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» PENDING HOME SALES HIT 31-MONTH HIGH By Mark Lieberman, Economist for the Five Star Institute The National Association of Realtors' (NAR) Pending Home Sales Index (PHSI) increased for the third straight month in November, improving 1.7 percent compared with the month prior. Economists expected a slightly more brisk 1.8 percent increase. The index, according to NAR, is at its highest level since April 2010. "The upward momentum means existinghome sales should rise 8 to 9 percent in 2013 to approximately 5.1 million, following a 10 percent gain expected for all of 2012," the Realtor trade group said in its report. "The median existing-home price is projected to rise just over 4 percent in 2013 after rising more than 7 percent in 2012." For November, NAR reported sales of existing single homes rose to their highest level in three years, clocking an annual rate of 5.04 million. Distressed homes—foreclosed REOs and pre-foreclosure short sales sold at deep discounts—accounted for 22 percent of November's total existing-home sales (12 percent were REOs and 10 percent were short sales). The distressed share of sales is down from 24 percent in October 2012 and 29 percent in November 2011. These discounted properties represented almost 30 percent of existing home sales last year. November 2012 was the 19th straight month pending home sales came in higher than a year earlier. Pending sales data are generally reflected in the report on existing-home sales one or two months out, meaning the November index points to stronger growth in completed home sale transactions reported for December or January. The 5.9 percent increase in existing-home sales in November followed a 5 percent increase in the pending home sales index in October. STAT INSIGHT 1.8 Million Properties with at least one foreclosure filing in 2012. Source: RealtyTrac VISIT US ONLINE @ DSNEWS.COM NATIONAL COUNSELING PROGRAM SERVES 1.5M After four and a half years, the National Foreclosure Mitigation Counseling (NFMC) program has assisted about 1.5 million at-risk homeowners, according to a NeighborWorks America report. Consumers who received mortgage modification assistance from NFMC, which was created by Congress and is administered by NeighborWorks, saw their monthly payments decrease by an average of $176 more per month than non-NFMC clients, NeighborWorks reported. The difference represents an annual savings of $372 million for NFMC clients over non-counseled homeowners. In addition, homeowners who sought assistance from NFMC were nearly twice as likely to receive a modification, and they were at least 67 percent more likely to stay current nine months after their loan was modified, according to the report. NFMC also stated that in 2008 and 2009, the program led to combined savings of about $920 million for local governments, lenders, and homeowners. In addition, the low mortgage rate environment brought relief to program clients. For example, in October 2008, 30 percent of clients reported they had interest rates below 8 percent compared with 57 percent in August 2012. According to NeighborWorks' report, the main trigger for NFMC customers facing foreclosure is generally income loss or income reduction. About 37 percent of program clients spend half or more of their income on their monthly mortgage payment, and about 19 percent spend more than 75 percent of their income on their mortgage. The greatest challenge reported by NFMC counselors continued to be efficient and timely communication with servicers with more than 40 percent citing it as an issue. NFMC received six appropriations from Congress since December 2007 totaling $619.87 million. As of August 31, 2012, NeighborWorks reported $583.3 million went toward foreclosure counseling and legal assistance to at-risk homeowners. Another $24 million was allocated for counselor training and other capacity-building activities. "A homeowner who receives help from the NFMC program saves significant money and time and, importantly, is able to remain in their home," said NeighborWorks America CEO Eileen Fitzgerald. "The NFMC program has provided counseling in every state, the District of Columbia, and Puerto Rico. We're proud to spotlight the excellence and perseverance of homeownership counselors in helping people to stay in their homes." VERBOSITY "As regulators now turn to implementing Dodd-Frank's risk-retention requirements for issuers of mortgage-backed securities, we encourage them to use today's 'qualified mortgage' definition as the 'qualified residential mortgage' definition. Such alignment would reduce confusion and burden on lenders while providing the protection and flexibility needed to ensure adequate access to credit for all families." —Julia Gordon, Director of Housing Finance and Policy at the Center for American Progress, on January 9 in response to the CFPB's "ability-to-repay" final rule 53

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