The volume of mortgage applications filed in the U.S. last week dropped a seasonally adjusted 8.5%, compared with the previous week, the Mortgage Bankers Association reported on Wednesday

LOS ANGELES, Calif., Feb. 23 (SEND2PRESS NEWSWIRE) -- New statistics from Foreclosure Deals, a leader in foreclosure listings industry, show the market for foreclosures is already improving in 2010, with foreclosures down 10% in January from the previous month. Foreclosure property inventories also fell in traditional foreclosure hotspots throughout the nation, which experts believe could be an excellent sign for buyers considering a purchase this year.

With 315,700 foreclosure properties reported in January, the national inventory is still 15% higher than it was one year ago. However, new foreclosures were up by only 4%, and with foreclosures falling in many key states, the new year figures to be a great time to find some excellent deals.

"Basically, we're seeing a tapering market for new foreclosures and, maybe most importantly, falling foreclosures in locations like Las Vegas, Orlando, and Miami," remarked James Foxx, a business analyst at Foreclosure Deals. "As sale prices continue to rise as we've been seeing, now is the time to buy low and get a great return on an investment. There are some excellent opportunities out there."

Despite holding the highest foreclosure rate among states with 1 in every 95 homes, Nevada foreclosures fell by 18% in the past year. California, with the largest total volume of foreclosure homes, also saw property foreclosures fall by roughly 6.5% from a year earlier. Florida and Arizona, the other two states which have consistently made up the Top 4 for in recent years, saw foreclosures rise by 43% and 15% respectively. However, these figures are all down significantly compared with 2008, indicating a trend of slowing foreclosures in all four states. Making up the rest of the Top 10 were Utah, Michigan, Georgia, Illinois, Idaho and Oregon.

States that saw the biggest decreases in foreclosures during the past month were South Dakota, falling 90%; Wyoming, where foreclosures fell 53%; and New Jersey, with a 40% decrease. While it remains to be seen if the trend of falling foreclosures will continue throughout the year, it's hard to ignore the positive signs, as Washington D.C., Rhode Island, Ohio and Virginia all also saw foreclosure properties decrease significantly in the past month.

States with the highest yearly increase in foreclosures were Nebraska, up an astounding 1125%; New Mexico, up 680%; and Montana, where foreclose property rose by 708%.

Visit Foreclosure Deals to get the latest news and information on the foreclosure market, as well as search current foreclosure listings anywhere in the country.

http://www.send2press.com/newswire/2010-02-0223-002.shtml

The new Case-Shiller U.S. National Home Price Index numbers show what happens when a skydiver pulls the rip cord:

Q1 2009 = -19%, Q2 2009 = -15%, Q3 2009 = -8.7% and Q4 2009 = -2.5% (YoY)

S&P/Case-Shiller Composite 10: Nov = 158.49  Dec = 158.18
S&P/Case-Shiller Composite 20: Nov = 146.28   Dec = 145.90

This monthly data includes prices for 20 individual cities, and two composite indices (10 cities and 20 cities).

Granted the data measures price changes for single family homes in December, a particularly sluggish month all-around. But it’s been nearly a year since the Home Affordable Modification Program (HAMP) was launched (March 2009) to help struggling homeowners modify their loans.

And despite slowing price declines for 2009 and falling delinquency rates, some economists predict that with ever-growing inventories of foreclosed properties and the new category of “redefaults,” the housing market will continue to eat its young.
According to a recent S& P report, the “shadow inventory” of delinquent loans and REO (bank-owned) properties are likely to keep housing prices constrained for some time, perhaps up to three years:

“S&P estimates the inventory to equal a 33-month supply of homes. Analysts added the estimate is actually conservative, as they did not assume homes not showing signs of distress would default and push the overhang of supply even further.

According to the S&P report, homes are falling into serious delinquency faster than REO transactions are closing. The total balance of seriously delinquent loans reached well over $400bn through November 2009, while the balance of REO properties reached its peak in September 2008 and declined to $50bn. On average, $14.5bn of seriously delinquent loans or REO property liquidates each month. According to the report, it will take 29 months to clear this supply of homes…”

http://wallstcheatsheet.com/breaking-news/economy/case-shiller-shows-housing-prices-stabilizing-for-now/?p=7123/

There was a big jump in real estate short sales in January. A short sale is one made by a lender on a foreclosed or repossessed parcel of real estate, typically a house, at a price below the balance due on the property. This is a big adjustment, on average, but one needed to induce buyers to undertake the risk of further declines in real estate prices and lenders to get the properties off their books.

