A lawsuit currently in the Florida Supreme Court has the potential to undo “hundreds of thousands of foreclosures and open up U.S. banks to severe financial liabilities in the state,” Reuters News reports.

This week the court heard oral arguments over whether banks filing foreclosure lawsuits using documents that were discovered to be fraudulent can dismiss the cases and then refile the cases with different paperwork.

Analysts say that the judges’ ruling on the case — which could still take eight more months to decide — has the potential to influence judgments in 26 other states that require lawsuits in foreclosures.

"If the Florida court takes a strong stand, it sends a strong signal to the mortgage servicing industry in the rest of the country," says Tom Cox about the case, Roman Pino vs. Bank of New York Mellon. Cox is a foreclosure attorney who in the past is known for bringing about one of the first foreclosure lawsuits in the country.

This current case, he says, has the potential to cause other judges to start overturning more foreclosure lawsuits.

"A broad universe of mortgages could be rendered unenforceable," former U.S. Attorney Kendall Coffey told Reuters News. “The cost to the financial industry is difficult to estimate, but it could be substantial."

The case has its roots in the robo-signing scandal, which rattled throughout the country in 2010 when banks were found to be approving foreclosure documents in mass numbers without conducting proper reviews.

Source: “Florida Foreclosure Case Could Slam Banks,” Reuters News (May 9, 2012)

The White House is set to announce today figures reflecting a big jump in the number of Americans participating in federal initiatives meant to aid financially strapped home owners and bolster the sluggish housing market.

Officials say the new data underscore the efficacy of programs President Obama has implemented to let more home owners refinance into historically low interest rates.

Obama will use the figures to demonstrate the need for lawmakers to take even more action to give still more Americans the same opportunity.

Source: "Obama to Tout Success of Mortgage Refinancing," Washington Post (May 11, 2012)

Home buyers and sellers need to get ready to pounce. Hard-hit housing markets are on the road to recovery and expected to see major price gains soon.

Some of the hardest-hit markets during the housing crisis — plagued by soaring foreclosures and plummeting home prices — are expected to post some of the biggest gains through 2013, according to a report released this week by Fiserv.

"Some markets may have overshot to the downside, and people are jumping in to try to catch the bottom," says David Stiff, Fiserv’s chief economist. Fiserv recently projected that nationwide housing prices will gain 4 percent a year over the next five years.

The areas projected to have the largest price gains, according to Fiserv:

1. Madera, Calif

Projected price increase by the end of 2013: 21.5 percent

2. Medford, Ore.

Projected price increase: 20.1 percent

3. Yuma, Ariz.

Projected price increase: 16.7 percent

4. Corvallis, Ore.

Projected price increase: 11.4 percent

Source: “10 Housing Markets Set for Double-Digit Price Gains,” CNNMoney (May 9, 2012)

Even creditworthy borrowers are finding it difficult to get a mortgage nowadays and it’s unlikely banks will ease their standards anytime soon, Federal Reserve Chairman Ben Bernanke told a banking conference in Chicago Thursday.

While banks have made huge strides in improving their balance sheets and overall lending (such as for credit cards and auto loans), banks continue to be extra cautious when it comes to issuing new mortgages, he said. Even borrowers coming with a 20 percent down payment on a home purchase may face hurdles unless they have stellar credit, he said.

"A return to pre-crisis lending standards wouldn't be appropriate," Bernanke said in referencing how banks prior to the housing crisis were issuing mortgages with little or no documentation for jobs or incomes. "However, current standards may be limiting or preventing lending to many creditworthy borrowers."

The challenges of getting a mortgage have been cited by real estate professionals and economists as one of the biggest obstacles standing in the way of a full housing recovery.

An estimated 10 to 20 percent of creditworthy home buyers are being locked out of the housing market because of tightened credit conditions, U.S. Housing Secretary Shaun Donovan told Reuters.

Source: “Credit Easing in U.S., Fed Chairman Says,” The New York Times (May 10, 2012) and “Bernanke: Even Worthy Borrowers Can’t get Mortgages,” Reuters News (May 10, 2012)

It’s an election year, and real estate professionals from across the country want to make sure their voices are heard. More than 10,000 REALTORS® from coast to coast are expected to come together next week to show their support for home ownership in the nation’s capital.

