Real Estate News

What's happening on the Real Estate front. News from around the nation, we could have focused on the Green Valley and Sahuarita Arizona news. But, we felt a more rounded picture was far more accurate.

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As lenders tighten their underwriting guidelines, borrowers are wise to raise their credit scores to qualify for loans, secure better loan terms, and receive lower interest rates.

"Individuals can positively affect their credit scores in as little as three weeks," says Edward Jamison, a Los Angeles-based credit attorney. "It's just a matter of getting educated and focused on the best, fastest, and most reliable course of action."

Jamison, who you may know as a credit expert on the NBC show, “Starting Over,” offers these six tips for improving credit strength quickly.

1. Know your limits. Borrowers should first check their credit limits and evenly distribute the balances they're carrying to help increase their credit scores, or better yet, pay them off in full to get the highest score increase. "Make sure your maximum limit is reported," Jamison says. "When no limit is reported, credit scoring software presumes the account is maxed out."

2. Bring the balances near zero. The credit scoring software scores more favorably to those with a closer balance to zero. Balances over 70 percent damage credit the most, followed by the next tier of 50 percent and then 30 percent of the maximum credit limit. "Rather than carrying a large balance in an unfavorable tier, redistribute outstanding balances over several credit cards," advises Jamison.

3. Don’t cancel your cards. "Closing credit card accounts can hurt your score unless the accounts were opened less than two years ago, and you have over six credit cards," Jamison says. Fair Isaac's credit scoring software assumes that people who have had credit for a longer time are at less risk of defaulting on payments.

4. Eliminate late payments (but ask nice). Get rid of late payments listed on the credit report. "Contact the creditors that report late payments and request a good faith adjustment that removes the late payments reported on your account," Jamison says. The creditor may work with you, but it may require more than one phone call; patience is required. Your odds of success will dwindle if you're rude or unclear about your request, he adds.

5. Get rid of collection accounts. But only if the collection agency agrees to delete them in return. Paying them off can otherwise actually lead to a decreased credit score due to the date of last activity getting updated to the current date when you pay. The consumer should contact the collector and request a letter explicitly stating the agreement to delete the account upon receipt or clearance of the payment, Jamison says. Not all collection agencies will delete reporting, but it's certainly worth the effort.

6. Pay off past due amounts on accounts that are not in charge-off status. After that, Jamison advises getting rid of charge-offs and liens that are less than two years old. "Charge-offs and liens that are older than 24 months do not affect your credit score nearly as much as ones under 24 months," says Jamison. "But if they're newer than 24 months, they can seriously damage your credit." If you have both charge-offs and collection accounts, but have limited funds, pay off the past due balances first, then pay collection accounts as long as the collectors agree to remove all references to credit bureaus.

— REALTOR® Magazine Online

July 9, 2007 Real Estate News "Proposed Bill Would Create Affordable Housing Fund"

A bill introduced Thursday on Capitol Hill will help address the growing crisis in housing affordability by providing additional resources for the building, rehabilitation, and preservation of affordable homes and rental units, according to the NATIONAL ASSOCIATION OF REALTORS®. The bill would devote up to $1 billion a year toward affordable housing opportunities over the next 10 years.

“Homeownership serves as a cornerstone of our democratic system of government and continues to be a strong personal and social priority for most Americans,” NAR President Pat V. Combs wrote in a letter to Congressman Barney Frank (D-Mass.), chairman of the House Financial Services Committee. "REALTORS® recognize that accessibility to safe, decent and affordable housing at all levels — rental or ownership — must be one of our nation’s highest priorities."

The bill would make funds available for rental housing and down payment and closing cost assistance for first-time home buyers. “Sadly, the stock of affordable rental units is rapidly declining and the difficulty of finding affordable homes to buy is increasing," Combs said. "This fund can have an immediate impact for many families."

— REALTOR® Magazine Online

July 9, 2007 Real Estate News "7 Tips for Foreclosure Property Investing"

With foreclosures rising nationwide, prices falling, and inventories swelling to historic levels, investors with a discerning eye and knowledge of the foreclosure process can build a profitable portfolio of distressed properties, says James Saccacio, CEO of RealtyTrac, which tracks foreclosure data.

Saccacio offers this basic advice to foreclosure investors:

* Know your market. The most important tool in your real estate investing toolbox is knowledge of the area where you plan to invest.

* Develop an appropriate investment strategy. Find an investment strategy that will work in your market, and then do what it takes to implement that strategy.

* Make the foreclosure process work for you. Decide what foreclosure buying technique works best with your investment strategy and your strengths as a person.

* Scrutinize each deal. Many real estate investors wrongly assume that if a home is in foreclosure it's a good deal.

* Rely on a trustworthy team. You'll be in over your head if you try to do all the work involved in foreclosure investing on your own.

* Network with banks and lenders. In a slow real estate market, banks and other lenders are saddled with larger inventories of foreclosed properties and will be more motivated to sell those properties at bargain prices.

