Formerly known as Cyberhomes and FNRES MLS, LPS Real Estate Group is now a division of LPS.

The real estate vertical ad network, launched by Cyberhomes in June 2008, was the first of its kind to link directly with real estate agent, broker and MLS Web sites as a way to offer national reach and local targeting for advertisers . Since then, LPS Real Estate Group has increased participation in the network to include nearly 800 Web sites that attract four million unique users each month.

The Real Estate and Living Media Network allows its members to control the type and number of ads placed on their site. Additionally, LPS offers full-service support from an experienced, dedicated LPS Real Estate Group account management team. There are no fees associated with becoming a member, and most Web sites begin earning income immediately.

The new media network name, Real Estate and Living Media Network, more accurately reflects its broadening scope to appeal to advertisers targeting home enthusiasts, as well as the “moving” segment – homeowners who are looking for a new place to live or who are in the process of moving to a new residence. Advertisers can target consumers at every stage of the homeownership lifecycle, giving them unparalleled, hyper-local reach at pivotal points in the home purchase process. Advertisers, such as Bank of America, AT&T, Time Warner, Prudential Real Estate Affiliates, Ditech, Richmond America and Experian, have already taken advantage of advertising with LPS Real Estate Group.

The Real Estate and Living Media Network offers its members nationally recognized real estate content, as well as a syndicated advertising platform that helps them access the $11 billion spent annually on advertising to online consumers. In turn, real estate professionals deliver more value to home buyers and sellers by adding local market information, data/trends, and award-winning editorial pieces to their Web sites, while receiving a continuous income stream from the advertising sold and distributed by the LPS Real Estate Group. The Real Estate and Living Media Network’s content includes neighborhood, school and environment reports, real estate news and feature stories in a programming format that real estate companies can easily integrate into their existing Web sites.

“Each month, the online real estate industry has more than 40 million unique consumers who spend more time visiting local and regional real estate Web sites than national portal offerings,” said Jay Gaskill, president, LPS Real Estate Group. “Our goal is to add value to these Web sites by offering rich content to improve the user experience, together with a turn-key advertising platform that real estate professionals can use to introduce national advertising or local service offerings.”

“Historically, only national media companies have captured a share of the $11 billion advertising spend,” said Prem Luthra, LPS Real Estate Group’s chief sales and strategy officer. “We felt this was an ideal time to help real estate companies capitalize on their Web site traffic and generate income.”

For more information on advertising or to join the Real Estate and Living Media Network, contact 866.599.8623 or e-mail realm@lpsvcs.com to schedule a demonstration.

For more information about LPS, please visit www.lpsvcs.com or www.lpsreg.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Mortgage rates just fell for the third straight week, according to mortgage finance firm Freddie Mac.

“The credit markets are still tight, but they have loosened up significantly from 90 days ago,” said Scott Norman, vice president of the Texas Mortgage Bankers Association.

So is this a good time to enter a mortgage transaction? It might be, if you can qualify. “The two biggest issues are going to be credit and down payment,” Norman said. “Those are really going to trigger your ability to get a mortgage in a decent amount of time.”

Here’s what you’re up against in specific mortgage situations and what you can do to increase your chances of getting a deal done.

If you’re buying a home
Get ready for paperwork. Have your bank statements, W-2 wage and tax statement and pay stubs organized.

“Overdocumentation is the name of the game right now,” said Linda Davidson, senior loan officer at Service First Mortgage in Garland, Texas.

Having all the documents upfront will speed the application process.

Check your credit score. The most widely used score is the FICO, which ranges from 300 to 850. Your score, based on information in your credit report, helps lenders predict how likely you are to make your payments on time. The higher the number, the better the chance you’ll be approved for a loan at a low interest rate. “Clean up your credit score,” Norman said. Catch up on any late payments and pay off or pay down your debt.

First-time buyers have a sweetener in the form of an $8,000 credit on federal income taxes for homes purchased before Dec. 1.

It’s critical that you have a down payment because lenders want to see that you have skin in the game. Mortgages insured by the Federal Housing Administration require a 3.5% down payment, which can come from a family member, employer or charitable organization as a gift. For a non-FHA-insured loan, lenders are requiring a 10% down payment, said real estate agent Brenda Rogers of Coldwell Banker Apex, Realtors in Plano, Texas.

