In real estate news, loan modifications and refinancings by Fannie Mae and Freddie Mac were up in the second quarter as the volume of permanent modifications under the Administration’s Home Affordable Modification Program (HAMP) increased 65 percent while refinancings under the Home Affordable Refinance Program (HARP) increased by 30 percent. The data were released in FHFA’s Second Quarter 2010 Foreclosure Prevention & Refinance Report, which includes data on all of the Enterprises’ foreclosure prevention efforts. I am not sure exactly how this news will affect the real estate market in South Carolina, other than it may hurt values since it is not the positive news we need. And it might persuade some buyers to delay making a home purchase. However since interest rates did go up this week, any money you might save in purchase price, you may lose paying to the bank in higher rates on your mortgage.

Some of the findings of the quarterly report from Fannie and Freddie include:

• Overall volume of loan modifications increased 24 percent to nearly 171,200 during the quarter, with the majority of modifications completed through HAMP.
• More than half of completed loan modifications in the second quarter lowered borrowers’ monthly payments by more than 30 percent.
• Loans modified in the last two quarters are performing substantially better than loans modified in earlier periods.
• Less than 10 percent of loans modified in the last two quarters were 60-plus-days delinquent three months after modifications.
• Short sales and deeds-in-lieu increased 27 percent during the quarter to nearly 30,900.
• Since the first full quarter in conservatorship (4Q08), combined completed foreclosure prevention actions total 1,013,700.
• Foreclosure starts increased 12 percent to nearly 275,100 while completed foreclosure sales and third-party sales increased 15 percent to nearly 112,400 in the second quarter.

So all in all, loan modifications are up but the more recent loan modifications seem to be doing better than earlier ones. And for those lucky enough to get a loan modification, getting their payment lowered by at least 30% has got to help. The fact that short sales,deeds in lieu, and foreclosure starts have increased does worry me though. It is not a good sign for the real estate market that we are continuing to have so many distressed sales. Look at the chart below:

It appears that for all the efforts of the government and the Obama Administration, the foreclosure number just keep on climbing. Maybe if the focus were on job creation and getting the economy better, there would be more positive results. With over 20 months of inventory in the Upstate South Carolina real estate market, and the unemployment numbers not improving, I am highly concerned about the real estate market. Especially after the Real Estate Market Indicators and the Housing Supply Outlook for last month did not show any signs of great improvement.