Orange County Register
Distressed home sales rising Pending home sales rose in February, as did the share of distressed properties sold, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported this week.

MAKING SENSE OF THE STORY
• Pending home sales in California increased in February, according to C.A.R.’s Pending Home Sales Index (PHSI)*. The index was 112.1 in February, rising 20.6 percent from January’s revised index of 93.0, based on contracts signed in February. The index was down 1.6 percent from February 2010, when the presence of housing tax credits played a strong role in home sales. Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market, according to C.A.R.
• “The increase in pending sales is typical for this time of year, as we usually see a seasonal improvement in the spring,” said C.A.R. President Beth L. Peerce.
• The total share of all distressed property types sold statewide increased in February to 56 percent, up from 54 percent in January and up from 55 percent in February 2010. Non-distressed sales made up the remaining share at 44 percent in February, down from 46 percent in January and down from 45 percent in February 2010.
• The statewide share of short sales increased to 23 percent in February, up from 22 percent in January and up from 19 percent in February 2010.

Read the full story:
http://mortgage.ocregister.com/2011/03/24/distressed-home-sales-rising/43621/

In Other News…
San Francisco Chronicle
Rates on 30-year fixed mortgage rises to 4.81 percent
Fixed mortgage rates edged up this week, but even 30-year rates below 5 percent have done little to boost home sales.

Read the full story:
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2011/03/24/national/a070117D54.DTL&type=business

The Wall Street Journal
Housing inventory increases, listing prices fall
Nationally, the inventory of unsold homes on multiple-listing services increased by 0.6 percent in February from one month prior. Over the past year, inventory is up by 13 percent, according to Move Inc.

Read the full story:
http://blogs.wsj.com/developments/2011/03/23/housing-inventory-increases-listing-prices-fall/

Los Angeles Times
Home resales fall 9.6 percent in February and prices are near 9-year low
Sales of previously owned homes dropped 9.6 percent in February and prices fell to their lowest level since 2002, reflecting a continued slump in the U.S. real estate market.

Read the full story:
http://www.latimes.com/business/la-fi-home-sales-20110321,0,7438761.story

The New York Times
More borrowers are opting for adjustable-rate mortgages
In the years since the financial crisis, adjustable-rate mortgages, or ARMs, with their low initial interest rates that changed over time, have been considered riskier than fixed-rate loans and shunned by most buyers. But these days more people are being persuaded to give the loans a try.

Read the full story:
http://www.nytimes.com/2011/03/20/realestate/20Mortgages.html?_r=1&ref=realestate

CNN Money
New home sales tumble to record low New home sales fell 16.9 percent in February, to the lowest level since the government began keeping records in 1963, as the reeling housing market failed to generate any momentum.

Read the full story:
http://money.cnn.com/2011/03/23/real_estate/new_home_sales/index.htm?hpt=T2

Mercury News
Are buyers turning away from new homes in weak markets? A new home, the dream of many would-be buyers, makes less and less financial sense in many places. A wave of foreclosures has driven down the cost of previously occupied homes and made them even more of a comparative bargain. By contrast, new homes have become more expensive.

Read the full story:
http://www.mercurynews.com/real-estate/ci_17674400

Yahoo Real Estate
Mortgage mod test becomes clearer Mortgage borrowers who are turned down for loan modifications may now get additional information that could help them understand why they didn’t qualify under the so-called “HAMP test.”

Read the full story:
http://finance.yahoo.com/news/Mortgage-mod-test-becomes-brn-3851250881.html?x=0&.v=1&.pf=real-estate&mod=pf-real-estate

What you should know about the market
• Buying a home can be time consuming. One way to save time is by organizing all the necessary documents most lenders require, such as those that prove employment and income. Typically, lenders want two recent pay stubs, two years of tax returns, bank statements, proof of assets, such as 401(k) and trusts, and debts, such as credit card statements. Documents are especially important for borrowers who are self-employed.
• Even if a home purchase is months or years away, having good credit history is essential. A few points on a FICO score can mean the difference between a higher or lower interest rate offered on a mortgage loan.
• Borrowers also are advised to monitor home-lending rates. Every Thursday, Freddie Mac officials calculate average mortgage rates by compiling rates from lenders across the U.S. on Monday through Wednesday. Rates can be found at freddiemac.com/pmms

The Wall Street Journal
Banks push home buyers to put down more cash
Many economists and housing analysts blame lax lending standards – including no-down payment, no-document loans – for contributing to the challenges in the current real estate cycle. As a result, most lending institutions have increased minimum down payment requirements. Now, a new proposal by the Obama administration calls for gradually raising down payments to a minimum of 10 percent on conventional loans – those that can be bought or guaranteed by Fannie Mae and Freddie Mac.

