The long-awaited foreclosure settlement for years of robo-signing, rubberstamping, and other fraudulent foreclosure practices is here, and over 40 states have signed the agreement calling for $25 billion from five major lenders (Bank of America, Wells Fargo, Citibank, Ally Financial, and JPMorgan Chase).

The deal is supposed to provide limited immunity for the banks in exchange for funds that are designated for principal write-downs, restitution payments, and mortgage loan refinancing. It also is supposed to send a loud and clear message to the banking industry that a fraudulent and error-prone foreclosure process is no longer acceptable – as well as to punish the banks with a hefty fee.

It appears, though, that the banks have adjusted for the anticipated settlement and have quietly been building their reserves for over a year to handle the financial impact.

In fact, since the five banks knew the settlement was coming down the pipeline so far in advance, any payments made as a result have already been factored into past earnings – and have also been factored into the share value by investors and analysts who also knew the settlement would one day be here.

In essence, while current homeowners and those who fell victim to home foreclosures will receive some monetary compensation or assistance, the settlement will not fulfill one of its main purported reasons for existence: teaching the banks a lesson.

That role may have to be fulfilled by the states – at least, the handful of states that did not agree to the settlement and have yet to sign. This group is small but influential, containing California and New York along with Nevada and Delaware. Attorneys general from New York and Delaware, among others, have promised some form of investigation or probe into the foreclosure scandals of the past three years, and criminal penalties could be pursued if the investigations turn up convincing, smoking gun evidence.

Nevertheless, as it stands today the bottom lines of the big banks are relatively protected from the full impact of the settlement, mainly due to the extended timeframe. They still will have to protect themselves from future legal action associated with several high-profile cases, particularly ones involving MERS and the Securities and Exchange Commission over securitization, but as for now, they are relieved that the settlement is here to stay.

Homeowners have a lot of tough decisions to make when buying a home. Anything and everything from the size of the home, neighborhood, and price to the color of the walls, age of the kitchen appliances, and type of flooring in the home is debated intensely.

But perhaps one of the most important things to do with buying a home, one of the main factors to consider, is the type of mortgage loan you should pursue. That is a pretty big undertaking for any homeowner, since it represents a pretty significant difference in how much you will pay monthly and how much you will owe overall.

Here we will talk about the two main types of mortgage loans in terms of interest rates – adjustable or fixed – and the advantages and disadvantages of each, so you can make an informed decision for your loan.

About Adjustable Rate Mortgages

Adjustable rate mortgages, or ARMs, are mortgages that have a variable interest rate. This means that the interest rate – the percentage of your overall loan amount that is charged to you annually over the term of your loan – will fluctuate depending on various conditions or factors. If you have heard of a variable-rate mortgage, that is the same kind of mortgage, just with a different term.

How Adjustable Rate Mortgages Work

As a rule, ARMs are more complicated than a fixed-rate mortgage. There are several types of ARMs out there, with different characteristics. Here we will talk in general about how they work financially so you can have a better understanding of their overall impact.

An ARM has a fixed-rate term at the beginning of the loan. In other words, when you sign on the dotted line and start making payments, for a period of time you will pay the same flat rate. This is the initial rate, and it does vary from lender to lender.

Many people take out ARMs that have initial rates lasting 12 months. The interest rate for the first 12 months will be low, but beginning in the 13^th month, it will rise. You could have an initial rate last for as short as a month, or it could be longer. (The longer the initial period, generally, the higher the rate will rise over the term of the loan.)

The value of the interest rate, or how much interest you will pay, is generally tied to an index. Lenders will have various rates they use, such as the 1-year T-Bill, 6-month CD rate, 3-year T-Note, 6-year T-Note, etc. The most common index used today is the Treasury Constant Maturities (or TCM). An important note: If your loan is not tied to an index, it can be arbitrarily adjusted by your lender. Be cautious about those, and ensure you have caps on how much your rate can increase.

In essence, as the index goes up, so does your interest rate. Likewise, if the index drops, you can even pay less interest – although you shouldn’t count on it.

Common Terms of Popular ARMs

Here we will take a look at some common features of ARMs and discuss some common terms contained in the loan contract.

- Adjustment period: The time during which the interest rate changes from a fixed rate to a fluctuating rate

- Index rate: The value of the index to which the ARM is tied.

- Interest rate caps: A limit on how much your interest rate can increase. It is important to ask about caps on your loan, to avoid having a spike in your payment should the index go off the charts.

- Margin: Percentage points a lender adds to the index rate to calculate the ARM’s interest rate.