Typically or on average, the sales prices these days are running about 91% of the balances due. This is a good sign that lenders are getting realistic. An extension of the first time homeowner’s tax credit is also helping here.

According to the latest Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions,

Short sales accounted for a substantial 15.9% of home purchase transactions in January. This was well above the share of other distressed property activity – damaged real estate owned or REO (13.4%) and move-in ready REO (13.8%) – and represented a big jump for short sales.

“Short sales activity took a temporary dip in November around the expected expiration of the first-time homebuyer tax credit,” reported Thomas Popik, research director for the Campbell/Inside Mortgage Finance survey. “Few first-time homebuyers wanted to take the chance that their short sale transaction wouldn’t be approved by the November 30 deadline. But now that the tax credit has been extended, we see first-time homebuyers once again snapping up attractively priced short sales.”

Short sales of homes are expected to increase sharply in 2010.

http://seekingalpha.com/article/190096-short-sales-of-real-estate-increase-sharply

As foreclosure fillings are down 10% in comparison to December’ 2009, experts predict the next wave of foreclosure hitting market in the coming months AS MORE AND MORE LOAN MODIFICATIONS FAIL.

REO activities nationwide were down 5%, but still up 31% compared to Jan’ 2009. While the default notices decreased 12%, but increased 4% from year ago. Actions are down 11% from December but still up 15% a year earlier. We will see increase in numbers in the coming months as lenders foreclose on delinquent loans where neither the existing loan modifications programs or the new short sale and deed-in-lieu of foreclosure alternatives work.

http://www.trulia.com/blog/manu_1/2010/02/foreclosure_reo_s_up_31

Feb. 10 (Bloomberg) -- More than a fifth of U.S. homeowners owed more than their properties were worth in the fourth quarter as the number of houses and condominiums lost to foreclosure climbed to a record, according to Zillow.com.

In the fourth quarter, 21.4 percent of owners of mortgaged homes were underwater, up from 21 percent in the previous three months and down from 23 percent in the second quarter, the Seattle-based real estate data provider said today in a report. More than one in 1,000 homes were repossessed by lenders in December, the highest rate in Zillow data dating back to 2000.

Underwater homes are more likely lost to foreclosure because their owners have a harder time refinancing or selling when they get behind on loan payments. U.S. home values dropped 5 percent in the fourth quarter from a year earlier, the 12th straight quarter of year-over-year declines, Zillow said.

“While the next few months are likely to bring further home value declines in most markets, we do expect to see a national bottom in home prices by the middle of this year,” Zillow Chief Economist Stan Humphries said in a statement. “Thereafter, home values are likely to bounce along the bottom with real appreciation remaining negligible for some time.”

There were 2.82 million foreclosures in the U.S. last year, according to RealtyTrac Inc., the most since the data provider began compiling figures in 2005. The number may rise to 3 million in 2010, the Irvine, California-based company said last month.

Bank sales of foreclosed properties accounted for a fifth of all U.S. home sales in December, Zillow said. Such transactions made up 68 percent of sales in Merced, California; 64 percent in the Las Vegas area; and 62 percent in Modesto, California, the company said.

Almost 29 percent of homes sold in the U.S. went for less than their sellers originally paid for them, Zillow said.

The closely held company uses data from public records going back to 1996. Its mortgage figures come from information filed with individual counties.

* 1 in 5 markets show signs of "double-dip" in home prices

* Home value bottom expected in second quarter

* More than 1 in 1,000 homes was being foreclosed in Dec

By Julie Haviv

NEW YORK, Feb 10 (Reuters) - One of every five U.S. home owners owed more on their mortgage than their home was worth in the fourth quarter, a trend that poses a serious threat to the U.S. housing market's recovery, real estate website Zillow.com said on Wednesday.

