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Home Prices Are Rising Again

*Home Prices On The Rise Again*
**New Data Emerges**

rising-prices***ZipRealty, an online technology-enabled residential real estate brokerage company, released its ZipRealty Home Price Report, which is based upon authoritative transactional and MLS data in 33 major metros. According to the report, U.S. median home sale prices have increased 11% on a year-over-year basis to $211,312. In 2011, the median home sale price was $190,000, according to data released by ZipRealty.

****While a recent report on existing home sales issued this week by the National Association of Realtors (NAR) found that home prices increased an average of 6.3% nationwide, ZipRealty found that in the 33 markets they and their Powered by Zip partners serve, home sale prices increased an average of 11%. According to ZipRealty’s data, Phoenix, Miami and Palm Beach, Fla., showed the largest increases in home prices on a year-over-year basis.

****Phoenix prices increased 29% from $112,329 to $145,500; Miami prices jumped 23% from $126,000 to $155,000; and Palm Beach housing prices rose 16% from $125,000 to $145,000 last year. Chicago home prices dipped 3% from $165,000 to $160,000 at year’s end; prices in Long Island’s Nassau and Suffolk counties in New York remain unchanged at $350,000; and Brooklyn, N.Y. home prices grew nominally from $420,500 to $421,000, according to ZipRealty data.

****“The metros that suffered the most during the real estate downturn – South Florida and Phoenix – have exhibited the greatest improvement recently,” according to Jamie Wilson, ZipRealty’s Senior Vice President of Technology, who oversees the firm’s research department. “Previously, these metros were characterized by a high volume of housing market distress in the form of foreclosures, and we are now seeing that trend reverse itself with greater volumes of regular re-sale activity even in many of the hardest hit markets.”

Slow Recovery, But Good Technology News Ahead

*Slow Recovery, But Good Technology News Ahead*
**By Tony Garritano**

TonyG***This study had me jumping for joy this morning. The William Mills Agency has released its 10th Annual “Bankers as Buyers” survey. This year’s findings indicate a slow but positive climb out of the financial crisis. Strength is returning to the financial services industry, and established technologies are gaining more ground, according to the research. Here’s why:

****Interestingly, this year’s survey found the largest percentage increases in technology spending in the coming years will not be from the larger institutions, but from the next tier of banks, those between $1 billion and $10 billion, according to IDC Financial Insights.

****Some key findings from this year’s “Bankers as Buyers” survey include:

****>> North American financial institution technology spending is expected to increase to $57 billion according to IDC Financial Insights.

****>> A total of 14,210 financial institutions make up today’s depository landscape, which is down 3.7 percent from 2011 according to the FDIC and CUNA.

****>> While much of the focus on payment technology is on mobile, financial institutions are looking at improvements in online payments, ACH, P2P payments and even prepaid payment cards to attract customers.

****>> Mobile Banking gained a stronger foothold in 2012 as financial institutions sought to meet increasing consumer demand for anytime, anywhere financial services.

****>> Consumer Mobile Banking is now used by 33 percent of mobile consumers according to Javelin Strategy & Research.

****>> According to the 2012 KPMG Community Banking Outlook Survey, 47 percent of respondents identified regulatory and legislative pressures as the most significant barrier to growth over the next year.

****>> Raymond James predicts North American bank IT spending will continue to grow at the three-year compound annual growth rate of 3.1 percent.

****>> An older technology that is getting increased adoption in financial institutions is branch/teller capture with a 98 percent expected adoption rate in 2013 and 2014, according to Celent.

****>> Cloud computing is a reality now, financial institutions no longer need to be convinced, rather executives are asking about different cloud strategies, according to Dan Holt, president and general manager, Managed Services, CSI.

****>> Being able to leverage data will be increasingly important to a financial institution’s profitability, both in terms of serving consumers and in serving small businesses according to Jim Swift, CEO of Cortera.

****>> According to Celent, 80 percent of financial institutions are considering mobile RDC, enabling a consumer to take a picture of a check and email it for deposit.