The Rally to Protect the American Dream will be held May 17 in front of the Washington Monument in Washington, D.C. The rally will take place during the National Association of REALTORS®' Midyear Legislative Meetings & Trade Expo, May 14-19.

Several members of Congress are also expected to attend the rally and listen to real estate professionals speak out about the critical issues facing home ownership today and how important housing is to an overall economic recovery. Among the housing issues to be addressed are the threats mortgage interest deduction, foreclosures and short sales, affordable financing, and ensuring that credit is available for those who want — and are able to — purchase a home.

To learn more about the REALTOR® rally or to register to attend, visit www.realtorrally.org.

By Melissa Dittmann Tracey, REALTOR® Magazine Daily News

For the second consecutive week, fixed-rate mortgages reached new all-time records lows, offering another big boost to home buyer affordability.

The 30-year fixed-rate mortgage averaged 3.83 percent for the week ending May 10, posting a new record low from last week’s 3.84 percent average. The 15-year fixed-rate mortgage also posted a new record, averaging 3.05 percent this week.

Here’s a closer look at mortgage rates for this week:

• 30-year fixed-rate mortgages: averaged 3.83 percent, with an average 0.7 point, down from last week’s previous record of 3.84 percent. A year ago at this time, 30-year mortgages averaged 4.63 percent. The 30-year fixed-rate mortgage, the most popular choice among home buyers, has averaged below 4 percent for nearly every week — except for one — since Dec. 8, 2011, according to Freddie Mac.
• 15-year fixed-rate mortgages: averaged 3.05 percent, with an average 0.7 point, dropping from last week’s previous record low of 3.07 percent. Last year at this time, the 15-year fixed-rate mortgage averaged 3.82 percent.
• 5-year adjustable-rate mortgages: averaged 2.81 percent, with an average 0.5 point, dropping from last week’s 2.85 percent average. Last year, 5-year ARMs averaged 3.41 percent.
• 1-year ARMs: averaged 2.73 percent, with an average 0.5 point, rising from last week’s 2.70 average. A year ago, 1-year ARMs averaged 3.11 percent.

Source: Freddie Mac

The rate of borrowers past due by 60 days or more on their mortgage payments fell in the first quarter to 5.78 percent, the lowest delinquency rate since 2009, according to TransUnion.

The pace was lower in all but eight states, with Florida and Nevada posting the highest rates. TransUnion forecasts a decline in delinquency rates this year as gradual improvements in the economy help more borrowers to repay their home loans.

Source: "TransUnion: Mortgage Delinquencies Down in 1Q to Lowest Level Since 2009," Wall Street Journal (05/09/12)

Do you have a fear of being apart from your cellphone? If so, you may suffer from "nomophobia" or "no mobile phone phobia," MSNBC.com reports.

It's on the rise. And in the real estate industry, where smartphones are dominant, you may be at risk. Do you never turn off your phone? Obsessively check it? Constantly worry about losing it?

If so, you may be among the 66 percent who recently admitted to having "nomophoboia," according to a national study by SecurEnvoy, a mobile phone technology firm. Four years ago, a study showed 53 percent admitted to having it.

According to the survey, respondents, on average, reported checking their cellphones 34 times a day. Seventy-five percent reported taking their cellphone with them to the bathroom. And some of those surveyed also reported sleeping with it and even taking it in the shower with them (protecting it so it stays dry, of course).

"Cellphones are tools that should be used to enhance our lives -- not to destroy our interpersonal communication skills with those that we love," Mitch Spero, director of child and family psychologists, told MSNBC.com.

Source: “Addicted to Your Cellphone? Nomophobia on the Rise,” NBCMiami.com (May 8, 2012)

A new study estimates that 17.3 million prospects for new mortgages are being overlooked by lenders. Many of these prospects hold little credit history and, therefore, may be viewed as a risk to some lenders in making a loan.

Experian, a credit analytics provider, notes that lenders will need to widen their market base if they are to grow their portfolios. That may require lenders to expand who they're lending to, including finding creditworthy prospects who may have lower credit scores than the typical prime borrowers.

"Identifying near-prime borrowers is a trend in place for the last eight years, but lately there is a renewed focus as small- to medium-sized lenders get into the mortgage space more," Michele Pearson, vice president of product management at Experian, told HousingWire. "We want to give those folks a chance to identify those borrowers."