If you’re refinancing
“Have plenty of equity,” Rogers said. Equity represents the ownership value you’ve accumulated over time by making payments, and lenders want you to have a financial stake in the refinancing. “The lender doesn’t want to lend 100 percent of the value of the property,” said Norman, of the Texas Mortgage Bankers Association.

Another reason to build equity is that you don’t want to owe more on your home than it’s worth, a situation some homeowners face today.

Also, consider how long you plan to remain in your home, because you need to stay long enough to recoup closing costs associated with refinancing. Those costs typically will total $3,000 to $5,000, said Davidson, of Service First Mortgage. “If you’re going to move out of your home in five years or less, then typically it’s not going to be worth your doing,” she said. “If you plan on staying longer than that, then we need to look at the costs vs. the monthly savings to see how long it will take to recoup that cost.”

Sometimes things outside your control can affect your attempt to refinance.

Rachel Kelley of Plano said she’s been trying to refinance with Bank of America, which last year acquired her original lender, Countrywide Financial Corp. Kelley, a medical writer, ran into financial trouble after her work was cut to part time. “I cannot afford my house payment anymore,” she said. She said her repeated attempts to get more information from Bank of America on how to refinance her home through the Obama administration’s Making Home Affordable refinancing program have been unsuccessful. “I spoke to several people, trying to get information about the program and what I needed to do to refinance,” Kelley said. “It is very likely I will be behind on my payments in the near future due to their inability to get me the proper information on time in order to refinance.”

Loan modifications
A loan modification is when a lender changes the terms of your loan so you can afford your payments.

That can be done by lengthening the term of your loan, lowering your interest rate or allowing you to skip payments and adding those to the end of your loan.

The Obama administration is prodding mortgage-servicing companies to bolster their efforts to modify troubled loans. The servicer is the company that collects and processes your mortgage payment. It may or may not be your original lender.

If you’re having trouble making your payment, contact your servicer immediately and ask about a loan modification.

(c) 2009, The Dallas Morning News.
Distributed by McClatchy-Tribune Information Services.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

For more real estate tips and topics, be sure to check out these headlines on RISMedia.com:

Are Tighter Appraisals Hurting Home Sales? 
Thinking Outside the Box – One Agent’s Unique Approach to Real Estate

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com

If you decide to accept this mission, which is not impossible by any means (actually, it’s extremely crucial to the growth and success of your company) the first step is to schedule time to start this plan. It’s as easy as that. You must block off the time just like you would an appointment with a buyer or seller. And commit to it like going to the gym. If you’re serious then you block off the time regularly. Pull out your schedule, ‘crack-berry’ or your, I love-my-phone phone, and schedule 30-60 minutes every two days to spend on any aspect of recruiting.

The first week or so should be focused around mapping out a plan and system. I guarantee you already have some type of system working for you in other areas of your business, so now you need to carve out some time for recruiting. This means you are totally uninterrupted, phones turned off and door is shut. This sounds basic to most of you but honestly – how many of you really do this? If you are the typical real estate type that I work with every day, you can’t stop yourself from answering the phone or responding to a message the minute it comes in. If you HAVE to be available for support, then book this time when support issues are low.

Congratulations if you’ve made up your mind to seriously book time on your calendar for recruiting. You’ve passed the first step committed to creating a recruiting plan and system. This is NOT a mission impossible, and if you feel you need a coach – here I am.

How have you conquered the challenge of making the time to recruit? We want to hear your comments and suggestions.

Part 3 of this process will be about devising your recruiting goals, and if you’re not going to do it to stop talking about it.

Jason Shaw is Senior Account Manager and Recruiting Consultant for AlignMark, Inc. jshaw@alignmark.com

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

For more real estate tips and topics, see:

Working the Foreclosure Market – 5 Things You Need to Know h
So, You Want to Be an REO Agent? 
The Do’s and Don’ts of Short Sales

Moderator: Virginia Cook, Special Liaison for Large Firm Relations, NAR

Participants: Jon Coile, President, Champion Realty, Chesapeake Bay, Maryland
Helen Sossa, President, Prudential Palms Realty, Sarasota, Florida.
Vince Leisey, President, Prudential Ambassador Real Estate, Omaha, Nebraska

Vince Leisey: To begin with, I think we need to recognize that consumer confidence fell for a variety of reasons that had nothing to do with our ability as sales professionals. Consumers lost faith because as home prices dropped, equity was eroded. At the same time, unemployment was going up as the stock market was tanking. But we need to remember that, as always, what was a challenge for some became an opportunity for others and I think we’re seeing that opportunity come into its own today.