MAKING SENSE OF THE STORY
• Banks have found that larger down payments discourage delinquencies by increasing the buyers’ exposure to loss and reducing the impact of declining prices. According to a study by the Federal Reserve Bank of St. Louis, buyers who made smaller down payments were more likely to default during “unfavorable economic circumstances, such as a housing market slowdown or job loss.”
• A recent analysis showed the median down payment in nine major U.S. cities rose to 22 percent last year on properties purchased with conventional mortgages. That percentage doubled in three years and represents the highest median down payment since the data were first tracked in 1997.
• Higher borrowing costs and larger down payments could cause housing prices to decline further, analysts say. For now, borrowers who can’t afford such amounts are turning to alternative programs, such as loans for veterans or those backed by the Federal Housing Administration. Some industry experts say this has created a nonconventional mortgage market for riskier borrowers and those who don’t qualify for conventional loans.

Read the full story:
http://online.wsj.com/article/SB10001424052748703312904576146532935600542.html?mod=WSJ_hp_LEFTTopStories

In Other News…
CNN Money
30 percent of mortgages are underwater
Home prices dropped 2.6 percent nationwide during the last three months of 2010, pushing more borrowers underwater, according to a quarterly real estate market survey from Zillow.com.

Read the full story:
http://money.cnn.com/2011/02/09/real_estate/underwater_mortgages_rising/index.htm

San Diego Union-Tribune
Will Millennials reinvigorate the U.S. housing recovery?
Millennials, those between18-34, will drive America’s housing recovery as prices have generally become more affordable and mortgage rates are still historically low, said Pete Flint, CEO of real estate website Trulia.com.

Read the full story:
http://www.signonsandiego.com/news/2011/feb/09/will-millennials-reinvigorate-us-housing-recovery

San Francisco Chronicle
Foreclosures raise U.S. economic stress The nation’s economic stress inched up in December because higher foreclosures outweighed lower unemployment, according to The Associated Press’ monthly analysis.

Read the full story:
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2011/02/08/financial/f031330S84.DTL

The New York Times
Calculating the annual percentage rate
The lending industry has tried to make it easier for borrowers to understand the true cost of a mortgage by disclosing both its interest rate and its annual percentage rate, or A.P.R. But consumers may often wonder which figure they should focus on when buying or refinancing a property.

Read the full story:
http://www.nytimes.com/2011/02/13/realestate/mortgages/13mortgages.html?_r=1&ref=realestate

CNN Money
Foreclosures are falling – but it’s a fake out
Foreclosure filings plunged in January, but don’t shake those pom-poms yet. It’s strictly a fake out.

Read the full story:
http://money.cnn.com/2011/02/10/real_estate/foreclosure_filings_fall/index.htm

Los Angeles Times
Rising construction costs could boost new-home prices soon
With interest rates near rock-bottom levels, most people realize it’s only a matter of time before loan costs start to rise. After all, what comes down in the mortgage world always has a way of going up.

Read the full story:
http://www.latimes.com/business/realestate/la-fi-lew-20110213,0,6809981.story

CNN Money
Home sales grow, aided by more stable prices
Home sales volume rose sharply in the final three months of 2010, aided by more stable prices on a year-over-year basis, a real estate industry group reported last week.

Read the full story:
http://money.cnn.com/2011/02/10/real_estate/realtors_home_prices/index.htm

Los Angeles Times
Federal Housing Agency backs off proposal to ban transfer fees
Thousands of homeowner associations and condominiums around the country just sidestepped a potentially costly problem: A federal agency this month backed off its controversial plan that would have made obtaining mortgages in their communities much more difficult, and would have dried up a key source of revenue that associations use to pay for improvements and property maintenance.

Read the full story:
http://www.latimes.com/business/realestate/la-fi-harney-20110213,0,6473192.story

What you should know about the market…
• When preparing for the purchase of a house, there are several items buyers must think about, such as their main priorities. Buyers should determine whether it’s more important to live in a particular type of home, such as a single family home with a garage, or in a particular neighborhood.
• Some neighborhoods hold value more than others during a housing downturn. Buyers can work with a knowledgeable REALTOR® to find a neighborhood that meets their needs as well as one where home values are stabilizing or rising.
• Once a buyer finds a home he want to make an offer on, he should be sure not to make a low-ball offer. Some sellers are willing to negotiate and others are not. Working with a REALTOR® can help ensure the buyer is dealt with fairly and guided through the process.

New York Times
Online mortgage shopping made easier The vast amount of information available online about mortgages – such as interest rates, loan benchmarks, prepayment penalties, and the like – can cause home buyers to feel confused and overwhelmed when shopping for a mortgage. Most surprisingly, a recent survey found that only 61 percent of homeowners surveyed said they comparison shopped for a mortgage, and 39 percent said they took out a home loan based on just one quote.