Foreclosures Continue To Dip

*Foreclosures Continue To Dip*
**New Data Released**

***There were 55,000 completed foreclosures in the U.S. in November 2012, down from 72,000 in November 2011, a year-over-year decrease of 23 percent. On a month-over-month basis, completed foreclosures fell from 59,000 in October 2012 to the current 55,000, a decrease of 6 percent. As a basis of comparison, prior to the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month between 2000 and 2006. Completed foreclosures are an indication of the total number of homes actually lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 4.0 million completed foreclosures across the country.

****Highlights as of  November 2012:

****>> The five states with the highest number of completed foreclosures for the 12 months ending in November 2012 were: California (102,000), Florida (94,000), Michigan (75,000), Texas (58,000) and Georgia (52,000). These five states account for 50 percent of all completed foreclosures nationally.

****>> The five states with the lowest number of completed foreclosures for the 12 months ending in October 2012 were: South Dakota (19), District of Columbia (64), Hawaii (452), North Dakota (511) and Maine (643).

****>> The five states with the highest foreclosure inventory as a percentage of all mortgaged homes were: Florida (11.1 percent), New Jersey (7.7 percent), New York (5.3 percent), Illinois (5.0 percent) and Nevada (4.8 percent).

****>> The five states with the lowest foreclosure inventory as a percentage of all mortgaged homes were: Wyoming (0.5 percent), Alaska (0.7 percent), North Dakota (0.7 percent), Nebraska (0.8 percent) and South Dakota (1.0 percent).

****“The continued fall in completed foreclosures is a positive supply-side contribution in many regions of the U.S.,” said Anand Nallathambi, president and CEO of CoreLogic. “We still have a long way to go to return to historic norms, but this trend is firmly in the right direction.”

****“The pace of completed foreclosures has significantly improved over a year ago as short sales gain popularity as a disposition method. Additionally, the inventory of foreclosed properties continues to decline while the housing market demonstrates an ongoing ability to absorb the distressed sales that result from completed foreclosures,” said Mark Fleming, chief economist for CoreLogic.

National Foreclosure Numbers Decline

*National Foreclosure Numbers Decline*
**New CoreLogic Report**

***There were 57,000 completed foreclosures in the U.S. in September 2012, down from 83,000 in September 2011 and 59,000 in August 2012. Prior to the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month between 2000 and 2006. Completed foreclosures are an indication of the total number of homes actually lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 3.9 million completed foreclosures across the country.

****Highlights as of September 2012:

****>> The five states with the highest number of completed foreclosures for the 12 months ending in September 2012 were: California (108,000), Florida (92,000), Texas (59,000), Georgia (55,000) and Michigan (51,000). These five states account for 47.7 percent of all completed foreclosures nationally.

****>> The five states with the lowest number of completed foreclosures for the 12 months ending in September 2012 were: South Dakota (20), District of Columbia (58), Hawaii (436), North Dakota (583) and Maine (625).

****>> The five states with the highest foreclosure inventory as a percentage of all mortgaged homes were: Florida (11.5 percent), New Jersey (7.3 percent), New York (5.3 percent), Illinois (5.2 percent) and Nevada (4.9 percent).

****>> The five states with the lowest foreclosure inventory as a percentage of all mortgaged homes were: Wyoming (0.5 percent), Alaska (0.7 percent), North Dakota (0.7 percent), Nebraska (0.9 percent) and South Dakota (1.1 percent).

****“Homes lost to foreclosure in September 2012 are down 50 percent since the peak month in September 2010 and 22 percent less than the beginning of the year,” said Mark Fleming, chief economist for CoreLogic. “While there is significant progress to be made before returning to pre-crisis levels, the trend is in the right direction as short sales, up 27 percent year over year in August, continue to gain popularity.”

****“The continuing downward trend in foreclosures along with a gradual clearing of the shadow inventory are signs of stabilization and improvement in the housing market,” said Anand Nallathambi, president and CEO of CoreLogic. “Increasingly improving market conditions and industry and government policy are allowing distressed homeowners to pursue refinancing, loan modifications or short sales rather than foreclosures.”

