Record Drop in January Index of Home Prices
The New York Times

The decline in housing prices maintained its record-breaking descent in January, according to data released Tuesday.

Standard & Poor’s Case-Shiller Home Price Index, a widely watched measure of 20 metropolitan areas, fell 19 percent in January from January 2008. That was slightly faster than it dropped in December.

In the Exurbs, the American Dream Is Up for Rent
The Wall Street Journal

PLANO, Ill. — Kim and Robert Discianno had the American dream. Now, they rent a few streets away.

The Disciannos moved from Aurora, Ill., to their home here in Plano three years ago, lured to the outermost fringes of suburbs, known as the exurbs, by the promise of owning their first home. Today, their credit is shot and they no longer own, but Ms. Discianno still has a four-hour commute.

What Might Be Hurting Home Values
The Washington Post

Are low-balled value estimates on short sales and bank-owned foreclosures artificially depressing property values in neighborhoods across the country?

Growing numbers of appraisers and consumer groups think the answer is yes ¿ and are demanding that Congress or state regulators crack down. Their complaints focus on what are called "broker price opinions," or BPOs, which substitute for appraisals.

Dramatic increase in prime-loan foreclosures
Inman News

Foreclosure starts and foreclosure sales of homes purchased with prime loans increased dramatically from January to February, and the percentage of homes completing the foreclosure process approached highs not seen since last summer.

The latest report from mortgage servicers participating in the lending industry's HOPE NOW alliance shows that despite continued strides in helping subprime borrowers avoid foreclosure, foreclosures and foreclosure sales among prime borrowers continue to climb.

California housing may have a new foundation
Los Angeles Times

Other than perhaps McDonald's hamburgers, what is selling better today than it did a year ago? Resale homes in California.

Sales in the last six months have gone up 89% compared with sales for the same period a year ago, according to the California Assn. of Realtors. Despite a worsening economy and a media and government afflicted with a bad-news disorder, something strange is happening in the California housing market. There is strong evidence that basic economics is addressing the housing meltdown in a direct manner, which might set the stage for stability and give a hint as to what policies work best.

Program could help thaw out mortgage lending
Detroit Free Press

In a nation still struggling to break the grip of a credit crisis, no local housing market is more hamstrung by the lack of mortgage financing than the city of Detroit.

Oh, some banks will tell you they're making mortgage loans in Detroit. But read the fine print and you'll find that down payments of 30% or more are needed, even for borrowers with impeccable credit history.

Study: Land trusts lead to lower foreclosure rates
citizen.com

A recent survey conducted by the National Community Land Trust Network and the Lincoln Institute of Land Policy, based in Cambridge, Mass., revealed that foreclosure rates are lower among community land trust homeowners than the average owner of market-rate houses.

According to the survey, at the end of last year homeowners in community land trusts had a foreclosure rate of 0.52 compared to the overall national rate of 1.08.

Those who rent foreclosed property in US at risk of losing everything
Propertywire.com

More and more tenants in the US are returning home to find their property locked and their possessions in bags outside as landlords default on their mortgages.
Renters of foreclosed properties are now amongst the most at risk of homelessness but their plight is virtually unknown, according to a new report.

Lennar Lowers Mortgage Rate To 3.625%
CNNMoney.com

NEW YORK — A mortgage-rate war among home builders continues, this time with Lennar Corp. (LEN) offering a fixed rate of 3.625% "for life," which it says is its lowest ever.
The nation's largest builder by revenue is offering the special "on select homes." Closings must occur by April 30, and the loan amount can't exceed $417, 000, according to the terms listed on its Web site. The minimum credit score is 700.

Banks Starting to Walk Away on Foreclosures
The New York Times

SOUTH BEND, Ind. — Mercy James thought she had lost her rental property here to foreclosure. A date for a sheriff’s sale had been set, and notices about the foreclosure process were piling up in her mailbox.

Ms. James had the tenants move out, and soon her white house at the corner of Thomas and Maple Streets fell into the hands of looters and vandals, and then, into disrepair. Dejected and broke, Ms. James said she salvaged but a lesson from her loss.

Greening Foreclosures: Buy a Home in Detroit for $40
Red Green and Blue

Along with the rest of the country suffering from the mortgage crisis, Detroit has seen more than its fair share of foreclosures. Coupled with a failing American auto industry, the Motor City has been hit hard by the current recession. The national rate for home foreclosures is one in 300, yet Detroit has the highest home foreclosure rate in the country. Since 2000, Detroit has lost over 150,000 jobs to downsizing in the auto parts and auto industry. Michigan also has the highest percentage of subprime mortgages in the US, and the state suffers from the highest unemployment rate in the union.

So how much does a foreclosed home in Detroit cost? Two weeks ago, you could buy a home for $1 in the city. Today the lowest price I could find was $40.

Mortgage fraud reports jump 26% amid clampdown
San Francisco Chronicle

The mortgage industry, applying much more scrutiny after a tidal wave of defaults, reported a record number of mortgage fraud incidents last year, with Rhode Island making its first appearance as the nation's top fraud hot spot.

The number of mortgage fraud reports among loans made last year grew 26 percent from a year earlier, according to a study released last week by the Mortgage Asset Research Institute.

New Task Seen for Fannie, Freddie
The Wall Street Journal

The regulator of Fannie Mae and Freddie Mac is considering giving the government-backed mortgage companies another role: helping to finance small mortgage banks.