MAKING SENSE OF THE STORY
• Resulting from consumer feedback about lending Web sites being unhelpful or difficult to navigate, some of the nation’s leading mortgage sites have responded by working to become more consumer-friendly. The revamped sites allow borrowers to not only browse lender rates and terms, but also learn about market trends and read comments from other loan shoppers.
• One of the challenges borrowers have, according to Keith T. Gumbinger, the vice president of HSH Association, is that while there is plenty of mortgage information available, consumers often have difficulty understanding the technical aspects of a mortgage, such as when an adjustable rate mortgage actually adjusts, and when a prepayment penalty applies.
• One site, LendingTree, allows consumers to browse quotes from various lenders, read an array of industry articles, use research tools and calculators, and peruse consumer-generated ratings and reviews of lenders. In December, the company created an online feature in which borrowers can post a mortgage-related question to be answered by a LendingTree loan specialist.
• Online direct lender, Quicken Loans, offers an expanding number of customer-written reviews on buying and refinancing. Beginning in March, consumers can download Quicken Loan’s iPhone app and track when appraisals come in, closing dates are set, and when other time-sensitive hurdles in the home-buying process are reached.
• Some major lenders also are making changes, including Bank of America, which offers articles and tools specifically for first-time buyers, and another set for more experienced borrowers.
• Of course, borrowers also can forgo the online aspect of mortgage shopping, and instead work with an experienced mortgage broker who can help guide the buyer through the process, including locking in the best rates available for their situation.

Read the full story
http://www.nytimes.com/2011/02/06/realestate/mortgages/06mort.html?ref=realestate

In Other News…
Wall Street Journal
Cash buyers lift housing
Buyers in markets around the U.S. are snapping up homes in all-cash deals, betting that prices are at or near bottom and breathing life into some of the nation’s most battered housing markets.

Read the full story:
http://online.wsj.com/article/SB10001424052748704570104576124502975117950.html?mod=WSJ_hp_LEFTWhatsNewsCollection

San Francisco Chronicle
Bank payment policy keeps some from mortgage aid
Some California homeowners are finding that bank policies are preventing them from participating in the new Keep Your Home California program, which provides up to $3,000 a month in mortgage payments to qualified, unemployed homeowners in California.

Read the full story:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/02/08/BU7R1HJT69.DTL&tsp=1

The Wall Street Journal
Home affordability returns to pre-bubble levels
Home affordability returned to pre-bubble levels in a growing number of U.S. markets over the past year as price declines laid the groundwork for a housing recovery.

Read the full story:
http://online.wsj.com/article/SB10001424052748703313304576132291585938656.html?mod=WSJ_RealEstate_LEADTopNews

CNBC
Managing a potential flood of foreclosures
REO inventory is rising. Four million seriously delinquent loans, out of 50 million first mortgage loans, and, according to Economist Mark Zandi, there are still over 600,000 properties in REO, which will only put more pressure on prices when they come to market.

Read the full story:
http://www.cnbc.com/id/41412751

The Wall Street Journal
Survey: Mortgage process has become too confusing A new survey shows that Americans’ confusion over mortgage applications has become one of the most challenging aspects of buying a home today.

Read the full story:
http://blogs.wsj.com/developments/2011/02/08/survey-mortgage-process-has-become-too-confusing/

The New York Times
Housing bubbles are few and far between
What’s the outlook for home prices over the next decade? It’s not easy to tell.

Read the full story:
http://www.nytimes.com/2011/02/06/business/06view.html?ref=realestate

The Washington Post
Housing finance changes likely to mean less government backing for some buyers
The Obama administration is likely to recommend reducing the size of mortgages eligible for government backing, according to current and former officials, a move that could make getting a home loan in high-prices areas more expensive.

Read the full story:
http://www.washingtonpost.com/wp-dyn/content/article/2011/02/03/AR2011020307205.html?hpid=topnews

USA Today
Can you claim the home buyer tax credit?
If you bought a home last year, you may be eligible for a tax credit of up to $8,000 when you file your 2010 tax return. But before you start shopping, make sure you qualify.

