THE MORTGAGE DIRECTORS

Sabbatical on Postings.

2007-12-26T16:03:00.000-05:00

I have been posting to this blog for 2 solid years, and 3 prior years to the Article Manager at www.1stMortgages.com. In that time, I have been able to share and advise a great number of people on the chaotic mortgage market. It has been quite a ride.

But, it is now time for me to take a seasonal leave of absence. For the past 3 1/2years, I have been the Managing Director and Chief Learning Officer for Lengthen Your Stride! LLC. In this position, I develop and manage a huge curriculum of educational material. MY efforts with them have provided little time to research and report on the ongoing changes in the real estate and mortgage markets.

Due to these time constraints, I am using this final post as a 'farewell' wave. I have not abandoned this blog, but for now will take a sabbatical on posting.

House Prices Could Fall by 30%

2007-12-07T07:08:00.000-05:00

Housing markets from Punta Gorda, Florida, to Stockton, California, will crash and suffer price drops of more than 30 percent before the housing crisis is over, a report from Moody's Economy.com said on Thursday.

On a national level, the housing market recession will continue through early 2009, said the report, co-authored by Mark Zandi, chief economist, and Celia Chen, director of housing economics.

The report paints a worsening picture of the hard-hit housing sector, which is in the midst of its worst downturn since World War II.

While activity will stabilize in 2009, it will not be until 2010 before a measurable improvement in sales, construction and pricing will emerge, the report said.

House prices are forecast to fall 13 percent from their peak through early 2009. After accounting for incentives home sellers are offering buyers, effective declines peak-to-trough will total well over 15 percent, the report said.

Punta Gorda, Florida, and Stockton, California, are the hardest hit markets in the U.S., with price declines from peak-to-trough forecast at 35.3 percent and 31.6 percent, respectively.

"This is the most severe housing recession since the post-World War II period," Zandi told Reuters.

These markets have been hard hit due to several reasons, namely the exiting of investors from the areas, a fair amount of subprime mortgage loans causing an increase in foreclosures and overbuilding by home builders, Zandi told Reuters.

Home sales, however, should hit a bottom in early 2008, which will mark a 40 percent drop from peak-to-trough.

http://biz.yahoo.com/rb/071206/usa_economy_housing.html?.v=3

Technorati

2007-12-01T16:04:00.001-05:00

Technorati Profile

Nightmare Economic Scenario

2007-11-24T21:09:00.000-05:00

Having just finished reading this article from Associated Press, I could not help to share it with my readers. It is frightening! Here are some excerpts:

In the months ahead, millions of other adjustable-rate mortgages like Colombo's will reset, giving them a higher interest rate as required by the loan agreements and leaving many homeowners unable to make their payments. Soaring mortgage default rates this year already have shaken major financial institutions and the fallout from more of them, some experts say, could spread from those already battered banks into the general economy.

The worst-case scenario is any one's guess, but some believe it could become very bad.

"We haven't faced a downturn like this since the Depression," said Bill Gross, chief investment officer of PIMCO, the world's biggest bond fund. He's not suggesting anything like those terrible times -- but, as an expert on the global credit crisis, he speaks with authority.

"Its effect on consumption, its effect on future lending attitudes, could bring us close to the zero line in terms of economic growth," he said. "It does keep me up at night."

Whoa, was all I could respond once I had read that. But it does not get better, as the article continues, it gets worse, much worse.

Some 2 million homeowners hold $600 billion of subprime adjustable-rate mortgage loans, known as ARMs, that are due to reset at higher amounts during the next eight months. Subprime loans are those made to people with poor credit. Not all these mortgages are in trouble, but homeowners who default or fall behind on payments could cause an economic shock of a type never seen before.

To read the entire story click here.

In my personal analysis of the mortgage markets, I had concluded that what we had seen to this point was not the bottom. I fully expect that the bottom will be seen some time in the second to third quarter 2008. I do not expect any recovery in the mortgage and real estate markets until the first or second quarter of 2009.

The economic impact that will be sustained by the country is inestimable. Homeowners will have a rough time in the next 18 months and values will be depressed until well into 2009.

Fix Your Credit

2007-11-08T09:15:00.000-05:00

Have you found yourself paying all your bills and finding that you have little money left over? Don’t worry your not alone. We find ourselves buying what we need, paying all our bills, and still struggling to get by. What happens when you get behind on bills because of a family emergency, this is one reason you might have bill collectors calling you. This is what happened to me, and I found my way out with some direction from friends and family. Figure out how much you owe on all your bills.