Helen Sossa: I agree, because pending sales are clearly picking up. We’ve had more unit sales over the last couple of months than in the entire history of our company. People-especially young people-who have good jobs and haven’t overspent the last couple of years are qualifying for some of the best home values available in years. I overheard a conversation the other day between two young women sitting in an airport coffee shop. One of them said the recession was “the best thing that could have happened to her” because it enabled her to buy her first home.

Jon Coile: That is especially true in light of the $8,000 tax credit for first-time buyers. That alone is a confidence booster, and it’s bringing in a lot of buyers who had been waiting on the sidelines. Granted it’s starting things moving at the low end of the market, but we need to capitalize on that activity. No more media doom and gloom. We’re turning that around, meeting actively with reporters and editors to update them on what’s happening. There is plenty of activity now.

VL: The mentality has shifted. Consumers are looking ahead, not back, and as Realtors we need to take that ball and run with it.

HS: That’s true. And there are plenty of ways beyond the federal tax credit to help boost consumer confidence-things like mortgage protection programs that are beginning to pop up, and homeowner counseling and assistance programs we can offer our customers.

JC: But we have to do more than change consumer attitudes, we have to manage the attitudes of our agents. When one of our top producers was lamenting the market a couple of months ago, her branch manager threw some numbers out that made her sit up and take notice. Once she understood the opportunities in the market, she wrote three contracts in three weeks.

Virginia Cook: Does all this activity mean we need to find new ways to reach out to consumers?

JC: I don’t think so. I think the ways to reach out are already in place, and by that I mean the tech revolution. As an industry, we are finally using technology and social networking to be more proactive, to build up our databases, and to be instantly responsive to our clients.

VC: What does that say about our marketing outreach programs?

VL: It means a shift there, too. According to the statistics, reaching a market of 50 million people would take 38 years by radio, 13 years by television, four years on the Internet, and three on iPod-but only two years via Facebook. What does that tell you?

HS: It tells me technology is the new way to win friends and influence people. But we must not lose sight of the fact that consumers trust us, by and large, because we build and sustain relationships. If we combine technology with our well-honed people skills, we can boost consumer confidence off the charts.

VC: Thank you all for your insight on this ongoing challenge. The NATIONAL ASSOCIATION OF REALTORS® (NAR) offers a number of tools and resources to help brokers and their agents communicate the value Realtors bring to the transaction, including the publication “It Pays To Work With A REALTOR®,” available to members for download free of charge as part of the Right Tools, Right Now initiative. In addition, NAR’s Public Awareness Campaign uses a comprehensive mix of television, radio and print advertising to educate consumers about the benefits of homeownership and buying opportunities in a changing real estate market. Learn more at www.REALTOR.org/RightTools.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Don’t miss previous NAR Power Broker Roundtable topics on RISMedia.com, see:

What Differentiation Means Today
It’s Not Easy Being Green – Industry Leaders Accept the Challenge
The New First-Time Home Buyers – How to Cultivate Their Business

Right Tools, Right Now – Free Articles & Information

Stay on top of current industry trends and information with free June articles and information thanks to NAR’s RIGHT TOOLS, RIGHT NOW, including “7 Recession-Busting Steps to Take Your Business Higher”, featuring tips to improve your financial mindset and identify growth areas in your market and “Mr. Internet: Use Facebook to Get Face Time”, a great resource to help you learn a new way to generate business. Visit www.REALTOR.org/RightTools. New offers each month!

Insurance & Home Warranty Solutions through NAR’s REALTOR Benefits® Program

Insurance products are available for auto, home, and errors and omissions. Home warranties are also available through American Home Shield. Visit the REALTOR Benefits® Program page for complete details on these offerings.

