More Approvals for Short Sales

Sales of homes in the process of being foreclosed increased to 12% of total sales of homes in the 2nd quarter of 2011 as banks have increased their approvals of short sales.  RealtyTrac reported both an increase in the number approvals and shorter average time to conclude short sale transactions.  They also noted bigger discounts being approved relative to standard sales, indicating that banks are getting more efficient at clearing inventories.

"This is a glimmer of hope that lenders are getting more realistic," Rick Sharga, senior vice president of RealtyTrac, said in a telephone interview with Bloomberg News. "It's a win for borrowers who avoid foreclosure, buyers who get a house in better condition and banks that lose less money, which is also a win for taxpayers."

Mortgage Rates at 50-Year Low!

The roller coaster stock market is pushing investors into bonds, forcing yeilds down and translating into lower mortgage rates.  Freddie Mac has reported the average rate for a 30-year fixed loan dropped to 4.15 percent in the week ended Thursday from 4.32 percent last week. That was the lowest in more than 50 years. The average 15-year rate fell to 3.36 percent, down from from 3.5 percent

Lower rates aren't doing much to improve the housing market, but have created a boom in refinancing with Mortgage Banker's Association reporting an 8% rise in refinance applications.  The share of refinancings rose to 79% of all mortgage applications.

Excess Foreclosure Inventory Solution

Tne Federal Housing Finance Agency is considering options for selling foreclosed homes to investors who would rent them out. The sale in bulk of 10s of thousands of forclosures returned to Freddie Mac and Fannie Mae to institutional investors that would renovate and manage them as rentals could aid the housing market by reducing forclosed inventory, stablilize neighborhoods, and even keep financially-troubled owners in their homes as renters.  Interesting idea from the Obama administration.  Read more at U.S. moves to sell, rent 92,000 foreclosures.