Housing pundits have long warned of a backlog of foreclosures waiting to flood the market and further sink housing prices. But according to the Wall Street Journal, the bursting of the pipe may never come to fruition. New foreclosure filings remain well below their levels from this time last year, down 31.1 percent year-over-year in March, according to LPS applied analytics. Delinquencies are also down 8.8 percent over that time frame. [more]

As lenders increasingly favor the faster and more lucrative short sale process, those deals outnumbered purchases out of foreclosure for the first time in the U.S. Citing data from Lender Processing Services, Bloomberg News reported that short sales accounted for 23.9 percent of home purchases in January, while foreclosures represented 19.7 percent of sales. [more]

The Consumer Financial Protection Bureau is proposing a new set of rules for lenders to follow that intend to help homeowners avoid foreclosure, the Associated Press reported. The proposal comes in the wake of Congress demanding changes to the problematic industry. [more]

The guidelines for the conversion of real estate owned homes into rental properties were released by the Federal Reserve last week, the Los Angeles Times reported. The central bank decreed that lenders could receive Community Reinvestment Act credit under the new policy. The Community Reinvestment Act, enacted in 1977, was intended to encourage lenders to provide housing to low- and moderate-income people. [more]

Banks have higher maintenance standards for foreclosed properties that they own in upscale white neighborhoods as opposed to low-income communities of color, according to a new study by the National Fair Housing Alliance, which the Wall Street Journal reported. Foreclosures in minority neighborhoods nationwide were 42 percent more likely to be poorly maintained, the report indicates. [more]

Adam Leitman Bailey

Adam Leitman Bailey, the high-profile New York City attorney who runs a firm bearing his name, sat down with Fox News in the video after the jump and explained how a layman should approach buying foreclosed homes.

“This is the greatest time in the history of the world to buy a home,” Bailey said. But he warns “it’s very complicated, and you can lose your shirt very easily.” [more]

More real estate experts are forecasting larger-than-expected U.S. home price declines, as foreclosures make their way through the market. Citing Moody’s data, Bloomberg News reported that sales of repossessed properties will rise 25 percent this year from the 1 million such sales recorded in 2011.

Because repossessed properties sell at a 35 percent discount from lenders’ valuation of the homes — and a 60 percent discount for distressed homes on the market for two years, according to the Federal Reserve Bank of Cleveland — home prices are sure to fall with the continued foreclosure activity. [more]

Home sales are down

The fourth quarter of 2011 was a dismal one for the New York City residential real estate sector, per a study released today by New York University’s Furman Center for Real Estate and Urban Policy.

The volume of home sales — single-family, co-op and condominium — in the five boroughs was down 15 percent quarter-over-quarter and 11 percent year-over-year, the report says. The sales volume is the lowest recorded since the second quarter of 2009. And there is little hope of sales increasing soon, as the number of new residential building permits citywide was down 60 percent quarter-over-quarter, according to the report. [more]

The foreclosure settlement reached yesterday between 49 state attorneys general and the five largest mortgage servicers could result in a wave of foreclosures that would temporarily depress the American housing market even further, Bloomberg News reported.

Banks had waited until an agreement was pounded out to proceed with many foreclosures, Bloomberg said, and now that the agreement is finalized they will likely push forward, foreclosing on the backlog of underwater properties. The number of foreclosures initiated in the U.S. fell 46 percent between October and December of 2011, according to data from RealtyTrac, a real estate analytics firm. The investigation into foreclosure abuses began in October of 2011. [more]

Despite Herculean efforts to stem the rising tide of foreclosures, New York State faces an estimated 100,000 impending foreclosure cases, the New York Times reported.

New York has been relatively aggressive in the foreclosure arena, granting new legal protections to borrowers and turning the courts into “negotiation centers working to keep people in their homes,” the Times said. But despite the state’s intentions, the situation seems to be worsening. “We are a shining example of somebody’s best efforts falling short through no fault of our own,” Paul Lewis, a senior official in the New York court system, told the Times. [more]