Payoff Your Bills

1. Put as much as can in to them each paycheck.
2. Get one loan to pay them off.
3. Cut up the credit cards.
4. Make a budget, and stick by it.
5. Cut back on buying things that are wants and not needs.

Get A Credit Report

1. Find out what your score is.
2. Find out who wants to collect from you.
3. Call your creditors and let them know your plan.

Results

1. You have paid your debts, and now you want your credit score to be better
2. Take a secured loan out for one thousand dollars.
3. Pay on the loan for a year.
4. Take out another loan for fifteen hundred dollars, this time not secured.

Normally what happens when you take out the secured loan and pay it off is you gain trust with your bank.

Three Years Later

1. It is time to get another credit report.
2. After paying off the bills, and paying off your loans, it’s time to smile.

Your hard work will pay off with better [tag] credit scores [/tag] . No it’s not going to be easy, but you can do it and when you do, email me with some of your success stories and I will put them on my site. It's your credet....

The end is NOT near!

2007-10-27T12:58:00.000-04:00

"In the next six months, one year, two years, the problems in the mortgage market can cause a lot of problems with consumers and hurt buying power in the United States,” Billionaire investor Warren Buffett said at a press conference.

Mr. Buffett has sobering words for consumers and investors who hope that the end is near for the subprime crisis — it’s not. Nevertheless, he did suggest that, "overall, the economy will make progress.”

Housing Sector Stabilizing?

2007-10-25T08:13:00.000-04:00

Here's the economic outlook according to Simon Kwan of the San Francisco Fed. The bottom line is that:

There is little evidence that the ongoing weakness in the housing sector is spilling over to the broader economy, and there are some tentative signs that the housing sector may be stabilizing. Furthermore, there appears to be a fair amount of strength in both consumer spending and labor market developments. Thus, the current economic slowdown seems like a well-timed opportunity to bring the somewhat elevated inflation down to a more acceptable level.

Based on all available information, real GDP growth during the current quarter is likely to be at just under 2 percent at an annual rate. As the drag on the economy due to housing gradually disappears, economic growth is expected to pick up slowly in 2007, but seems likely to remain at a below-trend rate of about 2.5 percent.

Existing-Home Sales Fall To Record Low

2007-10-25T08:08:00.000-04:00

Sales of existing U.S. homes sank to a record low in September, part of a slew of bad news Wednesday that sparked renewed fears about the economy and hopes for aggressive Fed action.

Home resales fell 8% to an annualized 5.04 million last month, the lowest since the National Association of Realtors began tracking combined home and condo sales in 1999. Economists had expected sales to fall to 5.25 million.

Housing starts tumble to 14-year low

2007-10-17T16:35:00.001-04:00

Can it get any worse? Construction of new homes plunged by a bigger-than-expected amount in September, reflecting the deepening troubles in housing.

Groundbreaking for new U.S. homes and permits for future building both hit a 14-year low last month. The Commerce Department reported on Wednesday that housing construction fell by 10.2 percent last month to a seasonally adjusted annual rate of 1.191 million units. Applications for building permits, considered a good sign for future activity, also fell sharply in September, dropping by 7.3 percent to 1.226 million units.

Housing sales, which had set records for five straight years, have been slumping since 2006, a downturn that has intensified in recent months as mortgage lenders have tightened standards for getting loans in response to soaring defaults.

Economists taken by surprise

2007-10-15T13:39:00.000-04:00

Economists had expected housing starts to slip, but the sharpness of the downturn took them by surprise.

"There is no end in sight," said Kurt Karl, chief U.S. economist with Swiss Re in New York. "The builders didn't realize how many cancellations they are going to face. If we hit 1.0 million start range, it's consistent with recessions in the past. And we are heading in that direction."

The dour report pushed up prices for bonds and weighed on the dollar as traders saw greater likelihood the Federal Reserve would follow up a rate cut it made last month with another at its next meeting on October 31.

Index That Forecasts Near-Term Home Sales Fell in August

2007-10-02T17:52:00.000-04:00

An index that forecasts near-term home sales fell in August to a record low as would-be homebuyers had difficulty getting mortgages. Economists said the housing market's woes show no sign of improving soon.