Forget The Jobs Numbers, Let’s Talk About Positive Trends

*Forget The Jobs Numbers, Let’s Talk Positive Trends*
**By Tony Garritano**

***No surprise, another disappointing jobs report this morning. We created under 100,000 new jobs last month. I guess the election will decide if we stay on this course or try something new. But on a positive note, the CoreLogic Home Price Index (HPI) showed that home prices nationwide, including distressed sales, increased on a year-over-year basis by 3.8 percent in July 2012 compared to July 2011. This was the biggest year-over-year increase since August 2006. On a month-over-month basis, including distressed sales, home prices increased by 1.3 percent in July 2012 compared to June 2012. The July 2012 figures mark the fifth consecutive increase in home prices nationally on both a year-over-year and month-over-month basis.

****Excluding distressed sales, home prices nationwide increased on a year-over-year basis by 4.3 percent in July 2012 compared to July 2011. On a month-over-month basis excluding distressed sales, home prices increased 1.7 percent in July 2012 compared to June 2012, also the fifth consecutive month-over-month increase. Distressed sales include short sales and real estate owned (REO) transactions.

****The CoreLogic Pending HPI indicates that August home prices, including distressed sales, will rise by 4.6 percent on a year-over-year basis from August 2011 and at least 0.6 percent on a month-over-month basis from July 2012. Excluding distressed sales, August house prices are also poised to rise 6.0 percent year-over-year from August 2011 and by 1.3 percent month-over-month from July 2012. The CoreLogic Pending HPI is a proprietary and exclusive metric that provides the most current indication of trends in home prices. It is based on Multiple Listing Service (MLS) data that measure price changes in the most recent month.

****“The housing market continues its positive trajectory with significant price gains in July and our expectation of a further increase in August,” said Mark Fleming, chief economist for CoreLogic. “While the pace of growth is moderating as we transition to the off-season for home buying, we expect a positive gain in price levels for the full year.”

Closed Loan Rate Declines

*Closed Loan Rate Declines*
**By Tony Garritano**

***Origination vendor Ellie Mae has released its Origination Insight Report for July 2012. To get a meaningful view of lender “pull-through,” Ellie Mae reviewed a sampling of loan applications initiated 90 days prior (i.e., the April applications) to calculate a closing rate for July. Ellie Mae found that 45.8% of all applications closed in July 2012 compared to 46.2% in June 2012.

****“The 30-year note rates on closed loans declined to 3.870% in July, down from 3.992% in June, and were at the lowest point since we began tracking in August 2011,” said Jonathan Corr, chief operating officer of Ellie Mae. “With more borrowers ‘in the money,’ the refinance share of closed loans rose by 4% on a month-over-month basis.

****“The percentage of closed conventional refinances with LTVs of 95%-plus declined for a second consecutive month to 8.7% in July from 10.2% in June, perhaps indicating that HARP 2.0 activity may be slowing,” Corr noted.

****The Origination Insight Report mines its application data from a sampling of approximately 33% of all mortgage applications that were initiated on the Encompass origination platform. Given the size of this sample and Ellie Mae’s market share, Ellie Mae believes the Origination Insight Report is a strong proxy of the underwriting standards that are being employed by lenders across the country.

****“In July, the closing rate for purchase loans increased for the third month in a row up to 58.7% from 57.8% in June and 56.8% in May––a sign that the purchase market may also be showing some traction,” he said.

****“The combination of extremely low interest rates and a strengthening purchase market pushed out closing times for both refinance and purchase loans in July. These time frames are similar to what we saw in January of last year, when a surge of activity challenged the industry’s capacity,” he added.

Fraud Risk In The U.S. Goes Up

*Fraud Risk In The U.S. Goes Up*
**New Research Released**

***Interthinx has released its quarterly Mortgage Fraud Risk Report covering data collected in the second quarter of 2012. According to the most recent analysis, overall risk resumed its upward climb after a one-quarter pause, with the Index value rising nearly 7 percent to 149 (n = 100). The change was primarily driven by the recent inclusion of 91 metropolitan statistical areas (MSAs) that moved into the “very high risk” category. That includes Chattanooga, Tennessee, which — with a quarter-on-quarter increase of more than 30 percent in its Index value — is currently the riskiest MSA in the country. In addition, Georgia has joined the top five states for overall mortgage fraud risk for the first time since the report started in second-quarter 2009. Other notable findings include:

****>> The New York City MSA continued its precipitous rise in the rankings, climbing to sixth place in the current quarter from seventeenth place just six months ago. In addition, five New York City area ZIP codes — including three in Brooklyn — are now among the top ten riskiest ZIPs in the nation.

