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HOME VALUE FORECAST INDICATES HIGHPRICED HOMES ARE LEADING THE RECOVERY Historically, higher-priced homes are a leading indicator of coming activity for the real estate market as a whole, tending to lead the market during times of recovery, according to the Home Value Forecast (HVF) report jointly released by Pro Teck Valuation Services and Collateral Analytics. The companies assessed price changes in the Bay Area and around Los Angeles and found high-end markets showed stronger price growth compared with lower-priced areas. According to the HVF report, the markets for higher-priced homes tend to be in desirable locations where supply is very limited. The buyer profile is also different in these markets. "Buyers in these markets tend to be better capitalized, using more equity and lower loan-tovalue mortgages. These markets have been less affected by tight underwriting, which has plagued the middle and lower price ranges, where loanto-value averages are generally much higher," the report explained. According to the HVF report, upscale cities in the Bay Area have shown strong price performance and have seen their average sale prices move up to all-time record levels. For example, the HVF compared performance for lower- and higher-priced homes in Palo Alto and found the largest and most expensive homes were the first to show price gains over the past year. Furthermore, the rate of price appreciation for higher-priced homes was much greater. "[T]his suggests that high-price homes are market leaders both across different markets as well as within the same market," the report concluded. In addition, in Los Angeles County, the Manhattan Beach market has seen prices rise to all-time highs. "This should be viewed as confirmation that the Los Angeles County real estate market is in the early stages of a new upward cycle in home prices," said Michael Sklarz, principal of Collateral Analytics and contributing author to the report. 26 The HVF also included a list of the 10 bestand worst-performing metros for February based on factors such as sales/listing activity and prices, months of remaining inventory, days on market, sold-to-list price ratio, and foreclosure and REO activity. Sklarz noted one new entrant to the list was Indianapolis. "Like a number of Midwest markets, Indianapolis did not participate in the nationwide housing bubble and its home prices have been among the most affordable in the country for many years. It's also a market with compelling rental yields for both institutional and individual single-family home investors," he said. In addition, Sklarz explained markets such as Phoenix and Sacramento dropped off the list because their year-over-year sales counts are down due to lack of inventory. Top Markets: » Boston-Quincy, Massachusetts » Cambridge-Newton-Framingham, Massachusetts » Indianapolis-Carmel, Indiana » Santa Ana-Anaheim-Irvine, California » Oxnard-Thousand Oaks-Ventura, California » Raleigh-Cary, North Carolina » Los Angeles-Long Beach-Glendale, California » Wichita, Kansas » Colorado Springs, Colorado » San Antonio-New Braunfels, Texas Bottom Markets: » Cape Coral-Fort Myers, Florida » Rochester, New York » Baton Rouge, Louisiana » Albany-Schenectady-Troy, New York » Greenville-Maudlin-Easley, South Carolina » Tampa-St. Petersburg-Clearwater, Florida » Mobile, Alabama » Little Rock-North Little Rock-Conway, Arkansas » Shreveport-Bossier City, Louisiana » Spokane, Washington OCC AND FED RELEASE AMENDMENTS TO CONSENT ORDERS The Office of the Comptroller of the Currency (OCC) and the Federal Reserve amended their enforcement actions against 13 mortgage servicers in late February. The amendments memorialize the foreclosure agreements reached between the regulators and servicers in January—controversial agreements that supplanted the Independent Foreclosure Reviews that began in November 2011 to rectify procedural missteps that may have occurred in the processing of foreclosures between January 1, 2009, and December 31, 2010. With the amended enforcement actions, the servicers agreed to pay a total of $9.3 billion—$3.6 billion in cash to be disseminated to eligible borrowers whose foreclosure cases were mishandled and $5.7 billion provided in the form of mortgage assistance to struggling homeowners. Amended agreements were forged with Aurora, Bank of America, Citibank, JPMorgan Chase, Goldman Sachs, HSBC, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo. According to regulators, 4.2 million borrowers can expect to receive compensation ranging from hundreds of dollars to as much as $125,000 under the new settlement. Officials say the new arrangement makes it possible for eligible borrowers to be compensated much sooner than the independent reviews previously in place. Servicers subject to regulators' enforcement actions but not participating in January's revised settlement agreement include Ally, EverBank, and OneWest. According to the OCC, the independent consultants retained by these three servicers are continuing with the individual case reviews. STAT INSIGHT 5.4 Million New renter households in the U.S. between 2004 and 2011. Source: Freddie Mac

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