WASHINGTON (AP) -- The average rate on the 30-year fixed mortgage fell this week to a record low, the ninth time that has happened in the last year. Even with the cheapest rates in history, the housing market remains depressed.

Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan dropped to 3.87 percent this week. That below the previous record of 3.88 hit two weeks ago.

The average on the 15-year fixed mortgage fell to 3.14 percent, also a record low. Records for mortgage rates date back to the 1950s.

Mortgage rates tend to track the yield on the 10-year Treasury note, which fell below 1.9 percent this week.

Rates have been low for more than a year, and the average rate on the 30-year loan has hovered near 4 percent for more than three months. Yet few people can afford to buy a home or qualify for a loan. Those who can have already done so.

High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many don't want to sink money into a home that they fear could lose value over the next few years.

Sales of previously occupied homes were dismal last year. New-home sales in 2011 were the worst on records going back half a century.

Builders are hopeful that the low rates could boost sales next year. But so far, they have had a minimal impact.

Mortgage applications have risen slightly over the past four weeks, according to the Mortgage Bankers Association. But they are coming off extremely low levels.

To calculate the average rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.

The average rates don't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for the 30-year loan rose to 0.8 from 0.7; the average on the 15-year fixed mortgage was unchanged at 0.8.

For the five-year adjustable loan, the average rate fell to 2.80 percent from 2.85 percent. The average on the one-year adjustable loan rose to 2.76 percent from 2.74 percent.

The average fee on the five-year adjustable loan rose was unchanged at 0.7; the average on the one-year adjustable-rate loan was unchanged at 0.6.

By Leah Schnurr

NEW YORK (Reuters) - Home prices fell more steeply than expected in November, and consumers turned less optimistic in January, highlighting the hurdles still facing the bumpy economic recovery.

After accelerating at its fastest pace in 1-1/2 years at the end of 2011, the U.S. economy is expected slow in early 2012.

The S&P/Case-Shiller composite index of single-family home prices in 20 metropolitan areas, released on Tuesday, declined 0.7 percent on a seasonally adjusted basis, a bigger drop than the 0.5 percent economists expected.

The decrease added on to the 0.7 percent decline in October from September.

Separately, an index of consumer attitudes fell to 61.1 in January from 64.8 the month before, as Americans turned gloomy about the job market and income prospects, said the Conference Board, representing private companies.

The data frustrated expectations for an increase after sharp gains in consumer confidence in November and December.

"We are braced for a more bumpy picture over the next few months. A lot of expectations probably ran away or got a little too lofty coming into the end of the year," said Sean Incremona, economist at 4Cast Ltd in New York.

"We are still in a very modest recovery, and we do see consumption slowing this quarter, and data like this supports that picture."

Some improving housing data in late 2011 had raised hopes the recovery was finding its footing. But weaker numbers this month have underscored how lengthy the healing process will be.

"I'm absolutely of the opinion we've bottomed out. The debate now is whether the recovery begins, and I'm not sure that recovery is earnestly underway," said Eric Lascelles, chief economist at RBC Global Asset Management in Toronto.

"The reality is the housing market is so far from normal that it will take years to get back to its normal state. Similarly it will take a while before it really is contributing properly to economic growth."

U.S. housing prices have plunged by about a third from their peak before the financial crisis, and a combination of high unemployment, tight mortgage lending conditions and more foreclosures in the pipeline are holding back a recovery.

Would-be homeowners have also shied away and data from the Commerce Department on Tuesday showed the homeownership rate dipped in the fourth quarter to 66.0 percent from 66.3 percent.

Aside from the second quarter of 2011 when the rate was at 65.9 percent, homeownership is at its lowest level since the second quarter of 1998.

The day's disappointing data took Wall Street lower, undermining earlier optimism over a possible Greek debt deal.

Also weighing on the market was a report that showed business activity in the U.S. Midwest grew more slowly than expected in January - the index fell to 60.2 compared with a forecast of 63 - hurt by a weaker labor market.

A wider reading of the U.S. factory sector is due on Wednesday with the release of the Institute for Supply Management national manufacturing survey.

Last week, the Federal Reserve showed the extent of its concern about the uncertain U.S. economic recovery by signaling it would keep interest rates near zero for nearly three more years. That gloomy assessment was echoed on Tuesday by a Congressional Budget Office report that saw U.S. unemployment above 8 percent this year and in 2013.

Companies are feeling the pinch too. Growth expectations for

first-quarter earnings are declining sharply, due to worries about slowing growth and weak revenue trends at major U.S. firms, according to Thomson Reuters data.

A report released on Monday showed spending was flat in December as Americans focused more on saving.

Once a key pillar of the U.S. economy, Americans have taken a more frugal tack as many struggle with hefty debt burdens.

"With the global economy slowing and domestic fiscal policy a drag on growth, the wellbeing of the U.S. consumer is crucial to the recovery," Alistair Bentley, economist at TD Bank Group, wrote in a note.