The National Association of Realtors said Tuesday its seasonally adjusted index of pending sales for existing homes fell 6.5 percent from July and 21.5 percent from a year ago.

The pending home sales index has done a farily good job of predicting sales levels over the following two months said Joshua Shapiro, chief U.S. economist with MFR Inc. in New York.

Shapiro and other analysts expect prices to fall further before home sales rebound. Developers are already making big price cuts to move unsold new homes, but existing homeowners are more reluctant to do so.

"We haven't reached bottom yet," Shapiro said.

August's reading of 85.5 was below analysts' expectations and the lowest ever for the index, which started in January 2001. An index reading of 100 is equal to the average level of sales activity in 2001.

With defaults rising among borrowers with weak credit, lenders in August backed off from all but the safest mortgages.

The problems, experts say, were seen especially in expensive areas where borrowers need to take out "jumbo" home loans above $417,000 that can't be sold to government-sponsored mortgage companies Fannie Mae and Freddie Mac

In late August, the gap in mortgage rates between jumbo loans and "conforming" loans below the $417,000 limit widened to 0.93 percentage points, up from a typical level of 0.2 percentage points, according to financial publisher HSH Associates.

That difference makes it harder for prospective buyers -- particularly in the pricey Northeast and West Coast markets -- to afford more expensive homes.

"This is probably the most challenging credit market environment that's faced the housing market in 10 years," said Keith Gumbinger, vice president of HSH.

As of last week, the gap had narrowed to a difference of 0.76 percentage points, with 30-year fixed rate jumbo home loans nationwide averaging 7.22 percent and conforming loans averaging 6.46 percent, according to HSH's weekly survey.

While that's an improvement, Gumbinger said, it could take months for the situation to improve.

In some areas, up to 30 percent of signed contracts fell through in August, said Lawrence Yun, senior economist at the real estate trade group.

"Some creditworthy people are trying to buy homes but can't," Yun said in a prepared statement.

The Realtors' index is based on a sample representing about 20 percent of existing home sales nationwide.

Last week the trade group said that sales of existing single-family homes dropped by 4.3 percent in August to the lowest point in five years. Sales dropped to 5.5 million units that month, the slowest pace since August 2002.

While the real estate trade group has forecast a recovery in home sales by next year, some investors see a long, deep housing market decline and a recession ahead.

"The housing bubble has burst," said Peter Schiff, president of Euro Pacific Capital in Darien, Conn. "Prices are going to collapse and sales are going to fall through the floor."

Sales of New Homes Have Dropped 21 Percent During the Past Year

2007-09-28T08:38:00.000-04:00

August was the worst month for sales of new homes in seven years, according to figures released this morning by the government.

The official sales pace for last month was a seasonally adjusted annual rate of 795,000 units – well below the 867,000 economists were betting on and the slowest since June 2000.

downward move more than erased July's uptick in new home sales, and reflects some of the credit issues that roiled the stock market last month.

During the past year, sales of new homes have dropped some 21 percent, which is forcing builders to provide huge incentives to move the houses they've completed.

For August, the government said the median price of a new home sold was $225,700 – 7.5 percent lower than the same period last year. That's the biggest drop in 37 years.

"Certainly problems across the mortgage finance arena are taking their toll on buyer demand, which is weighing heavily on builder confidence measures," said David Seiders, National Association of Home Builders chief economist, in a press release. "We now expect to see home sales return to an upward path by the second quarter of 2008 and we expect housing starts to begin a gradual recovery process by the third quarter of next year. At that point, the market will have substantial growth potential."

Inventories of new homes for sale increased to an 8.2 months supply, indicating that there are likely to be continued price reductions in the coming months as builders try to find ways to close deals.

Taken with the bad news about existing home sales numbers released this week, we have a gloomy picture of the overall market. Existing sales were down an astounding 4.9 percent last month. That's the worst monthly performance since March of this year and scuttles any hope that July's rather tepid results had offered.

Housing starts lowest since '95

2007-09-21T11:07:00.000-04:00

Home builders began work on the fewest homes in 12 years in August, raising the risk the real estate woes will spread to other parts of the economy.

The Commerce Department said Wednesday that housing starts slid 2.6 percent, to an annual rate of 1.331 million. Building permits, a sign of future construction, dropped 5.9 percent, to a 1.307 million pace, also the slowest since 1995. Both figures came in below economists' estimates.