Homeowners with "underwater" mortgages are more prone to defaults and foreclosures. They typically do not qualify for refinancings and are unable to sell their homes because they would need to cough up cash at closing time to pay off their mortgage.

The percentage of American single-family homes with mortgages in negative equity rose to 21.4 percent in the fourth quarter from 21 percent in the third quarter, according to the Zillow Real Estate Market Reports.

U.S. home values declined again in the fourth quarter, as the Zillow Home Value Index fell 5 percent year-over-year and down 0.5 percent quarter-over-quarter, to $186,200. It was the 12th consecutive quarter of year-over-year declines, the reports showed.

"The prevalence of markets in or near a double-dip situation shows that we are not yet at the bottom, in terms of home values," Stan Humphries, Zillow chief economist, said in an interview.

One in five, or 29 of the 143 markets tracked by Zillow, had at least five consecutive month-over-month increases in home values during 2009 before values began to flatten or fall again in the second part of the year. These markets included the Boston, Atlanta and San Diego metropolitan areas.

Zillow said it defines a "double dip" as two periods of sustained declines in home values separated by a brief period of stabilization or recovery.

Zillow forecasts a definitive bottom in home values in the second quarter of 2010, Humphries said.

"It is important to note, however, that the arrival of the bottom does not mean that recovery is around the corner," he said.

Home values in 29 markets, including the Los Angeles and New York metro areas, increased on a month-over-month basis throughout the fourth quarter. The rate of increase, however, slowed from November to December in 21 of those markets.

Meanwhile, the number of homeowners losing their homes to foreclosure across the country rose to a new high in December, with more than one in every thousand homes being foreclosed, the highest since Zillow began recording national foreclosure data in 2000, the reports showed.

Foreclosure resales remained high, making up 20.3 percent of all U.S. home sales in December. Foreclosure resales also made up the majority of sales in several metropolitan areas, including Merced, California, at 68.3 percent; Las Vegas, at 64 percent, and Modesto, California, at 62 percent. Additionally, 28.5 percent of home sales nationwide sold for less than what the seller originally paid.

Home values increased year-over-year in 27 of 143 markets and remained flat in 15. (Editing by Leslie Adler)

http://www.reuters.com/article/idUSN0914378220100210

NEW YORK (MarketWatch) -- Federal Reserve Chairman Ben Bernanke is expected to lay out a plan for raising interest rates as the economy picks up steam in the next several months, The Wall Street Journal reported on Monday. The initial focus by the U.S. central bank will be the relatively new interest rate on excess reserves, a tool given to the Fed by Congress in 2008. The interest rate on excess reserves amounts to payments the Fed pays to banks on money left on reserve with it. Currently that rate is 0.25%. The Fed isn't expected to raise any rates for several months.

http://www.marketwatch.com/story/fed-to-lay-out-interest-rate-hike-plan-this-week-2010-02-08

Most have heard the terms: short sales, foreclosures, and REO, which are no doubt the buzz words of the real estate industry these days. They are the processes you hope you don’t have to go through as a homeowner. However, these are also the factors that are, in part, making this a buyer’s market.

What exactly are the differences between each situation? Each process is complicated and complex, and as always, your best bet is to get yourself situated with a trusted and experienced REALTOR®. It also helps if you understand, at least to a certain extent, the processes yourself.

Natascha Tello clears up the confusion and clearly defines short sales, foreclosures and REO.

“Short sales, in most circumstances, are the first step to avoid foreclosure. Although the lender(s) will recover less than the total loan amount in a short sale, they may prefer this in lieu of foreclosure. The costs of foreclosing on a property may be more than the bank’s loss by taking a short sale.

Also, the property may not sell at auction and then the bank would be forced to take it back as an REO (Real Estate Owned) property, which then they would have to maintain, list and sell themselves.”

Short sales, foreclosures and REO are all feasible options if a homeowner is unable to make their monthly mortgage payments. But before you jump in and decide which is the best option for you, be sure to talk to your Realtor. The same applies for potential homebuyers looking for a great deal. These options may just be the ticket for you.

http://www.realtor.com/blogs/2010/02/07/the-differences-between-short-sale-foreclosures-and-reo/