Market Studies

Two separate industry gauges released Tuesday indicate that despite the ups and downs seen in monthly reports on home prices over the last year, residential property values ended 2010 relatively unchanged from 2009 levels. Reports from both Integrated Asset Services and CoreLogic point to level ground over the 12-month period, although consecutive month-to-month declines were the dominant pattern during the latter part of the year without the homebuyer tax credit incentives.

According to data released by Lender Processing Services (LPS) Tuesday, delinquency rates are down across all first-lien home loan products, with an 18 percent overall decline since the start of 2010. The company attributed the drop to more loans entering foreclosure, combined with a decline in new delinquencies. The nation's foreclosure inventory, on the other hand, swelled almost 10 percent over the course of 2010. LPS says 30 percent of the foreclosures started during the month of December are ""repeat foreclosures,"" meaning they have been in foreclosure previously.

The latest loan officer survey from the Federal Reserve shows a more positive outlook for certain sectors of the lending industry, but says little improvement is expected in residential real estate this year. Although, about 45 percent of banks responded that they experienced recent growth in their residential mortgage portfolios, despite weakened demand. Around one-third reported having originated a large amount of loans that are not eligible for guarantee by the Federal Housing Administration and cannot be sold to Fannie Mae and Freddie Mac.

Barclays Capital says that as servicers perform complicated modifications and other actions, remittance reporting has been found wanting. A recent study by the research firm examines typical remittance reports and points out flaws in the process, aiming to make a case for a complete overhaul. Barclays says current procedures sometimes make it difficult to understand where money is coming and going, and with some transactions the math gets fuzzy very quickly.

Mortgage bankers originated $110 billion of commercial and multifamily mortgages during 2010 - an increase of 36 percent from 2009, according to the Mortgage Bankers Association. A separate report from Jones Lang LaSalle corroborates the trade group's assessment of a resurgence in the financing market and indicates even stronger growth in 2011, even without the predicted surge is distressed sales. Wells Fargo is ranked as the largest servicer of commercial and multifamily mortgages.

With loan modifications on a steady decline, the analysts at Fitch Ratings say the common thread running through the industry has become when will the servicer foreclose as opposed to how can a distressed borrower stay in their home. Fitch's analysis of loan mod trends shows little improvement in success rates. While alternatives like short sales are modestly improving loss severities, the agency says servicers report borrowers are electing to remain in their property longer by staying on through the extended foreclosure process.

Although the nation is in the midst of an economic recovery, unemployment levels remain extremely elevated, and that - along with lower housing prices and a large inventory of homes in foreclosure - is leading to an increase in defaults on housing finance agency (HFA) loans, according to the analysts at Standard & Poor's (S&P). A recent study by S&P has revealed that delinquent HFA loans have exceeded state averages for the first time since the agency began tracking loan performance in 2006.

Moody's Investors Service studied two million loans backing residential mortgage-backed securities (RMBS) pools and found that a loan that is modified and then reported as current is three times as likely to default over the ensuing twelve months as a current loan that has not been modified. The agency's also put the practices of eight major servicers under the microscope. It found that six-month re-default rates vary considerably, from 20 percent for Citi and Litton to 33 percent for Bank of America.

The nation's unemployment rate dropped to 9.0 percent in January, although employers added just 36,000 jobs to their payrolls, according to figures just released by the Department of Labor. January's rate is down from 9.4 percent in December, and is the lowest jobless reading reported by the federal government in two years. The market was expecting the drop. The Dow Jones Industrial Average broke 12,000 on Thursday in anticipation of the decline.

Forget win-loss records, quarterback ratings, and total yardage tallies -- the winner of Sunday's Super Bowl XLV showdown can be predicted most accurately by analyzing the prevailing commercial real estate climate in the opposing teams' hometowns, according to Jones Lang LaSalle. Based on historical analysis of recent Super Bowls, the firm found that teams from cities with a higher percentage of vacant office space have won the Lombardi Trophy nearly two-thirds of the time.