Read the full story:
http://www.usatoday.com/money/perfi/taxes/2011-02-04-personalfinance04_ST_N.htm?loc=interstitialskip

What you should know about the market
• Getting a mortgage is a complex, time-consuming process that is generally one of the most significant events in one’s life. Because of this, there are several potential pitfalls borrowers should avoid.
• Applying for new credit and a mortgage simultaneously is never recommended. Anytime a borrower applies for new credit, the borrower is seen as a greater credit risk, at least initially. If the borrower also applies for a credit card or auto loan around the same time as applying for a mortgage, the borrower’s credit score might get dinged enough to increase the interest rate applied to the loan, or disqualify the borrower altogether. Borrowers should first apply for a mortgage, then apply for other consumers loans after the mortgage has been funded.
• Another mistake some borrowers make is failing to look at the total housing payment. A mortgage payment consists of principal, interest, taxes, and insurance (PITI). Commonly, some prospective home buyers forget to factor in the property taxes and insurance premium into the overall mortgage budget.

Los Angeles Business Journal
California home sales hit seven-month high in December
California home sales rose in December, posting their highest level since May, according to a report from the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), as the inventory of unsold homes dwindled.

MAKING SENSE OF THE STORY
• Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 520,680 units in December, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. December’s sales were up 5.9 percent from November’s revised pace of 491,590 units, but were down 6.8 percent from the revised 558,840 sales pace recorded in December 2009. The statewide sales figure is adjusted to account for seasonal factors that typically influence home sales.
• Following three consecutive monthly declines, the median price of an existing, single-family detached home sold in California increased 1.7 percent from a revised $296,690 in November but was down 1.6 percent from the revised $306,860 median price recorded for the same period a year ago.
• “December’s sales increase reflects buyers taking advantage of rock bottom interest rates and improved affordability since the first half of the year, when prices were higher,” said C.A.R. President Beth L. Peerce. “Most of December’s sales opened escrow in October and November. Rates hit their absolute lowest in October but began edging higher in November, prompting buyers to get off the fence,” she said.
• For more about the California housing market, watch a video of C.A.R. Chief Economist Leslie Appleton-Young as she discusses highlights of the December sales and price report.

Read the full story:
http://www.bizjournals.com/losangeles/news/2011/01/21/california-home-sales-hit-7-month-high.html

In Other News…
CNN Money
Shadow inventory threatens housing recovery
There is a growing glut of foreclosed homes threatening to hit the market over the next couple of years, potentially delaying any recovery.

Read the full story:
http://money.cnn.com/2011/01/20/real_estate/shadow_inventory_rise/index.htm

The New York Times
More transparency for variable-rate loans
Changes to the Truth in Lending Act have helped make loan documents more understandable for many borrowers, but some people with more complicated, fluctuating mortgages may still struggle to grasp all the terms.

Read the full story:
http://www.nytimes.com/2011/01/23/realestate/mortgages/23mort.html?_r=1&ref=your-money

The Washington Post
Housing policy and the gay community
The Dept. of Housing and Urban Development is taking steps to ensure gays and lesbians don’t face discrimination when applying for federal housing assistance.

Read the full story:
http://www.washingtonpost.com/wp-dyn/content/article/2011/01/23/AR2011012303404.html

USA Today
Poll: Hiring plans top layoffs by most in 12 years
Industry economists say the U.S. economic recovery is gaining strength, with more firms expressing positive hiring plans than in over a decade.

Read the full story:
http://www.usatoday.com/money/economy/2011-01-24-nabe-survey_N.htm?loc=interstitialskip

The Washington Post
Federal officials studying how to protect housing market
Federal official took steps last week to attempt to reduce the likelihood of a second financial crisis caused in large part by large declines in the housing market.

Read the full story:
http://online.wsj.com/article/SB10001424052748704482704576071984006994652.html?mod=WSJ_RealEstate_LeftTopNews

The Wall Street Journal
JP Morgan admits wrongful military foreclosures
J.P. Morgan Chase & Co. admitted that it wrongly foreclosed on 14 active-service military families and overcharged thousands more on their mortgages, a continuing internal bank review has found.

Read the full story:
http://online.wsj.com/article/SB10001424052748704678004576090224257754378.html?KEYWORDS=
JP+Morgan+admits+wrongful+military+foreclosures

The New York Times
U.S. housing starts slowed sharply in December
Groundbreaking on new homes fell more than expected in December to its lowest in over a year, suggesting the battered housing sector remained a roadblock to a recovery

Read the full story:
http://www.nytimes.com/2011/01/20/business/economy/20econ.html?ref=economy

DSNews.com
Study finds California mortgage applicants have highest credit scores
California mortgage applicants have the highest average credit scores in the nation, according to a state-by-state study conducted by Mortgage Marvel, a nationwide online mortgage-shopping service. The average credit score in California is 755, a full 20 points higher than the national average.