There are a few common terms in a typical ARM contract. For starters, you will determine the overall length of the loan, such as a 30-year loan, 15-year loan, etc. You will also see the adjustment period, and how often the interest rate will adjust over the course of the loan. Some contracts, for example, stipulate that your rate will adjust every six months, or every year.

The type of loan is another term. There are several different types of ARMs, from hybrid ARMs to option ARMs. Hybrid ARMs feature a fixed rate for a period of time at the beginning, following by an adjustable rate. Two common hybrid ARMs are 3/1 and 5/1, in which the initial period lasts for three and five years, respectively, followed by adjustment periods every year after.

Option ARMs allow you to choose between four monthly payment choices: a minimum payment; an interest-only payment; a 15-year payment; and a 30-year payment. Speak with your loan officer about the advantages and disadvantages of this particular type.

When Rates Change

The big feature about ARMs is the rate fluctuation. As discussed below, the interest rate fluctuates with the index rate to which the ARM is tied. When this change happens is determined by the loan’s adjustment period. The standard adjustment period is 1 year, so every 12 months after you begin your loan, your rate will change based off of the index.

Pros and Cons

Simply put, the pros of an adjustable-rate mortgage is flexibility. ARMs allow people to transfer the risk from the lender to the borrower in exchange for potentially-lower monthly payments for the borrower. Even if payments increase, sometimes the borrower still benefits from having an option to pay less in the first year than he or she would otherwise with a fixed rate.

The drawbacks to an ARM revolve around upside risk for the borrower. If the index rate increases – and it does happen – then the borrower could pay more monthly. Additionally, ARMs are inherently more complicated, especially some of the newer variants. It is easy to misunderstand the terms of the contract, and lenders aren’t always good at explaining them (or ethically ensuring that you understand them, either).

About Fixed-Rate Mortgages

Fixed-rate mortgages are far easier to understand for most people than ARMs, simply because they involve a fixed-rate that typically does not change over the course of a home loan. For this reason, they are the most popular type of loan between the two, especially for first-time homebuyers who are new to borrowing for a home.

How Fixed-Rate Mortgages Work

A fixed-rate mortgage has an index rate, an interest rate, and a loan term just like an ARM. That is where the two differ, though. A fixed-rate mortgage features the same flat rate throughout the term of the loan. That means for each and every payment, the interest rate will stay the same – thus allowing a borrower to more easily predict how much equity one builds up due to the amortization schedule. Plus, it allows a borrower to know the amount of overall interest one will pay by the time the term is over.

Let’s take a look at a standard type of fixed-rate mortgage. One popular FRM is a 30-year FRM at 4% interest (or whatever the current interest rate is). The interest rate is calculated by taking the index rate – usually the 10 or 30-year Treasury Note yield but potentially the prime rate that is tied to the Fed Funds rate – and adding margin, or additional percentage points, for creating the loan.

According to this loan, the borrower will pay 4% interest every month on the loan, each year, for 30 years. The exact proportion of interest to principal paid each month varies depending on the amortization schedule. Most today feature more interest paid on the front end of the loan and curving off until the final payments are almost all principal.

Common Terms of Fixed-Rate Mortgages

It is relatively easy to determine the terms involved with a fixed-rate mortgage. In essence, there are three factors that make up each FRM loan:

- Interest rate

- Compounding frequency

- Duration

The interest rate, as explained above, is the index rate plus margin. If you are being offered the prime rate, you are generally being offered the lowest rate the bank can offer you without losing money, which means prime rates typically go to the bank’s best or most qualified customers.

Compounding frequency is how often the interest on the total amount of your loan is compounded, or added to the principal. Most mortgages are compounded monthly.

Finally, duration is the term of your loan. Most are for 30 years, with 15-year terms a close second in terms of popularity. There are even 40 and 50-year terms out there, typically used with expensive housing that 30-year mortgages wouldn’t sufficiently cover.

The duration is of huge importance because it has a major effect on the size of your monthly payment. It also usually has a big impact on the interest rate that you will have to pay. A 15-year mortgage involves much-higher monthly payments than a 30-year mortgage, but the interest rate is often much lower. It is a trade-off, and people who take out 15-year FRMs want to pay off the mortgage faster. Doing so saves you more in the long run because you’ll pay less interest over the course of your loan, so while it is more expensive monthly, it is less expensive overall.

When Rates Change

As a rule, barring some form of intervention, fixed-rate interest rates do not change. They are intended to offer stable rates so the risk is transferred more to the lender than the borrower, which makes things, as a whole, easier on the borrower.

