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54 GSE-BACKED MORTGAGES, HOME PRICES HITTING HIGH NOTES; DEFAULTS DOWN Mortgages funded by Fannie Mae and Freddie Mac are at a 15-year high, according to the July 2017 Housing Finance at a Glance Monthly Chartbook recently released by the Urban Institute. e share from 2007 to 2013 was approximately 40 percent, but Q1 2017 is reflecting an increase to 47.8 percent. is is one of the few rates that is increasing—but decreasing rates in other areas, in this sense, are certainly a good thing. e appreciating home prices in today's market are good for those who are underwater. According to the report, homes in negative equity (LTV greater than 100) are declining as housing prices appreciate. Compared to the share of all residential properties with a mortgage, as of Q1 2017, those in negative equity were at 6.1 percent. Properties near negative equity (LTV between 95 and 100) stood at 1.6 percent. To paint the picture, in Q 3 2008, those in negative equity were hovering right around 25 percent until around Q 4 2012, when rates slowly began to decline. at's not the only figure looking better for consumers—90-day delinquencies are resuming their decline after a slight seasonal increase in Q 4 of 2016 from 1.6 percent to 1.37 percent in Q1 2017. Foreclosures are falling to 1.39 percent of all loans. Combining both delinquencies, this is down from Q 4 2016's 3.13 percent and Q1 2016's 3.29 percent to 2.76 percent in Q1 2017. e government sponsored enterprises (GSE) had a slowing in Home Affordable Refinance Program (HARP) refinances due to the high volume of borrowers who have already done so. Data from the FHFA Refinance Report and Urban Institute point to this trend continuing, considering the recent rate increases. HARP refinances total 3.46 million since Q2 2009 (HARP's inception) and account for 12.6 percent of all GSE refinances in Q1 2016. Compared to all refinances, HARP refinances were 3 percent. is is based on all data that is available until April. ZILLOW: NUMBER OF UNDERWATER HOMEOWNER SLOWING SIGNIFICANTLY e share of American homeowners who are underwater has fallen by the second smallest percentage on record, according to Zillow's Q1 2017 Negative Equity report released in July. ough the number of underwater borrowers is now less than a third of its 2012 peak, this significant slowdown isn't a trend to ignore. Between Q 4 2016 and Q1 2017, just over 5 million U.S. homeowners—or about 10.4 percent of all borrowers—were behind on their mortgage loans. According to the Zillow report, more than three times that—15.7 million—were underwater in 2012. In Q 4 2016, 12.7 percent of borrowers were underwater, and in Q1 2012, it was 31.4 percent. "e 0.1 percentage-point quarterly drop between Q 4 2016 and Q1 2017 negative equity was the smallest since a barely noticeable drop from Q 3 2014 to Q 4 2014," Zillow reported. "e Q1 2016–Q1 2017 annual change of 2.3 percentage points is the smallest on record (data dates to Q2 2011), tied with the annual drop recorded in Q 3 2012 and again in Q2 2016. e annual change, spread over four quarters, is smaller than the one-quarter change recorded between both Q2–Q 3 2012 and Q2–Q 3 2013." e amount that borrowers are underwater is also of note. According to Zillow's report, an overwhelming majority of America's underwater borrowers are behind 20 percent or more. Another 15 percent owe twice as much as their home is worth. "e bulk of those homeowners that remain in negative equity are very deep underwater—56.7 percent of those in negative equity were underwater by more than 20 percent as of the end of Q1," Zillow reported. According to the report, homeowners with "shallow negative equity"—or those who are only slightly behind on their loans—have likely caught up by selling in today's highly appreciating market. "Essentially, those 'easy' homeowners in relatively shallow negative equity have likely already or will soon resurface as home values have grown over the past few years," Zillow reported. "at leaves just those millions of harder cases remaining that are likely to take much longer to free."

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