Read the full story:
http://www.dsnews.com/articles/study-finds-california-mortgage-applicants-have-highest-credit-scores-2011-01-19

What you should know about the market:

• Before you sign on the dotted line for that apartment or home whose great price you just can’t pass up, make sure you’ve figured out how your new location is going to fit into your life. It might just end up costing you more in commute costs as affordable housing moves from the urban cores to the suburbs.
• A new study by the Center for Neighborhood Technology has found that a growing number of communities that are considered affordable aren’t quite so affordable when transportation costs are factored in to the median income.
• Its analysis of 377 metropolitan areas, which includes 161,000 neighborhoods and 80 percent of the U.S. population, found that even though seven out of 10 U.S. communities are considered affordable, that number decreases to two in five — or 39 percent — when transportation costs are included in the mix.
• Housing is considered affordable if it costs less than 30 percent of household income, and the analysis ups that to 45 percent when transportation costs are added in.
• But considering that transportation is the second-largest household expense next to housing, it often costs more than the allotted 15 percent of the budget.
• The Center for Neighborhood Technology actually found that the portion of household income most people spend ranges from 12 percent in walkable communities with sidewalks, nearby stores, and public transportation to 32 percent for those who have no option but to drive long distances to get anywhere.
• When communities have few transportation options and require driving long distances for basic necessities, already stressed household budgets are very vulnerable to spikes in gas prices and rising transportation costs,” said Scott Bernstein, president and founder.

Smart Money
Real Estate: Finally a good investment?
The housing market still looks pretty bleak:  There were a record 1 million foreclosures last year, home prices are still falling in many regions, and the number of “underwater” properties is at a record high.
And things don’t look much better in other areas of real estate. The number of construction jobs continues to decline, even as other parts of the economy have added jobs. And mortgage rates have moved higher as long-term Treasury yields have backed up during the past few months.  Basically, the real estate market remains a mess.
Real estate encompasses a wide range of markets – homes, apartments, hospitals, office buildings, strip malls, dormitories and other properties. But for our purposes, let’s focus on residential real estate, or homes. Here are four reasons to think residential real estate might represent a bargain – with one big caveat.

KEEP THIS IN MIND
• Everyone hates homes – When the housing market is in the doldrums, people tend to avoid thinking about the value of their home. Sellers complain they’re not getting offers and buyers bemoan the strict lending requirements. However, prospective buyers should be contrarian and take advantage of a down housing market.
• Smart people are buying real estate – A prominent hedge-fund manager said in a speech last fall: “If you don’t own a home, buy one. If you own a home, buy another one, and if you own two homes, buy a third and lend your relatives the money to buy a home.” He believes that interest rates and home prices will rise this year, so real estate bargains won’t last much longer.
• Real estate performs well during inflation – Convention says Treasury Inflation Protected Securities, commodities, and real estate do well in an inflationary environment. Real estate performed well during the period in the 1970s, when persistent inflation and high unemployment occurred.
• Demand may be coming back – Job creation and getting people employed are the two major factors in the housing rebound. There’s much debate about when the job market will recovery. Optimists say the recovery will happen this year, while pessimists say it won’t happen for several years.

Read the full story:
http://www.smartmoney.com/personal-finance/real-estate/-1295050347411/

In Other News…
CNN
Existing home sales jump 12 percent
Sales of existing homes jumped in December, marking the fifth month of gains in the past six months, based on an industry report released Thursday.

Read the full story
http://money.cnn.com/2011/01/20/real_estate/existing_home_sales/index.htm

NY Times
When mortgage rate locks expire
As mortgage rates have edged higher, many borrowers have been locking in loan rates for a home purchase or refinancing.

Read the full story
http://www.nytimes.com/2011/01/09/realestate/mortgages/09mort.html?_r=1&ref=realestate

USA Today
2011’s green homes to be cheaper, smarter, tighter
What will be the top 2011 trends in green building? A non-profit research group expects green homes will become increasingly affordable, smart, and energy-efficient — all trends that Green
House agrees are likely.

Read full story:
http://content.usatoday.com/communities/greenhouse/post/2011/01/2011-green-buillding-trends/1

The Wall Street Journal
Market for vacation homes is on the rise
Sales in many vacation communities across the U.S. soared last year to levels not seen since boom times, driven by deep discounts, cash purchases, and buyers’ rising stock portfolios.

Read the full story:
http://online.wsj.com/article/SB10001424052748704482704576071984006994652.html?mod=WSJ_RealEstate_LeftTopNews

USA Today
Credit scores get easier to track down and less secretive
You may be a pillar of your community, admired by your colleagues and beloved by friends and family, but if you have a mediocre credit score, you probably won’t be able to get a decent interest
rate on a car loan, mortgage, or credit card.

