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VISIT US ONLINE @ DSNEWS.COM Michigan rank: 35 90+ Day 2.72% 3.39% -19.9% 90+ Day 4.22% year ago 4.78% percent point change -11.7% -27.9% Top Core-Based Statistical Area FLINT, MI 90+ Day 4.19% year ago 5.10% percent point change -17.8% -9.0% note: The 90+ Day delinquecy rate is the percentage of outstanding mortgage loans that are 90- plus days delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the August 2012 foreclosure rate. All figures are rounded to the nearest decimal. The unemployment rate reflects preliminary August 2012 figures released by the Bureau of Labor Statistics. All other data courtesy of Lender Processing Services. 3.17% Delinquency Rate august 2012 2.88% Foreclosure Rate 4.40% Delinquency Rate Foreclosure Rate august 2012 2.02% year ago 2.56% percent point change -21.0% Top County GRATIOT COUNTY Delinquency Rate august 2012 3.17% to hover below 9 percent before the end of the year and stay around 8 percent into 2013. The research firm also pointed to concerns The state's unemployment rate is projected for Michigan regarding the relocation of manufacturing companies to places with cheaper labor since manufacturing wages are slightly higher in Michigan than the rest of the U.S. Even with this outlook, Michigan is said Foreclosure Rate Unemployment Rate 9.4% 10.4% -9.6% Jerry Takis o: 248.755.5600 jerry@takishomes.com Caryn Jensen o: 248.320.5760 cjsellsre@comcast.net o: 248.681.8300 www.legacy4u.com Michigan Combined years experience: 40+ tomorrow. An appraisal is an estimate based on history. A BPO is an expectation based on history." WAC shared data on properties that sold far above the BPO and appraisal price based on demand. One example was a foreclosed home in Chicago that sold for $154,157 when the list price was at $53,900 in June. The BPO valued the property at $50,000, and the appraisal at $49,000. The bank property had 75 offers. Another foreclosure in San Diego had 76 offers and sold for $301,000 when it was listed at $204,750, but had BPO and appraisal values at $195,000 and $180,000, respectively. "This data speaks to the fact that the IN THE NEWS Michigan's Housing Market Improving, Employment Key Concern: IHS economic issues in Michigan were examined as part of the research firm's analysis of the 12 swing states. While sales and housing starts have made In a report from IHS Global Insight, strides in the state, IHS still found lots of room for improvement. For example, housing starts, prices, and sales, while rising, are still at 19.8 percent, 75.2 percent, and 79.9 percent of their respective, pre-recession peaks, and construction employ- ment has fallen below the recession-era low. "Demand will have to be great enough to clear the existing inventory of housing stock before it can drive significant growth in new starts and stimulate construction payrolls," IHS stated. IHS also expects growth to slow for to hold an advantage—"a large, skilled, and experienced workforce." The state's workforce might be enough to keep manufacturing jobs on the short term, but consequences of higher wages are expected to push jobs out of the state over time. Woodward Asset Capital Argues for Buyer Demand to Determine Prices parent company to software solutions OfferSubmission and VerifiedShortSale, expressed frustration in a release over how property values are currently determined. Rather than relying on broker price opinions (BPOs) and appraisals, the company said market demand from buyers should dictate home values. Ronald Jasgur, WAC president, com- Woodward Asset Capital (WAC), traditional way of marketing distressed assets leaves a lot of money on the table. That's a loss for everyone—servicer, investor, neighbors, and local taxing authorities. The industry cannot afford to continue to rely on outdated practices when available technology can help us determine true market value," Jasgur said. WAC, headquartered in Southfield, Michigan, provides customizable technology solutions to help manage real estate sales and prevent fraud in the distressed asset market- place. Risk of Default for New Loans Slightly Higher in Q3: UFA the third quarter of this year is slightly higher compared to the previous quarter, according to the University Financial Associates (UFA) Default Risk Index. With 100 as the baseline, the risk index The risk of default for loans originated in rose to 113 from the previous quarter's revised 111. This means UFA estimates the risk of default on newly originated mortgages (both prime and nonprime) will be 13 percent higher than the baseline average of the 1990s. Still, the risk of default is much lower than mented, "Existing models of valuation are inherently flawed because they are subject to human selection and error. Twenty-three percent of all listings in our systems consis- tently sell above the bank's list price, which the client formulated using appraisals, BPOs, and automated modeling." Jasgur continued, "The only value that employment, real income, and real gross state product into 2013. the worst vintages from 2006-2008. During certain time periods in 2007, the index rose above 200. While the risk of default increased slightly in Q3 and the economy has slowed, the housing market is growing overall. "UFA's nominal, five-year house price matters when negotiating an REO or short sale is what the actual market is willing to pay today. The past is history; it's no indication of what's happening today or what could happen forecasts are solidly positive at both the state and metro area levels," said Dennis Capozza, the Dale Dykema professor of business ad- ministration in the Ross School of Business at the University of Michigan, and a founding principal of UFA. "With the risk of falling 91

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