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Shadow Inventory: 46 Months to Clear Distressed Housing Supply

It will take 46 months to clear the market's supply of distressed homes, or the shadow inventory, according to estimates from Standard & Poor's Rating Services based on first-quarter 2012 data. While national residential mortgage liquidation rates appeared stable over the first three months of this year, these rates varied widely between local markets. Regional variations in how quickly servicers can clear the backlog of nonperforming loans are primarily due to differences in foreclosure procedures. S&P says its months-to-clear estimate in judicial states is almost 2.5x as long as non-judicial states.

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Florida Seeing Rapid Revivals but Still Haunted by Shadow Inventory

As one of the hardest hit states during the real estate downturn, Florida often pops up in market reports as having a noticeably higher foreclosure rate than other states. Even so, the state is also becoming recognized for how quickly some of its markets are climbing out of the housing slump. For example, the National Association of Realtors recently cited data from Move Inc. showing the top 10 turnaround markets. Seven out of 10 were in Florida. Yet, a recent report from Florida Realtors stated that while Florida is in a revival period, distressed properties will remain a big factor for the next 10 years.

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Freddie Mac Appoints Private Sector Banking Exec to CEO Post

Freddie Mac said Thursday that its board of directors has selected Donald H. Layton to serve as the company's new CEO. Layton will join the GSE on May 21, and will also have a seat on the board of directors. In October 2011, the Federal Housing Finance Agency announced that Charles E. Haldeman, Jr. had informed Freddie Mac's board of his desire to step down within the year. Haldeman served as the GSE's CEO since August 2009. Layton has had a long career in the private banking and financial services sectors. He worked for nearly 30 years at JPMorgan Chase and its predecessors and more recently, served as chairman and CEO of E*Trade Financial.

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With $2.7B Profit, Fannie Mae Ends Q1 Without Drawing Taxpayer Funds

Fannie Mae said Wednesday that it brought in $2.7 billion dollars in net income during the first quarter of this year, and for the first time since it was seized by the government in September of 2008, the company does not need a draw of taxpayer funds from Treasury to get out of the red. Fannie Mae says its improving numbers can be traced to lower credit-related expenses as the decline in home prices slowed and the company shed some of its REO holdings.

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Fiserv Expects Home Prices to Stabilize This Year Despite Price Declines

Analyzing the housing market through the perspective of 384 markets, Fiserv Case-Shiller Indexes pointed to a slow, but steady pace toward recovery after dramatic price declines. According to the Fiserv indexes, in the fourth quarter of 2011, home prices in 70 of the 384 metro areas tracked were either unchanged or had increased compared to the same quarter a year ago. Also, 122 of the metros saw prices decline by less than 2 percent. On the other hand, nearly one-half of the metro areas, or 191, saw prices decrease by more than 2 percent.

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Home Prices in March Show Monthly Gain but Yearly Loss: CoreLogic

When including distressed sales, home prices rose month-over-month by the same percentage point as they dropped year-over-year. CoreLogic reported Tuesday in its March Home Price Index (HPI) that compared to a year ago, prices declined 0.6 percentin March, while prices rose 0.6 percent compared to the month before in February. The monthly gain when including distressed sales is the first time since July 2011. Distressed sales include short sales and REO transactions.

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FHFA Explains Intentions of REO-to-Rental Initiative

Clarification was offered Monday on misconceptions regarding the REO-to-Rental Initiative, currently in pilot stages. Meg Burns, FHFA's senior associate director for housing and regulatory policy, explained in testimony to lawmakers the purpose and intent of the pilot program, which involves the bulk sale of Fannie Mae REO properties to investors who will then convert their purchases into rental units. Burns made it clear that the program is highly targeted for select markets that have specific characteristics including an oversupply of single-family homes for sale and a strong demand for rental housing.

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Slow Growth: 115,000 Jobs Added In April, Unemployment Rate Down

The nation added 115,000 jobs in April, far below expectations and a drop from March’s revised payroll growth of 154,000, the Bureau of Labor Statistics reported Friday. The closely watched unemployment rate dipped again to 8.1 percent – its lowest level since January 2009 (7.8 percent) when President Obama took office – a function of a sharp drop in the nation’s labor force. Payroll gains for February and March were revised, adding 19,000 to the February numbers and 34,000 to March. The average workweek remained at 34.5 hours – still below the level when the recession began in December 2007 (34.6) and average hourly earnings improved by one cent. The number of people not in the labor force increased, as both the number of people employed and unemployed declined.

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Payment to Treasury Drags Freddie Mac to Net Worth Deficit

Freddie Mac reported net income of $577 million for the first quarter of 2012. That combined with $1.21 billion in unrealized gains on securities investments resulted in comprehensive income of $1.79 billion. The GSE's finances didn't sit in the black for very long, however. After a $1.8 billion dividend payment to its primary shareholder, the U.S. Treasury, Freddie's net worth was a deficit of $18 million. Looking at the GSE's loss mitigation numbers, short sales almost equaled the number of loan modifications during the first quarter.

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Is This Market ‘Bottom’ a True One That Will Stick?

During a CoreLogic economic webinar Thursday, the company's chief economist, Mark Fleming, Ph.D., was asked if the housing market has hit bottom and will it stick, as reports seem to be speculating. Apparently, the market was thought to have hit bottom twice before already. Fleming noted that this happened in 2010 when the home buyer tax credit was available and a second time in 2011 before the European debt crises, the Japanese earthquakes, and our own debt ceiling debate crushed consumer confidence.

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