Read the full story:
http://www.usatoday.com/money/perfi/columnist/block/2011-01-11-yourmoney11_ST_N.htm\

San Francisco Chronicle
CalHFA mortgage aid program for jobless begins
On Monday, more than two months behind schedule, the California Housing Finance Agency will begin taking applications for a federally funded program that will give some unemployed homeowners up to $18,000 each over six months to pay their mortgage.

Read the full story
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/01/09/BU4N1H5FOR.DTL

Los Angeles Times
Home seizures by banksdecline in state
Fewer Californians grappled with foreclosure last year, bucking a national trend and giving homeowners fresh hope that the state’s housing market could be on the mend.

Read the full story
http://www.latimes.com/business/la-fi-foreclosures-20110113,0,6804237.story

Sacramento Bee
The “Big One” might be a flood
California has more risk of catastrophic storms than any other region in the country – even the Southern hurricane states, according to a new study released Thursday.

Read the full story
http://www.sacbee.com/2011/01/14/3323275/the-big-one-might-be-a-flood.html

CNN Money
1 million homes repossessed in 2011
Foreclosures were at a record high in 2010, and more than 1 million people lost their homes, even as notices started leveling off during the end year.

Read the full story
http://money.cnn.com/2011/01/13/real_estate/foreclosures_2010/index.htm

What you should know about the market:
• Historical data from the National Association of Realtors (and adjusted for inflation by Businessweek.com) show that in 18 of the 25 largest metro areas in the U.S., the value of homes purchased in 1990 had increased by 2010, often by double digits. And this in a year when real estate prices around the country have softened since their peak in 2006. These houses would have been worth even more a few years ago.

• In an analysis of the country’s 25 largest metro areas, Businessweek.com found that the Portland, Ore., area had the largest real price gain since 1990, with the median sale price in this year’s third quarter ($242,100) up about 85 percent over 1990, in inflation-adjusted terms. Home prices in the Denver, Baltimore, and Seattle areas also made gains of more than 50 percent in that period.

• Yet in some other markets where homeownership skyrocketed during the housing boom, inflation-adjusted prices have fallen so dramatically that they are now below 1990 levels. Real prices in the Atlanta metro, for instance, are down about 21 percent compared with 2 years ago, and in Sacramento they are down 19 percent.

• After recovery from the housing bust, home prices are expected to settle into a price-growth trends that’s slightly higher than inflation over the long term. So in that sense, housing is still a long-term investment with a positive yield.

The New York Times
A little-known strategy for cutting mortgage payments Homeowners looking to lower their monthly mortgage payments and reduce their interest rate may be able to do so without refinancing. A little-known strategy called recasting or re-amortization is available through some mortgage lenders and servicers, and eliminates the hefty fees and daunting credit requirements of refinancing.

KEEP THIS IN MIND

• Re-amortization requires borrowers pay off a lump sum of the principal amount on the mortgage and asking to have the monthly payments reset according to the original interest rate and loan terms. The lump sum reduces the principal, so the new monthly payments decrease slightly and interest paid over the life of the loan is reduced.

• Lenders typically charge an administrative fee of $150 or more to re-amortize a mortgage; however, borrowers are not required to pay closing costs or submit to another credit check.

• Re-amortizing works well for homeowners unable to qualify for refinancing, especially those who are self employed or have low poor credit.

• Homeowners consider re-amortizing their mortgage should be aware that some lenders require a minimum amount to be paid toward the principal in the lump sum. JPMorgan Chase, for example, charges a $150 fee and requires a minimum $5,000 payment toward the principal.

• Another challenge is finding a lender, or loan servicer, that offers re-amortizing. JPMorgan Chase and Bank of America exclude loans backed by the Federal Housing Administration and Dept. of Veterans Affairs, and loans that were sold off and securitized may also need investor approval.

Read the full story:
http://www.nytimes.com/2011/01/02/realestate/mortgages/02Mort.html?_r=1&ref=realestate

In Other News…
Los Angeles Times
Foreclosure ruling could be setback for banks The highest court in Massachusetts agreed with a lower court ruling that two home foreclosures were invalid and found that lenders Wells Fargo Bank and US Bank had failed to prove they owned the mortgages.

Read the full story:
http://www.latimes.com/business/la-fi-foreclosure-ruling-20110107,0,7857552.story

The Wall Street Journal
The reverse mortgage gets a makeover A reverse mortgage has long been considered a loan of last resort because of its high fees. Now, a new type of reverse mortgage is attracting the attention of more-affluent borrowers eager to extract cash from their homes. But older homeowners – and adult children who advise them – need to be aware of the new trade-offs.

Read the full story:
http://online.wsj.com/article/SB10001424052748703808704576061703405555630.html?mod=WSJ_RealEstate_LeftTopNews

Yahoo! Finance
Resolutions for home sellers in 2011 If your New Year’s resolution involves selling a home in 2011, you’ve got some work to do: There’s lots of inventory out there and in a buyer’s market, getting an offer on a home can be challenging.

