Loans NOT Yet in Foreclosure Will Impact Selling Prices in 2011. The percentage of loans not yet in foreclosure that has not had a payment made in over six months. 27.2% of loans 6 months behind are still NOT in foreclosure 21.1% of loans 12 months behind are still NOT in foreclosure 19.2% of loans 18 months behind are still NOT in foreclosure 18.3% of loans 24 months behind are still NOT in foreclosure Foreclosure Sales Any loan that was in foreclosure in the prior month that moves into post-sale status or is flagged as a foreclosure liquidation. Foreclosure sales plummeted 35% in Nov 2010. The monthly fall-off could be explained by the moratorium put into effect by some banks because of the robo-signing challenge. Bottom Line The delinquency situation seems to be improving. However, the large number of foreclosure coming back to the market will impact listing prices in January 2011.

1. Price must be compelling!

2. Sales vs. Months Supply KCM 12/2010 NAR Sales Months Supply

3. "Homes sold out of foreclosure represent a low-priced alternative to homes sold by owner-occupants. When foreclosure sales increase as a share of total home sales, as they are now, owner-occupants face increased pressure to reduce prices in order to compete. If sales of foreclosed homes continue to show greater stability than sales of other homes, overall housing prices will continue to deteriorate." RPX Monthly Housing Market Report 12/2010 Impact of Shadow Inventory - Quinn Eddins, Director of Research at Radar Logic

4. CoreLogic Shadow Inventory Report 11/2010 Shadow & Visible Inventory Detail

5. CoreLogic Shadow Inventory Report 11/2010 Shadow Inventory Detail

6. Month’s Supply of Distressed Homes CoreLogic Shadow Inventory Report 11/2010

7. Month’s Supply of Distressed Homes CoreLogic Shadow Inventory Report 11/2010

8. ‎ "Our focus should be on fixing problems where they are found and then moving forward expeditiously with foreclosure proceedings ." - Edward J. DeMarco, Acting Director Federal Housing Finance Agency Federal Housing Finance Agency 12/02/2010 Foreclosures Will Increase

9. Value by Sale Category Realty Trac Foreclosure Report 12/02/2010 Type of Sale % of Value Non-Distressed Sale 100% Short Sale 81% Foreclosure Sale 59%

10. Home Price Expectation Survey 11/2010 Housing Recovery Expectations