May Existing-Home Sales Continue Rising Trend

Sales of existing homes showed another gain in May, benefiting from favorable affordability conditions and a first-time buyer tax credit, according to the NATIONAL ASSOCIATION OF REALTORS®. May’s increase was the first back-to-back monthly gain since September 2005.

For more information, visit www.REALTOR.org.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Miss last week’s NAR Pulse? Click here.

Many companies have started experiencing great success finding candidates at a lower cost per candidate utilizing many less well known, free job boards. One of the keys to having success with any job board is the frequent “updating” and utilization of the job posting.

A system that has functionality that allows a company to create a job description and automatically posts to a variety of free job boards such as GoogleJobs, Simply Hired, Craigslist, and Kijiji will lead to an increased number of candidates. In other words a company that now posts on 10 job boards versus just one will clearly not have any fewer candidates and in fact will have significantly more. Subsequently, the system must automatically keep the post updated. This will keep the job listing fresh and listed towards the top of similar postings.

There are numerous examples of systems working as described above. A major real estate brokerage has utilized a system for five months now. Since the system was implemented, there has been over a 100% increase in the number of leads generated through job boards in the past. This has significantly lead to a decrease in the need to spend as much money on the more expensive job boards thereby leading to a significant return on investment. For example, here are some job boards without a system and with a system:
                                                          Without System                                       With System
Paid job board ad per month            $695                                                       $0

Costs for posting on other
job boards                                         $200 (time it takes to post and              $135 (auto poster
                                                          update to 10 job boards once                 capabilities of a System)
                                                          per week)  

Total costs to generate leads
through job boards                             $895                                                      $135

Number of leads from job boards       40                                                          0

Additional leads generated                  0                                                            10

Postings on other job boards              40 (if not updated leads begin               40
                                                             to diminish)

Total leads                                            80                                                          50

Cost per lead                                        $11                                                         $2.70

We’d be interested in your input with regards to your organization posting listings on job boards. Do you have a system in place for keeping your listing updated? Are you interested in finding such a system?

Dr. Jaffee is CEO/President of AlignMark, Inc.

For more information, visit www.alignmark.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Related headlines on RISMedia.com:

Turnover-What Is It Costing You? 
Generation Y – An Opportunity and a Challenge 
Why Agent Selection is Essential in Today’s Market

“That’s pretty remarkable considering what’s happened to home prices and sales this year,” said Charles McMillan, who this year is leading the 1.1 million-member National Association of Realtors.

McMillan got his start in real estate in Fort Worth in 1983. He was the Greater Fort Worth Association of Realtors’ 1992 Realtor of the Year and the 2000 Texas Realtor of the Year.

He’s now director of realty relations and broker of record with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. He returned to his home turf Friday to speak to the Dallas-Fort Worth Chapter of the National Association of Hispanic Real Estate Professionals.

He told the group that consumers want back in the market on two conditions: They can get a home for a good price and financing at an affordable rate.

“With so many distressed properties for sale, it’s not difficult to find a bargain. However, some might say that we communicated our message too well because now we have so many buyers who have unrealistic low-price expectations for all homes. They have the feeling that all sellers are distressed sellers and they’re not.”

Finding affordable financing for potential home buyers also remains a challenge, McMillan said. Last year’s government takeover of Fannie Mae and Freddie Mac should have encouraged financial institutions into pumping more money out to consumers, but that has not been the case, he said.

“I’ve heard many, many stories from Realtors who have seen good-credit clients turned down for loans,” he said. “We’ve got to take a critical look at lending practices and find a way to balance responsible lending with an appropriate pool of capital in the marketplace.”

McMillan spoke with the Star-Telegram following his address:

Star-Telegram: As the housing market was going bad, was there anything that real estate agents could have done back then to help?

McMillan: Neither the real estate industry nor its allied folks and regulators knew the huge tsunami that was about to hit us. One of the things we did, and do, as Realtors, is we would bring to the attention of authorities when we saw abuses going on at the closing table; fraud going on at the closing table. As far as us forecasting and foreseeing the great decline, we did not, nor should we be faulted for it.

Star-Telegram: What is it going to take to stabilize the U.S. housing market?

McMillan: Keep interest rates low and stable. The volatility that’s occurred in the last three weeks has not been helpful. Make financing, mortgage money, available. That’s still a challenge despite the fact that all of the bailout money was given to financial institutions. Stem the tide of foreclosures; shrink the existing foreclosure inventory. Our data shows that is starting to happen.

