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27 » VISIT US ONLINE @ DSNEWS.COM BORROWER EQUITY ON THE RISE HUD Secretary Julián Castro recently said that homeownership is "still an important tool to build wealth in our country and pass that wealth on." Based on CoreLogic's Q 4 2015 Equity report, a lot of wealth is being built in America. In Q 4, the aggregate amount of home equity increased over-the-year by $682 billion, or 11.5 percent, which was the 13th consecutive quarter of double-digit growth, according to the analysis. During 2015, approximately one million borrowers in the country regained equity in their homes, bringing the total of homes nationwide that have equity up to approximately 46.3 million (about 91.5 percent of homes with a mortgage) out of 50 million. "e number of homeowners with more than 20 percent equity is rising rapidly," said Anand Nallathambi, president and CEO of CoreLogic. "Higher prices driven largely by tight supply are certainly a big reason for the rise, but continued population growth, household formation and ultralow interest rates are also factors. Looking ahead in 2016, we expect home equity levels to continue to build, which is a good thing for the long- term health of the U.S. economy." Approximately 4.3 million (8.5 percent) homes had negative equity, or were "underwater" as of the end of Q 4. is total was a decline of 19 percent from the same quarter in 2014, when 5.3 million (10.7 percent) of homes were underwater. e aggregate value of negative equity in those 4.3 million homes was $311 billion, which was a 10.7 percent decline from $348 billion reported at the end of Q 4 2014. Approximately 19 percent, or 9.5 million properties, had less than 20 percent equity in Q 4 (referred to as "under-equitied"), and about 2.3 percent, or 1.2 million, currently have less than 5 percent equity (in a "near negative equity" position). Typically, under-equitied borrowers have difficulty refinancing existing homes or obtaining financing to sell or buy a new home due to underwriting constraints. If home prices fall, borrowers with near negative equity are at risk of falling into negative equity. HUD MEASURES PROGRESS TOWARD HELPING STRUGGLING HOMEOWNERS HUD has helped millions of struggling homeowners avoid foreclosure and stay in their homes with the completion of more than 10.2 million modifications and other forms of assistance arrangements since April 2009 (as of January 2016), according to HUD's February Scorecard. According to HUD, more than 2.5 million of these actions assisting homeowners have taken place through the Making Home Affordable (MHA) program, which was launched in February 2009 in response to the housing crisis. MHA is scheduled to end on December 31, 2016, and the Department of Treasury released its first set of guidelines to servicers for MHA termination in March. Nearly 1.6 million of those 2.5 million homeowner assistance actions were permanent loan modifications completed through the Home Affordable Modification Program (HAMP). e Federal Housing Administration (FHA) has completed more than 3.1 million loss mitigation and early delinquency interventions during that same period from April 2009 until January 2016. "ese Administration programs continue to encourage improved standards and processes in the industry, with lenders offering families and individuals more than 4.6 million proprietary modifications through December," said Katherine O'Regan, Assistant Secretary for the Office of Policy Development & Research at HUD. "Although there is good news overall, the Administration remains committed to helping more Americans realize their dream of home ownership through an improving economy and new programs that will provide greater access to credit." Citing data from the National Association of Realtors, HUD also reported that in January, existing homes rose to their second-highest pace since 2007, increasing by 0.4 percent up to a pace of about 5.47 million units annually—an 11 percent year-over-year increase. Existing-home sales have sold at a rate of more than 5 million annually for 10 of the last 11 months. Housing prices were up by 5.6 percent over the previous six months and are 1.2 percent above the peak reached in March 2007, according to data from the Federal Housing Finance Agency.

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