"Today's number, coupled with yesterday's disappointing personal spending data, offers a reminder that underlying demand is still too soft to absorb the economy's excess slack."

On a seasonally adjusted basis, 17 of 20 cities racked up monthly home price declines, and average national prices were around levels seen in mid-2003, according to S&P/Case-Shiller.

Prices in the 20 cities also steepened their year-over-year decline, falling 3.7 percent compared to a 3.4 percent decline in October.

Last week, the Obama administration took steps to head off a new foreclosure crisis but critics and even some supporters said it was unlikely to prove much more successful than other government programs to date.

Some Federal Reserve officials have said the central bank should consider buying more mortgage-backed securities to help boost the struggling sector, though some economists question how effective that would be with borrowing costs already so low.

(Additional reporting by Chris Reese; Editing by Chizu Nomiyama)

As reported here: http://finance.yahoo.com/blogs/daily-ticker/freddie-mac-betting-against-homeowners-latest-gse-outrage-164015828.html

NPR and ProPublica released an explosive report Monday that found government-owned mortgage giant Freddie Mac betting against the very homeowners it is supposed to help. According to the news article, the investment division of Freddie Mac (or as Henry calls it, Freddie's "gambling desk") placed billions of dollars of bets against homeowners who were trying to refinance their mortgages at lower rates.

According to NPR/ProPublica's review of public documents, Freddie Mac invested in securities called "inverse floaters," which receive all the interest payments from a specified mortgage-backed securities. "If lots of people 'pre-pay' their old loans and refinance into new, cheaper ones, then Freddie Mac starts to lose money," ProPublica's Jesse Eisinger and NPR's Chris Arnold explain. "If people can't refinance, then Freddie wins because it continues to receive that flow of older, higher interest payments."

Although Freddie Mac's bets are legal, they're highly offensive. Rightly or not, many Americans blame Freddie Mac and Fannie Mae -- which was not mentioned in the NPR/ProPublica report -- for the housing boom and subsequent bust. Nearly all Americans would agree the company's should not be focused on generating profits, now that they are officially wards of the state and are using taxpayer dollars to make these bets, as Aaron and Henry discuss in the accompanying video.

Freddie Mac plays a significant role in determining mortgage rates and is one of the "gatekeepers" with the power to decide whether a homeowner can refinance at a lower rate. If homeowners can reduce their mortgage payments, then Freddie Mac loses money. Hence the conflict of interest and the concern Freddie has been turning down refi requests in order to benefit its proprietary trades.

Freddie Mac Spokesman Michael Cosgrove provided this response to the NPR/ProPublica report:

"Freddie Mac is actively supporting efforts for borrowers to realize the benefits of refinancing their mortgages to lower rates. During the first three quarters of 2011, we refinanced more than $170 billion in mortgages, helping nearly 835,000 borrowers save an average of $2,500 in interest payments during the next year. Refinancing accounted for more than 70 percent of our loan purchases during the first nine months of 2011. We remain committed to reducing our retained portfolio and appropriately managing its risks. Our retained portfolio has declined by about $200 billion since its peak, and at the end of 2011 was more than $60 billion below the cap required by the U.S. Treasury."

Freddie Mac and Fannie Mae are technically wards of the U.S. government after Washington stepped in to shore up the balance sheets of the troubled mortgage lenders in 2008 at the height of the housing market collapse. According to the report, Washington spent $169 billion on Freddie and Fannie and any risky bets Freddie makes will technically affect all taxpayers. Freddie Mac has asserted its investment arm, the division that places bets against homeowners via complex mortgage securities, is "walled off" from the mortgage-lending unit and other Freddie Mac personnel. The government mortgage buyers guarantee more than half of all the $10.3 trillion in outstanding U.S. home loans, as reported by the Wall Street Journal.

Many economists and policymakers say the number of foreclosures will drop if Americans are able to refinance their high-interest rates. For the week ending Jan. 26, the rate on the 30-year-fixed mortgage averaged 3.98 percent. President Obama reiterated his administration's commitment to helping homeowners in last week's State of the Union.

"I'm sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low rates," Obama said. "No more red tape. No more runaround from the banks." (See: Taken to Task: Getting a Mortgage Shouldn't Be This Hard)

Both companies have been in the hot seat before over payments to their CEOs and top executives. The salaries for Michael Williams and Charles Haldeman Jr., the departing CEOs of Freddie Mac and Fannie Mae, were expected to be as high as $6 million each last year although both companies reported deep financial losses. California has filed a suit against Freddie and Fannie last December, asking the firms to provide extensive rejoinders about the properties they own and foreclosed in the state. The Securities and Exchange Commission has brought civil fraud charges against former Fannie CEO Daniel Mudd and former Freddie CEO Richard Syron, stating that the mortgage giants were untruthful about their subprime exposure.

..

Below is a media release that will likely be seen by thousands of people, as it was on the National Association of Realtors web site. The most important part of the story is that they leave out is WHY foreclosures are really down in the 4th quarter of 2011.