* Act quickly, but don't be in a hurry. A slow real estate market gives you the upper hand as a buyer, but you'll still need to act quickly to get the best deals.

June 26, 2007 Real Estate News "When Contingencies Halt Negotiations"

When Contingencies Halt Negotiations With the amount of time that homes are sitting on the market climbing, more practitioners are facing real estate deals that are contingent on the buyer selling a current residence. But before accepting a contract contingency, Apple Valley, Minn.-based REALTOR® Steve Fiorella urges sellers to determine whether the buyer "is marketing their home aggressively and pricing it accurately."

Buyers might want to indicate their commitment to the purchase by reducing the price of their existing home to ensure a speedier sale, Fiorella says.

However, real estate practitioner Faith McGown says buyers would be in a better position if they sell their current residence prior to making an offer. McGown suggests that those who need a contingency might want to make a full-price offer to compensate for having a contingency. Fiorella recommends they offer more earnest money — some of it nonrefundable.

Source: Lakeland Ledger (Fla.), Aimee Blanchette (06/23/07)

June 15, 2007 Real Estate News "More ARM Borrowers Switch to Fixed-Rate Loans"

The most recent U.S. Mortgage Payment Index from the University of Pennsylvania's Wharton School indicates that stricter underwriting guidelines are helping the mortgage market correct itself, says Wharton real estate and finance professor Susan Wachter.

According to Wachter, prime loans accounted for over 60 percent loans sold through brokers in January, reflecting a gain from 50 percent the prior year.

Additionally, 89 percent of borrowers with one-year adjustable-rate mortgages and 84 percent with hybrid ARMs refinanced into fixed-rate products during the first quarter, up 4 percent and 8 percent, respectively, from a year ago.

Wachter also reports a month-to-month gain of 55 percent in applications for private mortgage insurance in March, noting that such coverage is now less expensive than taking on a piggyback loan to cover the down payment.

Source: Inman News (06/14/07)

June 15, 2007 Real Estate News "Foreclosures Hit 37-Year High"

More home owners entered the foreclosure process during the first three months of 2007 than during the record-setting final quarter of 2006, according to a report by the Mortgage Bankers Association.

The MBA’s Chief Economist Doug Duncan predicts that delinquencies would continue to rise, peaking later this year. He also points out that the rate would have fallen if it weren’t for substantial increases in seven states.

"The percentage of loans in foreclosure would be well below the average of the last 10 years were it not for Ohio, Michigan, and Indiana," Duncan says. "And the rate of foreclosures started nationwide would have fallen were it not for the big jumps in California, Florida, Nevada, and Arizona. Those states have special circumstances that do not reflect what is happening in the rest of the country."

Seasonally adjusted, 0.58 percent of loans entered the foreclosure process last quarter, compared with 0.54 percent in the fourth quarter of 2006 and 0.41 percent in last year's first quarter. The rates for the past two quarters are the highest in the survey's 37-year history.

— REALTOR® Magazine Online and The Wall Street Journal, Damian Paletta and James R. Hagerty (06/15/07)

June 14, 2007 Real Estate News "Ariz.: Law Change Makes Mortgage Fraud a Felony"

The Arizona legislature has voted to make mortgage fraud a felony, punishable by up to three years in prison for a first offense, with tougher penalties if there is evidence of a larger conspiracy.

The law is in response to the cash-back schemes described by state regulators in which buyers used inflated appraisals to obtain mortgages for more than homes are worth, splitting the resulting cash among real estate practitioners, appraisers, and mortgage brokers.

Felicia Rotellini, superintendent of the Department of Financial Institutions and head of a mortgage fraud task force of state and federal agencies, applauded passage of the law. "When mortgage fraud is clear, and the penalties are evident, the fraudsters will accept a plea bargain much more readily. This is because the facts themselves will prove the case," Rotellini says.

Georgia, Nevada, and Colorado have similar laws on the books.

Source: The Associated Press, Paul Davenport (06/11/2007)

June 13, 2007 Real Estate News "Foreclosures Climb Dramatically in May"

Foreclosures rose 90 percent in May, compared with the same month a year ago, according to data from RealtyTrac released Tuesday.

May foreclosures — a sum of default notices, auction sale notices, and bank repossessions — totaled 176,137, up 19 percent from April, the analytical firm reported in its May 2007 U.S. Foreclosure Market Report.

RealtyTrac calculated that there was a national foreclosure rate of one foreclosure filing for every 656 U.S. households during May.

The 10 states with the highest percentage of foreclosures, according to the report, are:

1. Nevada 2. Colorado 3. California 4. Florida 5. Ohio 6. Arizona 7. Georgia 8. Michigan 9. Indiana 10. Connecticut

Source: Reuters News, Julie Haviv (06/12/07)

June 8, 2007 Real Estate News "Housing Bounces Back: Here are the Signs"

Several factors suggest that housing is looking better, after a year when a slump has had a hold on not only housing but also economic growth in general.

