More borrowers with good credit are defaulting on their home loans, and that’s going to make it even harder for the staggering housing market to recover.

Les Christie / CNNMoney.com

Prime mortgages are starting to default at disturbingly high rates – a development that threatens to slow any potential housing recovery.

The delinquency rate for prime mortgages worth less than $417,000 was 2.44% in May, compared with 1.38% a year earlier, according to LoanPerformance, a unit of First American (FAF, Fortune 500) CoreLogic that compiles and analyzes residential mortgage statistics.

Delinquencies jumped even more for prime loans of more than $417,000, so-called jumbo loans. They rose to 4.03% of outstanding loans in May, compared with 1.11% a year earlier.

To view all of this article, please visit this link at CNNMoney.com

Bob Ivry / Bloomberg.com

Almost one-third of U.S. homeowners who bought in the last five years now owe more on their mortgages than their properties are worth, according to Zillow.com, an Internet provider of home valuations.

Second-quarter home prices fell 9.9 percent from a year earlier, giving 29 percent of owners negative equity, said Zillow, the Seattle-based service that offers values for more than 80 million homes. For those who bought at the 2006 peak of the housing market, 45 percent are now underwater, Zillow said.

To view all of this article, please visit this link at Bloomberg.com

Rising foreclosures, big new-home inventory push recovery into next year

John W. Schoen, Senior Producer, MSNBC

When will home prices stop falling?

The answer is critical to millions of American homeowners who are watching their home equity melt away or are unable to move because falling values have sent potential buyers to the sidelines. Even if you don’t own a home, the question is central to your chance of getting a good night’s sleep if you’re worried about your job, your bank account or the investment in your 401(k).

To view all of this article, please visit this link at MSNBC

Dena Kouremetis, RealtyTimes

According to California’s Building Industry Association, fewer new homes will be built in California this year than in any year since World War II.

This news was announced at the recently held Pacific Coast Builder’s Conference by CBIA president Bob Rivinius.

To view all of this article, please visit this link at Realty Times

Dawn Kopecki / Bloomberg

Borrowing at Fannie Mae, the U.S. government-sponsored mortgage company, has never been so expensive and it may not get better any time soon.

Fannie Mae paid a record yield relative to Treasuries on the sale of $3 billion in two-year notes yesterday amid concern the biggest provider of financing for U.S. home loans won’t have enough capital to weather the worst housing slump since the Great Depression. The company’s credit-default swaps show traders are treating the AAA rated debt as if it were five steps lower. Fannie Mae shares tumbled 13 percent yesterday in New York to the lowest level in almost 14 years.

To view all of this article, please visit this link at Bloomberg.com

Bob Hunt / Realty Times

At the recent mid-year meetings of the National Association of Realtors the Board of Directors adopted new policy regarding the disclosure of short sale listings in a multiple listing service data base. According to an NAR news release, the directors “approved new model rules for MLSs that would enable practitioners to alert one another to potential short sales and put them on notice about the sharing of any reduction in gross listing commission required by a lender. MLSs are given the authority to decide whether or not their participants have to disclose reasonably-known short sales.”

To view all of this article, please visit this link at Realty Times

Broderick Perkins / Realty Times

California’s housing market can see a very faint glimmer at the end of the tunnel.

Unfortunately, it’ll be at least another year before the Golden State’s housing market really sees the light.

The latest Anderson Forecast at the University of California in Los Angeles reports that California has suffered through several years of declining sales and rising foreclosures.

To view all of this article, please visit this link at Realty Times

The White House temporarily suspends a rule that imposes a 90-day waiting period before foreclosed homes can be sold to receive government loans.

AP / CNNMoney

The Bush administration is temporarily suspending a 5-year-old rule intended to deter property flippers, as part of an effort to help speed the sale of foreclosed properties.

For one year, the Federal Housing Administration will no longer impose a 90-day waiting period before foreclosed properties can be sold to receive government-backed loans.

To view all of this article, please visit this link at CNN Money

Prashant Gopal / Business Week / Yahoo Finance

By April, 2009, hundreds of thousands of option ARM mortgages will begin resetting, bringing on a fresh wave of foreclosures.

The American homeowner must feel like one of those characters in an old cartoon who has just been hit by a falling piano. After dusting himself off and touching the large bump on his head, he probably doesn’t expect another piano to be dangling overhead. But he’d be wrong.

But what’s often funny in a cartoon is anything but in real life. With the subprime mortgage crisis already crippling the U.S. economy, some experts are warning that the next wave of foreclosures will begin accelerating in April, 2009. What that means is that hundreds of thousands of borrowers who took out so-called option adjustable-rate mortgages (ARMs) will begin to see their monthly payments skyrocket as they reset. About a million borrowers have option ARMs, but only a fraction have already fallen due.

To view all of this article, please visit this link at Yahoo Finance

FROM THE ORB / MICHAEL BELOTE

The mad rush by policymakers to do something in the wake of the mortgage and foreclosure crises has hit California with a vengeance.

Operating year-round and already the busiest state legislature in the country, California lawmakers have introduced a veritable tsunami of bills designed to address the rise in defaults and foreclosures. The proposals touch virtually every area of real estate, including those affecting lenders, servicers, brokers, foreclosure trustees, asset managers and landlords.

To view all of this article, please visit this link at Mortgage Orb