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Industry Argues in Defense of the Mortgage Interest Tax Deduction

As Washington engages in a standoff over budgetary proposals to avert the fiscal cliff, several industry professionals and associations are calling upon lawmakers to avoid slaughtering what was once thought to be a sacred cow: the mortgage interest tax deduction (MID). While many housing professionals view the deduction as a break for homeowners and an incentive for others to purchase their own homes, critics call the MID a ""subsidization of the real estate industry."" Now that the MID is on the bargaining table, a number of people are speaking up in defense of it.

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Specialty Servicers Should Expect Large Transfers

Tailwinds should continue for specialty servicers in 2013, according to a report from FBR. As large, traditional servicers become unwilling to service certain asset that require more attention, FBR says it believes about $600 billion to $700 billion in ""high-touch, credit sensitive assets"" will eventually make their way into the specialty servicing and sub-servicing sectors.

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A Tricky Transition from Housing Stability to Strength in 2013

Some level of certainty and stability returned to the U.S. housing market in 2012, providing a solid foundation for the market to build on in 2013. But there are still significant risks that threaten this hard-won stability and could trip up some local markets trying to make the tricky transition from stability to strength. RealtyTrac expects 2013 to be bookended by two discrete increases in foreclosure activity: a jump in bank repossessions (REOs) near the beginning of the year and a jump in foreclosure starts near the end of the year.

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DBRS: Risk of Shadow Inventory on Housing Recovery

The housing market remains under pressure in the near term, with shadow inventory, in particular, posing a risk to the housing recovery, according to a report from DBRS. According to estimates, the report revealed about 2.3 million homes still remain in the shadows as of July 2012, and another 2.5 million homes are in existing and new home inventory, or visible inventory. ""Once unleashed, the number of shadow properties will undoubtedly boost supply and distress the local markets that were just beginning to recuperate,"" the report stated.

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KBW Expects ‘Modest Changes’ in Mortgage Market in New Year

Keefe, Bruyette & Woods (KBW) a boutique investment bank and broker-dealer, recently released its predictions for the mortgage market for the year 2013, entitled Watching Grass Grow: Mortgage Reform in 2013. As the title implies, KBW does not expect major changes in the New Year. However the investment bank does expect some ""modest changes in the mortgage landscape driven by the Federal Housing Finance Agency (FHFA).""

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Five Star Economist: Housing in 2013 Depends on Many Moving Parts

No matter how foggy the haze is, economists typically dust off their crystal balls in December. However economic forecasts too often involve driving by looking in a rear-view mirror. Anticipating what might happen in the housing markets, with so many moving parts involved, can be the trickiest of all forecasts. Because housing is a unique expenditure--combining elements of investment and a service--it depends on a variety of elements: employment, income, interest rates, the regulatory environment, and even the weather.

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TransUnion Projects Drop in Delinquencies, but Rate Remains High

TransUnion forecasts a decline in mortgage delinquency rates for 2013, but the rate is expected to stay above 5 percent. The credit bureau expects the mortgage delinquency rate to drop to 5.06 percent by the end of 2013 from an estimated 5.32 percent at the end of this year. At its peak, the mortgage delinquency rate reached 6.89 percent in the fourth quarter of 2009. If the rate does drop to 5.06 in 2013 as TransUnion predicts, the decrease would only be a 27 decline from the peak and still remain above normal levels, which the credit bureau says ranges from 1.5 to 2 percent.

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Zillow: Home Values to See First Annual Cumulative Gain Since 2006

After five years of cumulative losses, home values will finally post their first annual gain, according to data from Zillow. The calculations show homes are expected to gain $1.3 trillion in cumulative value for 2012, the largest gain since 2005 and the first annual increase since 2006, Zillow reported. In 2006, homes increased their value by $483 billion, but then declined from 2007 to 2011, with the largest drop in 2008, when homes lost more than $3.2 trillion in value, according to Zillow.

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OCC: Mortgage Peformance Improves in Q3, Fewer Initiated Foreclosures

In the third quarter of this year, the overall percentage of mortgages that managed to stay current improved from last year, but declined slightly quarter-over-quarter, according to a report from the Office of the Comptroller of the Currency (OCC). The report also found foreclosure activity ""remains elevated,"" but fewer properties entered the foreclosure process. In Q3, more home retention actions were also applied compared with home forfeiture actions (foreclosure sales, short sales, and deeds-in-lieu).

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