New Construction On The Move:

Housing Starts increase in May and Building Permits hit a five month high.
U.S. housing starts rose more than expected and permits for future construction touched a five month high in May, a government report showed on Thursday.

The Commerce Department said housing starts rose 3.5 percent to a seasonally adjusted annual rate of 560,000 units, retracing almost half of April's steep decline. April's starts were revised up to a 541,000 unit pace, which was previously reported as a 523,000 unit rate.

Single-family home construction, which accounts for a large portion of the market, rose 3.7 percent.

New building permits unexpectedly rebounded 8.7 percent to a 612,000-unit pace last month, the highest level since December. Economists had expected overall building permits in May to fall to a 558,000-unit pace.

Permits were boosted by a 23.2 percent surge in the multi-family segment. Permits to build single-family homes rose 2.5 percent. New home completions climbed 0.4 percent to 544,000 units in May.

Treasury withholding financial incentives for BofA, Chase, and Wells

HUD and the U.S. Dept. of the Treasury recently released the May edition of the Obama Administration's Housing Scorecard, which now includes detailed assessments of the 10 largest mortgage servicers participating in the Making Home Affordable Program. Since the inception of the Making Home Affordable Program, Treasury has required participating servicers to take specific actions to improve their servicing processes. The new Servicer Assessments summarize performance for the 10 largest Making Home Affordable participating servicers from reviews largely conducted throughout the first quarter of 2011 on three categories of program implementation: identifying and contacting homeowners; homeowner evaluation and assistance; and program reporting, management and governance. Based on the reviews for this quarter, four servicers have been identified as needing substantial improvement and six servicers have been identified as needing moderate improvement. The servicers identified as in need of substantial improvement are:

• Bank of America, NA;
• J.P. Morgan Chase Bank, N.A.;
• Ocwen Loan Servicing, LLC; and
• Wells Fargo Bank, N.A.

While servicers are required to address all instances of non-compliance, beginning this month, the Treasury Department is withholding financial incentives for three servicers: Bank of America, NA; J.P Morgan Chase Bank, NA; and Wells Fargo Bank, N.A. Treasury will not withhold financial incentives owed to Ocwen Loan Servicing, LLC for this quarter as their compliance results were substantially and negatively affected by a large servicing portfolio acquired during the compliance testing period.

Talking Points

Each year, about 15 million American households move, with the majority changing households between Memorial Day and Labor Day. Unfortunately, this same time period also is peak season for moving company scams.

To avoid falling victim to common scams, experts in the moving industry recommend consumers do the following:

• Go with a company that has a well-known and recognized name
• Get a referral from friends, family, neighbors, and colleagues
• Ask for an in-home estimate, to ensure accuracy of the estimate
• Don’t always go with the lowest price
• Do not pay up-front fees
• Conduct research on the government website protectyourmove.gov to find out if a mover is licensed for interstate moves by the Federal Motor Carrier Safety Association.
• Get all details of the transaction in writing
• Request a copy of “Your Rights and Responsibilities When You Move,” a brochure created by the Federal Highway Administration that outlines consumers’ rights. Federal law requires movers to give this to customers prior to an interstate move.

An old mortgage scam aims to hijack a payment or two (Los Angeles Times)

A mortgage scam in which con artists send letters telling borrowers they should begin sending their mortgage payments to a fictitious company that has begun servicing their loan, is making the rounds again. Unfortunately, by the time borrowers figure out their loan has not changed servicers, they’ve already sent one or two mortgage payments to the fictitious company.
Making sense of the story

• According to those familiar with the scam, it typically works because most borrowers are unaware of the rules when it comes to the transfer of mortgage-servicing rights. Under the law, the current servicer is required to send a “goodbye” letter notifying the borrower that payments should be sent to a new company as of a certain date.
• A week or two later, the law says the borrower should receive a second letter, which, by law, should include a welcome missive from the new servicer with the details of the mortgage payment – a breakdown among principal, interest, and escrow. The package also is likely to include a few payment coupons, if not a brand-new coupon book, and self-addressed printed envelopes for borrowers to make payments.
• Both the goodbye and welcome letter should include the mortgage loan number. If either letter does not, or if the information included in one doesn’t match what’s in the other, borrowers should call their original servicers to inquire.
• Borrowers only receiving one letter should be extra cautious. Even if everything appears to be standard procedure, borrowers are still advised to call the first company’s toll-free number just to be sure.