Otherwise, lenders may miss out on the potential to grow new mortgages at an estimated $3.86 billion, Experian estimated in a recent white paper.

Source: “Experian: Mortgage Lenders Looking to Draw Lower-Credit Borrowers,” HousingWire (May 8, 2012)

The U.S. Department of Justice is investigating Wells Fargo, the largest mortgage servicer, over allegations that the bank may have discriminated against minority home buyers by offering them risky loans when they qualified for more traditional, safer loans.

Wells Fargo have called the charges unjustified and says the banks has complied with fair lending laws.

City officials in Baltimore and Memphis have filed lawsuits against Wells Fargo, accusing the bank of "'reverse redlining' or intentionally targeting minority communities for predatory mortgage loans, leading to high foreclosures in minority neighborhoods," Reuters reports about the lawsuits.

Bank of America's Countrywide Financial unit recently faced similar charges of discriminating against minority home buyers. Despite denying the claims, the bank still agreed to pay $335 million, a record, to settle the charges in December. The bank had been accused of issuing higher interest rates and fees and steering Hispanics and black borrowers to pricey subprime loans. On the other hand, investigators argued that white borrowers tended to be offered less risky loans than minority borrowers.

Wells Fargo also announced this week that it's facing investigations by the government into over whether it violated other laws with its mortgage origination practices. For example, the bank may face charges over whether it properly disclosed risks to investors of its mortgage-backed securities from September 2006 through early 2008.

Source: “Wells Fargo May Face Fair Lending Claims,” Reuters News (May 8, 2012)

Have home prices finally hit bottom? Many analysts think so. According to the latest forecast by Fiserv, the market watcher sees a big boost to home prices on the horizon, projecting that home prices will rise nearly 4 percent per year for the next five years.

The real estate markets expected to see the biggest increases in home prices will likely be those hardest hit the last few years by foreclosures, such as in Phoenix and Las Vegas, and areas where prices have fallen the most, according to Fiserv’s forecast.

Housings rising affordability mixed with falling inventories of for-sale homes are the main factors driving the expected price increases, according to Fiserv.

Initially, investors are expected to help drive most of this price increase, and then followed by first-time and trade-up buyers as they re-emerge in bigger numbers to the market.

Source: “U.S. Home Prices Could Rise 4% a Year, Forecast Says,” USA Today (May 8. 2012)

Tighter housing inventories are starting to lift home prices, says Anand Nallathambi, CoreLogic’s CEO.

CoreLogic’s latest home price index, which includes distressed sales, shows a slight month-over-month increase of 0.6 percent in home prices from February to March. But some markets are seeing much more of a price boost this spring.

"This spring the housing market is responding to an improving balance between real estate supply and demand, which is causing stabilization in house prices," says Mark Fleming, CoreLogic’s chief economist. "Although this has been the case in each of the last two years, the difference this year is that stabilization is occurring without the support of tax credits and in spite of a declining share of REO sales."

States With Highest Appreciation

According to CoreLogic, the following states had the highest appreciation in March (this includes distressed sales):

1. Wyoming: +5.9%
2. West Virginia: +5.3%
3. Arizona: +5.1%
4. North Dakota: +4.7%
5. Florida: +4.5%

States With Biggest Depreciation

Meanwhile, the states with the greatest depreciation, when also figuring in distressed sales, are:

1. Delaware: -10.6%
2. Illinois: -8.3%
3. Alabama: -8%
4. Georgia: -7.3%
5. Nevada: -5.8%

By Melissa Dittmann Tracey, REALTOR® Magazine Daily News

It wasn’t exactly the welcoming response from the neighborhood a couple expected when they tried to enter a home they just purchased which had been in foreclosure. Their two new neighbors held them hostage at gunpoint.

Jean-Joseph Kalonji, 61, and his wife Angelica, 57, arrived at the home their son had just purchased to have the locks changed. But two men suddenly came up behind them as they were trying to get into the home, and pointed semi-automatic rifles at their backs.

"Shut up or I'll shoot," the men reportedly told the couple, having the couple lift their arms over their heads.

The men — a neighbor and his teenage son — had thought a robbery was in progress at the foreclosed home, which had stood vacant for several months. The men thought they were saving the day.

The couple claimed to be the new owners but couldn’t produce the closing paperwork so the men contacted police as they kept the couple held at gunpoint. The police arrested the couple, and they were sent to jail, charged with loitering and prowling.

