Fort Worth Star-Telegram
By: Sandra Baker
August 4, 2010
Housing and Urban Development Secretary Shaun Donovan told a group of black real estate professionals Tuesday in Fort Worth that while the Obama administration has made strides in ensuring affordable housing for all, there's still room to improve.
"There's no question that the state of today's housing market is in significantly better shape than anyone predicted a year ago," Donovan said. "Home equity has grown $1.1 trillion in the last year after home prices fell for 30 straight months."
Speaking to the National Association of Real Estate Brokers convention at the Renaissance Worthington hotel, Donovan recounted the programs and measures that his department has implemented in the past 18 months and the progress of the housing recovery.
Soon, he said, HUD will release the Federal Housing Administration's new Short Refinance program, which is designed to aid refinancings by borrowers who are underwater, meaning they owe more on their mortgage than the home is worth.
Underwater borrowers, along with continued high unemployment, remain the biggest threats to the housing recovery, Donovan said. At the end of last year, among all U.S. homes with a mortgage, 11.3 million, or 24 percent, were underwater, he said. Those properties are mostly in California, Arizona, Florida, Michigan and Nevada.
"We remain concerned that the recovery is fragile," he said.
Donovan said measures that increased the number of low-income buyers helped by the FHA have helped maintain homeownership. Recent figures show that the FHA backed financing for 51 percent of African-American home buyers and 45 percent of Hispanic home buyers, he said.
Also, the first-time home-buyer tax credit, which expired April 30, helped 2.5 million people buy a home, while the Home Affordable Modification Program, which helps borrowers modify mortgages rather than face foreclosure, is on pace to help 3 million to 4 million homeowners by 2012, he said.
HUD will also be releasing about $87 million for housing and mortgage modification counseling, he said.
After his speech, Donovan said that while he appreciates the brokers association's support of the administration's housing policies, he will take back to Washington the message that communities are still hurting.
"Just because there's been improvement doesn't mean there's not still pain," he said. "We're trying to manage a balance between responsible lending, strengthening the finances of FHA, while not going so far that we hurt the housing recovery and in particular the underserved communities that have been hardest hit."