REO

While Barack Obama and Mitt Romney may have been ""frustratingly light on detail"" so far with regards to housing, an analysis by Capital Economics reveals the two candidates' policies may have more in common than they care to admit. In a Housing Market Update released by the company, property economist Paul Diggle writes that, based on the information Capital Economics has pieced together, ""it looks like anyone expecting either candidates' housing plan to make a dramatic difference to the course of the housing recovery will be disappointed.""

The California Association of Realtors (C.A.R.) continued to report a shortage of inventory in September, which is limiting home sales but seems to be pushing up home prices. According to C.A.R., the median home price in California is now at the highest level in more than four years.

Even though the number of foreclosure filings has risen dramatically in recent months in some parts of the country--specifically in judicial states--the ratings agency DBRS expects the total number of foreclosure filings to show evidence of a steady decline in 2013 when compared to 2012. This is due to ""the record number of servicers that are using short sales as their primary loss mitigation tool to prevent delinquent loans from entering foreclosure,"" the agency's analysts said in a research note issued Monday.

The American Civil Liberties Union announced it has filed a suit against Morgan Stanley on the grounds of loan discrimination. The complaint filed by the ACLU, the National Consumer Law Center, and Lieff Cabraser Heimann & Bernstein alleges Morgan Stanley discriminated against black homeowners and violated civil rights laws by providing incentives to a subprime lender to originate mortgages that were likely to be foreclosed on.

Home prices in September were up 5 percent year-over-year while home sales posted a 4 percent annual increase, even as housing metrics began their typical seasonal declines, according to Redfin's analysis of activity across 19 major U.S. markets. Between August and September, these 19 markets saw prices decline just 0.8 percent, which Redfin says is a smaller decline than is customary at this time of year. At the same time, the number of homes for sale in the target markets was down 29.3 percent from September 2011.

Foreclosure starts fell dramatically in all five West Coast states tracked by Foreclosure Radar, further confirming suspicions that a foreclosure wave may not arrive. ""The continued decline in Foreclosure Starts clearly shows that even though servicers are now apparently in compliance and clear to move forward with foreclosures, they are still in no rush to foreclose on the majority of delinquent borrowers,"" said Sean O'Toole, CEO of ForeclosureRadar.

Foreclosure filings were reported on 180,427 U.S. properties in September, according to RealtyTrac. The total number of filings last month was down 7 percent from August, down 16 percent from September 2011, and was the lowest monthly total recorded by RealtyTrac since July 2007. The foreclosure tracking company says the national decrease in September was driven primarily by sizable declines in non-judicial foreclosure states such as California, Georgia, Texas, Arizona, and Michigan.

Inflated appraisals were identified as one of the causes of the housing bubble, and now undervalued appraisals are viewed as a reason for a stalled recovery. In a National Association of Realtors survey related to home appraisals over the past three months, 11 percent of Realtors said a contract was cancelled because a home was appraised at a value below the negotiated price. One reason for the low values, according to the NAR, is because some appraisers are not taking into account the difference between distressed and non-distressed homes when making comparisons.

The shadow inventory that previously darkened industry outlook is beginning to fade. In fact, we may soon begin to see the sunlight on the horizon. In July shadow inventory - unlisted homes that are seriously delinquent, in foreclosure, or held as REOs - declined 10.2 percent year-over-year, falling to 2.3 million homes, according to CoreLogic's Shadow Inventory Report released Tuesday. Seriously delinquent homes – those 90 or more days delinquent – are the most common type of home in today's shadow inventory, making up 1 million of the 2.3 million-home total.

Hard-hit markets are aching for stabilization that only occupancy can remedy, Marlene Minemier, director of national portfolio management for Cityside Management Corporation, told colleagues at a recent industry conference. ""It is my belief that the emerging REO rental model is a viable, real-world solution allowing tenancy to be an attractive preservation technique,"" Minemier said as she presented her position during a panel discussion on rentals vs. traditional sales.