The neighbors — Robert Canoles and his son — had been praised by police for busting what everyone assumed was a foiled robbery.

However, the tables turned when the couple and their son proved they were actually the new owners of the home. The charges against the couple were dropped, and the men now face charges for holding their new neighbors at gunpoint. The two men were arrested and charged with aggravated assault, false imprisonment, and criminal trespass.

Meanwhile, the couple’s son, Bruno Kalonji, says "we're waiting to move" into the home, but "we're still afraid of what the guy next door might do."

Source: “Newton County Neighbors Charged After Home Buyers’ Arrests,” The Atlanta Journal-Constitution (April 24, 2012)

As the number of for-sale homes listed on the multiple listing service (MLS) drops, the number of single-family homes up for rent has been gradually increasing, RISMedia reports.

Single-family home rentals are a growing business, as more investors buy up foreclosures at bargain prices and then transform them into rentals.

About 16 percent of all listings on the MLS are rentals, which is more than double the number of rentals listed in 2006, RISMedia reports. Single-family rentals are often listed on the MLS by real estate brokers, whereas multifamily units typically aren’t.

The single-family rental market now accounts for “21 million rental units or 52 percent of the entire residential rental market,” according to a new study by CoreLogic.

Single-family rentals are usually very differently from multi-family homes. For example, rents for single-family rentals typically are 1.5 to 1.6 times higher than multifamily homes. Also, families and prior home owners tend to be attracted to single-family rentals whereas multifamily tenants tend to be younger, more mobile people who have never owned a home before.

Many of the single-family rental tenants nowadays are former home owners who had faced foreclosure and can no longer afford to own. According to CoreLogic, more than 3 million home owners have been turned into renters over the past five years due to foreclosure.

Source: “Single Family Rentals Now Exceed Multifamily,” RISMedia (April 23, 2012)

Where is it cheapest to buy a home? Look in the Midwest for the bargains, according to a recent 24/7 Wall St. article, which used Realtor.com data to track the most affordable housing markets based on the lowest price per square footage.

“In general, the cities with the lowest real estate prices per square foot were cities that have suffered from poor economic conditions for some time,” 24/7 Wall St. notes in the article. “Many of these cities have begun to see interest from potential home owners and investors.”

The following cities have the lowest cost per square foot in the nation:

1. Detroit

Price per square foot: $62.45

Median list price: $84,900

2. Fort Wayne, Ind.

Price per square foot: $66.03

Median list price: $104,900

3. Toledo, Ohio

Price per square foot: $67.02

Median list price: $100,000

4. Indianapolis

Price per square foot: $68.56

Median list price: $133,000

5. Wichita, Kan.

Price per square foot: $69.04

Median list price: $129,900

The metro with the highest price per square footage? San Francisco, where the price per square foot averages $420.99, and the median list price is $611,700.

Source: “America’s Most and Least Affordable Cities to Buy a Home,” 24/7 Wall St. (April 23, 2012)

Real estate agents earned a place on U.S. News and World Report's recent compilation of the best business jobs, alongside such other professions as human resources specialists and meeting, convention, and event planners.

In addition to putting the customer first and other tips, insiders say that staying on top of business trends is critical for success. Often, according to Destin Real Estate Company owner Blake Morar, real estate agents allow emotion more than anything else guide their recommendations to home buyers and sellers, which he says is the wrong way to go about it, since evaluating housing markets is a huge part of the agent's responsibility.

Morar, whose firm is based in Santa Rosa Beach, Fla., suggests that would-be agents “become a student of the business,” learning as much as possible about the process before diving in head first. That advice is in line with what other professionals in other fields say about launching a successful business career, along with maximizing flexibility and looking proactively for a job opportunity that’s the right fit.

Source: “6 Booming Business Jobs,” U.S. News & World Report (April 19, 2012)

Living near a high-scoring public school district can raise home values $205,000 higher compared to homes located in neighborhoods with low-scoring school districts, according to a new study by Brookings Institution. Brookings analyzed the nation’s 100 largest metro areas to find the differences between living near a high-scoring public school and a low-performing school.

“We think of public education as being free, and we think of the main divide in education between public and private schools,” Jonathan Rothwell, a senior research analyst at Brookings, told The New York Times. “But it turns out that it’s actually very expensive to enroll your children in a high-scoring public school.” The cost of living in a high-scoring public neighborhood can be higher than paying a private tuition at a school, researchers note.