Read the full story:
http://finance.yahoo.com/real-estate/article/111704/resolutions-for-home-sellers-in-2011

San Diego Union-Tribune
Do you have enough homeowner’s insurance? Some homeowners wonder if they should lower their homeowner insurance amounts given the decline in home prices.

Read the full story:
http://www.signonsandiego.com/news/2011/jan/08/intricacies-homeowner-insurance

Los Angeles Times
Water-line insurance could be money down the drain
A study says cities where home prices have fallen the most – including Riverside, San Bernardino, and Fresno – could suffer long-term deterioration similar to that of the Rust Belt.

Read the full story:
http://www.latimes.com/business/la-fi-lazarus-20110104,0,639053.column

The Wall Street Journal
Explaining the (stingier) energy tax credit Homeowners who make energy-efficient improvements to their houses can still get a break from Uncle Sam next year, but the payback will be smaller and there are several catches that could shut out some taxpayers altogether.

Read the full story:
http://blogs.smartmoney.com/tax/2011/01/06/explaining-the-stingier-energy-tax-credit/

Los Angeles Times
Changes are likely for FHA insurance refunds Homeowners who trade in loans insured by the Federal Housing Administration could be in for a big payday, and not just in the form of a lower interest rate and correspondingly lower payments.

Read the full story:
http://www.latimes.com/business/realestate/la-fi-lew-20110109,0,6875521.story

Los Angeles Times
Fannie Mae is jacking up mortgage fees Potential home buyers who have high credit scores and hefty down payments may be surprised that even they are being targeted for higher “risk-based” fees.

Read the full story:
http://www.latimes.com/business/realestate/la-fi-harney-20110109,0,6538732.story

What you should know about the market

• First-time buyers planning to make the shift from renter to homeowner this year should begin preparations as early as possible. Prior to starting the home-buying process, potential buyers should make sure they are ready to buy a home where they will live for three to five years or longer, since it can take that long to build equity in a home and recoup investment costs.

• The first step a home buyer should take in the home-buying process is to check their credit score. Lenders base mortgage qualification on a variety of factors, including income and assets, the borrower’s debt-to-income ratio, pattern of savings, and job stability. However, the most important factor is the credit score. Lenders tie the interest rate the borrower pays to the credit score, so borrowers with a credit score of 720 and sometimes 740 and above are the only ones who will pay the lowest mortgage rates. Borrowers with a credit score below 620 may not qualify for a mortgage at all until they can improve their score.

• A lender tells the borrower how much they can borrow, but each potential homeowner should create a simple budget for themselves with income and spending to determine how much they are willing to spend on housing payments. Financial experts recommend that homeowners spend a maximum of about 30 percent of their gross monthly income on principal, interest, homeowners insurance, and taxes. Included in the budget should be approximately 1 percent of the home price for condo or homeowner association fees and maintenance costs.

Sacramento Bee

California home sales drop in August compared with last year
The median home price of an existing, single-family home in California rose 1.2 percent compared with July and 8.6 percent from a year ago, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported this week. Following two months of consecutive month-over-month declines, California home sales edged up 1.8 percent in August compared with July, but were down 14.9 percent compared with August 2009.

KEEP THIS IN MIND

• According to C.A.R. President Steve Goddard, home buyers who are waiting on the sidelines should consider the opportunities available in today’s market. Favorable home prices and interest rates at or near historic lows make housing affordability the best in recent years. Anyone who is in a position to buy a home should do so before either of these key factors rise.

• The statewide median home price posted its 10th consecutive year-over-year gain in August, according to C.A.R.’s report. The median price of an existing, single-family detached home sold in California during August 2010 was $318,660, an 8.6 percent increase from the revised $293,400 median price recorded in August 2009. The August 2010 median price was up 1.2 percent compared with July’s $314,850 median price.
• C.A.R. Chief Economist Leslie Appleton-Young says California’s housing market is transitioning from the conclusion of the federal home buyer tax credit and that home sales are strongest in the higher-price range. The strength in the upper-end market combined with inventory levels that are higher, but still lean by average, has led to home prices holding steady.

• To hear more from Ms. Appleton-Young, please visit
http://videos.car.org/mediavault.html?menuID=1&flvID=10.

Read the full story:
http://www.sacbee.com/2010/09/22/3048464/california-home-sales-drop-in.html

In Other News…

Los Angeles Times

Debate might give new life to mortgage cramdown legislation If there is a term that strikes fear in the hearts residential lenders everywhere, it is “cramdown.” Lenders dread the judicial procedure that erases a portion of a borrower’s mortgage because the house, which is the underlying security or collateral for the loan, is worth less than what is owed on it.

