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.

Sales of new homes plunged last month to the lowest level in 16 and a half years.

Washington, DC– OFHEO Director James B. Lockhart announced agreements with OFHEO, New York State Attorney General Andrew Cuomo, Fannie Mae and Freddie Mac (Government Sponsored Enterprise (GSE)) to strengthen the independence of the appraisal process. For mortgages the Enterprises buy or guarantee, the agreements seek to enhance appraisal and evaluation services that are critical to the residential mortgage process. Flawed appraisals artificially inflate home prices and are often a sign of mortgage fraud and undue influence on appraisers.

“Accurate, independent appraisals are very important to ensuring the safety and soundness of Fannie Mae, Freddie Mac and the mortgage market,” said Director Lockhart. “These agreements build upon existing federal and state laws and regulations to further strengthen the single-family home appraisal process. The agreements should help restore confidence in the mortgage market by enhancing underwriting practices, reducing mortgage fraud and making home valuations more reliable. I thank the Attorney General, Fannie Mae and Freddie Mac for their strong roles in this important effort.”

There are many significant provisions in the agreements that are designed to strengthen the independence of appraisers, including eliminating broker-ordered appraisals, prohibiting appraiser coercion, and reducing the use of appraisals prepared in-house or through captive appraisal management companies in underwriting mortgages. The agreements also enhance quality control in the appraisal process and establish a complaint hotline for consumers. The agreements include a Home Valuation Code of Conduct that the Enterprises will apply to lenders selling mortgages to Fannie Mae or Freddie Mac. The Code becomes effective on January 1, 2009.

The parties also agreed to establish and the Enterprises fund an Independent Valuation Protection Institute designed to supplement current efforts to provide an appraisal complaint process, mediation of appraisal disputes, and mortgage fraud reporting. The agreement seeks the comments and concurrence of the federal banking agencies and solicits the comments of market participants that will be considered in making amendments to the Code during the implementation process.

“Attorney General Cuomo and I understand these are strong steps which will improve our mortgage finance system,” said Lockhart. “This Code is one way of ensuring that homebuyers and secondary mortgage market investors get the fair and independent property valuations that they expect and deserve. At the same time, I will be closely monitoring the nine-month period prior to implementation. OFHEO is committed to working closely with fellow regulators, the New York Attorney General, Fannie Mae, Freddie Mac, appraisers, lenders and other market participants to assure that the roll-out of the new code builds upon best practices, recognizes constructive comments to identify further refinements, and avoids unintended consequences.”

“In addition, OFHEO will continue its work to combat mortgage fraud, including its joint efforts with state and federal regulators. It is imperative that state appraisal licensing bodies be active in policing appraisal practices at the state level and that federal agencies share information on a timely basis in order to assist law enforcement and regulatory efforts to fight mortgage fraud,” Lockhart said.

Fannie Mae Agreement
Freddie Mac Agreement
Home Valuation Code of Conduct

Pockets of Strength Remain; Coasts, Midwest Show Biggest Declines

WASHINGTON, DC – U.S. home prices fell in the fourth quarter of 2007 according to OFHEO’s seasonally-adjusted purchase-only house price index. The index, which is based on data from home sales, was 1.3 percent lower on a seasonally-adjusted basis in the fourth quarter than in the third quarter of 2007. This decline was substantially greater than the 0.3 percent price decline between the second and third quarters. Over the past year, prices fell 0.3 percent, as the fourth quarter decline erased earlier price gains.

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 rose 0.1 percent over the latest quarter and 0.8 percent over the latest year.

The figures were released today by OFHEO Director James B. Lockhart, as part of the quarterly report analyzing housing price appreciation trends. “Although prices for home purchases in the quarter fell in every state except Maine, only 16 states plus the District of Columbia showed price declines for the full year 2007,” said Lockhart. “While the market weakness is most significant in areas that saw the greatest price run-ups during the boom, other states have clearly not been immune to recent declines.”