****>> Nevada and Arizona remain the two riskiest states despite experiencing a small decrease in overall fraud risk over last quarter. Nevada’s Index value is currently 208, and Arizona’s is at 206. The MSAs for Las Vegas-Paradise, Nevada, and Phoenix-Mesa-Scottsdale, Arizona, are notably absent from the list for the first time since fourth-quarter 2009.

****>> Florida remained the third riskiest state, with a Fraud Risk Index value of 199. Contributing to Florida’s ranking is its dominance of the overall and type-specific top ten lists: Miami-Fort Lauderdale-Pompano Beach, Cape Coral-Fort Meyers, and Port St. Lucie for overall risk at the MSA level; two of the riskiest MSAs for Property Valuation and one for Occupancy Fraud; and four of the riskiest ZIP codes.

****>> For the first time since the inception of this report in second-quarter 2009, California is not in the top five and is replaced by Georgia. Despite California’s overall decline in fraud risk, its metros are well represented in all the top ten lists, taking nine of the top ten spots for Employment/Income Fraud Risk. The San Jose-Sunnyvale-Santa Clara MSA was the riskiest metro for Identity Fraud Risk with an Index value of 280 — 20 percent higher than its nearest rival.

****>> Fraud risk for condominiums differs from that of single-family homes. In particular, condos are more at risk for Employment/Income and Identity Fraud Risk but less at risk for Property Valuation Fraud Risk. Geographically, the difference in risk between census divisions varies as well, with condos presenting less risk in the East North Central, Middle Atlantic, and New England divisions and having more risk in the West North Central Division.

Home Prices Increase

*Home Prices Increase*
**New Data Is Released**

***CoreLogic released its June Home Price Index report, which said that home prices nationwide, including distressed sales, increased on a year-over-year basis by 2.5 percent in June 2012 compared to June 2011. On a month-over-month basis, including distressed sales, home prices increased by 1.3 percent in June 2012 compared to May 2012. The June 2012 figures mark the fourth consecutive increase in home prices nationally on both a year-over-year and month-over-month basis.

****Excluding distressed sales, home prices nationwide increased on a year-over-year basis by 3.2 percent in June 2012 compared to June 2011. On a month-over-month basis excluding distressed sales, home prices increased 2.0 percent in June 2012 compared to May 2012, the fifth consecutive month-over-month increase. Distressed sales include short sales and real estate owned (REO) transactions.

****The CoreLogic Pending HPI indicates that July home prices, including distressed sales, will rise by at least 0.4 percent on a month-over-month basis from June 2012 and by 2.0 percent on a year-over-year basis from July 2011. Excluding distressed sales, July house prices are also poised to rise by 1.4 percent month-over-month from June 2012 and by 4.3 percent year-over-year from July 2011. The CoreLogic Pending HPI is a new and exclusive metric that provides the most current indication of trends in home prices. It is based on Multiple Listing Service (MLS) data that measure price changes in the most recent month.

****“Home prices are responding positively to reductions in both visible and shadow inventory over the past year,” said Mark Fleming, chief economist for CoreLogic. “This trend is a bright spot because the decline in shadow inventory translates to fewer distressed sales, which helps sustain price appreciation.”

****“At the halfway point, 2012 is increasingly looking like the year that the residential housing market may have turned the corner,” said Anand Nallathambi, president and CEO of CoreLogic. “While first-half gains have given way to second-half declines over the past three years, we see encouraging signs that modest price gains are supportable across the country in the second-half of 2012.”