Read the full story:
http://www.latimes.com/business/realestate/la-fi-lew-20100919,0,251792.story

Bloomberg

U.S. home prices fell 3.3 percent in July from year earlier
U.S. home prices dropped 3.3 percent in July from a year earlier, the eighth consecutive decline, as foreclosed properties flooded the market.

Read the full story:
http://www.bloomberg.com/news/2010-09-22/home-prices-in-u-s-fell-3-3-in-july-from-year-earlier-fhfa-index-shows.html

The Wall Street Journal

Refinancing: Who can you trust? With mortgage rates falling to record lows this summer and the housing market showing signs of a pulse, refinancing activity is perking up. It’s too bad that so many people are relying on oversimplified advice and bad numbers to decide when to pull the trigger.

Read the full story:

http://online.wsj.com/article/SB10001424052748704652104575494190518195172.html?mod=WSJ_RealEstate_LeftTopNews

Los Angeles Times
FHA may slash upfront costs of some reverse mortgages The Federal Housing Administration isn’t talking publicly about it, but the agency may be getting ready to cut the upfront costs of reverse mortgages for some borrowers.

Read the full story:
http://www.latimes.com/business/realestate/la-fi-reverse-mort-20100919,0,5678747.story

CNN

A housing rebound? Yes, it’s possible Despite continued discouraging data from the real estate sector, a few bullish arguments are beginning to emerge. One MIT economist even believes that demand for new homes exceeds residential construction.

Read the full story:
http://finance.fortune.cnn.com/2010/09/17/a-housing-rebound-yes-its-possible/

San Diego Union-Tribune

Most oppose walking away from mortgage A majority of Americans believe it is “unacceptable” for homeowners to stop paying mortgage payments and walk away from their homes, says a Pew Research Center survey.

Read the full story:
http://www.signonsandiego.com/news/2010/sep/15/most-oppose-walking-away-mortgage/

Los Angeles Times
Shorter-term mortgages make sense for some people, not for others
Loans that must be paid off in 15 or 20 years instead of the standard 30 have benefits, but there may be better ways to invest your cash.

Read the full story:
http://www.latimes.com/business/la-fi-perfin-20100919,0,2494709.column

CNN

Foreclosure rates hold steady
The foreclosure crisis has entered a new phase: The number of properties entering the foreclosure process has dropped, and now nearly matches the number of repossessions.

Read the full story:
http://money.cnn.com/2010/09/16/real_estate/steady_foreclosure_rates/index.htm?hpt=T2

What you should know about the market

• Some homeowners may attempt to make home improvements on their own, without the proper permits and/or skill set. When it comes time to sell the house, buyers likely will use that to their advantage when negotiating. To avoid this, many real estate professionals advise homeowners to hire licensed contractors and to do due diligence to ensure the proper permits have been approved by the city, county, or others who may need to approve the project.

• When it comes time to hire a licensed contractor, homeowners may opt to search online. Sites that are driven by consumer ratings often will be the best bet because consumers can see what other homeowners say about the contractor and his/her quality of work. However, consumers should beware of sites with anonymous postings and advertisements that appear in search results that look like positive ratings.

Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®

For the second time in three years, Prudential achieves distinction among full service real estate firms Prudential Real Estate ranks highest among home sellers that use full service real estate firms according to the J.D. Power and Associates 2010 Home Buyer/Seller Satisfaction StudySM. This is the second time in the past three years that Prudential has been recognized with this important distinction—most recently in 2008. In addition to ranking highest overall among home sellers, Prudential also achieves the highest scores in the study for the Agent/Salesperson factor and Real Estate Company Marketing factors.

Beware

BEWARE: Foreclosure Rescue Scams

Bailout Package

Lloyd Blankfein CEO – Goldman Sacs

2008 Compensation
$54 Million
Goldman Sacs Govt.
Bailout: $10 Billion

John Thain CEO – Merrill Lynch

2008 Compensation
$83 Million
Merrill Lynch Govt.

Bailout: $10 Billion

This information is from their SECC filings – disclosing all their perks, golf memberships etc..

Apparently John Thain only worked for 1/2 a year with a signing bonus of $15 million who gave up his bonuses for huge stock options. Goldman Sacs says they will give up their bonuses but how much of this will be a token because most of what they have been saying is that they need some of this money to retain Talent & that they cannot bring in the Executives they need if they cannot offer them high salaries. Aren’t these the guys that created the mess we are ?????????

SIX FINANCIAL COMPANIES THAT GOT $270 BILLION STILL OWN CORPORATE JETS.

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