Star-Telegram: The NAR has called for the expansion of the first-time home-buyer tax credit for all buyers. How will that affect the market?

McMillan: It will impact the market significantly. The current tax credit brought buyers back in unprecedented numbers. Approximately 43% of all sales have been first-time home buyers making use of the first-time tax credit.

Star-Telegram: What glimmers are you seeing in the housing market right now?

McMillan: Existing home sales are increasing. They’re increasing more dramatically in areas that had more severe downturns, like California, Nevada, Arizona and Florida. That says a lot about the ability to decrease the excess inventory on the market. Unfortunately, most of the sales that are a part of this dramatic increase are distressed sales.

Star-Telegram: What other issues will be facing your organization this year?

McMillan: There are two issues: reform with respect to appraisal issues and appraisal management companies and healthcare. Almost 50% of real estate practitioners operating as independent contractors don’t have healthcare.

Star-Telegram: You took over this organization at one of the most critical times in the housing market. How are you handling the pressures?

McMillan: I think I’ve been handling it very well. Hours after I took over, I was scheduled to go to Tokyo and no sooner I got home, with a 48-hour turnaround, I flew back to Washington to testify before the House Financial Service Committee about reform. While the job has been difficult, it’s required a whole lot of time. It’s a commitment I made going into this role.

Star-Telegram: What has been your biggest accomplishment?

McMillan: Having Freddie Mac and Fannie Mae eliminate their “declining markets” policy, which was adding tremendously to the decline of neighborhoods by stigmatizing those areas. That was a huge coup. We met with them intensely and hours later they rescinded that policy. [Under the policy, loan underwriters were requiring larger down payments in areas where home prices were falling or were hard to determine. The NAR argued that the policy disproportionately affected minorities and lower-income families.]

Star-Telegram: Is real estate still a good career choice?

McMillan: Absolutely it is. One of the things we’re seeing now, more people are coming into this who have chosen real estate as a career from high school.

Copyright ©2009, Fort Worth Star-Telegram, Texas
Distributed by McClatchy-Tribune Information Services.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Neighbors always suspected “something wasn’t right with the milk” at 330 Alesio Avenue as the value of the home more than doubled to $1.2 million in the short time span. It turns out they were on to something.

Last week a federal judge sentenced Jose G. Martin, who had once posed as a renter in the home, to 65 months in prison for orchestrating a $6.6 million mortgage fraud scheme involving the Alesio property and six other homes in Miami-Dade County.

In all, prosecutors say he pocketed $1 million – $450,000 alone from his machinations at 330 Alesio. He used the money to pay off co-conspirators and enrich himself.

Martin’s sentence, which came on Wednesday, is a sign the federal government is taking a tougher stance against people who commit mortgage fraud – a crime once so pervasive that it played a role in bringing about the current economic crisis.

Average sentences for mortgage fraud convictions have increased from 24 months since 2004 to between 50 and 55 months currently, according to Rachel Dollar, a California-based attorney who specializes in fraud recovery litigation.

And, they’re expected to soon get harsher. Last month, Congress passed new legislation strengthening prosecutors’ ability to fight fraud and promised new funding for more agents, analysts and investigators.

Task Force

It also created a nationwide mortgage fraud task force modeled after a task force in Miami-Dade County, where mortgage scammers such as Martin ran amok during the housing boom.

Despite his stiff sentence, the Alesio neighbors said it wasn’t long enough – considering the harm mortgage fraud has done to South Florida’s housing market and the national economy.

“I’m happy someone got punished for it, but maybe they didn’t go up high enough. It’s criminal what the banks and mortgage companies were allowed to get away with,” said Fred Hermes, who lives across the street. Yolanda Feanny, a few doors down, also blamed the banks for allowing Martin to so easily rip them off.

But now lenders are subjecting loans to rigorous underwriting in an effort to fight fraud and avoid future losses.

The message currently telegraphed is that people who committed mortgage fraud during the boom should be expecting a knock on their doors, said Michael Sichenzia, president of Deerfield Beach-based Dynamic Consulting, a loss mitigation and real estate analytics firm.

