NEW YORK – Analysis in a new report from Barclays Capital suggests the worst is over for declining home values.
Lenders surveyed by Barclays largely were in agreement that home prices appear to have stabilized throughout most of the country, according to analysts at Barclays Capital and National Mortgage News, an affiliate of Credit Union Journal.
Residential portfolios continue to constitute a large portion of troubled assets and the degree to which banks have provided for losses related to these portfolios varies widely, based on its new report, "Homebuilding and Building Products." In the report, many management teams pointed to improving credit metrics, believing that the pace with which residential troubled assets grow will continue to decline.
Analysts say lenders continue to celebrate reduced exposure to homebuilders (albeit largely due to write-offs and sales), and similar to trends impacting the residential portfolio, they are currently experiencing lower in-flows of problem assets in this category. "The pace with which land deals are coming to market has accelerated, several banks indicated an aggressive stance towards moving through REO inventory."
The company said the sequential rise in banks' troubled debt restructuring balances suggest increasing participation in recent loan modification programs, such as the government's HAMP initiative as well as internally-generated company programs.