The housing slump could deepen after borrowing costs rose and lenders shut off access to credit, causing growth to slow even more, economists said.

On Tuesday, Federal Reserve policymakers lowered their benchmark interest rate by half a percentage point to prevent a broader economic slowdown.

"The housing market deteriorated significantly in August," said Brian Bethune, an economist at Global Insight Inc. in Lexington, Mass. "Housing activity will continue to be a significant drag on overall growth through 2008."

Construction of single-family homes plunged 7.1 percent in August, to a 988,000 rate, the slowest since March 1993.

Work on multifamily homes, such as townhouses and apartment buildings, jumped 13 percent, to an annual rate of 343,000.

The decrease in starts was led by a 38 percent plunge in the Northeast that was the biggest since 1990 and an 18 percent decline in the West. Construction increased 11 percent in the South and 4.2 percent in the Midwest.

The number of homes under construction fell 1.2 percent, to a 1.132 million pace. Housing completions decreased 0.2 percent, to an annual rate of 1.523 million. The number of properties authorized but not yet started skidded 0.9 percent, to 195,300.

Falling real-estate prices and subprime mortgage defaults will probably prolong the home-building recession, already the worst in 16 years.

As mortgages become harder to get, increasing foreclosures will throw more properties back on the market, economists said.

Know when to hire tax adviser & pay off that mortgage early

2007-09-20T11:29:00.001-04:00

QUESTION: How do I decide whether I should hire a tax preparer to do my taxes, which are on extension, or do the return on my own?

ANSWER: A good reason to hire a tax adviser/preparer is when you've had a major financial change that greatly affects your tax return/situation. For example, if you leave a job with an employer and start your own business, you'll be confronted with completing a Schedule C.

Before hiring a tax adviser to help you with new tax challenges, I suggest you do some reading. Tax advisers charge by the hour, and good ones don't come cheaply, so it will be costly to utilize them as a "tutorial on taxes."

Q: How can I save money on my large mortgage? Is it smart to pay off my mortgage early, and what are the best ways to do that?

A: Keep an eye out for declining interest rates, such as we've had of late, and watch for opportunities to refinance. The best time to refinance a mortgage is when you can lock in a lower monthly payment to recoup the costs of refinancing within a reasonable period of time (less than five years). Be sure you're going to stay with the property for at least that long.

You may also "save" money by prepaying your debt sooner than is required. You should consider doing so especially if you aren't willing or able to use your extra cash to fund investments that could provide you with a higher rate of return than the interest rate you're being charged on your mortgage.

Simply send in extra payments whenever you have extra money available, or you could just add a certain set amount to each monthly payment.

If you have a low-cost mortgage and access to good investment options, then it's not such a good idea to pay off your mortgage faster than required. For example, if a person, say in her 30s, with extra monthly cash flow has a choice between paying down her 6.5 percent mortgage vs. socking the money away into her employer's tax-deductible retirement savings plan, better to opt for the retirement plan.

Another case where paying down mortgage debt early may not make sense is if it depletes your emergency reserve and causes you to run up high-cost credit-card debt when unexpected expenses arise.

Mortgage Deliquency & Foreclosure Lies

2007-09-12T14:49:00.000-04:00

The national press attention related to the national Foreclosure Problem has been highly misleading. For those within the industry, we have always known that the problems are more geographic specific than what was being led on. What newly released data shows is that 7 states have the highest concentration of new and increasing delinquency and foreclosure rates. They are: Ohio, Indiana, Michigan, Florida, California, Arizona and Nevada.

Here is a recent news program on this:

http://video.msn.com/v/us/msnbc.htm?g=828eba81-1eeb-4312-9d35-5b3ad4eaa73c&f=00&fg=copy

Even more interesting, is that 34 states reported a DECREASE in both delinquency and foreclosure rates.

Credit Cruch will Impact Home Sales until 2008

2007-09-12T09:02:00.000-04:00

Tighter credit for home mortgages will measurably dampen home sales in the short term and postpone an expected recovery for existing-home sales until 2008, according to the latest forecast by the National Association of Realtors(R).

Lawrence Yun, NAR senior economist, said unusual disruptions in the mortgage market are dampening the outlook for home sales, notably for August and September. "There's been an unusual hit to home sales, starting in March when subprime problems emerged and more recently when problems spread to jumbo loans, with many potential buyers on the sidelines.