Here are some of the signs that things are starting to look up:

* Sales of new homes soared 16.2 percent in April, the largest monthly gain in 14 years, reaching an annual rate of 981,000.

* Total single-family sales — both new and existing — during the first four months of the year have averaged 5.5 million, about the same pace as in the final four months of last year.

* Through May 25, the four-week average of applications for new mortgages was at its highest level since early 2006, according to data from the Mortgage Bankers Association.

To put the decline into perspective, nationwide home prices are up 29.2 percent over the past three years and 64.3 percent over the past five years. That should be enough to comfort consumers who might be worried about the value of their homes, say Business Week Magazine analysts,.

Source: Business Week, James C. Cooper (06/11/07)

May 24, 2007 Real Estate News "Rates Rise, but so do Mortgage Applications"

Despite rising interest rates, more people applied for mortgages last week, pushing the Mortgage Bankers Association Market Composite Index up 1.6 percent to 686.2 on a seasonally adjusted basis compared with the previous week.

On an unadjusted basis, the index increased 23 percent compared with the same week one year ago.

The refinance share of mortgage activity increased to 42.3 percent of total applications, up from 42.1 the previous week.

The average interest rate for 30-year fixed-rate mortgages increased to 6.23 percent from 6.13 percent. The average interest rate for 15-year fixed-rate mortgages increased to 5.96 percent from 5.81 percent. The average interest rate for a one-year ARM increased to 5.72 percent from 5.61 percent.

—REALTOR® Magazine Online


May 21, 2007 Real Estate News "Tax Credits Can Boost Housing Affordability"

Housing costs in many areas have continued to rise, making it increasingly difficult for many people to live near where they work, said Mike Szymanski, legislative aide to U.S. Sen. Hillary Rodham Clinton (D-N.Y.), during the NATIONAL ASSOCIATION OF REALTORS® Midyear Legislative Meetings & Trade Expo.

Syzmanski talked to attendees about the benefits of expanding employer-assisted housing initiatives across the nation and the Housing America’s Workforce Act, which addresses the lack of affordable housing opportunities for private sector workers by promoting EAH programs. NAR supported a similar bill introduced into Congress in June 2005; however, the bill never became law.

Aiming for EAH Tax Relief

Since 2003, NAR has sought enactment of an income tax credit or similar tax incentive for developing entry level and affordable housing. NAR also supports an incentive for employers to provide a down payment assistance fringe benefit to their employees and to assure that employees will not be taxed on any cash or loan forgiveness benefit provided to them.

The bill was recently reintroduced by Clinton and U.S. Rep. Nydia Velazquez (D-N.Y.) in both chambers of Congress. The bill would provide tax relief to working individuals by allowing them to exclude funds from EAH programs from their taxable income. Current law requires employees to include any housing assistance they receive from an employer as taxable income.

The legislation would also encourage businesses to offer EAH programs to their workers by creating an employer tax credit for qualified programs. Finally, the bill would establish a grant program available to nonprofit housing organizations to provide technical assistance, program administration and education to support employers undertaking EAH programs.

“Developing successful EAH programs can help employers reduce turnover, which helps lower training and hiring costs, increase employee morale, support bottom line business goals, and enhance the economic stability of the local community,” NAR President Pat V. Combs said.

What You Can Do

To help create more affordable housing opportunities for workers through EAH programs, NAR’s Housing Opportunity Program launched “Home from Work” in 2006. The program provides training and tools to get more information on working with local businesses to develop EAH benefits for their employees.

The benefits can include homebuying workshops, one-on-one housing counseling offered by a REALTOR® or in partnership with a nonprofit homeownership counseling organization, or an EAH financial incentive. NAR also provides employers with a free technical assistance toolkit to help develop a customized EAH plan for their workers.

— REALTOR® Magazine Online

May 18, 2007 Real Estate News "Appraisers Feel More Pressure to Boost Values"

WASHINGTON – Appraisers say they're feeling a lot more pressure in recent years to boost their estimates of residential property values for loan approvals, according to a just-released survey.

Valuation pressure primarily comes from mortgage brokers, according to respondents to the 2007 National Appraisal Survey, conducted by market information provider October Research Corp. for Forsythe Appraisals LLC in St. Paul, Minn.

Pressure from Lenders

Seventy-one percent of appraisers said mortgage brokers applied pressure in 2007, up from 60 percent who said that in 2003. Increasingly, real estate practitioners are also applying pressure, with 56 percent of respondents citing such pressure, up from 47 percent four years ago, the survey shows.

In addition, 75 percent of those appraisers say if they refused to modify a property valuation, they were subjected to negative ramifications. Sixty-eight percent said they lost the client as a result; 45 percent said they didn’t get paid.

Forsythe Senior Vice President Alan Hummel cautioned that the increase in pressure reported in the survey doesn’t mean that more appraisers are actually succumbing to pressure. He spoke to the NATIONAL ASSOCIATION OF REALTORS® Appraisal Committee at the REALTORS® Midyear Legislative Meetings & Trade Expo this week.

