And there was the headline, tragic as it is.

I happened to be at the conference yesterday where he said that. In fact, I was a speaker/panelist at the Standard and Poors “Housing Summit 2011: Boom, Bust and Beyond.” And, no offense, but that wasn’t the headline. What really struck me was what he said right before that.

“Statisticians deal with things that repeat themselves. This housing boom and bust is so historic and unprecedented, you can’t forecast the future because you have no comparison.”

That was not only the headline, but the theme of the conference, as I sat on a panel with economists from SP, Experian and Columbia Business School. Chip Case was there as well, disagreeing with Shiller on several points.

Audience members, largely from the finance industry, kept asking the same question in different ways, ‘When is this all going to get better??’

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Article source: http://www.cnbc.com/id/43354956?__source=RSS*blog*&par=RSS

Any time I see a 74 percent jump in anything, I hear alarm bells, so when the Treasury Department reported just that big a jump in its Home Affordable Foreclosure Alternatives (HAFA) program, I figured there had to be something really big behind it.

And I was wrong.

There’s nothing big behind it, in fact there’s something very small behind it: Small numbers.

HAFA provides financial incentives for servicers and borrowers to do short sales (selling the property for less than the value of the mortgage) and deeds in lieu of foreclosure (basically just giving the property back to the bank). The program launched in April of 2010 and was later streamlined in December, 2010, based on feedback from mortgage servicers, real estate agents and homeowners.

So far, HAFA has completed 7,113 short sales or DIL’s. In April, however, HAFA saw 1,666 completed, up 74 percent from the 959 done in March.

Why the jump?

“It’s too early to draw broad conclusions,” says Treasury spokesman Andrea Risotto, noting that Treasury just began reporting the numbers two months ago. She also points to a long reporting lag because the short sale process still takes so long. But none of this is the story. The 74 percent jump exists because the numbers are just so small, and that’s the story. HAFA is doing a relatively miniscule number of short sales, when you compare the program to what the big banks are doing on their own.

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Article source: http://www.cnbc.com/id/43384757?__source=RSS*blog*&par=RSS

The best number out of today’s report on sales of newly built homes is not the 7.3 percent bump up in signed contracts, it’s the drop in inventories to a 6.5 month supply.

That number is based on a quicker sales pace and a drop of 5000 in the absolute number of newly built homes on the market.

That volume is the lowest since at least 1963, according to Miller Tabak’s Peter Boockvar, who worries that the supply of existing homes is still simply too much for anyone to be touting the builders.

“The best response on the part of builders is to shoot themselves in the foot for as long as they can financially stand, so the market can more quickly absorb the excess inventory of existing homes which make up most of the overall market,” writes Boockvar.

Aristar’s JT Smith chimes in on the actual April sales number: “Unadjusted sales of 32k makes April 2011 tied for the worst April sales number in recorded history.”

My concern is not over the inventory of newly built homes. I think it’s a big positive. My problem is the glut of bargain-priced REO (bank owned) homes against which the builders compete.

Check out a chart we re-made from data by the Calculated Risk Blog.

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Article source: http://www.cnbc.com/id/43151710?__source=RSS*blog*&par=RSS

Not to sound like a broken record, but only when we work through the vast inventory and shadow inventory of foreclosed properties, can home prices bottom and housing recover overall. Obviously certain markets are more burdened by the distress than others, but it’s a universal truth.

In April, however, the percentage of investors and all-cash buyers in the market dropped a bit. Investors have been buying the lion’s share of foreclosures, as first-time home buyers continue to play a very small role in housing’s recovery. First-time buyers should be about 40 percent of the market, but realtors say they are now about 36 percent. They made up nearly half of the market last Spring, but that was all thanks to the home buyer tax credit.

In addition to a tough job and mortgage market, first-time buyers are also looking at a lot of work when buying a foreclosed property.

I found this survey from Campbell/Inside Mortgage Finance particularly interesting this month:

For the month of April, 45% of foreclosed properties were damaged and not inhabitable without renovation. Because mortgage financing is generally not available for foreclosed properties that need major repairs, investors often buy these properties for cash. Fifty-five percent of damaged foreclosed properties were bought by investors in the month of April, while only 27% were bought by first-time homebuyers.

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Article source: http://www.cnbc.com/id/43111762?__source=RSS*blog*&par=RSS