The housing market has built momentum during recent months, but some local areas continue to struggle despite improving national real estate averages.
Property records indicate national foreclosure activity declined significantly in July, according to the Obama Administration's most recent Housing Scorecard. This was the result of a greater number of borrowers capitalizing on government initiatives, such as the Home Affordable Modification Program, to restructure their loans into more favorable terms.
"This month’s indicators show momentum not seen since before the housing crisis as refinances through our enhanced Home Affordable Refinance Program continue to surge - HARP loans represented 20 percent of total refinance volume in May, the largest increase since the program was launched in 2009," said Department of Housing and Urban Development acting assistant director Erika Poethig.
As of the end of June, more than 1 million underwater households have capitalized on HAMP since its inception, saving approximately $537 each on monthly mortgage payments, the report said. To date this represents more than $13.9 billion in savings and the initiative is now being called the most sustainable foreclosure prevention program available.
Miami housing highlighted
Meanwhile, the scorecard had a special focus on housing and economic conditions in the Miami marketplace, which experienced improvements so far this year, but remains in a very fragile state. Specifically, more than 45 percent of borrowers in the area still owe more on their mortgage than their properties are worth.
Additionally, borrowers in Miami also have the highest rate of mortgage delinquency in the country, while many more households are currently in some stage of the foreclosure process. Since so many borrowers are defaulting on their loans, Miami also has the third-longest home repossession time in the country, as lenders struggle to work through vast backlogs of properties in the local foreclosure inventory.
In contrast, Miami did have some hopeful economic indicators, the report said. For example, the unemployment rate fell to just 8.6 percent in May, down from a peak of 11.4 percent in September 2010.
However, homeowners in the area are scheduled to benefit from more than $8.5 billion in foreclosure relief from the recent multibillion-dollar settlement reached between the nation's largest lenders and state attorneys general offices.