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REO SALES HOLD UNDER 20% OF OVERALL HOME SALES Clear Capital released a new market report last month, tracking home prices through the end of November. Nationally, quarterly price gains were cut by more than half compared to readings from the month before. For November, home prices edged up just 1 percent. Even with fewer fair market sellers putting their homes on the market—which is the typical trend during the winter season—Clear Capital says REO sales held steady at 18.4 percent of total sales. Even with the effects of winter unfolding, the company says REO saturation trends don't yet sound any alarms. Should distressed sales hold around their current level for the next several months, Clear Capital says downward price pressure should be minimal—but that's barring any other outside economic stress. Dr. Alex Villacorta is Clear Capital's director of research and analytics. He said, "November housing trends hinted at a winter slowdown ahead. While short-term growth across the country generally slowed, the housing market has built good momentum over the last year. As previously reported, these gains coupled with reduced rates of REO saturation signal housing should be strong enough to ride out winter, barring any shocks." The seasonal effects of winter started to take hold in three out of four regions in November 2012. Clear Capital says a pull-back in growth of similar magnitudes was echoed in the West, South, and Northeast, where quarterly price gains were 2.0 percent, 0.8 percent, and 0.3 per- 36 cent, respectively. The Midwest was the only region to hold the momentum of quarterly growth from October. However, at just 0.9 percent, the Midwest is in line with the level of growth across the other regions and at the national level. Price gain stalls are not as evident in yearly price trends. National yearly home prices in November held their ground with 4.6 percent growth. The South also mostly held its ground, with gains of 4 percent over last year. The West, though, continued to lead the recovery, yet with softer yearly gains of 10.3 percent in November, compared to October's yearly growth of 11.4 percent. The region continued to make progress in terms of REO saturation as REO sales declined to just 17.8 percent of all home sales in the region. REO saturation there has fallen by more than half since its peak in 2009. The Northeast posted just 1.4 percent price growth year-over-year, constrained by nearly flat quarterly gains. The region also saw price trends flatten in the top tier sector, or homes selling for $423,000 and more. The Midwest bucked the trend of softening gains and posted yearly growth of 2.9 percent in November. While the Midwest hinted at a slowdown in October, things appear to have picked back up just one month later. Clear Capital says it continues to expect volatility in the Midwest moving into the deeper winter months. The region typically exhibits price fluctuations, as it represents the lowest median prices of any of the four regions. MBA OPPOSES G-FEE HIKE TO PAY FOR NON-HOUSING REFORMS David Stevens, president and CEO of the Mortgage Bankers Association (MBA) has voiced his organization's opposition to legislation (H.R. 6429) that would raise guarantee fees (g-fees) on single-family mortgages purchased by Fannie Mae and Freddie Mac in order to pay for immigration reforms. The bill was passed by House legislators November 30 with a vote of 245 to 149 but must still go before the Senate. It is designed to provide immigrant visas for qualified persons who "hold a doctorate degree in a field of science, technology, engineering, or mathematics from a United States doctoral institution of higher education" and who seek to put their skills to use in the United States. In his statement, Stevens asked Congress to keep housing funds separate from other causes. "Fannie and Freddie's guarantee fees are supposed to be used to help offset the risk inherent in providing mortgages, and any increases to those fees should be used for that purpose," Stevens said. "Dipping back into the housing piggybank to pay for unrelated policy items on the backs of America's homebuyers sends the wrong message." Stevens went on to say, "We are asking Congress to reconsider the approach of using guarantee fees for anything other than their intended purpose. Increasing the cost of most mortgages will only add to the uncertainty that is plaguing the mortgage market and holding back a more a robust housing recovery." KNOW THIS In September, 19% of HARP refinances moved borrowers from a 30-year fixedrate mortgage to a shorter-term 20- or 15-year fixed-rate mortgage, the Federal Housing Finance Agency reported.

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