A spokeswoman for the regulator, the Federal Housing Finance Agency, said it is looking at ways that the two companies might help revive the market for so-called warehouse loans, which are loans made to mortgage banks. This possible role for Fannie and Freddie is the latest sign of how they are being used increasingly as instruments of government policy rather than corporations focused on shareholder returns.

Mortgage Defaults, Delinquencies Rise
The Wall Street Journal

Defaults on home mortgages insured by the Federal Housing Administration in February increased from a year earlier.

A spokesman for the FHA said 7.5% of FHA loans were "seriously delinquent" at the end of February, up from 6.2% a year earlier. Seriously delinquent includes loans that are 90 days or more overdue, in the foreclosure process or in bankruptcy.

California Home Prices Decline 41 Percent on Foreclosures
Bloomberg News

California home prices dropped 41 percent last month from a year earlier, more than double the U.S. decline, as surging foreclosures drove down values, the California Association of Realtors said today. The median price for an existing, single-family detached home in California sank to $247,590 in February from $418,260 a year earlier the Los Angeles-based group said in a statement.

GOP Plan Aims to Expand Home Buyer Tax Credits
Washington Post

House Republican leaders plan to unveil a housing package today that would increase the tax credits available for home buyers and would direct law enforcement to crack down on mortgage fraud.  Under the proposal, borrowers refinancing their mortgage would be eligible for $5,000 to help cover closing costs or to reduce their principal balance. The plan also revives a $15,000 home buyer tax credit proposal that Republicans pushed last year. This time, the proposal would require the borrower to have at least a 5 percent down payment. Both programs would expire in July 2010.

VOWs: MLS for the People
Inman News

Whether you are new to real estate or a seasoned veteran, you must be aware that consumers are using the Internet as the cornerstone in finding a home to buy. Year after year the influence of the Internet is measured by many -- including the "2008 National Association of Realtors Profile of Home Buyers and Sellers" study, which reports:

• 87 percent claim that they used the Internet as an information source (86 percent of repeat buyers, 89 percent of first-time buyers).

• 81 percent found the Internet as a useful source of information.

• 33 percent started their home search by looking online for properties for sale (38 percent of repeat buyers, 27 percent of first-time buyers).

Treasury Plan to Deal With Toxic Assets Banks on Private Cash
Wall Street Journal

Noting that the U.S. financial system "is still working against economic recovery," the Treasury Department Monday revealed details of its plan to address toxic assets weighing on banks' balance sheets.

My Plan for Bad Bank Assets
Wall Street Journal

The American economy and much of the world now face extraordinary challenges, and confronting these challenges will continue to require extraordinary actions. No crisis like this has a simple or single cause, but as a nation we borrowed too much and let our financial system take on irresponsible levels of risk. Those decisions have caused enormous suffering, and much of the damage has fallen on ordinary Americans and small-business owners who were careful and responsible. This is fundamentally unfair, and Americans are justifiably angry and frustrated.

Existing-Home Sales Rebound, but Prices Plunge
Wall Street Journal

Existing-home sales rebounded in February, climbing above expectations, but prices plunged again. Home resales climbed to a 4.72 million annual rate, a 5.1% increase from January's unrevised 4.49 million annual pace, the National Association of Realtors said Monday.

Local Realty Executive to Direct FHA
Washington Post

David H. Stevens, president of Long & Foster, the Washington real estate firm, is expected to be selected today to run the Federal Housing Administration.

Stevens, 52, became president and chief operating officer of Long & Foster in October. The company, which recently moved to Chantilly from Fairfax, is the nation's largest privately owned real estate firm.

The Decade for Global Banks
Financial Times

Global banking is in turmoil. The worst financial crisis since the second world war has not only forced governments across the western world to step in and rescue giant institutions. Amid the turmoil, there has also been a dramatic shift in banking’s centre of gravity. A decade ago, a list of the world’s largest financial institutions was dominated by banks from the US and UK. Today, just a handful of the top 20 have their headquarters in the US, still the world’s largest economy.

Fed Stays the Course in Light of Continued Contraction

The Federal Open Market Committee cited continued job losses, declining equity and housing wealth, along with tight credit conditions as its justification for keeping its federal funds rate at the current target range of zero to 0.25 percent.

The FFR is the interest rate at which banks borrow money from each other overnight in order to maintain proper capitalization. While it does not directly effect mortgage rates, it is an important indicator of consumer confidence since it does have an effect on credit card rates and auto loans, among other things.

Headed by embattled chairman Ben Bernanke, who in recent months has probably spent about as much time testifying before congressional committees as he has in his office, the Committee in its official statement admitted that it “anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.”

Concerned over the potential for persisting inflation in the near term, the Committee also announced a new round of purchases of various financial vehicles to prop up the nation’s mortgage lending and housing markets — including up to $1.25 trillion in mortgage-backed securities.

In a 60 Minutes interview which aired last Sunday, Bernanke forecasted that the recession would end later this year, with a slow recovery beginning in 2010. How soon and how much this will affect the nation’s most distressed housing markets is still open for debate.

The FOMC is trying everything in its arsenal to stimulate the housing markets. But is it going to be enough? In the meantime, the market for foreclosure properties is continuing to heat up as more investors and potential homebuyers come out of the woodwork to purchase property at discounted prices in many of the worst hurt markets.