Housing costs near high-scoring schools — those in the top one-fifth of schools in the area — were 2.4 times higher on average, or $11,000 more per year, than homes located in school districts in the bottom fifth, the study found.

“Some of the areas with the largest differences in housing costs also have the widest gaps in school test scores,” reports CNNMoney about the study’s findings.

Students from low-income families — classified as those who are eligible for free or reduced-price school lunches — were found to be more likely to attend schools that score in the 42nd percentile on state tests, according to Brookings. On the other hand, students from middle- to high-income households, on average, tend to attend schools that score in the 61st percentile.

Source: “Test Scores and Housing Costs,” The New York Times (April 19, 2012) and “Living Near Good Schools will Cost an Extra $200k,” CNNMoney (April 19, 2012)

Money used for a federal program aimed at helping 18 hard-hit housing market states can now reallocate its funds to help home owners complete short sales or other foreclosure alternatives, Freddie Mac announced Monday to mortgage servicers.

Mortgage giant Freddie Mac, along with Fannie Mae, has recently placed more focus on helping home owners complete short sales to avoid foreclosure. (Read more: Fannie, Freddie Speed Up Short Sales)

The Hardest Hit Fund reportedly has been an underused program by 18 states and the District of Columbia. The program is to provide home owner assistance to states through loan modifications, short sales, unemployment assistance, and mortgage principal reduction. But only 3 percent of the funds for the $7.6 billion program has been used as of Dec. 31.

Some of that money can now be allocated to helping more distressed home owners, including borrowers for short sales, deed-in-lieu of foreclosure, or relocation assistance, according to Freddie Mac.

Source: “Freddie Directs Servicers to use Hardest Hit Fund in Short Sales,” HousingWire (April 23, 2012)

Short sales are surging this year, and if the trend continues, they could reach record levels in 2012, RealtyTrac reports.

Short-sale transactions are starting to outpace foreclosure sales, as more banks see it as a better option to curb high losses from foreclosures. More mortgage servicers are also trying to increase the pace of approving short sales, a process that is generally viewed as drawn-out and lengthy.

Short sales increased 33 percent in the last year, according to January data released this week by RealtyTrac. Thirty-two states saw year-over-year increases in short sales. Lender Processing Services Inc., which also recently released its January housing data, showed that short sales accounted for 23.9 percent of home purchases in January while foreclosures made up 19.7 percent of sales — the first time that short sales have outnumbered foreclosures.

"[We] believe 2012 could be a record year for short sales," says Daren Blomquist, vice president at RealtyTrac.

This week, the Federal Housing Finance Agency, the regulator to mortgage giants Fannie Mae and Freddie Mac, issued new rules to speed up the pace of short sales. Mortgage servicers will be required to respond to a short-sale request within 30 days and make a decision about short-sale offers within 60 days. The new rules go into effect June 1.

Source: “Short Sales Expected to Surge This Year,” CNNMoney (April 19, 2012) and “Short Sales Start to Outpace Foreclosures,” REALTOR® Magazine Daily News (April 19, 2012)

Last year, 10 percent of REALTORS® complained about receiving low-ball offers on listed homes — offers usually submitted by the buyer for 25 percent or more below the list price, according to a National Association of REALTORS® survey of its members. But that number has dropped drastically.

According to a survey this March of 4,500 agents and brokers, no REALTORS® complained about low-ball offers. The main problem nowadays: The sudden drop in inventory of for-sale homes has led to fewer homes available to sell.

For home buyers who still think they have a chance of hitting it lucky with a low-ball offer, they’re finding in many markets that their offers are more often being rejected or countered closer to the original asking price, the Los Angeles Times reports.

West Neal with Prudential Olympia in Olympia, Wash., recalls a buyer who came in recently with an offer of $150,000 for a home listed at $250,000. Eventually, they negotiated a final sales price of $230,000, but it took a lot of negotiating on the agents’ parts to get the buyer higher.

"Low-ball offers are down a lot because we're seeing more homes come on the market that are more realistically priced," Neal told the Los Angeles Times.

Source: “Low-ball Offers Decline in Some Housing Markets,” Los Angeles Times (April 22, 2012)