REO

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.

Serious delinquencies are on the decline, according to a recent report from Foreclosure-Response.org, a joint venture of the Local Initiatives Support Corporation, the Urban Institute, and the Center for Housing Policy. Among the 100 largest metropolitan areas, the study found serious delinquencies declined from 10.4 percent at their December 2009 peak to 9.3 percent by mid-2011. At the same time, foreclosure completions have steadied at 5.5 percent - but this leveling could prove problematic for recovery.

Data released last week by Standard & Poor's indicates the fourth quarter of 2011 started with broad-based declines in home prices. The 20-city composite of S&P's closely watched Case-Shiller index was down 1.2 percent in October versus September. Home prices dropped in 19 of the 20 cities covered by the S&P/Case-Shiller Index. Phoenix was the only metro to see a month-over-month increase. Looking at the year-over-year comparisons, S&P says home prices are down more than 3 percent.

The Federal Housing Administration (FHA) is extending the temporary waiver of its property anti-flipping rule. FHA rules typically prohibit insuring a mortgage on a home owned by the seller for less than 90 days. In 2010, however, the agency waived this regulation, and later extended the waiver through 2011. This latest extension permits the use of FHA-insured financing for HUD-owned and bank-owned properties, no matter how long the homeowner has held the title, through December 31, 2012.

Despite record low mortgage rates, 2011 has seen a surprisingly high level of cash home purchases, according to the real estate research firm Hanley Wood Market Intelligence. Analysts with the company say between tight lending standards and a desperate search for yield by investors, cash purchases of homes - particularly for distressed properties - are becoming more common. The company's study found 38 percent of homes purchased in 2011 were bought with all cash.

With a New Year comes new challenges for our industry - and the promise of a better tomorrow. For homeowners. For our economy. For our nation. As it does for many Americans, a New Year offers the mortgage lending and servicing industry a chance to take a step back and reflect. The message we should take from 2011 is clear: The American Dream of homeownership is far from over. Americans want to own their slice of the dream, and one nightmare - namely, a financial crisis - will do anything but soften the strength and ingenuity of a time-tested people.

Home prices are expected to post a decline of 1.57 percent for the fourth quarter of 2011, after falling 0.4 percent through September, according to more than 100 economists and housing experts surveyed by Zillow. Prices are forecast to decline until the market's bottom is reached in late 2012 or early 2013. After 2013, panelists expect a steady annual appreciation rate of roughly 3 percent through 2016, which is slightly below appreciation rates experienced during the pre-bubble years.

The year 2011 is ending on a high note as economists anticipate some positive movement in the housing market. Prices appear to be reaching their trough, visible supply is on the decline, and banks are beginning just slightly to loosen lending standards, according to a fourth-quarter report from Capital Economics. However, the research firm warns these positive signs do not point to an immediate recovery, particularly with housing undervalued by the most it's been since at least 1975.

Home prices in the U.S. decreased 0.2 percent on a seasonally adjusted basis in October, according to the Federal Housing Finance Agency's (FHFA) House Price Index released Thursday. On a yearly basis, prices were down 2.8 percent. The drop brings prices to levels seen in February 2004. Current prices are about 19.2 percent below their peak in April 2007. FHFA also revised the previous month's index, lowering the 0.9 percent increase reported for September to a 0.4 percent increase.

As 2011 comes to a close, Zillow anticipates home value declines for the year will total more than $681 billion. The rate of depreciation, however, is slowing, the company says. This year's decline is 35 percent less than last year's $1.1 trillion drop in value. Additionally, much of this year's decline occurred during the first half of the year. In terms of dollar value, the sharpest decline in 2011 was seen in the Los Angeles metropolitan area, followed by New York and Chicago.