Aaron Task / Yahoo Finance

The government reported Thursday that home prices fell 3.1% in the first quarter, the worst quarterly drop on record.

As bad as that sounds, the housing market is going to get worse, says Liz Ann Sonders, chief investment strategist at Charles Schwab & Co.

Because home prices are depreciating, the “real” mortgage rate for homebuyers is about 15%, Sonders says.

To view all of this article, please visit this link at Yahoo Finance

By Emmet Pierce / UNION-TRIBUNE STAFF WRITER

Nearly 50 San Diego County dwellings per day were lost to foreclosure in April, as the tally of mortgage failures rose 169 percent above last year, DataQuick Information Systems reported yesterday.

Buckling under the weight of risky adjustable-rate loans, many borrowers are giving up on ever bringing their debt current.

To view all of this article, please visit this link at Union-Tribune

Caroline Baum / Bloomberg.com

Once upon a time, there lived a King who granted each subject enough money to make his home his castle.

Everyone was content. The castles created vast riches throughout the land.

Alas, the King had large armies to support, and the royal coffers had run dry. So he levied a tax on each household. And there was much misery throughout the land. The people rose up in protest. The King and his ministers knew not what to do.

To view all of this article, please visit this link at Bloomberg.com

Dan Levy / Bloomberg

California luxury home prices fell for the second consecutive quarter as banks required higher credit scores and down payments, reducing the number of potential buyers in the state’s wealthiest communities.

The average price of a luxury home in the San Francisco Bay Area declined 0.8 percent from the previous three months to $3 million, according to a survey by First Republic Bank, a unit of Merrill Lynch & Co. Los Angeles prices dropped 2.2 percent to $2.35 million and San Diego prices fell 2.2 percent to $2.06 million.

“Values of luxury homes in California have declined slightly in price after many years of strong appreciation,” Katherine August-deWilde, president of San Francisco-based First Republic Bank, said in a statement.

To view all of this article, please visit this link at Bloomberg.com

Dan Levy / Bloomberg

U.S. foreclosure filings climbed 65 percent and bank seizures more than doubled in April from a year earlier as mortgage industry efforts to modify loans fell short.

More than 243,300 properties were in some stage of foreclosure, the highest monthly total since RealtyTrac Inc., a seller of default data, began in January 2005. One in every 519 households received a filing and Nevada, California and Florida had the highest rates. Filings rose 4 percent from March.

The worst housing slump since the Great Depression may push the U.S. economy into a recession. Falling home prices, which dropped the most in 29 years in the first quarter, are making it tougher for homeowners to refinance, and voluntary programs to change loan terms for at-risk borrowers haven’t helped enough people, said Ira Rheingold, executive director of the National Association of Consumer Advocates in Washington.
To view all of this article, please visit this link at Bloomberg.com

PAUL JACKSON / Housing Wire

For the first time in California’s history, foreclosure sales exceeded 1,000 properties per day in April, according to a report released Tuesday afternoon. Foreclosure sales at auction — the last step in the foreclosure process — jumped 44 percent in April to 22,838 sales, representing $9.45 billion in combined loan value, according to foreclosure data firm ForeclosureRadar.

The vast majority of properties sold at auction received no third party bids, despite ever-increasing discounts from lenders anxious to prevent further build-up in REO inventories.

To view all of this article, please visit this link at HousingWire.com

NED RANDOLPH
San Diego Business Journal

With foreclosures hitting a 16-year high, demand for bank-owned homes has outstripped lenders’ ability to dispose of them.

Of the 5,000 properties in escrow last week in San Diego, 20 percent are bank-owned, said Brian Yui, chief executive officer of HouseRebate.com, which has launched a search tool that indexes foreclosed properties in local Multiple Listing Services.

Finding good deals depends on lender pricing and their need to dispose of them, he said.

To view all of this article, please visit this link at San Diego Business Journal

Jody Shenn / Bloomberg
About half of recent subprime and Alt-A borrowers may soon owe more on their mortgages than their houses are worth or hold minimal equity, putting $800 billion of debt at greater risk of default, according to Barclays Capital.

Subprime loans from 2006 and 2007 that exceed the value of the homes jumped 5 percentage points to 19.8 percent in the fourth quarter, and may reach 26 percent by midyear if prices drop at the same pace, Barclays analysts wrote in a report yesterday. Alt-A loans, a grade better than subprime, would grow to 23 percent from 16.3 percent.

To view all of this article, please visit this link at Bloomberg.com

David Mildenberg and Peter J. Brennan / Bloomberg.com

Bank of America Corp., seeking approval of its Countrywide Financial Corp. takeover, plans to modify at least $40 billion of mortgages during the next two years to keep customers in their homes.

The move will help as many as 265,000 homeowners, Liam McGee, president of the bank’s global consumer and small- business unit, said today in Los Angeles at a U.S. Federal Reserve hearing on the purchase. The company will donate $2 billion to communities in the next 10 years, including funds for organizations giving advice on foreclosures, he said.

To view all of this article, please visit this link at Bloomberg.com