"However, the jumbo loan market is now beginning to settle, and FHA-insured loans are helping to fill the subprime vacuum. The volume of existing-home sales this year will be better than 2002, which was the second year of the housing boom."

Existing-home sales are projected at 5.92 million this year and then to rise to 6.27 million in 2008, compared with 6.48 million in 2006. New-home sales should total 801,000 in 2007 and 741,000 next year, below the 1.05 million in 2006.

"A sharp production pullback by homebuilders deep into 2008 is a healthy trend that will help trim down housing inventory," Yun said. Housing starts, including multifamily units, are expected to total 1.37 million this year and 1.26 million in 2008, compared with 1.80 million in 2006.

"The mortgage markets will calm further in the months ahead, but it's important to underscore the fact that conventional loans --the vast majority of available financing -- are available to creditworthy borrowers," Yun said. "Patient buyers in most areas who do their homework will recognize that housing remains a good long-term investment."

Existing-home prices are likely to slip 1.7 percent to a median of $218,200 this year before rising 2.2 percent in 2008 to $223,000. The median new-home price is estimated to drop 2.2 percent to $241,100 in 2007, and then increase 1.7 percent next year to $245,100.

The 30-year fixed-rate mortgage is projected to average 6.4 percent for the balance of the year and then edge up to the 6.5 percent range in 2008.

"We expect the Fed to cut rates two times before the end of the year, which will lower interest rates for prime borrowers and FHA-insured loans," Yun said. "FHA modernization could buffer the fallout of subprime loans, which would raise our sales forecast in the future."

Growth in the U.S. gross domestic product (GDP) is forecast at 2.0 percent in 2007, below the 2.9 percent growth rate last year; GDP will probably grow 2.7 percent in 2008.

The unemployment rate should average 4.6 percent for 2007, unchanged from last year. Inflation, as measured by the Consumer Price Index, is estimated to be 2.8 percent in 2007, compared with 3.2 percent last year. Inflation-adjusted disposable personal income is likely to increase 3.6 percent this year, up from 3.1 percent in 2006.

The National Association of Realtors(R), "The Voice for Real Estate," is America's largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.

Existing-home sales for August will be released September 25; the Pending Home Sales Index is scheduled for October 2 and the next forecast will be October 10.

Foreclosures at a Record High

2007-09-06T11:28:00.000-04:00

The number of homeowners receiving foreclosure notices hit a record high in the spring, driven up by problems with subprime mortgages.

The Mortgage Bankers Association reported Thursday that mortgage-holders starting the foreclosure process in the April-June quarter reached 0.65 percent, marking the third consecutive quarter that this figure has set an all-time high.

The delinquency rate, which tracks the number of people who are behind in their payments but have not yet entered the foreclosure process, was also up sharply during the spring, rising to 5.12 percent of all loans, up nearly three-fourths of a percentage point from the same period a year ago.

Doug Duncan, the MBA's chief economist, said the worsening performance was driven by two factors -- heavy job losses in the Midwest states of Ohio, Michigan and Indiana and the collapse of previously booming housing markets in California, Florida, Nevada and Arizona.

The Midwest has been hit hard by a heavy loss of jobs in manufacturing, especially in autos and related industries.

"The percent of mortgages in Ohio that are 90 days or more past due or in foreclosure is still more than twice the national average and 1 percent of all the mortgages in Michigan had foreclosure actions started on them during the last quarter," Duncan said.

He said there were also significant problems in the neighboring states of Indiana, Illinois, Kentucky, Tennessee and Pennsylvania.

Analysts said the problems in the formerly red-hot housing markets of California, Florida, Nevada and Arizona reflected in part speculators walking away from mortgages they can no longer afford.

During a five-year housing boom, the prices in these areas surged, creating what many analysts have described as a speculative bubble as investors bid up the price of homes hoping to quickly resell them for a profit.

Now with home sales falling, the inventory of unsold homes rising and prices stagnant, some speculators are choosing to default on their mortgages.

Another big problem is that an estimated 2 million adjustable rate mortgages are scheduled to reset this year at sharply higher interest rates, which will cause monthly payments in some cases to double or even triple, a problem that is especially severe in the market for subprime mortgages, loans offered to borrowers with weak credit histories.

The delinquency rate for subprime loans increased sharply to 14.82 percent -- up from 13.77 percent -- in the first quarter.