“The year 2007 showed the first four-quarter decline in the purchase-only index since its earliest data in 1991,” Lockhart added. “However, both OFHEO’s purchase-only index and the all-transactions index show relatively greater house price stability than do other nationwide house price indexes. That may reflect, in part, the greater stability in the prime, conforming mortgage market served by the Enterprises than in other segments of the mortgage market,” said Lockhart.

New in this release are monthly purchase-only indexes through December 2007 for the nine Census Divisions and the U.S. The new series indicates that seasonally adjusted prices declined 0.2 percent in December across the U.S., on average. This is the sixth consecutive monthly decline, bringing the total drop from the April 2007 peak to 2.4 percent.

“Given the recent turmoil in housing markets we thought it would be helpful to provide a greater amount of information about price trends,” Lockhart said.

Beginning in March and on a monthly basis thereafter, OFHEO will provide news releases containing updated monthly indexes, with a two-month lag. For example, the March release will include January data. OFHEO’s quarterly house price releases will continue and will include both the quarterly and monthly information.

Nationally, house prices grew at a much slower rate over the last year than did prices of non-housing goods and services. While the national purchase-only house price index fell 0.3 percent between the fourth quarters of 2006 and 2007, prices of other goods and services rose 4.3 percent. The real price of homes thus fell 4.6 percent over the latest four quarters.

“While the declines are significant and quite large in some areas, the market still needs to work through its overhang of unsold inventory,” said OFHEO Chief Economist Patrick Lawler. “How much further down that inventory will ultimately push prices will depend on a number of factors, including what happens to interest rates and the overall health of the U.S. economy,” Lawler said.

Significant Findings:

Purchase-only Index:

1. The four-quarter decline in the purchase-only index was the first since at least 1991Q1 (the first period covered by that index).

2. Prices fell between the third and fourth quarters in every state except Maine.

3. Every Census Division also experienced a price decline between the third and fourth quarters. Prices were weakest in the Pacific Census Division, which experienced a 4.5 percent price decline in the quarter.

All- transactions HPI:

4. The states with the greatest rates of appreciation between the fourth quarter of 2006 and the fourth quarter of 2007 were: Utah (9.3%), Wyoming (8.3%), North Dakota (7.9%), Montana (6.9%), and Alaska (6.0%). The states with the lowest rates of appreciation for the same period were: California (-6.6%), Nevada (-5.9%), Florida (-4.7%), Michigan (-4.3%), and Rhode Island (-2.6%).

5. The Metropolitan Statistical Areas (MSAs) with the greatest rates of appreciation between the fourth quarter of 2006 and the fourth quarter of 2007 were: Wenatchee, Washington (13.7%), Houma-Bayou, Louisiana (12.2%), and Grand Junction, Colorado (12.0%). The MSAs with the lowest rates of appreciation for the same period were: Merced, California (-19.0%), Modesto, California (-15.5%), and Stockton, California (-15.3%).

6. Of the 291 cities on OFHEO’s list of “ranked” MSAs, 192 had positive four-quarter appreciation and 99 had price declines.

7. Of the 20 ranked cities with the greatest price declines over the latest four quarters, all but two were in California or Florida (Nevada and Michigan accounted for the remainder).

The complete list of state appreciation rates can be found on pages 25 and 26. The complete list of city (MSA) appreciation rates is available on pages 32 – 49.

Highlights

Details concerning the new monthly indexes can be found in the “Highlights” section of this report.

The Highlights section also includes a description of some technical changes that have been made to the way in which OFHEO’s national indexes are computed. The changes improve the weighting system that is used in constructing the index, but generally do not have a dramatic impact on index estimates.

Background

OFHEO’s purchase-only and all-transactions house price indexes track average house price changes in repeat sales or refinancings of the same single-family properties. The purchase-only index is based on more than five million repeat sales transactions, while the all-transactions index includes more than 34 million repeat transactions. Both indexes are based on data obtained from Fannie Mae and Freddie Mac for mortgages originated over the past 32 years.

