Pending Home Sales

110.0

100.0

90.0

80.0

70.0 Apr
NAR 03/2011

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Jan

Feb

Return on Investment
(January 1, 2000 April 1, 2011)
60

40.9
40

20 0

13

-4.5
-20
-40

-30.2

-60 Dow
Series 1

S&P

NASDAQ

Real Estate

13

-4.5 Macro Market Home Price Expectations Survey 03/2011 -30.2 40.9

Home Price Expectation Survey

10 8 6

4 2 0 -2 Today Appreciation 0 2011 -1.38 2012 -0.09 2013 2.67 2014 5.98 2015 9.64

Macro Market Home Price Expectations Survey 03/2011

Home Price Expectation Survey

4

-2 2011 Appreciation -1.38 2012 1.29 2013 1.38 2014 3.31 2015 3.66

Macro Market Home Price Expectations Survey 03/2011

The Wall Street Journal

Why your best investment is a house:
" With home sales starting to improve, and with prices now possibly forming a bottom, real estate could well be the asset class that represents the best low-risk buying opportunity out there today.
Market Watch 1/26/2011

Fortune
Real estate: It's time to buy again

Forget stocks. Don't bet on gold.

After four years of plunging home prices, the most attractive asset class in America is housing.
CNN Money.com 3/28/2011

Cost vs. Price

Mortgage Rates 30 Year Fixed

5.25

4.75

4.5

4.25

4/01/2010

Today
Federal Reserve

Price is the Same, it Just Costs More

Date Loan Amount $100,000 Interest Rate 4.86 Monthly Payment (P&I) $528.30 $487.27 $41.03

Today

Difference in$100,000 payments monthly Nov 2010 4.17

Difference in Mortgage Payments

Additional Cost Over 30 Years

Monthly Yearly

$41.03 $492.36

Over 30 Years $14,770.80 Difference in monthly payments

Quality Residential Mortgage - QRM

1.) A Product-Type qualified residential mortgage is a first-lien mortgage that is for an owner-occupant with fully documented income, fully amortizing with a maturity that does not exceed 30 years and, in the case of adjustable rate-mortgages (ARMs), has an interest rate reset limit of 2 percent annually and a limit of 6 percent over the life of the loan. 2.) A PTI/DTI qualified residential mortgage has a borrowers ratio of monthly housing debt to monthly gross income that does not exceed 28 percent and a borrowers total monthly debt to monthly gross income that does not exceed 36 percent. 3.) An LTV ratio qualified residential mortgage must meet a minimum LTV ratio that varies according to the purpose for which the mortgage was originated. For home purchase mortgages the LTV ratio is 80 percent. 4.) A FICO qualified residential mortgage has a borrowers FICO score greater than or equal to 690 at the origination of the loan.

Mortgage Market Note #11-02 3/31/2011

Quality Residential Mortgage - QRM

Percentage of All Mortgages That Would Have Met All Requirements Under the Newly Proposed QRM Standard
35 30.5 30 25 20.4 20 15 10 5 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 23.3 19.5 16.4 19.4 17 14.4 11.5 10.7 17.4 24.6 22.4

Mortgage Market Note #11-02 3/31/2011

Barbara Corcoran
We have a regular real
estate miracle happening. We not only have record low prices, but we also have cheap money.
- March 2011

Listing Appointment
Buyer Appointment

Negotiation of Offer
Price Correction

Supply & Demand

Visible and Pending Inventory

Congressional Oversight Panel 3/16/2011

Pending Inventory Detail

CoreLogic Shadow Inventory Report 3/30/2011

Foreclosures: The Eye of the Storm

Completed Foreclosures
200,000 186,854

168,256
160,000

157,733

132,625

120,000

95,067

80,000

4Q 2009

1Q 2010

2Q 2010

3Q 2010

4Q 2010

OCC and OTS Mortgage Metrics Report 3/2011

# of New HAMP Trial Modifications

Congressional Oversight Panel 3/16/2011

Foreclosures in Process
1,350,000 1,300,000 1,250,000 1,201,622 1,200,000 1,169,913 1,148,343 1,290,253