The delinquency rate for prime loans, offered to borrowers with good credit histories, also increased but by a much smaller amount, rising to 2.73 percent, up 2.58 percent in the first quarter.

Democrats have blamed predatory lending practices for a large part of the current problems and have introduced a number of bills aimed at helping homeowners stay in their houses.

Federal and banking regulators issued guidance this week encouraging lending institutions to work with borrowers to restructure loans at more favorable terms rather than foreclosing on the existing mortgages.

Last week, President Bush announced changes in the Federal Home Administration insured-loan program to help combat the expected wave of foreclosures and also answer attacks from Democrats that his administration has been slow to respond to a growing crisis in mortgage foreclosures.

Real Estate Pros singled out for credit restrictions

2007-09-01T08:40:00.000-04:00

If you are a RE Pro and need (re-)financing in the near future, GET IT NOW! Wall Street, which initially created the loose credit environment, is now redefining it. More documentation requirements, lower loan to values, higher Ficos, and - you guessed it - higher rates. The definition of "real estate professional" is broad, and can even include any person who owns more than two properties! Below is a listing of who can be considered a "real estate professional":

* Real Estate Brokers and Real Estate Agents, and their employees.
* Property Managers and employees of Property Managers or Property Management Companies.
* Home Improvement Dealers or Contractors and their employees.
* Home Builders and General Contractors and their employees.
* Real Estate Investors (defined as any person who owns more than two properties).
* Mortgage Brokers and their employees.
* Mortgage Lenders' employees, including principals and officers (excludes employees of national banks).
* Title Companies' employees, including principals and managers.
* Real Estate Appraisers and employees of Real Estate Appraisers or Appraisal
* Management Companies.

My recommendation (for anybody) is to consider the following:

* Do refinances required over the next 1-2 years now.
* Create financial reserves and flexibility by getting a Heloc.

Home sales still weak throughout the country

2007-08-29T08:14:00.000-04:00

The National Association of Realtors said 5.75 million existing homes (seasonally adjusted) were sold in July, a drop of 9 percent from 6.32 million in July 2006. The volume was down 0.2 percent from June, the fifth consecutive month of declines. The number includes single-family, townhomes, condos and co-ops.

The median home price fell for the 12th consecutive month, to $228,900. That was down 0.6 percent from last July's record median of $230,200.

Looking at just existing single-family homes, sales of 5 million units in July were down 9.3 percent from last July, and the median price was $228,600, a 1 percent drop from last year.

Sales of existing condos and co-ops were at 750,000, down 7.5 percent from last July.

The sales slump was most pronounced in the Western United States, where the 1.12 million existing homes sold represented a 15.2 percent decline from a year ago.

In the Northeast, sales were 2.9 percent lower than in July 2006. They were down 10.7 percent in the South and 5.6 percent in the Midwest.

Nationwide, the group said, inventory of existing homes stood at 9.6 months in July, the highest level in 16 years.

U.S. Home Prices Fall

2007-08-27T09:07:00.000-04:00

Forecasters expect the median price of U.S. homes to fall between 1 percent and 2 percent this year in what would be the first such decline since 1950, when federal agencies began tracking such statistics, the New York Times reported on Sunday.

The Office of Federal Housing Enterprise Oversight is scheduled to release the home-price index on Thursday, and research firm Global Insight expects it to show a decline of about 1 percent between the first and second quarter, according to the newspaper.

Global Insight also expects the decline of U.S. home prices to peak at 4 percent between their highest point in 2007 and the projected low point in 2009, the New York Times said.

The New York Times said other forecasters expect the index to climb slightly in the second quarter before falling later this year.

Foreclosure Rates are Geographic Specific

2007-08-21T13:02:00.001-04:00

Foreclosure filings rose 9 percent from June to July and surged 93 percent over the same period last year, with Nevada, Georgia and Michigan accounting for the highest foreclosure rates nationwide, a research firm said Tuesday.

The filings include default notices, auction sale notices and bank repossessions. The figures are the latest measure of the ailing housing market, which has seen defaults and foreclosures soar as financially strapped borrowers have failed to make payments or find buyers.

In all, 179,599 foreclosure filings were reported during July, up from 92,845 in the year-ago month, according to Irvine-based RealtyTrac Inc.

A total of 164,644 foreclosure filings were reported in June.

The national foreclosure rate in July was one filing for every 693 households, the firm said.

