Goldman Sachs has successfully completed 71% of the $1.8 billion in consumer-relief it is obligated to provide under its two mortgage-backed-securities settlements with the Department of Justice and three states, according to the latest report from Eric D. Green, Independent Monitor.

Green, a professional mediator and retired Boston University law professor, was named independent monitor with responsibility for determining whether Goldman Sachs fulfills its consumer-relief obligations. He has assembled a team of finance, accounting and legal professionals to assist in the task.

In his 10^th report on the Goldman Sachs settlement, Green approved settlement credit for Goldman Sachs' forgiveness of first-lien principal on 794 loans and extinguishment of another 58 second-lien loans, bringing Goldman Sachs' cumulative consumer-relief credits under the settlements to more than $1.25 billion.

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Since Green's previous report on Nov. 1, 2018, Goldman Sachs forgave of $82,828,355 in principal on 736 first-lien mortgages, for average principal forgiveness of $112,539 per loan and a reportable credit of $84,445,523.

Goldman Sachs also sought credit for the extinguishment of 58 second lien loans, with $3,734,507 in principal forgiven for an average principal forgiveness of $64,388 and \reportable credit of $1,826,785 after the application of appropriate crediting calculations and multipliers.

The latest increment brought the total amount of credit claimed and conditionally validated by the Monitor to $1,286,075,590 or 71% of the $1.8-billion target.

"I am pleased to be able to confirm that Goldman Sachs continues to make steady progress toward meeting its obligation to provide Consumer-Relief valued at $1.8 billion," said Green.  "Nearly three years after the Settlement Agreements were signed, Goldman Sachs appears to be 71% toward completing its Consumer-Relief obligations."

The modified first-lien mortgages are spread across 43 states and the District of Columbia, with 36% of the credit located in the settling states of New York, Illinois, and California, and 50% of the credit located in Hardest Hit Areas, or census tracts identified by the Department of Housing and Urban Development as containing large concentrations of distressed properties and foreclosure activities.

Goldman Sachs' two settlement agreements, reached on April 11, 2016, resolved potential claims regarding the marketing, structuring, issuance and sale of mortgage-based securities. Besides the Department of Justice, California, Illinois and New York, Goldman Sachs reached settlements with the National Credit Union Administration Board and the Federal Home Loan Banks of Chicago and Des Moines.

Under the settlements, Goldman Sachs agreed to provide $5.06 billion, including consumer-relief of $1.8 billion by Feb.1, 2021.

Mortgage rates held steady after declining for three consecutive weeks, according to the “Primary Mortgage market Survey” from Freddie Mac.

“Mortgage rates remained mostly unchanged this week, while mortgage applications rose 5.3 percent from the previous week,” said Sam Khater, chief economist for Freddie Mac. “The general decline in rates we have seen recently, combined with rebounding pending home sales, hint at a strong spring home buying season.”

The key takeaways from the survey are as follows:

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• The 30-year fixed-rate mortgage averaged 4.35 percent with an average 0.5 point for the week ending February 28, 2019, unchanged from last week. A year ago, the 30-year FRM averaged 4.43 percent.
• The 15-year fixed-rate mortgage this week averaged 3.77 percent with an average 0.5 point, down from last week when it averaged 3.78 percent. A year ago, the 15-year FRM averaged 3.90 percent.
• The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.84 percent with an average 0.3 point, unchanged from last week. A year ago, the 5-year ARM averaged 3.62 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage.

There were fewer first-time homebuyers amid housing slowdown in the fourth quarter of 2018.

Fully 480,000 single-family homes were purchased—a decline of three percent from a year ago, compared to a one percent increase in the third quarter, according to the First-Time Homebuyer Market Report from Genworth Mortgage Insurance.

"The first-time homebuyer market once again outperformed the broader housing market, recording its best purchase year since 2006 and regaining its pre-housing crisis level,” said Tian Liu, chief economist for Genworth Mortgage Insurance. “First-time homebuyers responded to declining affordability by taking a wait-and-see approach and opportunistically looking for lower-priced properties.”

The first-time homebuyer market was more resilient during the housing slowdown compared to repeat buyers, which saw a decline of seven percent. In fact, first-time homebuyers accounted for 39 percent of single-family homes sold in 2018, up from 31 percent in 2014; 56 percent of new purchase loans in 2018, up from 52 percent in 2014; Highest level of first-time homebuyer mix in the housing market since 2000.

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Housing affordability deteriorated by 17 percent in the fourth quarter from a year ago, due to rising interest rates and higher home values. Homebuyers have reacted to the worsening affordability by putting off buying and looking for lower-priced homes, which resulted in lower prices for first-time homebuyers in the fourth quarter. For instance, the median price paid by first-time homebuyers declined by two percent year-over-year to $233,600.

Over two million first-time homebuyers purchased single-family homes in 2018, up less than one percent from 2017, and the most since 2006.

They accounted for 99 percent of the growth in home sales between 2014 and 2018. First-time homebuyers are reshaping the demographics by moving from states, such as California, Illinois, Massachusetts, Michigan, Louisiana, New York and Texas, and into states such as Arizona, Florida, Georgia, Delaware, Idaho and Nevada

Fully 682,000 homebuyers used conventional mortgages with mortgage insurance to finance their first home purchase in 2018, 53,000 more than the federal housing authority, historically the largest first-time homebuyer product. The mortgage insurance industry now serves twice as many first-time homebuyers compared to 2014.