Legislation to Improve Appraisal Environment

Several bills are in the works to shore up appraiser independence, including the Fair Appraisal Act (HR 1723). NAR's Appraisal Committee voted to establish a position on an aspect of the bill that would establish a blind draw selection system for FHA appraisers.

The vote — opposing the blind draw motion — hinged on whether the value of the draw to potentially distribute appraisal work more equitably outweighed the possibility that it would lengthen the FHA loan process, discount the value of legitimate strong lender-appraiser relationships, and grant work to appraisers unfamiliar with local market trends.

Several committee members noted there are vastly different levels of experience and competency among appraisers, so a blind draw could unfairly disregard appropriately qualified appraisers.

H.R. 1723 also would increase fines on those who would improperly influence appraisers in FHA transactions. The legislation could be added to a larger FHA reform bill scheduled to be considered in early summer by the House Financial Services committee; then it would be taken up on the House floor.

— By Christina Hoffmann Spira for REALTOR® Magazine Online

May 16, 2007 Real Estate News "How to Help Clients Avoid Foreclosure"

The NATIONAL ASSOCIATION OF REALTORS®, in a partnership with the Center for Responsible Lending and NeighborWorks America, introduced a new brochure today at NAR’s 2007 Midyear Legislative Meetings & Trade Expo. "Learn How to Avoid Foreclosure and Keep Your Home" is the fifth mortgage-related brochure in NAR’s consumer education series.

CRL estimates that 2.2 million American households have lost or will lose their homes as monthly payments rise on high-risk mortgages in the next few years. Nontraditional and other new types of mortgages that opened doors to homeownership or refinancing just a few years ago might soon be showing some borrowers the door, as interest rates reset, payments adjust, and monthly payments become unaffordable for families at greatest risk.

“Foreclosures threaten the very communities that REALTORS® work to build,” says NAR President Pat V. Combs. “REALTORS® care as much about keeping families in their homes as we do about helping them find the home of their dreams, which is why NAR has partnered with the Center for Responsible Lending and NeighborWorks America to give our members tools to help clients and customers at risk and educate home owners about their options if they’re facing foreclosure.”

Why Foreclosures Have Jumped

In recent years, people with imperfect credit or minimal cash reserves who may have previously been unable to qualify for a mortgage were able to become home owners because lenders began offering new types of mortgage products in the subprime market. Many of these new mortgages kept initial payments down by offering a very low “teaser rate,” interest-only period, or the option to pay varying amounts each month. When the initial period ends, the monthly payment increases, often by a significant amount.

Compounding the problem, subprime borrowers are often the people least able to afford these large increases, given their limited cash flow and past credit problems.

“We estimate that families will lose as much as $164 billion in home equity due to foreclosures in the subprime mortgage market,” says Mike Calhoun, president of the Center for Responsible Lending. “Government agencies, lenders, nonprofit organizations, REALTORS® and home owners must all work together to minimize foreclosures and foster responsible lending practices to help ensure the stability of these families, their communities, and the entire mortgage financing system.”

Avoiding Foreclosure

The new brochure illustrates examples of mortgages that can put certain borrowers in danger, cautions consumers about predatory lending practices, identifies housing counseling organizations and other resources, and suggests steps home owners should take as soon as they think they might not be able to make a monthly mortgage payment.

Home owners in this situation may have more options than they know, including:

* Forbearance. Lenders may let a borrower pay less than the full amount of the mortgage, or skip a few payments, if there is a reasonable plan to become current on the loan.

* Reinstatement. A home owner may be able to make a payment that covers all of the previous late payments, usually at the end of a forbearance period.

* Repayment plan. Lenders may allow a borrower who has fallen behind to make additional payments each month until the amount past due is paid.

* Loan modification. Lenders will sometimes change the terms of a mortgage to help home owners avoid foreclosure.

“This is an issue that affects individual families as well as entire communities,” says NeighborWorks America CEO Ken Wade. “We share NAR’s concern and are committed to reaching out to consumers through our 50-state network of organizations, working one-on-one with borrowers, and continuing to develop long-term solutions that not only help people to become homeowners, but also ensure that they can afford to keep their homes.”



May 14, 2007 Real Estate News "Solar Companies Aim for Curb Appeal"

Solar companies PowerLight, BP Solar, and Dow Chemical are working to make solar installations more attractive in the hopes that more builders and buyers will embrace them. They want to make their power generating solar panels more invisible on exterior walls, rooftops, and window treatments of buildings.

"There are certain customers who ... won't buy [solar] because of aesthetics," says Geoffrey Slevin, director of marketing for BP Solar. BPSolar just launched EnergyTime, a roofing tile embedded with solar technology and designed to mimic and replace concrete roof tiles that are seen on many California homes.

PowerLight Corp., a subsidiary of solar manufacturer SunPower, sells SunTiles. These tiles can be laid out in one area on a roof and slide into place next to the regular roof tiles they are designed to imitate.