‘Clear Mandate’

“Law enforcement has been given a clear mandate to go after mortgage fraud and prosecute people to the fullest extent of the law,” Sichenzia said. “This is going to be like the war on drugs 20 years ago because the government has to send a message that this will not be tolerated.”

Eric Bustillo, who heads the economic crimes section for the U.S. attorney’s office in Miami, said the office began attacking the problem early. In 2007, it joined forces with state law enforcement to step up investigations and prosecutions. Then, last year, it formed a separate strike force of teams from other federal agencies to enhance efforts.

In two years, the office has charged 176 people with mortgage fraud, convicting 120 of them. But with new, labor-intensive cases pouring in almost daily, Bustillo said the office is asking for more resources to tackle pending investigations, which have exploded by 600%.

As for the house at 330 Alesio Avenue, neighbors said they suspected wrongdoing for a long time. “It just kept changing hands,” said Linda Marquis, who lives across the street with her husband, Fred Hermes.

Martin, prosecutors said, was running a classic straw borrower scheme, in which he recruited and paid thousands of dollars to three stand-in buyers to purchase 330 Alesio and other homes in Miami using fraudulent papers. Few, if any, payments were ever made on the loans that totaled $6.6 million, and $2.6 million for the Alesio home.

As soon as the properties entered foreclosure, Martin would arrange the next bogus sale. At each closing, he collected on phony invoices for construction work that was never done by his company, Old Martin Construction.

Raphael Piedra and Jose D. Martinez, two of the alleged straw borrowers, also have been charged, but remain fugitives. A third straw borrower, Samuel Morejon pleaded guilty and was sentenced to 27 months in jail.

“Fraud was everywhere you turned,” said Sichenzia, who himself served three years in federal prison for mortgage securities fraud between 2003 and 2005, but now helps law firms and lenders ferret out malfeasance.

“If I look at 100 transactions month, 90% of them have one aspect or more of a misrepresentation in the documents,” he said.

The house at 330 Alesio doesn’t appear to be worth anywhere near its last sale price of $1.2 million. The lawn is overrun with weeds. Thieves long ago stripped the place of its appliances and fixtures.

“My handyman was here and he said he wouldn’t give them more than $200,000 for it, it’s going to need so much work,” Marquis said.

©2009, The Miami Herald.
Distributed by McClatchy-Tribune Information Services.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Related topics on RISMedia.com:

Recovery Act’s Home buyer Tax Credit Can Immediately Help Thousands of First-Time Home Buyers
Effective Staging Tips – Don’t Overlook the Mirror 
Foreclosure Relief Still Iffy – Are Challenging Times Still Ahead?

A 1,600-square foot rancher listed for $179,000 – after last selling for $425,000 in 2004 – drew multiple offers last month with a high of $210,000 in cash. The topper: The property was a “short sale” whose owner needs lender approval to sell for less than the mortgage owed-and which buyers wouldn’t touch just three months ago.

“My phone was ringing off the hook, my voice mail was on overload and people were coming into the office receptionist saying they couldn’t reach me,” said Christy Howard, a Coldwell Banker Coon and McCreary agent who listed the Antioch house. “Everyone was waiting for the bottom, and the problem is they waited to long, because the bottom has already come and gone.”

Spurred by markdowns up to 80% from market highs, first-time buyers and investors both American and foreign descended en masse in the last three months on San Francisco’s hardest-hit hinterlands as Wall Street and the economic climate improved. They’re picking clean the Delta region’s banked-owned inventory as soon as properties hit the market and are engaged in unprecedented bidding wars even on short sales.

The panicked buying – fueled by buyers’ fear they’ll miss out on fire-sale prices – belies the doom-and-gloom evoked by recent reports of rising mortgage delinquency rates and foreclosure activity. It is one of several overlooked signs the U.S. housing-market turnaround has started in the nation’s hardest-hit markets, which is critical to driving an overall recovery:

- After spending most of the 1990s in the $250,000 range, the median-priced home that was sold in the seven-county San Francisco area rose to a staggering $850,000 by its May 2007 peak. It since fell to a low of $399,000 in February – a 53% drop in just 21 months – before posting its first monthly gain in March, albeit a 1% uptick. The median is expected to continue rising at a healthy clip in months ahead since it’s now at the level of nine years ago, before the bubble began inflating.