OFHEO analyzes the combined mortgage records of Fannie Mae and
Freddie Mac, which form the nation’s largest database of conventional, conforming mortgage transactions. The conforming loan limit for mortgages purchased in 2007 was $417,000 and remained at that level in the first month of 2008. Legislation enacted earlier this month has raised it on a temporary basis to as much as $729,750 in high cost areas. The data reported here do not reflect this change.

This HPI report contains four tables: 1) A ranking of the 50 States and Washington, D.C. by House Price Appreciation; 2) Percentage Changes in House Price Appreciation by Census Division; 3) A ranking of 291 MSAs and Metropolitan Divisions by House Price Appreciation; and 4) A list of one-year and five-year House Price Appreciation rates for MSAs not ranked.

OFHEO’s full PDF of report is at:
www.ofheo.gov/media/pdf/4q07hpi.pdf. Also, be sure to visit www.ofheo.gov to use the OFHEO House Price calculator. Please e-mail ofhe...@ofheo.gov for a printed copy of the report. The next monthly house price index report will be released on March 25, 2008 and the next quarterly HPI report will be posted May 22, 2008.

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OFHEO’s mission is to promote housing and a strong national housing finance system by ensuring the safety and soundness of Fannie Mae and Freddie Mac.

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.

Debate over Barack Obama’s $10 Billion housing bailout plan.

Did you know that you, the tax payer, will foot the bill?

We find it to be really funny how the so called ‘experts’ think that housing woes will be over within the next few months. What actual numbers are they reading?

Don’t let anybody fool you, the housing/mortgage bubble will last well into 2009 and here is why and we will keep it short…

From May 2008 to September 2008 Census data states that we will see about 2 million adjustable rate mortgages that will reset and come due. This is double what we saw in 2007 and we had some serious problems.

All the FHASecure and ‘Interest Rate Freeze’ programs have guidelines that are strict and should only assist approximately 15 to 25% of the affected families. Now add an average of 2 months in reserves that most families have. This takes us to somewhere in the neighborhood of September 2008. The quickest a home can be foreclosed on in some states in 6 months, like California and the longest is about 18 months like New York, so lets say an average of nine months to foreclose. Now we are at June of 2009! After 3 consecutive years of this foreclosure and depreciating home value problem, who is going to buy then?

We feel that the first time the national real estate market will flatten on an overall average will be during the 2010 buying season

Federal Reserve Panel Voiced Foreclosure Concern

Members of the Federal Reserve monetary policy committee are concerned that rising foreclosures and the huge supply of unsold homes on the market could put additional downward pressure on house prices and lead to “further disruptions in the financial markets.”

The minutes of the Dec. 11 Federal Open Market Committee also reveal that members did not expect that the housing market would continue to deteriorate after their last meeting on Oct. 31 or that the reduced availability of jumbo mortgages would last so long.

The FOMC members “agreed that the housing correction was likely to be both deeper and more prolonged than they had anticipated in October,” the Dec. 11 minutes say. The committee voted to lower the target federal funds rate 25 basis points to 4.25%.

Boston Federal Reserve Bank president Eric Rosengren advocated a more aggressive cut due to a “deteriorating housing sector, slowing consumer and business spending, high energy prices, and ill functioning financial markets.”

Florida Home Resales Drop

Sales of existing single family homes in Florida totaled 8,106 in November, a decrease of 30% from the level recorded a year earlier, according to the Florida Association of Realtors.

The median sales price of homes sold in November declined to $215,800, down 10% from $239,800 in November 2006, FAR reported.

Among the state’s larger markets, resales decreased 35% in the Orlando metropolitan statistical area and 59% in the Miami MSA, while median resale prices fell to $239,000 in Orlando, down 9% from $263,600 a year earlier, and to $359,300 in Miami, down 4% from $372,400 a year earlier, the trade group said.