The Dow Chemical Co. wants to expand the market beyond tile roofs. The company is working with its building solutions unit to integrate solar technology into other roofing materials and exterior building supplies such as siding. It expects to have a line of products available for sale within five years.

Solar power generated in the U.S. amounts to roughly one-thirtieth of 1 percent of all the electricity produced in the U.S.

Source: Dow Jones & Co., Stephanie I. Cohen (05/14/07)

May 11, 2007 Real Estate News "Are Sales Incentives Skewing the Numbers?"

Subsidies and incentives that get a sale closed are increasingly popular in both the new and the existing home market — so popular that some economists are concerned that they are skewing the home price data.

There are no national numbers available, but in the Washington, D.C., area deals with some form of seller subsidy jumped from 35 percent to 58 percent in two years, according to Lisa Fowler, a researcher at George Mason University's Center for Regional Analysis. The average home sold there for $470,000 in April, with a subsidy of $9,700.

Fowler found that prices in Washington, D.C., fell by 0.2 percent over the past year if incentives were included, compared with a 0.7 percent rise if they weren't.

Lenders are also concerned that the most aggressive deals could be fraudulent. "These days you cannot get into a home unless you're putting some money down, at least 10 percent for those with less-than-stellar credit," says Frank McKenna, chief fraud strategist at BasePoint Analytics, which analyzes mortgage data. "If borrowers are subverting that by getting cash back from sellers, that's when lenders consider it a misrepresentation, or fraud."

Source: BusinessWeek Online, Christopher Palmeri (05/10/07)

May 11, 2007 Real Estate News "Most Affordable Suburbs in the West"

The desire to live in the American West has driven home owners for nearly two centuries, but the cost – no matter how you measure it – has always been a deterrent.

But there are still some great Westward spots where crime is low, schools are good, jobs are ample, commutes are short, and costs aren't out of reach. Sound too good to be true? It's not.

BusinessWeek Online took a look at these areas in the latest installment of its weekly series, "America's Best Affordable Suburbs." Here’s the top 10 list along with their median home prices and location:

* Anchorage, Alaska, $550,000 * Bellingham, Wash., 78 miles from Seattle, $359,500 * Castle Rock, Colo., 28 miles from Denver, $240,000 * Eagle, Idaho, 9.3 miles from Boise, $569,900 * Eugene, Ore., 106 miles from Portland, $429,000 * Folsom, Calif., 22.8 miles from Sacramento, $551,600 * Fort Collins, Colo., 58.1 miles from Denver, $245,500 * Grants Pass, Ore. 218.5 miles from Portland, $310,000 * Kaysville, Utah, 20 miles from Salt Lake City, $442,900 * Logan, Utah, 69 miles from Salt Lake City, $183,500

Source: BusinessWeek Online (May 9, 2007)

Home owners are backing away from borrowing against their home equity, according to data from Equifax Inc. and Moody’s Economy.com.

Total home-equity borrowing rose just 9 percent in the 12 months through March, well below the 21 percent average annual growth rate of the past five years, the report says.

Rising interest rates are probably also a factor. The average rate on home-equity lines of credit has risen to 8.7 percent, up from as little as 4.64 percent in April 2004, according to HSH Associates.

Fixed-rate home loans are slightly more attractive, averaging 8.1 percent, up from 6.75 percent 12 months ago.

Source: The Wall Street Journal, Ruth Simon (04/26/2007)

Californians are packing up and moving to Arizona — where bargain hunters can still buy their dream house for less than $300,000.

"Housing isn't cheap in Phoenix compared to what it was. But it's still cheap compared to California," says R.L. Brown, publisher of the Phoenix Housing Market Letter. "We're averaging 9,000 Californians a month changing their [driver's] licenses to Arizona. To me, that's a phenomenal number."

February's median home price in Los Angeles County was $528,000, while in the Phoenix area it was $253,000.

Jobs also are plentiful in Arizona. Unemployment runs on average about 4.2 percent, says Barry Broome, CEO of the Greater Phoenix Economic Council, and "would be lower, but we add 100,000 to 130,000 people each year."

Source: Los Angeles Times, Maria L. La Ganga and Doug Smith (04/24/07)

Across the United States, preservationists are taking aim at tear downs, and some buyers aren’t happy that roadblocks are getting in their way of building that big new home they envisioned.

Tear downs are “a huge phenomenon, and a very large concern of ours,'' says Richard Moe, president of the National Trust for Historic Preservation. ''When you inject these super-sized mansions into communities built according to an older standard, it can create enormous damage to the character of a place.''

Cities large and small — including Austin, Texas, Atlanta, Salt Lake City, Ocean City, N.J., Larchmont and Brighton, N.Y., and the Chicago suburbs of Evanston, Oak Park, and Naperville — are among those that have passed building moratoriums and tightened zoning laws limiting how high, wide, and big new homes can be in relation to surrounding homes.

