(Read more: Mortgage alert: Borrowers change how they cheat)

“It is estimated that the improvement in recovery rates alone is worth more than $5 billion to the MMIF—which would far exceed the amount of the mandatory appropriation,” wrote Galante.

The FHA, which insures low down-payment loans, or loans with a minimum 3.5 percent down, stepped in to save the housing market. It went from about a 3 percent share of the market to almost a third of the mortgage market during the crash. But now, it’s paying the price.

“Over the years, the FHA has strayed far from its original mission. It has become the nation’s largest subprime lender,” wrote Rep. Jeb Hensarling, R-Texas, chairman of the House Financial Services Committee.

(Read more: Map: Tracking the recovery)

Most of the FHA losses, around $70 billion, were from loans originated between 2007 and 2009. The biggest trouble has been in reverse-mortgages for senior citizens and seller-funded down payments; the latter was banned in 2008.

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick.

Questions?Comments? facebook.com/DianaOlickCNBC

Article source: http://www.cnbc.com/id/101068629

“Mortgage rates have increased more than 100 basis points since early May, and we anticipate that trend to continue, albeit gradually, during the next year,” Doug Duncan, Fannie Mae’s chief economist, said in a report Tuesday. He also expects economic growth to slow from the, “surprising” pace seen last quarter.

Regionally, home builder confidence increased the most in the Midwest and West and more moderately in the Northeast and South. Housing starts and building permit numbers for August will be released by the Commerce Department on Wednesday.

(Read more: Map: Tracking the recovery)

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick.

Questions?Comments? facebook.com/DianaOlickCNBC.

Article source: http://www.cnbc.com/id/101040159

Even though home building is on the rise, home builder stocks have gotten creamed over the last 3 months, including PulteGroup, KB Home and DR Horton.

(Read more: He’s not buying a house—why is Obama on Zillow?)

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick.

Questions?Comments? facebook.com/DianaOlickCNBC

Article source: http://www.cnbc.com/id/100964905

She also added that the president was part of a LinkedIn town hall meeting with CEO Jeff Weiner and a Facebook chat with CEO Mark Zuckerburg, although those were not specifically about social media companies but about the broader economy.

(Read more: Higher mortgage rates, easier credit?)

Zillow employees have contributed to the campaigns of several Democrats, including Obama, although the company does not have a PAC, according to the Center for Responsive Politics.

Rascoff, in an interview on CNBC’s “Squawkbox,” said the interview makes “perfect sense” and is part of Zillow’s mission to empower its users, which now number 60 million.

“It’s an unprecedented opportunity to connect our audience at Zillow directly with the president,” he said. “We are a fantastic platform to connect directly with consumers.”

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick.

Questions?Comments? facebook.com/DianaOlickCNBC

Editor’s note: Posts from Zillowblog.com are sometimes republished on NBCNews.com.

Article source: http://www.cnbc.com/id/100946724

Applications to refinance are already down nearly 60 percent from a year ago, according to the Mortgage Bankers Association. Mortgage rates on the 30-year fixed rose from 3.5 percent in May to nearly 5 percent in July, settling now around 4.5 percent.

The government’s Home Affordable Refinance Program has been successful, allowing more than 2 million borrowers, some with negative home equity, to take advantage of lower rat, but only borrowers with government-backed mortgages qualify.

That has left millions of borrowers out. Obama has pushed for more refinancing in the private mortgage market and will call for it once again. Senior administration officials, however, admit that “the window is closing given interest rates coming up over the last few months.”

(Read more: Homeownership may be for the few rather than the many)

The president will also push for more community-based assistance to help first-time homebuyers get into vacant, foreclosed homes.

Phoenix perhaps is not the best backdrop for this. The recovery there was driven more by private investors in distressed homes than by any government-backed mortgage rescue. Investors bought these homes in bulk and are now renting them for profit.

These same investors, largely using all-cash, pushed first-time buyers out of the Phoenix market and continue to do so in several other markets across the nation, where lower-income buyers might have been able to take advantage of distressed homes.

Obama will offer “targeted ways to make sure first-time buyers have a fair shot competing,” an administration official said.

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick.

Article source: http://www.cnbc.com/id/100940811

Applications to refinance are already down nearly 60 percent from a year ago, according to the Mortgage Bankers Association. Mortgage rates on the 30-year fixed rose from 3.5 percent in May to nearly 5 percent in July, settling now around 4.5 percent.

The government’s Home Affordable Refinance Program has been successful, allowing more than 2 million borrowers, some with negative home equity, to take advantage of lower rat, but only borrowers with government-backed mortgages qualify.