There are certain ways the rate can change, however. The most common method is through a refinance. When you refinance a fixed-rate mortgage, you are essentially paying off the old loan and taking out a new one with a lower interest rate, or a shorter term, or even a longer term (to reduce monthly payment amounts). People refinance because interest rates drop and they want to change the terms of their loan to take advantage of the lower interest rates.

The big drawback to refinancing for most people is the cost. Typically, most people pay 3-6% of their outstanding principal balance in fees related to the refinancing. This is due to loan origination fees, discount points (a one-time fee to get a lower rate), appraisal fees, and additional fees, charges, and penalties. You could also avoid refinancing if you have had the loan for a long time, or you have prepayment penalties, or plan to relocate within the next few years.

Rates can also be modified through a loan modification, undertaken generally when you are experiencing financial difficulties and are having a hard time making your payments. Since 2006, many people have had to pursue loan modifications because the interest rates when they purchased their home were far higher than after the housing market collapse in 2007-2008.

Choosing the Right Option

Overall, the type of mortgage loan you take out varies greatly depending on your individual circumstances. Evaluate your finances and consider why you are buying the home. If you do not want risk and intend to live in the home for a long time, a fixed-rate mortgage is probably best for you. If you do not mind risk and are willing to “gamble” a bit for a lower rate or more flexible payment options, an ARM might be your thing. You could even be a foreclosure investor who finds a foreclosure listing online and wants to finance it cheaply because you expect to sell it quickly.

In the end, it has been found that most borrowers pay less overall with adjustable-rate mortgages, that is not always the case – and even if it is, the risk and complication may not be your style. Your individual circumstances and situation will dictate which one is best for you. Use online mortgage loan calculators to make the best decision possible and pick out the type of mortgage loan that fits your financial needs, income, payment ability, and risk profile.

Those in the real estate market today looking to buy a home should use the best tools out there to make a smart purchase. After all, in today’s market, wise choices are at a premium – and tools like online mortgage calculators can help prospective homebuyers make the right decision.

Here is a brief guide to the benefits of using an online mortgage calculator to help you determine the finances behind purchasing the next home of your dreams.

How an Online Mortgage Calculator is Used

As with any tool, an online mortgage calculator is only as useful as what you use it for – and that is especially true with making a big decision like taking out a mortgage.

Planning for the Future

The main purpose of an online mortgage calculator is to help plan for the future. Heading into financial decisions – especially buying a home – without doing the necessary planning to plot a smooth course of sailing is ill-advised. A mortgage calculator allows you to project 5-30 years into the future and see what the costs will ultimately be for your new home.

Calculating for any Scenario

An online mortgage calculator also helps you calculate for any scenario. How much will it cost if your interest rate is 4.25% versus 4.5%? What if you decide to go with an adjustable-rate mortgage instead of a 30-year fixed-rate loan? What about a down-payment? All the variables are easily calculated and are at your fingertips for any scenario.

Deciding to Rent Versus Buy

One of the most important decisions facing prospective homeowners today is the decision to buy a home rather than rent one. It can be a tough decision, especially given the real estate market as it stands today.

Many people use online mortgage calculators to determine if the price of a mortgage is worth the venture – or if it is more expensive to buy rather than rent. In today’s environment, you might very well find that availability of discounted homes – particularly foreclosures – and low prices makes buying more attractive; if so, you can use an online calculator to make that decision.

The Benefits of Using an Online Mortgage Calculator

An online mortgage calculator delivers plenty of benefits to those who want a capable and versatile tool to assist in a crucial decision-making process.

One key benefit is the ability to use numbers that fit your situation, not those of other people. Everyone’s circumstances are different. Some people can put down a large down payment; others can’t. Some will be able to have access to super-low rates of below 4%; some will have to use higher interest rates, or will desire longer payment terms. Whatever your case may be, your circumstances can be accurately reflected in the tool.

Additionally, you can prepare several different scenarios and analyze them to find the right scenario for you. It gives you the ability, at a glance, to take in several paths to home ownership and find the most affordable or the most sustainable one. Maybe a fixed-rate, 15-year mortgage with 20% down at 4.25% is the best course of action for you. Unless you see all the numbers, though, you’ll never know.

Furthermore, an online mortgage calculator can give you something to take to the lender to demonstrate your ability to afford a particular mortgage. This not only saves you time but also allows you to support your argument if the lender disagrees and shows reluctance with the loan, as many are wont to do at this point in time.