The National Association of Home Builders estimates that there were 330,000 home demolitions in the country last year of every kind, including those made necessary by damage and disrepair. That’s 20 percent lower than in 2005, the peak of the housing boom.

Defenders of tear downs say buyers want big new homes not small older ones.

''Buyers today want extra master bedrooms,'' says Dan Ryan, manager of a Prudential Douglas Elliman real estate agency in Massapequa,, NY. ''They want dens. They want two-car garages. They want saunas. Is it the builder's fault that he builds them bigger because someone wants to buy it that way?''

Source: The New York Times, Paul Vitello (04/23/07)

Foreclosure continues to be a serious concern for many U.S. home owners. Indeed, according to a recent survey from Yahoo Real Estate and Harris Interactive, 22 percent of home owners are at least somewhat concerned about the possibility of foreclosure due to their inability to meet monthly mortgage payments.

But Americans remain bullish on real estate. In fact, 37 percent of all U.S. adults would be at least somewhat interested in buying a house in foreclosure.

Here is a list of the 10 metro area markets where mortgage delinquency rates increased the most between the fourth quarter of 2005 and the first quarter of 2007, according to Equifax and Moody's Economy.com. The following list also includes the percentage increase in foreclosures for each area during that time period.

Modesto, Calif.: 3.9 percent Stockton, Calif.: 3 percent Merced, Calif.: 2.8 percent Port St. Lucie-Fort Pierce, Fla.: 2.7 percent Miami-Miami Beach-Kendall, Fla. Metropolitan Division: 2.5 percent Riverside-San Bernardino-Ontario, Calif.: 2.5 percent Vallejo-Fairfield, Calif.: 2.4 percent Las Vegas-Paradise, Nev.: 2.3 percent Atlantic City, N.J.: 2.2 percent Cape Coral-Fort Myers, Fla.: 2.2 percent

Source: Dow Jones Business News, Ruth Mantell (04/23/07)

With many first-time and even move-up buyers strapped for down-payment cash, an increasing number of parents are helping their grown children buy a home — and taking an equity share in return.

Typically, parents put in cash to help the buyers amass a down payment of at least 20 percent. That allows buyers to qualify for a conventional 30-year fixed-rate mortgage. The equity sharers get back their initial stake plus 10 percent to 50 percent of the profits.

Generally, a written contract spells out that the home owners are responsible for mortgage payments and get the tax deduction that comes with it. The contract also specifies who pays the property taxes — often that’s a 50-50 split. In some cases, the parent’s name is on the loan. In others, it isn’t.

Economist Andrew Caplin of New York University and a number of other experts are designing standardized shared-equity mortgages that would allow outside investors to buy a piece of the equity gain. Caplin estimates that about 25 percent of first-time homebuyers could find such arrangements attractive. One thing is certain: Investors in it for the money will extract stiffer terms than mom or dad.

Source: Business Week, Christopher Farrell (04/20/07)

Fixed mortgage rates broke a string of four consecutive increases, dipping this week in response to favorable news on the inflation front, according to Bankrate’s national survey of large lenders.

The average 30-year fixed mortgage rate slid to 6.29 percent, with an average of 0.27 discount and origination points, says Bankrate, which operates consumer finance Web site Bankrate.com. The average 15-year fixed rate mortgage, popular for refinancing, inched lower to 6.02 percent.

With larger loans, the average jumbo 30-year fixed rate nosed higher to 6.59 percent. On adjustable rate mortgages, the average 5/1 ARM sank 6.11 percent and the average one-year ARM held at 6 percent.

The alternating good news/bad news on the economy has kept mortgage rates in a narrow band of approximately one-eighth of a percentage point in the past two months.

Mortgage rates had increased in each of the four prior weeks, aided by comments from the Federal Reserve about the focus on taming inflation. But several inflation readings in the past week served to calm the nerves of investors, and the upward momentum on Treasury yields and mortgage rates subsided.

Fixed mortgage rates are notably lower than last summer when the Fed last raised interest rates. At the time, the average 30-year fixed mortgage rate peaked at 6.93 percent, and a $165,000 loan carried a monthly payment of $1,090.00. With the average 30-year fixed rate now 6.29 percent, the same loan originated today would carry a monthly payment of $1,020.23. Fixed mortgage rates are a compelling refinancing alternative for adjustable rate borrowers facing sharp payment adjustments.

Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

Source: Bankrate

Fair Isaac has launched the FICO Expansion Score to help prospective borrowers with minimal credit histories obtain loans and credit scores.

The Expansion score gauges a borrower's creditworthiness using timely utilities and rent payments and clean checking accounts, among other factors.

While car dealers and credit-card companies have already embraced the new scoring model, mortgage lenders are unlikely to do so unless Fannie Mae and Freddie Mac purchase the resulting loans.

Kiplinger's Personal Finance, Joan Goldwasser (03/07)

The word "slowdown” largely doesn't apply in the luxury real estate market.