1,150,000
1,100,000 1,050,000 1,078,703

1,000,000
950,000

4Q 2009

1Q 2010

2Q 2010

3Q 2010

4Q 2010

OCC and OTS Mortgage Metrics Report 3/2011

Value by Sale Category

Type of Sale % of Value

Non-Distressed Sale
Short Sale Foreclosure Sale

100%
83% 78%

NAR 3/22/2011

Value by Sale Category

Type of Sale % of Value

Non-Distressed Sale
Short Sale Foreclosure Sale

100%
81% 59%

Realty Trac Foreclosure Report 12/01/2010

New Short Sales

Up 30.3% year-over-year
60,000

55,441
50,000

56,257 48,980

40,000

41,031 37,584

30,000

20,000

10,000

4Q 2009

1Q 2010

2Q 2010

3Q 2010

4Q 2010

OCC and OTS Mortgage Metrics Report 3/2011

Months Shadow Inventory by State

NAR 3/21/2011

Share of Distressed Sales by State

NAR 3/21/2011

Prices: Case Shiller

(Current data) brings us weakening home prices with no real hope insight for the near futureWe have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing.

Case Shiller 03/29/2011

Prices: Core Logic

A number of factors continue to dampen any recovery in the housing market. Negative equity, weak demand and the overhang of shadow inventory all continue to exert downward pressure on housing prices.

We are looking out for renewed demand in the coming months as the spring buying season gets underway to hopefully reduce the downward pressure.

CoreLogic 03/10/2011

Prices: Radar Logic

The supply of homes for sale and potentially for sale is very large relative to demand, and it continues to be fed by high rates of mortgage defaults and foreclosures. At the same time, demand for homes is constrained by tight lending standards. Unfortunately, declining home prices are likely to exacerbate these challenges to the housing market.

Radar Logic 03/24/2011

Prices: FHFA

FHFA 03/22/2011

KCMBlog.com

Resources
Slide 2 3 3 4,5 6 7 9 10 12,13 19 Slide Title Pending Sales Return on Investment (House Prices) Return on Investment (Stocks) Home Price Expectation Survey Wall Street Journal Fortune Mortgage Rates Price is the same Quality Residential Mortgage - QRM Visible & Pending Inventory Link http://www.realtor.org/research/research/phsdata http://www.standardandpoors.com/home/en/us http://money.msn.com/ http://www.macromarkets.com/real-estate/home-price-survey.asp http://www.marketwatch.com/story/why-your-best-investment-is-a-house-2011-01-26 http://finance.fortune.cnn.com/2011/03/28/real-estate-its-time-to-buy-again/ http://www.freddiemac.com/pmms/ http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx http://www.fhfa.gov/webfiles/20686/QRM_FINAL_ALL.pdf http://cop.senate.gov/documents/cop-031611-report.pdf http://www.corelogic.com/uploadedFiles/Pages/About_Us/ResearchTrends/CoreLogic_Shad ow_Inventory_March_2011_FINAL_033011.pdf http://www.ots.treas.gov/?p=PressReleases&ContentRecord_id=0845ce23-9df5-5add-557b023f1cef9df3

20

Pending Inventory Detail

22

Completed Foreclosures

KEEPINGCURRENTMATTERS.COM

Resources (cont.)
Slide 23 24 25 26 27 28 29 30 31 32 33 Slide Title # New Hamp Trial Modifications Foreclosures in Process Value by Sale Category (NAR) Value by Sale Category (RealtyTrac) New Short Sales Months Shadow Inventory by State Share of Distressed Sales by State Prices: Case Shiller Prices: Core Logic Prices: Radar Logic Prices: FHFA Link http://cop.senate.gov/documents/cop-031611-report.pdf http://www.ots.treas.gov/?p=PressReleases&ContentRecord_id=0845ce23-9df5-5add-557b -023f1cef9df3 http://economistsoutlook.blogs.realtor.org/category/distressed-property/ http://www.realtytrac.com/content/press-releases/foreclosure-homes-account-for-25-percent -of-all-q3-2010-residential-sales-6194 http://www.ots.treas.gov/?p=PressReleases&ContentRecord_id=0845ce23-9df5-5add-557b -023f1cef9df3 http://economistsoutlook.blogs.realtor.org/2011/03/21/state-by-state-estimate-of-shadowinventory/ http://economistsoutlook.blogs.realtor.org/2011/03/21/state-by-state-estimate-of-shadow -inventory/ http://www.standardandpoors.com/home/en/us http://www.corelogic.com/About-Us/ResearchTrends/Home-Price-Index.aspx http://www.radarlogic.com/news/announcements/January2011RPXmonthlyReportPressRele ase.pdf http://www.fhfa.gov/Default.aspx?Page=14

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