"While 43 states experienced year-over-year increases in foreclosure activity, just five states -- California, Florida, Michigan, Ohio and Georgia -- accounted for more than half of the nation's total foreclosure filings," said RealtyTrac Chief Executive James J. Saccacio.

Nevada posted the highest foreclosure rate: one filing for every 199 households, or more than three times the national average. It reported 5,116 filings during the month, an increase of 8 percent from June.

Georgia's foreclosure rate was more than twice the national average, with one filing for every 299 households. The state reported 12,602 foreclosure filings, up 75 percent from June.

Michigan reported 13,979 filings in July, a 39 percent spike from June.

California, Florida, and Ohio were among the states with the highest number of foreclosure filings in July, the firm said.

California cities continued to dominate top metropolitan foreclosure rates.

The state reported 39,013 foreclosure filings last month, the most by any single state, but the number of filings rose less than 1 percent from June's total.

The state's foreclosure rate was one filing for every 333 households, RealtyTrac said.

Florida's foreclosure filings fell 9 percent between June and July to 19,179. The July figure represents a 78 percent jump from a year ago.

RealtyTrac did not say if a single property received more than one notice. The company did not break out the exact property count.

In recent months, the mortgage industry has been battered by rising defaults and foreclosures, primarily driven by borrowers with subprime loans and adjustable rate mortgages.

Lagging home sales and flat or decreasing home prices have made it more difficult for homeowners who fall behind on payments to sell their homes and clear the debt, spurring the rise in foreclosure activity.

FICO Facts

2007-08-16T14:10:00.000-04:00

To receive a FICO score, a person must have at least one credit account open for six months and at least one that has been active within the last six months. Here are a few tips on how to improve that score:

· Pay bills on time, and pay at least the minimum amount due.

· Contact your creditors immediately if you miss a payment, and work out a payment plan (preferably before they report you to the credit bureaus).

· Do not close credit card accounts in good standing. Someone with no history of credit tends to be seen as a higher risk than someone who has a record of managing debt responsibly.

· Avoid charging to the limit of one card. It's better to charge less on two cards with room to spare.

· Ask creditors to raise your credit limit so that you do not appear overextended.

· Do not open new accounts, because it shows an interest in acquiring new debt, which can lower your score.

· Aim for a rich mix of credit, with revolving credit (credit cards) and installment debt (car loan, student loan).

· Correct errors on your credit reports.

· If you suspect your creditor is not reporting positive information to the bureaus, contact the creditors or the bureaus directly to set the record straight.

· Do not assume that a high salary guarantees a good credit score.

· Find out the key factors that are dragging down your score so you can fix them.

SOURCES: MyFICO.com, Freddie Mac's CreditSmart program

Here's how you can contact each credit bureau:

· Equifax: 800-685-1111.

· Experian: 888-397-3742.

· TransUnion: 800-888-4213.

Here's where you can request your free credit report:

· http://www.annualcreditreport.com/.

Construction Falls in July to the Slowest Pace in More Than a Decade

2007-08-16T11:35:00.001-04:00

The Commerce Department reported Thursday that construction of new homes and apartments dropped 6.1 percent last month to a seasonally adjusted annual rate of 1.38 million units. That was down 20.9 percent from the pace of activity a year ago and represented the slowest pace since January 1997.

The housing industry, which had enjoyed a prolonged boom until 2006, has been struggling this year with a deepening slump as builders are slashing prices and throwing in various incentives in an effort to unload record levels of unsold homes. The problems have been worsened by rising home foreclosures, especially in the subprime market, a development which is dumping even more homes onto the glutted market.

In other economic news, the Labor Department reported that the number of newly laid off workers filing for unemployment benefits rose by 6,000 last week to 322,000. The increase was unexpected. Analysts had been looking for a decline of around 1,000.

The July drop in housing construction followed a 2.1 percent rise in June, which had been driven by a big increase in apartment building.

Applications for building permits, considered a good barometer of future activity, fell by 2.8 percent in July to an annual rate of 1.373 million units.

Housing construction fell in all parts of the country except the Midwest which posted a 2.6 percent increase in July. Construction starts were down 11 percent in the South, 3.7 percent in the West and 1.3 percent in the Northeast.

The current housing slump is the worst since a downturn that occurred during an economic recession in 1990-91.

Overall economic growth has slowed but so far there has been no recession as other sectors have offset the weakness in housing. However, private economists say that the threat of a recession would rise if consumer and business confidence were seriously eroded by the current troubles in financial markets.

