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» FREDDIE MAC ANNOUNCES WINTER BONUS Agents who sell Freddie Mac's HomeSteps REOs may be eligible for additional compensation. The GSE announced it will pay $1,000 extra to selling agents and $500 extra to listing agents as part of a winter promotion. The incentive program lasts until February 28, 2013, and is applicable in 20 states. Only transactions involving buyers who are purchasing a primary or secondary residence are eligible for the winter incentive payment. The offer excludes investor purchases, auction sales, sealed-bid sales, and bulk sales, but Freddie Mac stated two-thirds of HomeSteps homes are sold to owner-occupants. Offers must be approved by the end of February and close on or before April 15, 2013. The promotion applies to homes sold in Alabama, Colorado, Iowa, Illinois, Indiana, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, Missouri, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Virginia, Washington, and Wisconsin. As of September 30, 2012, HomeSteps held 50,919 homes in its inventory and about two-thirds were in the 20 eligible states. On average, Freddie Mac says its properties sell for 95 percent of their current market value. HomeSteps is Freddie Mac's REO marketing and disposition unit. Agents can find additional details about the GSE's winter promo at HomeSteps.com. STAT INSIGHT 4.07 Million Total home sale transactions during the 12 months ended in October, of which 1.32 million were distressed. Source: Lender Processing Services VISIT US ONLINE @ DSNEWS.COM CONFORMING LOAN LIMITS UNCHANGED The Federal Housing Finance Agency (FHFA) announced that the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2013 will remain at existing levels. In most of the country, the loan limit will be $417,000 for one-unit properties. The loan limits are established under the terms of the Housing and Economic Recovery Act of 2008 (HERA) and are calculated each year. The law sets loan limits as a function of median home values in local areas. While some counties saw increases in home prices in 2012, no loan limit increases were evident after other HERA terms such as the statutory ceiling and floor were taken into account, FHFA explained. The maximum conforming loan limit for one-unit properties—which has been in effect for new originations since October 1, 2011—is $417,000 in most locations but as high as $625,500 in certain high-cost markets. A list of the 2013 maximum conforming loan limits for all counties and county-equivalent areas is available on FHFA's website. For loans originated prior to October 2011, the maximum loan limit was raised to as much as $729,750 in high-cost areas— that's when FHFA and the administration opted to lift the ceiling for loans the GSEs were allowed to purchase to compensate for tight credit conditions and a virtually non-existent private capital market during the housing crisis. That higher limit was permitted under legislation that is no longer applicable. FANNIE MAE RELEASES FORECAST ON HOUSING, ECONOMY Given improvements seen in housing, Fannie Mae revised its housing forecast higher for 2012 and 2013 in its November economic outlook report. According to the GSE, the fundamentals are in place for a "solid" housing recovery, including low interest rates, rising prices, and a labor market that's healing. Considering these developments in housing, the GSE's Economic & Strategic Research Group anticipates single-family housing starts jumped 25 percent in 2012, then rise by another 22 percent in 2013. Existing-home sales should also rise and see a 9 percent increase in 2012 and a 4 percent gain in 2013. When combining new and existing-home sales, the increase is expected to be 10 percent for 2012 and an additional 6 percent in 2013. And if there's any risk in this forecast, Fannie Mae says it's that housing demand may actually result in stronger housing activity than currently anticipated. Based on the Federal Housing Finance Agency's purchase-only index, home prices should see an increase of 2.9 percent for the remainder of 2012 and a 1.6 percent increase in 2013, according to the GSE's economic team. Fannie Mae is also optimistic about originations, forecasting new mortgage activity to reach $1.81 trillion in 2012 and $1.54 trillion in 2013. The refinance share of originations should rise to 71 percent in 2012 before dropping to 62 percent in 2013, according to Fannie's report. The 30-year fixed-rate mortgage is expected to stay low and average 3.5 percent in 2013. The GSE also expects the Federal Reserve to continue buying up mortgage-backed securities (MBS) to the tune of $40 billion each month through 2013. Unemployment is expected to dip further in the new year and fall to 7.6 percent. Gross domestic product is expected to grow at a rate of 2.2 percent next year. Even though reports on the housing sector give reasons to be optimistic, Fannie Mae still warned, "data continue to show a sluggish recovery overall." The GSE also noted consumer spending was the largest contributor of growth in Q 3. However, consumer confidence may be weakened in coming months due to the fiscal cliff and debt ceiling debate, which "are likely to create the most significant barriers to meaningful growth," Fannie Mae stated. In addition, Fannie Mae's chief economist Doug Duncan cautioned, "While the pick-up of activity in the third quarter is encouraging, it is compared to the weak pace seen in the second quarter and doesn't portend a robust recovery in the near term." 21

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