Buying an apartment or a house in the United States is no longer out of reach for many foreigners.

Attracted by a weaker dollar and a wide array of opportunities, more and more Europeans are investing in Real Estate. Florida is one of their favorite destinations.

A new reports says that homes in the Inland Empire are most likely to lose value.

Massachusetts has some new tools to fight the foreclosure crisis. Twenty million, to be exact.

The state has just activated a 20 million dollar loan fund for community groups to buy foreclosed homes before they become neighborhood wrecking eyesores and worse.

Foreclosures are devastating both for individual homeowners and their families and also to communities.

The 20 million dollar fund will provide loans of 250 thousand to a million dollars to community groups.
That’s expected to buy 250 to 500 foreclosed homes and apartments, with the Boston, Brockton, Chelsea, Lawrence, New Bedford, Springfield, and Worcester areas.

Notably, it doesn’t use any state money. 17 million comes from private lenders in the Massachusetts housing investment corporation, 2 million from the Boston foundation, and 1 million from the Hyams foundation in Chelsea.

Wachovia has big news today. Shares of falling in the premarket after the company ousted CEO Ken Thompson.

Wachovia stated he is stepping down at the request of the board, saying no single precipitating event calls because the board to reach the decision, but a series of previously disclosed disappointments and setbacks cumulatively have negatively impacted the company and performance. Perhaps you can call it an understatement.

Shares down 57% in the past 12 months.

The average time that a home sits on the market when it is for sale is now 11 months.

So what does that mean to you and me? It means nothing. Despite what is said by the professionals, we are still facing the largest portfolio of mortgage resets from right now in May 2008 to September 2008 (Mortgage reset chart).

So what does this really mean? Now we are on to something. Until the underlining mortgage issues are resolved, meaning the homeowners with mortgage resets that become unaffordable, of which only 30% of the affected homeowners are being helped, expect further home depreciation.

CNN.com has stated within the last few weeks that even with all the programs developed by the government, only about 30% of the homeowners can be helped. The reason is obvious. Why does any, for profit banking institution, want to take on the problems of another bank?

And the math is so simple. Add the inflationary pressures of oil, energy and what they mean to consumers discretionary dollars, as well as, the volume of adjustable rate mortgages that are resetting (remember that it takes between 6 months and 12 months to foreclose on a home - every state has their foreclosure laws) and you have a formula saying that we will be having credit and housing deterioration until at least 2010.

Sharpest Declines in California, Nevada and Florida;
Small Price Increases in Strongest Markets

U.S. home prices fell in the first quarter of 2008 according to OFHEO’s seasonally-adjusted purchase-only house price index. The index, which is based on data from home sales, was 1.7 percent lower on a seasonally-adjusted basis in the first quarter than in the fourth quarter of 2007. This decline exceeded the 1.4 percent price decline between the third and fourth quarters of 2007 and is the largest quarterly price decline on record. Over the past year, prices fell 3.1 percent between the first quarter of 2007 and the first quarter of 2008. This is the largest decline in the purchase only index’s 17-year history.

OFHEO’s all-transactions House Price Index (HPI) which includes data from home sales and appraisals for refinancings, showed less weakness than the purchase-only index. The all-transactions HPI fell 0.2 percent in the latest quarter and was flat over the four-quarter period.

The figures were released today by OFHEO Director James B. Lockhart, as part of the quarterly report analyzing housing price appreciation trends. “These substantial home price declines bring positive and negative news,” said Lockhart. “For homeowners and financial market observers, these declines spell further erosion in home equity levels and potentially more trouble for mortgage markets. To prospective home buyers who have been shut out of homeownership because of affordability constraints, these declines may be welcome news, as are continued low mortgage rates“.

Both OFHEO’s purchase-only index and its all-transactions index show much more muted price declines than do other house price indexes. “While house price declines are widespread, homes financed with prime, conforming mortgages continue to hold up better than those financed with other types of mortgages, a phenomenon we’ve been observing for the last several quarters,” Lockhart said.

With this release, OFHEO continues its publication of its monthly price index, which was introduced in February. Monthly price trends are shown on pages 8 and 9 and are provided for months through March. Between February and March, prices fell 0.4 percent nationally on a seasonally-adjusted basis, and they have fallen a total of 3.7 percent since their April 2007 peak.

As we continue to analyze and manage our product set, Chase has made the decision to discontinue offering our Subprime and Home Equity products through our Wholesale channel.

New Wholesale Subprime and Home Equity registrations will not be accepted after Friday, May 16, 2008.

New foreclosure filings rose 4% in April and were nearly 65% higher than the level recorded a year earlier, according to RealtyTrac.

The company’s U.S. Foreclosure Market Report indicates that foreclosure filings, default notices, auction sale notices, and bank repossessions were reported on 243,353 properties in April.

"The total number of U.S. properties with foreclosure activity in April was the highest monthly total we’ve seen since we began issuing the report in January 2005," said James J. Saccacio, RealtyTrac’s chief executive officer. "Although only about 2% of households nationwide are in foreclosure, these properties contribute to already-bloated inventories of homes for sale and put downward pressure on home values."

The company noted California, Florida, and Ohio recorded the highest foreclosure rates in April.

President Bollinger, Dean Hubbard, Co-Chairman Kravis, and distinguished guests, I am very pleased to be here and especially honored to receive the Columbia Business School’s Distinguished Leadership in Government Award. This evening I would like to offer a few thoughts on mortgage markets and the recent increase in the pace of delinquencies and foreclosures. My particular focus will be on geographic variation in mortgage performance and how that variation can help us better understand and prevent foreclosures. I will also discuss some initiatives taken by the Federal Reserve to address the foreclosure crisis as well as other policies that might be used to strengthen mortgage and housing markets.

Geographic Variation in Loan Mortgage Performance

As my listeners know, conditions in mortgage markets remain quite difficult, and mortgage delinquencies have climbed steeply. The sharpest increases have been among subprime mortgages, particularly those with adjustable interest rates: About one quarter of subprime adjustable-rate mortgages are currently 90 days or more delinquent or in foreclosure. Delinquency rates also have increased in the prime and near-prime segments of the mortgage market, although not nearly so much as in the subprime sector. As a consequence of rising delinquencies, foreclosure proceedings were initiated on some 1.5 million U.S. homes during 2007, up 53 percent from 2006, and the rate of foreclosure starts looks likely to be yet higher in 2008. Not all foreclosure starts result in the borrower’s loss of the home; sometimes the borrower is able to make up the missed payments or other arrangements are made with the lender. Given the number of borrowers in distress and the weakness of the general housing market, the share of foreclosure initiations that ultimately result in the loss of the home seems likely to be higher in the current episode than customarily has been the case.

We did find the housing inventory numbers increased, which is key. We are looking at the 10.3 month supply compared to 9.7 in December. In January, we were up in terms of inventory, that seems to be a problem. We are not anywhere close to that, for existing home prices, is not good at all and it will drag on.

New home prices is a different picture because the home builders are biting the bullet here. The leading home price index suggests that, in effect, although that may be a problem, there is an interesting optic we see at the end that makes us wonder whether new home practices might actually stabilize as wee see within the S&P/Case-Shiller Home Price Index report.