Foreclosures May Just Rise Again

*Foreclosures May Rise Again*
**New Data Looks Ahead**

***CoreLogic released its National Foreclosure Report for June, which provides monthly data on completed foreclosures and the overall foreclosure inventory. According to the report, there were 60,000 completed foreclosures in the U.S. in June 2012 compared to 80,000 in June 2011 and 60,000 in May 2012. Since the financial crisis began in September 2008, there have been approximately 3.7 million completed foreclosures across the country. Completed foreclosures are an indication of the total number of homes actually lost to foreclosure.

****Approximately 1.4 million homes, or 3.4 percent of all homes with a mortgage, were in the national foreclosure inventory as of June 2012 compared to 1.5 million, or 3.5 percent, in June 2011. Month-over-month, the national foreclosure inventory was unchanged from May 2012 to June 2012.  The foreclosure inventory is the share of all mortgaged homes in some stage of the foreclosure process.

****“While completed foreclosures and real-estate owned (REO) sales virtually offset each other over the past four months, producing static levels of foreclosure inventory for most of this year,  they are beginning to diverge again,” said Mark Fleming, chief economist for CoreLogic. “Over the last two months REO sales declined while completed foreclosures leveled out. So we could see foreclosure inventory rising going forward.”

****“The decline in the flow of completed foreclosures to pre-financial crisis levels is more welcome news pointing to an emerging housing market recovery,” said Anand Nallathambi, president and CEO of CoreLogic. “However, we believe even more can be done to reduce the inventory of foreclosures by decreasing the level of regulatory uncertainty and expanding alternatives to foreclosure.”

****Highlights as of June 2012:

****>> The five states with the highest number of completed foreclosures for the 12 months ending in June 2012 were: California (125,000), Florida (91,000), Michigan (58,000), Texas (56,000) and Georgia (55,000). These five states account for 48.4 percent of all completed foreclosures nationally.

****>> The five states with the lowest number of completed foreclosures for the 12 months ending in June 2012 were: South Dakota (39), District of Columbia (81), Hawaii (449), North Dakota (565), and Maine (625).

****>> The five states with the highest foreclosure inventory as a percentage of all mortgaged homes were: Florida (11.5 percent), New Jersey (6.5 percent), New York (5.1 percent), Illinois (5.0 percent) and Nevada (4.8 percent).

****>> The five states with the lowest foreclosure inventory as a percentage of all mortgaged homes were: Wyoming (0.6 percent), Alaska (0.8 percent), North Dakota (0.8 percent), Nebraska (0.9 percent) and South Dakota (1.2 percent).

Market Analysis: Tracking The Negative Equity Situation

*Tracking The Negative Equity Situation*
**By Tony Garritano**

***Today I got some research from CoreLogic that’s worth sharing. This data shows that 11.4 million, or 23.7 percent, of all residential properties with a mortgage were in negative equity at the end of the first quarter of 2012. This is down from 12.1 million properties, or 25.2 percent, in the fourth quarter of 2011. An additional 2.3 million borrowers had less than 5 percent equity, referred to as near-negative equity, in the first quarter.

****Negative equity, often referred to as “underwater” or “upside down,” means that borrowers owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.

****Together, negative equity and near-negative equity mortgages accounted for 28.5 percent of all residential properties with a mortgage nationwide in the first quarter, down from 30.1 percent in Q4 2011. More than 700,000 households regained a positive equity position in the Q1 2012. Nationally, negative equity decreased from $742 billion in Q4 2011 to $691 billion in the first quarter, a fall of $51 billion in large part due to an improvement in house price levels.

****“In the first quarter of 2012, rebounding home prices, a healthier balance of real estate supply and demand, and a slowing share of distressed sales activity helped to reduce the negative equity share,” said Mark Fleming, chief economist for CoreLogic. “This is a meaningful improvement that is driven by quickly improving outlooks in some of the hardest hit markets. While the overall stagnating economic recovery will likely slow housing market recovery in the second half of this year, reducing the number of underwater households is an important step toward reducing future mortgage default risk.”

****“We are encouraged by the positive trend of increasing housing prices and falling negative equity share in key states like Arizona, Nevada and Tennessee,” said Anand Nallathambi, president and CEO of CoreLogic. “Although it will still be a slow recovery for U.S. homeowners, we see this improvement as a stabilizing and positive development for the mortgage industry.”