If you do some google searches you will see, heck, maybe even on this blog too, the answer. Back at the end of November, many of the largest banks and mortgage servicers announced they would be holding off on foreclosure notices in the month of December as a gesture of goodwill during the Holiday season.

I am all for putting out positive stories to promote sales, but I am also in favor of more complete information when readily available. SR

Quote:

Daily Real Estate News | Thursday, January 26, 2012 In the third quarter of 2011, homes that were in foreclosure accounted for 20 percent of all residential sales in the country, according to RealtyTrac in its latest Foreclosure Sales Report. While a high number of foreclosures still persist, the bulk of foreclosed home sales is shrinking. In the second quarter of 2011, foreclosures accounted for 22 percent of all sales and 30 percent of all sales in the third quarter of 2010. For comparison, in 2005 and 2006, foreclosure sales accounted for less than 5 percent of all sales. Foreclosures continue to sell at big discounts compared to non-foreclosures. Foreclosures in the third quarter sold for about a 34 percent discount compared to the average home not in foreclosure, according to RealtyTrac. The average sales price of a home in foreclosure was $165,322, which is up 1 percent from the second quarter, yet down by 3 percent from the third quarter of 2010. “While foreclosures continue to represent an excellent bargain-buying opportunity for many buyers and investors, foreclosure sales accounted for a smaller share of the total market in the third quarter,” Brandon Moore, chief executive officer of RealtyTrac, said in a statement. “That trend is not too surprising given the continued ambiguity surrounding proper foreclosure procedures—and the ripple effect that has on sales of foreclosed properties that might have been improperly foreclosed. The sooner the market gets more clarity about accepted foreclosure procedures ... the sooner the market can more efficiently dispose of these distressed properties.” States With Highest Foreclosure Sales The states with the highest percentage of foreclosure sales in the third quarter were: •Nevada: Nearly 57% of all residential sales were from foreclosure-related sales •California: Nearly 44% of all residential sales •Arizona: 43% of all residential sales •Georgia: 34% of all residential sales •Colorado: 26% of all residential sales •Michigan: 23% of all residential sales Pre-Foreclosure Sales Surge in These States Meanwhile, pre-foreclosure sales — which are often sold via short sale — were on the rise in several states. The average sales price of a pre-foreclosure sale was $191,119 in the third quarter, a discount of 24 percent compared to a home not in foreclosure, according to RealtyTrac data. Pre-foreclosure sales jumped the most in the following states during the third quarter: •Michigan: Up 68% •North Carolina: 44% •Ohio: 43% •Georgia: 35%

1. Start with a clean slate
Before you can worry about where to place furniture and which wall hanging should go where, each room in your home must be spotless. Do a thorough cleaning right down to the nitpicky details like wiping down light switch covers. Deep clean and deodorize carpets and window coverings.

2. Stow away your clutter
It’s harder for buyers to picture themselves in your home when they’re looking at your family photos, collectibles, and knickknacks. Pack up all your personal decorations. However, don’t make spaces like mantles and coffee and end tables barren. Leave three items of varying heights on each surface, suggests Barb Schwarz of www.StagedHomes.com in Concord, Pa. For example, place a lamp, a small plant, and a book on an end table.

3. Scale back on your furniture
When a room is packed with furniture, it looks smaller, which will make buyers think your home is less valuable than it is. Make sure buyers appreciate the size of each room by removing one or two pieces of furniture. If you have an eat-in dining area, using a small table and chair set makes the area seem bigger.

4. Rethink your furniture placement
Highlight the flow of your rooms by arranging the furniture to guide buyers from one room to another. In each room, create a focal point on the farthest wall from the doorway and arrange the other pieces of furniture in a triangle around the focal point, advises Schwarz. In the bedroom, the bed should be the focal point. In the living room, it may be the fireplace, and your couch and sofa can form the triangle in front of it.

5. Add color to brighten your rooms
Brush on a fresh coat of warm, neutral-color paint in each room. Ask your real estate agent for help choosing the right shade. Then accessorize. Adding a vibrant afghan, throw, or accent pillows for the couch will jazz up a muted living room, as will a healthy plant or a bright vase on your mantle. High-wattage bulbs in your light fixtures will also brighten up rooms and basements.

6. Set the scene
Lay logs in the fireplace, and set your dining room table with dishes and a centerpiece of fresh fruit or flowers. Create other vignettes throughout the home—such as a chess game in progress—to help buyers envision living there. Replace heavy curtains with sheer ones that let in more light.

Make your bathrooms feel luxurious by adding a new shower curtain, towels, and fancy guest soaps (after you put all your personal toiletry items are out of sight). Judiciously add subtle potpourri, scented candles, or boil water with a bit of vanilla mixed in. If you have pets, clean bedding frequently and spray an odor remover before each showing.

7. Make the entrance grand
Mow your lawn and trim your hedges, and turn on the sprinklers for 30 minutes before showings to make your lawn sparkle. If flowers or plants don’t surround your home’s entrance, add a pot of bright flowers. Top it all off by buying a new doormat and adding a seasonal wreath to your front door.