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Market Studies

Mortgage Rates Reverse Course

Freddie Mac reported Thursday that mortgage interest rates have done a 180 and are now starting to climb, buoyed by positive housing data over recent weeks which show the market ended 2011 on a high note. The 30-year fixed-rate mortgage rose 10 basis points in one week's time and is now averaging 3.98 percent, reversing its previous three-week trend of setting all-time record lows. Despite the jump, this marks the eighth consecutive week the 30-year fixed rate has remained below 4.00 percent.

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Foreclosures for Sale: 34% Off

Foreclosure homes sold for 34 percent less than the average price of a non-distressed home during the third quarter of 2011, according to new data released by RealtyTrac Thursday. The average sales price of homes in the process of foreclosure or bank-owned was $165,322 over the July-to-September period last year. RealtyTrac says third parties purchased a total of 221,536 residential properties classified as foreclosures or REO during the third quarter of 2011, representing just 20 percent of all residential sales during that timeframe.

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Pending Home Sales Decline Monthly, Rise Annually

After reaching a 19-month high in November, pending home sales declined 3.5 percent in December, according to data released by the National Association of Realtors (NAR) Wednesday. November's pending home sales stood at 100.1 for the nation, just above the ""historically healthy"" average of 100, designated by NAR. The rate ticked down to 96.6 in December. Despite the decline, December's pending home sales are 5.6 percent higher than the rate recorded in December 2010.

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Housing Crisis to End in 2012 as Banks Loosen Credit Standards

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit. The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago. Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes ""the clearest sign yet of an improvement in mortgage credit conditions.""

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Housing Inventory Down 22% From Year-Ago Levels

At the national level, the inventory of for-sale single-family homes dropped by 22.29 percent over the last year, according to new statistics released by Realtor.com. The site concludes that at the close of 2011, there were 1.89 million single-family homes on the market, down 6 percent from just one month prior. Realtor.com views the development as a positive sign the market is holding its own at the national level, but notes that the weight of foreclosures is keeping the market in a fragile state.

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Investors With Cash Place Downward Pressure on Home Prices

Homebuyers with enough cash in hand to cover their offer price in full are able to bid significantly lower on properties and according to a new industry report released Monday, because they offer a shorter and more reliable closing timeline without the impediments of a mortgage, they often win out with that lower bid. The study found that this low-bid-winning dynamic is particularly true for distressed properties because mortgage servicers selling foreclosed or REO homes generally prefer transactions that can settle within 30 days.

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Loan Modifications Are on the Decline: Moody’s

As robo-signing reviews reach completion, servicers are beginning to work through some of their foreclosure backlogs, according to a third-quarter report from Moody's Investors Service. At the same time, the ratings agency found that loan modifications are on the decline. Servicers are now turning to loss mitigation alternatives such as short sales and deeds in lieu, Moody's says. The agency is also forecasting longer timelines this year to move properties from foreclosure sale to REO liquidation.

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Moody’s: U.S. CMBS Loan Delinquencies Rise to 9.32%

The delinquency rate on loans included in commercial mortgage-backed securities (CMBS) transactions increased by five basis points in December to 9.32 percent, according to Moody's Investors Service. At the same time, the rate of loans in special servicing declined by 13 basis points. December was the 12th consecutive month that CMBS delinquencies have been above 9 percent, by Moody's assessment. Bank of America Plaza in Atlanta, Georgia, with an outstanding balance of $363 million, was the largest newly delinquent loan in December.

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Rise in Home Sales Signifies Strengthening Market: Economists

The long-awaited housing recovery is beginning to blossom, according to industry experts taking a look at recent existing-home sales data. While admitting home sales are ""still very low,"" the chief economist at Capital Economics says it is clear the housing recovery is now well underway. The evidence: home sales have been on the rise for the past three months, posting a 5 percent increase in December, according to the latest market study released by the National Association of Realtors.

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Delinquency and Foreclosure Rates Down From a Year Ago: LPS

As of the end of December, Lender Processing Services (LPS) counted 6,167,000 borrowers behind on their mortgage payments, including those already in the process of foreclosure. That tally is the culmination of a steady decline over the last year, with both the national delinquency rate and foreclosure rate down when compared to their December 2010 readings. Delinquencies dropped by 7.7 percent from their year-ago level, while foreclosures declined by 1.0 percent.

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