GSEs complete more than 1.6 million foreclosure-prevention actions

Government-Sponsored Enterprises, Fannie Mae and Freddie Mac, have completed more than 1.6 million foreclosure-prevention actions since the beginning of conservatorship in the fourth quarter of 2008, with more than half of the actions resulting in loan modifications, according to the Federal Housing Finance Agency’s First Quarter 2011 Foreclosure Prevention & Refinance Report. According to the report, loan modifications declined for the third consecutive quarter, but resulted in larger payment reductions for more homeowners.
Additional findings of the report include the following:

• Total completed foreclosure-prevention actions declined in the first quarter to 171,531
  from 208,416 in the previous quarter, primarily driven by decreases in loan modifications and repayment plans.
• The GSEs’ completed loan modifications decreased to 86,201 from 119,778 during the first quarter.
• The cumulative total of refinancings through the Home Affordable Refinance Program (HARP) increased 21 percent during the quarter to approximately 752,000 loans.
• Loans modified in 2010 continued to perform substantially better compared to loans modified in earlier periods for two primary reasons:
  1) Loan modifications in 2010 resulted in larger payment reductions for a greater proportion of borrowers than in earlier periods
  2) The majority of completed loan modifications in 2010 required successful completion of a trial period prior to permanent modification.
• Foreclosure starts declined while completed third-party and foreclosure sales increased in the first quarter.

New York Time: Bottom Near for Housing

For real estate, some economists say, an end to the seemingly endless decline in housing values might be in sight.

Few analysts expect housing prices to rebound anytime soon. But quite a few are predicting that the market is close to the moment when things will stop getting worse, which will be a major improvement all by itself. By far the bulk of the downturn of housing prices is beyond us, said Paul Dales of Capital Economics.

There are some amazingly favorable signs. Housing is the most undervalued it has been in 35 years, Mr. Dales said. At some point, its going to do very well.

Peter Muoio, senior principal of Maximus Advisors, says he thinks the market has already bottomed, although he expects it to bounce around in a narrow range for a few years rather than recovering. And James F. Smith, chief economist for the investment firm Parsec Financial and a rare housing bull, is predicting a 25 percent climb from here by mid-decade.

There is a lot of pent-up demand for housing and someday it will be unleashed, Mr. Smith said, adding: Your guess is as good as mine when it will come.

Home improvements that boost resale value

When deciding which home improvements to make, many homeowners consider the amount of resale value the improvement may or may not make and compare that against the cost of the renovation. Homeowners concerned with making home improvements that will pay off when it’s time to sell the property, should consider the following tips.
Making sense of the story

• The first improvement/repair homeowners should consider are those that impact the home’s basic structures and systems. Potential home buyers generally do not want to face expensive repairs, and if items such as the foundation, roof, air conditioning, water heater, or other basic structure need to be fixed, the property will be considered a fixer-upper and its market price will be discounted accordingly.
  
  
• Some minor replacements will produce big results for minimal cost. Replacing and coordinating bathroom and kitchen hardware and fixtures are generally inexpensive, but tend to make a big difference. The same can be said for getting rid of any dated finishes, such as old wallpaper and brass light fixtures.
  
  
• Homeowners who don’t know when or even if they will be able to sell their home are advised to choose home improvement projects carefully. Unless the home is located in an upscale neighborhood and the property already is immaculate, owners can skip expensive upgrades – such as remodeled bathrooms – and focus on the fundamentals.