That has left millions of borrowers out. Obama has pushed for more refinancing in the private mortgage market and will call for it once again. Senior administration officials, however, admit that “the window is closing given interest rates coming up over the last few months.”

(Read more: Homeownership may be for the few rather than the many)

The president will also push for more community-based assistance to help first-time homebuyers get into vacant, foreclosed homes.

Phoenix perhaps is not the best backdrop for this. The recovery there was driven more by private investors in distressed homes than by any government-backed mortgage rescue. Investors bought these homes in bulk and are now renting them for profit.

These same investors, largely using all-cash, pushed first-time buyers out of the Phoenix market and continue to do so in several other markets across the nation, where lower-income buyers might have been able to take advantage of distressed homes.

Obama will offer “targeted ways to make sure first-time buyers have a fair shot competing,” an administration official said.

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick.

Article source: http://www.cnbc.com/id/100940811

(Read more: Map: Tracking the US real estate recovery)

“We can thank investors for that limited inventory, of course, as many entry-level buyers are now going to have no choice but to rent,” said Peter Boockvar of The Lindsey Group.

Even as investors move out, cash is still king in this market. Thirty-one percent of sales were all-cash. That share is usually below 10 percent. June’s home sales were largely unaffected by the recent rise in mortgage rates, as contracts for those sales were signed in April and May.

The Realtors’ group expects higher rates to slow sales in the coming months, and if investors, who drove the market for so long, continue to exit, those sales could be even slower.

(Read more: Go green? Get a bigger mortgage)

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick.

Questions? Comments? facebook.com/DianaOlickCNBC

Article source: http://www.cnbc.com/id/100903814

“A lot of the sub-contractors are seeing an increase in business, yet they’re reluctant to hire staff or have an inability to hire skilled labor, so we’re seeing delays with framers coming onto our properties to frame the houses, we’re seeing challenges with drywall finishers and painters,” says Paul.

Many builders are also seeing supply constraints, as they did not expect to see such a surge in demand. Demand is strong in large part because there is such a small supply of existing homes for sale nationwide, and because banks have been exceedingly slow to work through foreclosures in some states.

(Read More: Home Prices See Record Gain in April)

“About one third of homes sold are completed, down pretty significantly from where we were earlier in the cycle, which was in the 50 to 60 percent range,” notes David Goldberg, an analyst at UBS.

While the major public builders have not voiced concern publicly over risks to their backlogs, the analysts that cover them say if rates continue to rise, they will not be able to ignore it.

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick or on Facebook atfacebook.com/DianaOlickCNBC.

Questions? Comments? RealtyCheck@cnbc.com

Article source: http://www.cnbc.com/id/100849156

Based on the change in mortgage rates from early May to today, the average buyer would have to pay 13 percent more in monthly payments, including taxes and insurance, according to Mark Hanson, a California-based analyst. They also have to earn 10 percent more in income to qualify for a loan based on a typical qualifying debt-to-income ratio of 45 percent.

“These are huge moves especially considering—when purchasing a house using a mortgage—most people buy based on ‘monthly payment and the maximum allowable debt-to-income ratio.’ This means first-timer share will fall even further. They are already at a multiyear low even with record-low rates,” said Hanson.

(Read More: As Prices Rise, Banks Repossess More Homes)

First-time homebuyer participation was at just 29 percent, according to the Realtors, a five-year low. Without these buyers, as investors pull back and prices rise, home sales will likely lose steam. June’s report on pending home sales, or signed contracts in May, will tell just how much rising rates are impacting sales. That report will be released Thursday, June 27.

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick or on Facebook at facebook.com/DianaOlickCNBC.

Questions? Comments? RealtyCheck@cnbc.com

Article source: http://www.cnbc.com/id/100831431

(Read More: Short Supply Has Home Sales ‘Squeaking’ Out Gains)

While Humphries does not make the connection to rising bank repossessions in the report, his numbers do. They show inventory easing much more on the low end of the market, where distressed homes tend to be.

“The greatest year-over-year decreases in inventory were among more expensive homes, with the availability of top-tier and middle-tier properties each falling 15.7 percent year over year. The number of bottom-tier properties for sale on Zillow nationwide fell only 2.5 percent in early June compared to June 2012.”

As more bank-owned homes hit the market, inventories are likely to turn positive again in the near future.

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick or on Facebook at facebook.com/DianaOlickCNBC.

Questions? Comments? RealtyCheck@cnbc.com

Article source: http://www.cnbc.com/id/100812845