An online mortgage calculator is a terrific tool that any prospective homebuyer should use before he or she makes a move in the market.

Sometimes, a major bank – or two, or three, or twelve, or fifty – will do a particular action, or take a particular strategy, that appears short-sighted, misguided, and flat-out horrible. Sometimes, these actions nearly wreck the American economy. And sometimes, these banks look like they are repeating these actions – which makes us wonder what, if anything, they learned from the chaos of the past four years.

That is happening again, but this time, what was a mistake the first time around may be a key to the solution the second time.

JPMorgan Chase, the largest bank in America and one of the prime culprits in the horrific subprime mortgage meltdown of 2007 and subsequent housing and foreclosure crisis, is now considering a plan to offer mortgage-backed securities based on distressed properties and properties at risk of default.

To those who followed the bursting of the housing bubble, this sounds all too familiar. This time, though, the bank is attempting to set a price on these distressed properties and give investors the certainty and security of knowing exactly how much foreclosures, short sales, single-family homes, multi-family homes, townhouses, and condos are worth.

In essence, it could bring about the bottom of the market for which we’ve all been waiting but have been missing for close to four years.

Mortgage-backed securities typically work by basing their value on the value of the mortgage attached to a particular property. When the mortgage goes under, the security fails. In this instance, though, these loans are already in default. As such, they will be available for a steep discount, owing to the fact that many of them represent deeply discounted residential foreclosures and repo homes. Obtaining properties for far less is a winning move for investors, so it is likely that these securities being offered will be in high demand.

This solution is similar to the one enacted to help mitigate the damage of the savings and loan crisis of the late 1980’s and early 1990’s. Some have encouraged the recreation of the Resolution Trust Corporation, a body formed to handle a solution just like the one being followed by JPMorgan Chase. Commercial properties are also being considered for the program, not just residential ones.

The end result could be higher demand and more liquidity and movement in the market.

The news is filled with talks about the horrible economic situation of our economy and the continuously struggling real estate market. From the lack of confidence in the Obama administration and high unemployment rate to low consumer confidence and consumer spending, it is not surprising to see many potential homebuyers and investors reluctant to take a dip into the real estate market. However, leave it to the lenders to come up with new marketing pitches to attract buyers.

The current 30-year mortgage rates have reached record lows over the last few months, now being significantly below 4.0%. These interest rates have definitely attracted some buyers and investors over the last few months; however, with the shaky economy many buyers are still very reluctant to purchase. In an effort to get buyers interested in purchasing a home or foreclosure property, lenders are offering additional savings to potential homebuyers as well as those seeking to refinance.

Here is a look at some of the offers being brought to the table by lenders in an effort to spark a renewed interest in home buying.

Cutting Closing Costs

With most mortgage applications being refinancing, lenders are trying to find ways to increase the number of new home loan applications, which is only 20% of all mortgage applications according to the Mortgage Bankers Association. In a desperate effort to make buying a home more appealing to potential homebuyers, some lenders are cutting closing costs. For example, Standard Bank in Pittsburg is providing up to $500 in closing costs. On the other hand, Capital One is discounting closing costs up to $3,300, which is a great deal for borrowers.

Waiting Refinancing Fees

Along with cutting closing costs, some lenders are also slashing refinancing fees. There are a wide variety of perks aimed at those looking to refinance to take advantage of the new interest rates. For example, Capital One has started waiving most refinancing fees, which can save those refinancing over $3,000. Quicken Loans is taking another perspective on the matter and is encouraging customers to refinance or utilize them for new home loans, while providing funding for refinancing costs in the near future in case interest rates continue to fall.

Although many of these deals may be available to many of your average borrowers, there may be some steep qualifications for others. For example, opportunities like these being offered by Bank of America may come with a stipulation that requires the borrower to have roughly $50,000 either in an account with the bank or in the bank’s investment firm.

In short, there are great opportunities out there for investors and homebuyers to take advantage of if they desire to secure a home loan or refinance. However, be sure to pay careful attention to the small print and ensure you meet the qualification guidelines before wasting your time with the paperwork.

Over the last few months there have been mixed reports in regards to the real estate market. It appears as though one month foreclosures are down and mortgage applications are up and the next month the reverse is occurring. The real estate market is still far from stable; however, a recent report released by the Mortgage Bankers Association indicates that mortgage applications were up last week in comparison to the week before.

