Banks are more willing to offer loan modifications now that the economic recovery is in full swing, he said. Other positive economic indicators such as slow, but consistent, labor market growth and increased levels of consumer spending provide banks with confidence in the economy over the long term, he noted.
“Additionally, there are significantly fewer distressed properties in the market (after) the housing crisis, so banks are more willing to work with the remaining homeowners since their properties are at less risk of becoming distressed,” he said.
According to the Department of Treasury, as of June, under the Home Affordable Modification Program, 10,727 homeowners have obtained or started permanent modifications of their mortgage loans in Utah, on average saving homeowners more than $6,000 annually or $547 per month.
Slightly more than 700 Utah homeowners received principal reductions in conjunction with the modification plan, with a median principal reduction of more than $40,000 per household.
The Treasury Department also stated that 1,028 homeowners in Utah have received a short sale or deed-in-lieu of foreclosure through the Making Home Affordable program. The Hope Now alliance reported that through first quarter 2013, an additional 31,825 homeowners received private loan modifications, generally modeled after the Home Affordable Modification Program template.
The National Mortgage Settlement has provided about $306 million in relief to borrowers in Utah, the report stated.
"Low supply has also led to increased building activity, although Utah’s home builders are faced with a shortage of skilled workers — many skilled workers left the industry during the recession and have not returned,” Shumway commented. “This could lead to a greater increase in new home prices, further limiting supply, and when coupled with increasing mortgage rates, could cause many consumers to be priced out of the market.”
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