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Market Studies

Overall Mortgage Litigation Rises; Servicing Litigation Declines

In the third quarter of 2011, mortgage lawsuits reached their highest level since the Mortgage Litigation Index began tracking them in 2007; however, lawsuits involving servicers declined over the quarter. The index, tracked by MortgageDaily.com and prepared along with Patton Boggs LLP, observed 218 cases over the third quarter, up from 190 the previous quarter and 151 in the same quarter last year. Litigation against servicers dropped from 65 cases in the second quarter to 51 cases in the third.

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Home Prices Down in 2011, but Market Stability Forecast for 2012

While year-over-year home price measurements notched down in 2011, prices are expected to see a slight uptick in 2012, according to Clear Capital. Should the valuation company's predictions ring true, it would be the first time since 2006 that the change in annual home prices has landed in positive territory. Data released by Clear Capital Monday shows year-over-year, national home prices dropped 2.1 percent in 2011. For 2012, the company projects a slight gain of 0.2 percent.

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Delinquencies Stubbornly High as Earlier Declines Come to an End

New data released by Lender Processing Services (LPS) shows mortgage delinquencies at the end of November 2011 were nearly 25 percent below their January 2010 peak. LPS says over that period, the number of noncurrent mortgages was slashed by nearly a quarter simply because fewer borrowers were falling behind on their payments - a trend which dominated 2010 and the first quarter of 2011. Unfortunately, the company says that trend has come to an end.

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Recovery Will Be ‘Lengthy’ and ‘Gradual’: Report

At a national level, the housing market is on the mend, but recovery will be slow this year with little overall change, according to the latest forecast from Veros Real Estate Solutions. The good news is that many markets are no longer expected to be radically declining, but Veros reiterates earlier predictions that this recovery will be ""a lengthy and gradual one."" Throughout 2012, the company expects the strongest markets to experience a 4 percent price increase and the weakest markets to experience 5 to 6 percent declines.

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Unemployment Rate Falls to 8.5%

The nation's unemployment rate continues to trend down. It slipped to 8.5 percent during the month of December as the economy added 200,000 new jobs, the U.S. Department of Labor said Friday morning. December marks the sixth consecutive month of 100,000-plus job gains and the first such stretch employers have been able to string together since 2006. Over the 2011 calendar year, nonfarm payroll employment rose by 1.6 million. Employment in the private sector rose by 1.9 million over the past 12 months, while government employment fell by 280,000.

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Fed Identifies Markets Primed for Bulk REO-to-Rental Programs

The Federal Reserve is throwing its support behind a large-scale REO-to-rental program to address the oversupply of vacant homes and prevent property values from falling further. The Fed notes that in contrast to the market for owner-occupied homes, rental housing is strengthening. Officials say a government-facilitated program has the potential to help the housing market and improve loss recoveries. They've identified specific markets with large concentrations of vacant REOs, where bulk sales to investors make sense.

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Thirty-Year Fixed-Rate Matches All-Time Low

Fixed mortgage rates started the year at or near their all-time record lows. Data from Freddie Mac shows the interest rate on a 30-year fixed mortgage averaged 3.91 percent for the week ending January 5, 2012, matching the record low set just two weeks earlier. This marks the fifth consecutive week the 30-year rate has come in below the 4.00 percent mark. The 15-year fixed-rate is averaging 3.23 percent, just two basis points above its all-time low hit in December.

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Mortgage Modification Scams Make Top Ten Scam List for 2011

Mortgage modification scams made the list of ""Top Ten Scams of 2011,"" assembled by the Better Business Bureau (BBB). Because the federal government announced or expanded several mortgage relief programs this year, the BBB says all kinds of sound-alike websites have popped up to try to fool consumers into parting with their money. Scammers are representing themselves as government agencies or the BBB itself in order to gain consumers' trust.

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CMBS Delinquency Rates Trending Upward: Report

The delinquency rate among commercial mortgage backed securities (CMBS) rose in eight of 12 months in 2011, according to a report released Wednesday by Trepp. Most recently, the rate rose seven basis points to 9.58 percent for the month of December. That's up from 9.2 percent one year ago. Trepp views this as the first of a six to twelve month stretch where the rate could increase by 75 basis points in aggregate, as loans originated in 2007 begin reaching their balloon dates.

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Pending Home Sales Highest in Over a Year-and-a-Half

Pending home sales continued to rise in November, reaching their highest level in 19 months, the National Association of Realtors reported. The trade group's index of signed sales contracts jumped 7.3 percent between October and November and is 5.9 percent above its level a year earlier. The last time the index was higher was in April 2010 as buyers rushed to beat the deadline for the homebuyer tax credit. Analysts say the results are likely to feed the view that there is a recovery going on in the housing market.

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