A large majority of the mortgage applications increase includes refinancing applications. In fact, applications for homeowners seeking to refinance to take advantage of the lower interest rates climbed 11.2% while home loan application requests rose 2.6%. Combining both applications for homes and applications for those refinancing and the total increase last week was 9.3%.

What, exactly, led to the increase in mortgage applications last week? The continuously declining mortgage rates definitely played a role in the increase of mortgage applications. This time the decline in interest rates came after the Federal Reserve announced its new plan dubbed “Operation Twist.”

Although the thoughts about the impact of “Operation Twist” are mixed, it appears as though many are skeptical about the programs ability to be successful. In fact, many believe that the plan will further hurt the economy by inadvertently affecting the job market.

Investors are clearly skeptical about “Operation Twist,” which has in turn decreased consumer confidence and sparked a decline in mortgage rates. Although this decline in mortgage rates sparked a surge in mortgage applications, especially for homeowners looking to refinance, the fact still remains that the program proposed by the Federal Reserve is not receiving a standing ovation to say the least.

What is the concern? The possibility for a second recession.

In conclusion, mortgage applications rates rose last week to an adjusted 9.3%; however, this increase was due to a lack of investor and consumer confidence in the economy due to the Federal Reserve’s “Operation Twist.” All eyes are on the real estate market and the nation’s economy to see if a second recession is a realistic possibility. Hopefully this is just another instance of investors and the media seeking to scare consumers into thinking a second recession is just around the corner with the true ending being progress toward recovery. In the end, only time will tell.

Everyone can probably recall the settlement between Freddie Mac and Bank of America back in December/January that left Bank of America paying $1.35 billion in an effort to settle a dispute about the bank providing misleading information about home loans. This $1.35 billion agreement was a win for taxpayers as it held Bank of America accountable for wrongful actions and reduced the amount taxpayers would have to pay for the government bailout of Fannie Mae and Freddie Mac.

However, new report by a Federal Housing Finance Agency (FHFA) examiner indicates that Freddie Mac failed to analyze a significant number of loans that could have drastically increased the settlement amount that Freddie Mac obtained from Bank of America. Although this may seem like a trivial matter now—months later—it is actually a huge loss for taxpayers that have continued to put money into Fannie Mae and Freddie Mac. This error in analysis will cost taxpayers billions of dollars that could have been paid for by Bank of America.

Just how many loans were not analyzed? Over 300,000!

What is agency’s response to the new information? They simply stated that they still believe the agreement previously reached with Bank of America was “appropriate and reasonable.” However, we are sure the taxpayers disagree with that statement.

The fact that there were concerns about the review process before the settlement was reached but yet Freddie Mac agreed to a settlement with Bank of America despite these concerns is rather alarming. But what is even more alarming is the nonchalant attitude the agency is taking after learning that the $1.35 billion settlement is a joke and should have been several billion dollars more.

In the end, the taxpayers suffer and Bank of America wins yet again despite their faulty actions. At some point these lenders must be held accountable (truly accountable and not merely receiving a slap on the wrist) for their wrongful actions that continue to affect taxpayers across the country. The fact that taxpayers are still paying for the Fannie Mae and Freddie Mac bailout when the money needs to be used to combat unemployed is ridiculous.

This new finding shows that the settlement was far from “appropriate and reasonable.” Instead of providing such a biased response the agency should punish Freddie Mac for its faulty analysis that cost taxpayers billions of dollars.

Of all the banks that have had to deal with fallout from the gargantuan real estate market collapse and subsequent foreclosure fiasco, perhaps no other major lender is in as much hot water as the Bank of America. The largest bank holding company in the country by assets, BoA has endured endless criticism over its handling of the foreclosure crisis and its real estate portfolio in general.

Now, while mired in the multi-billion-dollar foreclosure settlement talks currently taking place, BoA is attempting to make some internal adjustments with its appointment of insider Jeff Horowitz to a key position within the company.

Horowitz, the former head of Merrill Lynch’s Global Real Estate division before its merger with BoA in 2009, replaces Ron Sturzenegger as the head of global real estate, gaming, and lodging. In his new job, Horowitz – a former head of real estate investment banking at Citigroup – will spearhead BoA’s real estate investment banking business as his predecessor, Sturzennegger, takes on a less-than-desirable role as the person in charge of cleaning up the bank’s toxic mortgage portfolio.

This move comes as BoA remains stuck in legal quicksand, trying to gain immunity from liability for its mishandling of thousands of foreclosures over the years in its negotiations with the federal government – negotiations that were proceeding relatively well up until a month or two ago.

