FHA extends hurricane foreclosure pause

Plus: Home equity growth slows down

December 09, 2024

Thanks for joining us this Monday. Today's newsletter is a 2.5-minute read.

Disclaimer: Average mortgage rates as of Dec 06, 2024. © MND Daily Rate Index.

1. FHA extends hurricane foreclosure pause

The Federal Housing Administration (FHA) has announced that it is extending its foreclosure moratoriums for FHA-insured Single Family Title II forward and Home Equity Conversion Mortgages in Presidentially Declared Major Disaster Areas as a result of Hurricane Helene and Hurricane Milton.

This extension provides borrowers impacted by these events with additional time to access federal, state, or local housing resources; to consult with a HUD-approved housing counselor; and/or to rebuild their homes.

“When disaster strikes, we know that families and communities need not only resources, but time to recover. Today, by extending our foreclosure moratorium, we continue the Biden-Harris Administration’s efforts to help those affected by the catastrophic Hurricanes Helene and Milton to repair and rebuild their homes, communities, and lives.”

HUD Agency Head Adrianne Todman

2. Home equity growth slows down

In Q3 2024, homeowner equity rose 2.5% year-over-year to $17.5 trillion, down from an 8% increase in Q2. Negative equity increased for the first time in two years. About 990,000 homes (1.8% of properties) were "underwater," with the national negative equity total rising to $324 billion, up $4.3 billion from Q2.

Falling home prices and natural disasters drove declines. Hawaii, Colorado, and Idaho saw the largest losses, with Hawaii averaging a $34,000 drop due to the 2023 wildfire, though its homeowners still averaged $700,000 in equity.

Northeastern states like New Jersey and Rhode Island led equity growth, with average gains of $43,000. Nationwide, homeowners gained an average of $5,700 in equity, down from the annual gain of $25,400 seen in Q2.

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3. More Nuggets

🏦 Top 20 banks by retail mortgage volume in Q3. (NMN)

📈 Employers added 227,000 jobs in November as the labor market rebounded. (FT)

📰 Trump says he will not try to replace Jerome Powell. (Reuters)

🏘️ 10 states are back above pre-pandemic housing inventory levels. (Charted)

4. Freddie Mac dropped from 'pay-to-pay' lawsuit

A federal judge ruled Freddie Mac cannot be held liable in a lawsuit accusing Mr. Cooper of charging illegal $25 "pay-to-pay" fees, dismissing claims against the GSE but allowing plaintiffs 15 days to amend.

The lawsuit alleges Mr. Cooper violated state consumer laws, with Freddie Mac accused of ignoring the fees. Mr. Cooper denies wrongdoing, maintaining the charges on its website, while Freddie Mac argued it only allows lawful fees and cited the Merrill doctrine for its defense.

Mr. Cooper, also facing other lawsuits and CFPB scrutiny, recently saw a class action over COVID-19 relief dismissed and filed its own lawsuit seeking $30 million from insurers after a 2023 data breach.

5. Sale-leaseback platform EasyKnock closes its doors

A real estate company offering controversial sale-leaseback deals to financially strapped homeowners, announced abruptly on Thursday that it is going out of business. EasyKnock promised to help people "unlock" the equity in their homes by buying the property from them and then letting them remain in the home as a renter.

"After many years of serving consumers, EasyKnock has closed its doors," reads a post on the company's website. "We are deeply grateful for the trust placed in us to be part of the financial journey of so many."

The news comes amid numerous lawsuits, investigations from state attorneys general, and an FTC warning about the “risky” financial maneuver. An NPR investigation also found that few customers were ever able to repurchase their homes and some were ultimately evicted.

☀️ You’re all caught up. See you on Wednesday!

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