Ultimate Homes magazine posted its annual list of the priciest homes on the market in the United States. New York, California and Florida dominate the list with more than $12 billion in luxury listings coming from these three states alone. The average price of a home on the list is $18 million.

Who are the owners of these mansions? A survey shows that 73 percent of homeowners who own at least one home valued at $2.5 million or above are younger than 55 and are self-made millionaires.

Here are the top 12 properties on the list:

$155 million - The Pinnacle at Yellowstone Club, Big Sky, Mont. $135 million - Hala Ranch, Aspen, Colo. $125 million - Trump Estate, Palm Beach, Fla. $100 million - Tranquility, Lake Tahoe, Nev. $75 million - The Portabello, Corona del Mar, Calif. $75 million - Three Ponds - Bridgehampton, New York $70 million - The Pierre Penthouse, New York City $65 million - 2845 Broadway, San Francisco $65 million - Malibu Beach Home, Malibu, Calif. $65 million - Sierra Star, Incline Village, Nev. $60 million - Robert Taylor Ranch, Brentwood, Calif. $60 million - Sassafras, Lloyd Neck, N.Y.

– REALTOR® Magazine Online

In a published statement, federal bank regulatory agencies said they “will not penalize financial institutions that pursue reasonable workout arrangements with borrowers who have encountered financial problems."

The regulators signing onto the statement include the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corp.,

Federal Reserve Governor Randall Kroszner said in a separate statement that "keeping families in their homes is generally good for borrowers, good for lenders, good for communities, and is a matter of great importance to the Federal Reserve."

—Dow Jones International News (04/17/2007)

Fed Minutes: Rate Rise Still on Table Minutes from the Federal Open Market Committee's March meeting, where central bank officials decided once again to leave the federal-funds rate unchanged at 5.25 percent, indicate that policymakers view rate hikes as one possible way to curtail inflation.

However, a surprising report of declining business investment has "cast some doubt on whether core inflation was on the expected downward path," according to the report.

Given that the direction of the economy is more uncertain, officials said their post-meeting statements will allow for alternatives to rate increases to keep inflation in check.

While rising energy prices increased overall inflation during the first quarter, the minutes reveal that the Federal Reserve is still predicting a decrease in the price index for personal consumption expenditures this year.

Source: The Wall Street Journal, Brian Blackstone(04/12/07)

Americans are convinced that in their own neighborhood home values are going to hold steady or increase in the next six months, according to a Los Angeles Times/Bloomberg poll.

About 30 percent said they thought home prices would rise; 16 percent said home prices would decrease; and the remainder said prices will hold steady.

“Housing is always a good investment,” said San Diego carpenter Scott Richard Wallace. “I don’t see it ever losing.”

Many of those responding to the poll, however, were not sympathetic toward people who took on loans they later couldn’t pay. About 28 percent said people should have known better. Lenders received the blame 39 percent of the time; and government regulators were deemed responsible by 20 percent of those polled.

Source: The Los Angeles Times, David Streitfeld (04/10/07)

California is the home base for many of the country's biggest subprime lenders, including Countrywide Financial and Wells Fargo; and with 22 percent of its total mortgages considered "risky," it leads the nation in terms of lending to borrowers with flawed credit.

Even so, California's foreclosure rate for the fourth quarter of 2006 came in at just 0.43. On the other hand, Midwestern states like Indiana, Michigan, and Ohio all crossed the 1-percent threshold.

Economists attribute the Golden State's resilience to a robust economy that continues to create jobs —which in turn allows residents to remain in their homes, supports housing prices, and allows home owners to use equity to refinance out of adjustable loan terms and into fixed loans.

Michigan, Illinois, Indiana, Ohio, and other Midwestern states, meanwhile, have been battered by the one-two punch of declining residential values and the loss of tens of thousands of manufacturing jobs, following cutbacks at auto companies.

"High foreclosures are historically linked to employment issues and regional and state economic conditions," confirms Laura Armstrong, Mortgage Bankers Association vice president of public relations.

Source: Investor's Business Daily, Scott Stoddard (04/10/07)

As the housing market has cooled, the developer’s mindset has changed. Rather than construct new developments quickly and wait for the buyers to flood in, more developers are relying on pre-construction sales to determine whether or not to break ground.

Here’s some advice for any buyer contemplating a pre-construction purchase:

Negotiate an exit strategy in your sales contract, especially as lead times for construction grow longer in some markets. For example, state that if the builder doesn't break ground by a certain day, you can get out of the contract.

If you're deposit money is going to sit there for an extended period, as the developer to pay interest.

Get in writing what changes that can be made to the project once the sales contract is signed. Finishes and appliances might not be set in stone at the time you sign the deal.

Try to find out the current state of the local market and gauge whether the developer is offering incentives to lure new buyers – which, though attractive to buyers in the short term, can put a downward pressure on prices.

Source: The New York Times, Amy Gunderson (04/04/2007)

Wells Fargo & Co. is the latest mortgage lender to offer a credit card that applies rebates toward a home loan.

