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Principal Reduction Most Effective Type of Mod: Amherst

Amherst Securities recently released a report declaring that principal reduction modifications, without question, are the most effective form of modification. Between three types of modifications - principal, rate, and capitalization - the controversial and much-debated principal reduction mod was found to be the most effective based when it comes to its 12-month re-default rate. For 2011 modifications, the re-default rate after 12 months for principal modifications was 12 percent compared to 23 percent for rate modifications and 30 percent for capitalization modifications, according to the report.

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Mortgage Fraud Continues to Plague Florida in 2012

Although mortgage fraud activity seems to be leveling off, a report from MortgageDaily.com showed that mortgage fraud continues to cause foreclosure problems for the most victimized states. Florida held the highest state index with 163. The state has held the No. 1 position for four of the past five quarters. For the first time since the index's inception in 2006, North Carolina broke into the top five with an index of 53.

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May New Home Sales Hit Two-Year High

New home sales jumped to 369,000 in May - the highest level since April 2010 - as the median and average home prices both dropped, the Census Bureau and Department of Housing and Urban Development reported jointly Monday. Economists had expected sales to reach 350,000 from the prior month's 343,000.

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Survey: Experts Agree Market to Hit Bottom in 2013

Experts surveyed by Zillow expect home prices to decline slightly in 2012 and predict they will bottom in 2013, according to the June 2012 Zillow Home Price Expectations Survey. The survey was comprised of 114 respondents with various backgrounds including economists, real estate experts, and investment and market strategists. Respondents predicted home prices will fall 0.4 percent in 2012, and then rise by 1.3 percent in 2013. Zillow Chief Economist Stan Humphries commented that the convergence of expectations among economists lends further support to the claim that a bottom is real.

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More Downgrades as Moody’s Goes After Several Banks

Count another major downgrade against the global financial community. On Thursday Moody's Investors Service slashed credit ratings for 15 major financial institutions, including Bank of America, Citigroup, JPMorgan Chase, and Morgan Stanley, among others. The reason for Moody's actions: The biggest banks face too much risk from debt-saddled Europe, earnings volatility, and still-faulty mortgages stateside. The ratings agency grouped the downgraded institutions into three groups. Stocks slid for many of the banks.

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Fitch: Clarifying Repurchase Triggers Will Aid Housing Recovery

Fitch Ratings released a commentary Thursday asserting that FHFA's plan to clarify the triggers for a loan repurchase request could be a boon for the industry at large. FHFA had made an earlier announcement that the agency intended to clarify its positions on the appropriate triggers for a putback request from Fannie Mae and Freddie Mac. The GSEs have asked for more than $80 billion in flawed loan repurchases from lenders over the past three years. As a result, it has been argued that lenders have raised standards for loans beyond what many homebuyers can achieve. In the commentary, Fitch suggested that laying out putback triggers and reducing putback liability will have an overall positive effect for the housing market.

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NAHB: Rising Student Loan Debt Could Be Good Sign for Housing

Data shows that the onset of the housing crisis brought with it an increase in students taking out loans for higher education. Since the third quarter of 2008, student loan debt has increased by 47.9 percent ($293 million). This increase is attributed to the drop in the availability of home equity loans, which are often used by homeowning parents to finance their children's education. While student loan debt has risen, NAHB's analysis dismissed speculation that loan delinquency could spell disaster for housing and the economy.

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Modified Borrowers Less Risky than Non-Modified: TransUnion

If a lender had to choose between a consumer with a modified mortgage or a consumer who defaulted but did not get modified, turns out, the lender should go with the modified borrower. According to a new TransUnion study, those who received a modification did better with maintaining payments on loans opened after their initial delinquency than those who did not get modified. The study looked at modified and non-modified delinquent borrowers who opened up auto loans and car loans after their initial delinquency.

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LPS: Prices Up Monthly, Alaska Posts Greatest Gain

U.S. home prices averaged $200,000 in April 2012, posting a monthly gain, but still down from a year ago, Lender Processing Services revealed in a preliminary release. According to the analytics company's Home Price Index (HPI), which reports on price changes based on residential real estate transactions occurring in April 2012, prices increased 1.1 percent from the month before and decreased by 0.1 percent from April 2011. The states, including the District of Columbia, which posted the greatest monthly increases were Alaska (2.6 percent), D.C. (2.4 percent), and Georgia (2.2 percent).

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