- California’s statewide inventory of unsold homes – based on the number on the market divided by the present monthly sales rate – stood at a 15.2 months supply in February, 2008. That figure was down to 5.8 months in March, near the historic average.

- At roughly 22,000 units, Las Vegas’ inventory is not far off its recent record high. Yet total sales closed in March showed flourishing demand, the fourth best on record. That monthly record – set during the height of the boom – is expected to be broken this summer.

“Things have been looking up but it’s going unnoticed,” says Forrest Barbee, a board member with the Greater Las Vegas Association of Realtors and a broker for Prudential American Group Realtors. “It’s just going to take the data a little longer to catch up with reality.” Listen to one analyst’s thoughts about housing having hit bottom.

Adds Rick Sharga, senior vice president of RealtyTrac, which compiles home sales and foreclosure data: “We’ve overshot the market in places like Las Vegas and Arizona in terms of fair value and buyers are bidding prices up again on many properties. The challenge is going to be whether there is enough financing to eat up the inventory that’s yet to come.”

The specter of rising foreclosures – born now of the recession rather than just overleveraged subprime borrowers – is the wild card in future health of the U.S. housing market and the economy by extension. Read about the difficulty borrowers are having with mortgage modifications.

The number of U.S. homeowners behind on payments or in foreclosure shattered the record in the first quarter, the Mortgage Bankers Association reported last week. Nearly one in eight mortgage holders were either delinquent or in the foreclosure process – and prime mortgages in trouble for the first time outnumbered subprime loans on a percentage basis. Read more on the record jump in foreclosures in the first quarter.

Yet the number of pending sales of existing U.S. homes took a surprising upswing in April, rising 6.7% in the biggest monthly gain in more than seven years, the National Association of Realtors reported Tuesday. That increase lags the 9.2% jump in October 2001, but that spike owed to buyers temporarily putting off home shopping following 9/11. See the latest data on pending home sales.

And in an overlooked report that belies the first-quarter delinquency numbers, defaults on privately insured mortgages – where borrowers are more than 60 days behind – fell 3% in April and were down 24% from a record 106,482 in February, the trade group Mortgage Insurance Companies of America reported Friday.

Most important for gauging the strength of the nationwide market is how conditions are improving in the most-depressed regional markets.

With those markets now stabilizing, banks are no longer anxious to dump real-estate owned properties, as houses in their foreclosure portfolios are called, fearing they’ll get appreciably less three months from now for their foreclosed properties.

As a result, they’ll be more judicious about the pace at which they release foreclosures onto the market. The new goal: To maximize the value of supplies in hand rather than unload it helter-skelter and torpedo the housing market like they did while they were shell-shocked by the devastation they’d wrought.

With the banks themselves now somewhat more stable, they’ll also be less likely to want to part with their “toxic assets” knowing the most-scorched, still-serviceable mortgages will be the most valuable on a credit-risk markup once the economy recovers. In fact, the price stabilization in the most-depressed U.S. markets will allow a clearer valuation of the toxic assets we now all hold by virtue of bank bailouts – a modicum of certainty that will hasten the overall recovery.

Homeowners in most of America know by their own property’s value that the spike in U.S. median home values was driven in considerable measure by soaring prices and volume in major markets, especially in California, Florida, Nevada and Arizona. By virtue of their climates and economic-growth rates, those four states have been on the extremes of the U.S. boom-and-bust housing cycle since the 1950s.

You can’t discount how critical an upturn in those states will be, considering they account for 46% of foreclosures nationwide. If foreclosures there are more quickly consumed as they’re starting to be now – fueled in part by foreign buyers who recognize their value – we’ll all reap a return on our bailout money a lot faster.

“The banks are getting smarter and realizing that if they don’t sell it in a short sale, they lose more money going the foreclosure route,” Barbee said.

Adds Sharga: “The banks will be very particular and thoughtful about how they’ll release new foreclosures, because they know now how flooding the market will have a disastrous effect.”

That, and if the chastened lenders would just swallow crow and pony up for rights to an encouraging Beatles song to play on their delinquent-payers’ hold line: “We can work it out.”

©2009, MarketWatch.com Inc.
Distributed by McClatchy-Tribune Information Services.

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