Several real estate markets are starting to show signs of improvement with home prices in the last quarter as the industry demonstrates more signs of stabilizing, according to Clear Capital's latest monthly Home Data Index Market Report.
REO saturation rates have improved in the majority of the country’s largest markets. However, many areas are still battling year-over-year price declines. Clear Capital’s index reports that quarter-over-quarter home price declines were 2.3 percent in the latest quarter, which is less than half compared to the previous month.
“The latest market report results through May suggest that home prices are starting to ease back from the heavy declines seen over the winter,” says Alex Villacorta, director of research and analytics at Clear Capital. “We are still far away from the strong demand needed to fully turn things around for the housing market. However, it is clear from the initial spring sales data that prices are softening, suggesting stabilization in the market."
The High PerformersSeven of the top 15 markets posted quarter-over-quarter property price gains in this month's report, compared to none in last month’s, according to Clear Capital. Here are the seven highest-performing major real estate markets, according to the report.
1. Washington, D.C.-Arlington, Va.-Alexandria, Va.Quarter-to-quarter home price change: 4.5%Year-to-year price changes (May 2010-May 2011): 4.9%REO saturation: 17.5%
2. St. Louis, Mo. Quarter-to-quarter home price change: 2.2%Year-to-year price changes: -11.4%REO saturation: 35.3%
3. Pittsburgh, Pa.Quarter-to-quarter home price change: 1.6%Year-to-year price changes: 0.3%REO saturation: 10.9%
4. New York, N.Y.-Long Island, N.Y.-No. New Jersey, N.J.Quarter-to-quarter home price change: 1.5%Year-to-year price changes: 1.4%REO saturation: 9.6%
5. Virginia Beach, Va.-Norfolk, Va.-Newport News, Va.Quarter-to-quarter home price change: 1.4%Year-to-year price changes: -13.2%REO saturation: 22.4%
6. Miami-Ft. Lauderdale-Miami Beach, Fla.Quarter-to-quarter home price change: 0.6%Year-to-year price changes: -5.2%REO saturation: 39.6%
7. San Jose-Sunnyvale-Santa Clara, Calif.Quarter-to-quarter home price change: 0.5%Year-to-year price changes: -5%REO saturation: 25%
Tthe lowest-performing market for the fifth straight month was Detroit-Warren-Livonia, Mich., with a 13.2 percent decrease in quarter-over-quarter home price change and a 58 percent REO saturation rate.
Source: “Clear Capital Reports Quarterly Home Price Decline Slows; Signs of Market Stability as Summer Approaches,” Clear Capital (June 9, 2011) 2 Executives Sentenced in $3 Billion Fraud Ring Two executives were sentenced to several years in prison for their involvement in a massive fraud ring — estimated at $3 billion — that led to the collapse of one of the country’s largest privately held mortgage lending companies, as well as a bank.
Taylor, Bean & Whitaker Mortgage Corp.’s former president Raymond Bowman and its former treasurer Desiree Brown were convicted for their part in trying to cover up major losses by the company in moving money between accounts at Colonial Bank and selling mortgage loans that never existed or that had previously been sold. TBW’s former chairman Lee Farkas, who prosecutors have called the ring leader of the fraud, is set to be sentenced June 27.
Bowman was sentence to 30 months in prison while Brown was sentenced to six years in prison.
"It was never my intent to commit a crime," Brown told the court. "It was always my intent to fix the problem."
Prosecutors say the mortgage fraud at TBW lasted more than seven years up until August 2009, which ultimately led to the collapse of TBW and Colonial BancGroup Inc.’s Colonial Bank. Prior to its collapse, TBW was one of the nation’s largest privately held mortgage lenders with some $20 billion in mortgage sales a year. Meanwhile, Colonial Bank — before regulators took it over — was once one of the top 50 U.S. banks.
Prosecutors say the case marks one of the few since the aftermath of the global financial crisis where charges have been brought up against executives at major firms.
Usually prosecutions, up to this point, have involved lower-level employees or smaller firms.
Source: “Former Executives Get Prison Time for Mortgage Fraud,” Reuters (June 10, 2011)