The move also coincides with an ongoing 8% drop in its stock value over the past five trading days, and a stunning 49% drop to date this year. Clearly Bank of America is attempting to salvage something from the real estate disaster that is unfolding for the bank – and will probably plan on selling off many of its internal assets anyway to help pay for the settlement.

In the end, Horowitz’s promotion will probably not save the day for BoA, or do much to rectify the housing market for the financial giant. So far, though, a 9% increase in stock value today following the announcement shows that investors view the move as a step in the right direction – even if it is one step in a long, long walk.

With an estimated two million homes in various stages of foreclosure today, the real estate market is struggling to restore some semblance of normalcy. Typically, banks – inundated with scores of foreclosures on their balance books – seek to rid themselves of these distressed properties by putting them up for sale at foreclosure auctions. That process typically gives them the best return on their investment, but it can be slow, costly, and ultimately unsuccessful.

Bank of America, one of the largest banks in the country with one of the largest foreclosure inventories in the country, is taking a new approach to dealing with foreclosures: demolition.

The bank announced plans to donate 100 foreclosed properties in the Cleveland, Ohio area to local organizations and, in many cases, bulldoze them to the ground in conjunction with a local agency that helps to manage blighted and undesirable properties. They also intend to do the same in Detroit, Chicago, and other cities.

Other major lenders reportedly are following their lead.

It seems crazy that lenders would demolish perfectly good homes, even ones that require major repairs. But, in this day and age, the crushing weight of foreclosure inventories are bearing down on lenders and restricting their efforts to lend elsewhere to help people pay for traditional homes (or foreclosure purchases).

This leads us to address one popular question with investors and homebuyers: How much does a foreclosure cost a bank?

The first answer to that question is a simple one. Banks rarely recoup the initial amount of the loan (when you add the amount of money already paid on the loan) through foreclosure. So, right off the bat, the mere fact that a home enters foreclosure drops the value of the home to the bank by a few percentage points. This is because it costs money in legal fees and time to bring a home to foreclosure.

Additional costs include the cash value lost on the home that otherwise would have been repaid. It’s not so much the lost principal, either; due to amortization, lenders lose most of their money through foreclosure due to lost interest payments, especially in the first few years of a home loan.

Lenders also have to pay property taxes. Due to the long average processing time of foreclosures today – a national average of roughly 400 days – property taxes become a costly issue when multiplied by the number of distressed properties in a lender’s inventory.

This is why some lenders are choosing to simply donate a home and raze it to the ground – sparing them the above costs plus maintenance and upkeep and other related fees and costs that can collectively run up to $70,000 per home.

This is also how you can get a great deal on a foreclosed home. The cost of a foreclosure is a prime motivator for banks to empty their inventory – and that means working with you either directly or through foreclosure auctions to move these homes quickly and efficiently.

High costs also help make short sales more attractive to lenders, so you have more options to choose from when buying a foreclosed home – and more leverage in the negotiations.

At the local level though, things have been relatively better, with Oklahoma City foreclosed homes and distressed houses in other areas of the state remaining manageable compared with most areas of the U.S. The state of Oklahoma had been one of a handful of states that was able to avoid the worst of the crisis, although it also felt the impact of the foreclosure problem.

However, although Oklahoma foreclosures did not increase to the same level seen in other hard-hit areas, a nationwide decrease in housing values will inevitably affect the state market, local analysts have stated. During the first three months of 2011, prices of residential properties reportedly dipped by 3% compared with last year's fourth quarter. Compared with the 2011 first quarter, the decline was 8.2%. The average value of residences in the whole country during the January-March 2011 period was pegged at $169,600.

Housing experts attributed the decline in housing values to the continuous flood of bank foreclosed and Freddie Mac homes for sale in the market. Since the housing industry crisis started, analysts reported that prices have plummeted by nearly 30% compared with their peak levels posted in June of 2006. Meanwhile, the number of underwater single family mortgages also went up during the quarter.

For January-March 2011, 28.4% of the nation's single family properties were considered underwater, rising from the 27% posted in the fourth quarter of last year and putting more homes on foreclosure during the period. In terms of actual foreclosure, analysts reported that lenders have resumed their work and numbers have started rising again by the middle of the initial quarter, with March figures showing that one household for every 1,000 housing units in the U.S. was under some stage of foreclosure.

With bank foreclosed properties and Freddie Mac homes for sale numbers expected to rise further within the year, analysts stated that a housing industry recovery is highly unlikely within the current period. According to them, the earliest recovery that the U.S. can hope for is by next year and even this is not a sure thing.