The San Francisco-based company on April 16 will kick off an in-store promotional campaign under which it will sell the card program, which applies rebates equal to 1 percent of purchases directly toward paying off principal mortgage balances in increments of $25.

GMAC and MBNA Corp. teamed up for a card mortgage rebate program in 2004, and Countrywide Financial has a similar partnership with JPMorgan Chase's First USA affiliate.

Source: American Banker, Harry Terris (04/09/07)

Subprime Fallout: No One Utters the 'B Word' As federal regulators and elected officials convene to examine the failures of the subprime mortgage market, officials have had no formal talk of a bailout just yet.

Among the upcoming gatherings is a "summit" of lenders, regulators, and consumer advocacy groups being planned by Senate Banking Chairman Christopher Dodd (D-Conn.). The various parties will gather to explore ways that home owners facing foreclosure can be helped.

Barney Frank (D-Mass.), House Financial Services chairman, says he will brainstorm with Fannie Mae, Freddie Mac, the Federal Housing Administration, and others to address the predatory-lending problem. Also, the staff of Treasury Secretary Henry Paulson plans to get together with federal and state regulators to "talk about lessons learned."

Meanwhile, later this summer, the Kansas City Fed's yearly symposium in Wyoming will examine the housing and mortgage markets' importance to monetary policy.

Source: The Wall Street Journal, Mary Lu Carnevale (04/06/07

In a slow market, it is particularly important to get a house ready to sell quickly. How do you help a client get their home in prime shape for showings?

Beverly Tracy of Beverly Tracy Home Design in Saratoga Springs, N.Y., walks through a client’s home and sticks Post-It notes on things she believes they need to do to get their home looking its best. Here are some of her most frequently made suggestions:

Fix any visible problems that might be a red flag for potential buyers, including repainting stained walls.

Cover damaged kitchen or bathroom floors with inexpensive peel-and-stick vinyl floor tiles – if a more expensive change seems out of the question.

Repaint public rooms that will garner a lot of a buyer's attention, including the kitchen, dining room and living room. Clean up the exterior of the house, added potted plants, repair damaged walkways and put a fresh coat of paint on the front door.

Rent a storage unit and get rid of about half the furniture and most of the personal items.

When showing the property, turn on every light in the house and tune radios on each floor to the same classical music station. Suggest that the owners refrain from doing much cooking (baking sweets is a good idea) and put good-smelling soaps in all the bathrooms.

Source: Albany Times Union, Stephanie Earls (04/05/2007)

The number of mortgage applications last week declined 3.2 percent from the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association Weekly Mortgage Application Survey.

On an unadjusted basis, the number of applications rose 5.3 percent compared with the same week one year earlier.

The refinance share of mortgage activity decreased to 44.5 percent of total applications from 45.1 percent the previous week.

The average interest rate for 30-year fixed-rate mortgages increased to 6.13 percent from 6.04 percent.

The average interest rate for 15-year fixed-rate mortgages increased to 5.85 from 5.77 percent.

The average interest rate for 15-year fixed-rate mortgages increased to 5.85 from 5.77 percent.

— REALTOR® Magazine Online

Subprime lender New Century Financial Corp., once the nation’s second-largest provider of mortgages to high-risk borrowers and the target of consumer and government criticism, filed Monday for bankruptcy protection.

The company, which fired 3,200 workers, says it intends to sell off its major assets. CEO Brad A. Morrice said in a statement that the company had made the decision after exploring a variety of ways to stay in business.

New Century said it agreed to sell its loan servicing business to Carrington Capital Management LLC and its affiliate for about $139 million, subject to the approval of the bankruptcy court. New Century has also agreed to sell certain loans and residual interest in some trusts to Greenwich Capital for $50 million.

CIT Group and Greenwich Capital Financial Products Inc. have agreed to provide up to $150 million in working capital to facilitate the reorganization process, the company said.

Source: Associated Press, Gary Gentile (04/02/07)

The surge of flippers and investors has dwindled, prompting a housing market slowdown, but some real estate markets are doing well without them, Century 21 CEO Tom Kunz told USA Today.

“We’re starting to see movement," he said. "The Carolinas are very strong and down around Atlantic City. The Midwest, you’re not going to see blazing increases we saw in the last few years, but it’s steady. Texas is strong.”

And the weakest? “Florida is still in a weak position. … Las Vegas is still a bit of a weak market.”

Would Kunz sell his own home in this market?

“Sure. I think there's this perception that people wait for a good market to sell their homes. Most people buy or sell because of major events taking place in their lives: births, deaths, marriage, divorce. No matter what the local real estate market is doing, having a job change as I did three years ago, going from California to New Jersey, I had to buy a house and sell a house.

"I may not get as much for the house as a year ago, but when I have to buy something else, it's not going to cost as much as a year ago. It's a good move-up market,” Kunz says.

Source: USA Today, Noelle Knox (4/02/2007)