Home Prices Are Down in a Third of Cities

2007-08-15T15:26:00.000-04:00

The new figures from the National Association of Realtors underscored the severity of the current housing slump, the worst downturn in 16 years.

However, Realtors officials said they saw some glimmers of hope in the data. They noted that existing home prices were up in 97 of the 149 metropolitan areas surveyed compared with the sales prices of a year ago.

That represented price gains for 65 percent of the areas surveyed, an improvement from the first quarter of this year when only about 55 percent of the metropolitan areas reported price gains from the same period a year ago. In the fourth quarter of last year, less than half of the metropolitan areas reported price gains.

"Although home prices are relatively flat, more metro areas are showing price gains with general improvement since bottoming-out in the fourth quarter of 2006," said Lawrence Yun, senior economist for the Realtors.

The states suffering the biggest drop in sales in the second quarter, compared to the same period a year ago, were Florida, down 41.3 percent, and Nevada, down 37.5 percent. Other states with big declines were Arizona, down 23.4 percent; Tennessee, down 21.5 percent; Maryland, down 21.1 percent, and California, down 19.8 percent.

Bucking the downward trend, six states actually showed sales increases during the second quarter while one state had unchanged sales and there was incomplete data for two states, the Realtors reported.

Wyoming had the biggest sales increase, a rise of 10.8 percent in the second quarter of this year compared to the second quarter of 2006. Sales were up 4.1 percent in Iowa from a year ago while sales in North Dakota rose by 2.9 percent, the third strongest gain.

Nationwide, sales of existing homes totaled 5.91 million units at an annual rate in the second quarter, down 10.8 percent from the sales pace of the second quarter of 2006.

The national median sales price in the second quarter was $223,800, down 1.5 percent from a median price in the spring of 2006.

the Effects of Falling Sales on Prices of Real Estate

2007-08-03T09:52:00.000-04:00

A market price of any product is determined by several factors. In real estate industry, the price of a house is always vulnerable to faltering financial conditions of the market. The housing sale is the most influencing factor in determining its price. In recent times, the wavering housing sale is being expected to leave a deep trace in housing price.

The recently published House Price Index report of Office of Federal Housing Enterprise Oversight (OFHEO), declares that there is price appreciation of 0.5% higher than the fourth quarter of the last year. This is recorded to be the lowest rate since 1998. The price appreciation comparison of this first quarter report of 2007 with the previous two-quarters' reports of 2006 shows poor record by 1.3%. Though at the beginning of 2007, the price was higher than the previous year by 4.3%, yet this comes out to be the lowest yearly comparison record since third quarter of 1997.

This appreciation record of HPI, when fed up with the information on home purchase and refinance, was turned out to be only 3% on quarter comparison between 2006 and 2007. The overall housing prices have arisen at the beginning of 2007, but it was the lowest rate in 10 years. The growth rate of the housing prices in the last year was faster than other non-housing materials and services by almost 3 points.

The existing home sales were down 2.6% in April, where new home sales jumped up several points. Prices rose slowly after May-June and inventories on the other hand decreased slightly. The national median existing home price was up by 0.3% from the last year. This was accompanied by the backlog clearance of unsold homes by 4.2% from previous months. Though the industry faced a slower sales rate, yet the inventory stayed on at 8.8 monthly supplies.

The threat of rising foreclosure, the bad market for the subprime borrowers, the declining rate of home sales and mixed information to the buyers became the reasons for the more decline in housing sales. In June 2007, there was a falling of housing inventory. It was supported by a noticeable rise of housing prices. This became the first instance in the last 11 months when the median home price grew higher than the previous year's.

The single-family home sales were fallen in June by 3.5% from May. This was also 12.1% lower than the 5.70 million-units level in the same time of the last year. On the other hand, the median of existing single-family home price was up 0.1% from 2006. Likewise, while the existing condominium and co-op sales were declined by 6.3%, the median sales price was up 2.6% from the previous year.

According to the National Association of Realtors, the housing price will be increased in the next year. This will be as a result of and accompanied by the rising of the real estate sales to almost 6.4 million in the next year. This year, it is estimated to be 6.1 million. While in the previous year, it was 6.5 million. Existing home prices are supposed to rise by 1.8% after this year's 1.4% fall. Also the new-home prices are presumed to gain 2.2% after this year's 2.6% fall.