The S&P/Case-Shiller national composite fell by 3.8 percent during the fourth quarter 2011 and was down 4 percent compared with the fourth quarter 2010. Both the 10- and 20-City Composites fell by 1.1 percent in December compared with November, and posted annual declines of 3.9 percent and 4 percent versus December 2010, respectively. With this latest data, all three composites are at their lowest levels since the housing crisis began in mid-2006.

In addition to both Composites, 18 of the 20 MSAs saw monthly declines in December compared with November.

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• Some borrowers who have sold their homes through short sales may be eager to buy another home while interest rates are still low.  However, these borrowers should be aware of the downside of trying to purchase a home right away.
• While banks are starting to lend again to those who have worked to polish their tarnished credit, and once-wary investors are starting to show renewed interest in sub-prime mortgage bonds, buyers who simply can’t wait will have to pay high interest rates and likely a down payment of at least 30 percent.
• Working with a private lender is one option, but borrowers should first check to make sure that the lender is licensed to provide mortgages by searching the Nationwide Mortgage Licensing System & Registry.

Borrowers who kept their mortgage payments current until the closing of the short sale also may be able to get a Federal Housing Administration loan.  If the mortgage was in default though, an FHA loan is not possible for three years.

The Internal Revenue Service has issued its annual “Dirty Dozen” ranking of tax scams, reminding taxpayers to use caution during tax season to protect themselves against a wide range of schemes ranging from identity theft to return preparer fraud.
The Dirty Dozen listing, compiled by the IRS each year, lists a variety of common scams taxpayers can encounter at any point during the year. But many of these schemes peak during filing season as people prepare their tax returns.
The following is the Dirty Dozen tax scams for 2012:
Identity Theft
Phishing
Return Preparer Fraud
Hiding Income Offshore
“Free Money” from the IRS & Tax Scams Involving Social Security
False/Inflated Income and Expense
False Form 1099 Refund Claims
Frivolous Arguments
Falsely Claiming Zero Wages
Abuse of Charitable Organizations and Deductions
Disguised Corporate Ownership
Misuse of Trusts

http://www.irs.gov/newsroom/article/0,,id=254383,00.html

The Los Angeles Times

The Consumer Financial Protection Bureau this week will unveil a prototype for a new monthly mortgage statement for consumers designed to clearly show important information from their servicer.

Read the full story
http://www.latimes.com/business/money/la-fi-mo-mortgage-statement-20120213,0,5870776.story

Sales to third parties, typically investors, rose significantly in January, according to a report by ForeclosureRadar.  California saw the most activity, with investors purchasing 3,964 properties for $766.2 million. This is the fourth largest month on record in California, and the busiest since March of 2011.
Despite what appears to be significant percentage increases in foreclosure starts in California, Nevada and Washington, these increases barely offset the declines seen over the holidays. Compared with January one year ago, foreclosure starts are significantly lower.
“January’s numbers should put to rest any notion that we will see a wave of foreclosures in 2012, at least in the western states that we cover,” stated Sean O’Toole, founder and CEO of ForeclosureRadar. “Foreclosure Starts remain near record low levels, significantly lower than a year ago, when many banks still had self-imposed moratoriums in place due to the robo-signing scandal. Add to that a foreclosure timeframe of more than 8 months, and there is little chance of a wave this year even if all the banks started the foreclosure process en masse tomorrow.”
In January, foreclosure starts in California rose 15.5 percent and foreclosure sales increased 14.6 percent.

CNN Money

On Thursday, federal and state officials announced a $26 billion foreclosure settlement with five of the largest home lenders.  California is expected to receive approximately $12 billion in principal write-downs, including through short sales, over the next three years, according to the state attorney general’s office.

Making sense of the story

• The deal settles potential state charges about allegations of improper foreclosures based on robo-signing, seizures made without proper paperwork.
• The settlement sets up a federal monitor to oversee the process and try to prevent the challenges that tripped up many homeowners seeking help in earlier programs designed to address the housing crisis.
• Most of the relief will go to those who are underwater on their homes.  That relief will come over the course of the next three years, with banks having incentives to provide most of the relief in the next 12 months.
• At least $17 billion will go to reducing the principal owed by homeowners who are underwater and behind on their mortgages.
• Up to 750,000 other underwater homeowners who are current on their mortgages will be able to refinance their current loans at lower rates.  They will not receive a reduction in principal, but with mortgage rates near record lows, they could receive substantial savings on their monthly payments.
• Approximately $1.5 billion will go to homeowners who had their homes foreclosed upon between Jan. 1, 2008 and Dec. 31, 2011, and who meet other criteria.  They will receive up to $2,000 each.
• The five mortgage servicers that are parties to the settlement include Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, and Ally Financial (formerly GMAC).

Read the full story
http://money.cnn.com/2012/02/09/news/economy/mortgage_settlement/index.htm?hpt=hp_t1

This week, C.A.R. sent letters to members of Congress sharing its concerns about the disposition of Enterprise/FHA REO assets.  In the letter, C.A.R. President LeFrancis Arnold states that if the program is implemented improperly, it will have a negative impact throughout California and set back the housing market.

C.A.R. understands that some cities across the country may benefit from the bulk sale of REO properties, however, the Association feels that housing regulators have not appropriately analyzed proposed pilot cities.  Los Angeles and the Southern California region have been named as a potential pilot program location. However, these areas are experiencing an inventory shortage and many homes for sale, especially distressed properties, are receiving multiple bids.  Removing REO inventory through a bulk sale and rental program would hurt these communities.  In addition, taxpayers will lose because these REOs will be sold for less money in bulk sale than if sold as individual units.

While the nation continues to face its most difficult housing crisis since the Great Depression, C.A.R. hopes FHFA and HUD will withhold or delay the release of their REO bulk sale initiative in California’s housing market.

Read the letter

San Diego Union Tribune

The American Guild of Appraisers is digging into a federal rule it says has driven down the quality of home valuations, negatively affecting appraiser wages along with borrowers trying to get mortgages or refinances.
Read the full story
http://www.utsandiego.com/news/2012/jan/26/appraisers-say-feds-rule-has-hurt-their-pay-homeow/

Calif. median home price: December 2011: $285,920 (Source: C.A.R.)
Calif. highest median home price by region/county December  2011: Marin: $693,880 (Source: C.A.R.)
Calif. lowest median home price by region/county December 2011: Madera: $106,000 (Source: C.A.R.)

Calif. Pending Home Sales Index: December 2011: 91.6, an increase from the revised 82.5 recorded in December 2010

Calif. Traditional Housing Affordability Index: Third quarter 2011: 52 percent (Source: C.A.R.)

Mortgage rates: Week ending 1/26/2012 30-yr. fixed: 3.98% fees/points: 0.7% 15-yr. fixed: 3.24 fees/points: 0.8% 1-yr. adjustable: 2.74% Fees/points: 0.6% (Source: Freddie Mac)