Equities pared losses as Alexis Tsipras said his Syriza party wants Greece to stay in the euro and Europe must reexamine its policy of austerity. JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) fell at least 1.7 percent as European lenders slumped. ConocoPhillips and Dow Chemical Co. slid more than 1.1 percent to pace losses in commodity producers. Symantec Corp. (SYMC), the biggest seller of security software retreated 0.8 percent after Goldman Sachs Group Inc. cut its recommendation.

The Standard & Poor’s 500 Index slipped 0.8 percent to 1,343.10 at 11:49 a.m. New York time, after dropping as much as 1.2 percent earlier. The Dow average fell 95.66 points, or 0.8 percent, to 12,724.94. Trading in S&P 500 companies was 2 percent above the 30-day average at this time of day.

“The fear factor is definitely higher,” said Madelynn Matlock, who helps oversee about $14.7 billion at Huntington Asset Advisors in Cincinnati. “The whole European (SX7P) political situation is really the focus at this point. Nobody really knows what’s going to happen next and the market hates uncertainty more than anything.”

Global stocks fell as Greece’s political deadlock went into a second week after President Karolos Papoulias failed to secure agreement on a unity government and avert new elections with the country heading toward a possible exit from the euro area. Greece’s biggest anti-bailout party defied overtures to join the government yesterday, deepening the impasse.

Record High

Concern about Europe’s crisis grew as the cost of insuring against a Spanish default jumped to an all-time high. Chancellor Angela Merkel’s party was defeated in Germany’s most populous state in an election that helped the Social Democrats tighten their grip on the country’s regional governments. The result may embolden the Social Democrats as they align with French President-elect Francois Hollande in an anti-austerity front.

“We certainly have a lot to worry about,” said John Manley, chief equity strategist for Wells Fargo Advantage Funds in New York. His firm oversees $207 billion. “The odds of Greece leaving the euro are higher. It’s an enormous game of chicken that they are playing with each other. To the degree it does represent the democratic process in Greece, it makes it more likely they default and the Europeans have to do something.”

American banks slumped as a measure of European lenders tumbled 2.8 percent. JPMorgan, which plunged 9.3 percent on May 11, lost 2.1 percent to $36.20. Bank of America fell 1.7 percent to $7.42. Citigroup Inc. (C) retreated 2.7 percent to $28.57. Morgan Stanley (MS) slid 3.5 percent to $14.43.

Downgrade Plans

Moody’s Investors Service will delay plans to downgrade more than 100 banks as it assesses the effect of JPMorgan’s trading losses and a greater possibility of a euro breakup, a Moody’s official said. Fitch Ratings lowered JPMorgan’s credit grade by one level to A+ from AA- on May 11, saying the $2 billion loss “raises questions regarding JPM’s risk appetite, risk management framework, practices and oversight.”

Residential Capital LLC, the unprofitable mortgage company whose parent Ally Financial Inc. is trying to repay a U.S. government bailout, filed for bankruptcy.

Energy and raw material producers sank as the S&P GSCI gauge of 24 commodities dropped 1.2 percent. ConocoPhillips (COP) declined 1.3 percent to $52.79. Dow Chemical retreated 1.1 percent to $31.80.

Symantec slid 0.8 percent to $15.32. Goldman Sachs cut its rating to sell from neutral, citing worsening margins and cash flows. The share-price estimate was lowered to $14 from $16.

Inman News®

Sun house image via Shutterstock.

Pending sales of existing homes rose to their highest level in nearly two years in March, according to the National Association of Realtors’ latest Pending Home Sales Index.

The index, which represents contracts signed but not yet closed, jumped a seasonally adjusted 4.1 percent from February to March, to 101.4. That’s the highest index level since April 2010, when the deadline for a federal homebuyer tax credit program loomed. The index was 111.3 then.

Pending sales were up 10.8 percent from the same time a year ago on a non-seasonally adjusted basis.

An index score of 100 is equal to the average level of sales contract activity in 2001, a robust year for home sales and the first year examined by the trade group. The index typically represents about 20 percent of all existing-home transactions. Contracts signed in March typically close one or two months later.

“First-quarter sales closings were the highest first-quarter sales in five years. The latest contract signing activity suggests the second quarter will be equally good,” said Lawrence Yun, NAR’s chief economist, in a statement.

“The housing market has clearly turned the corner,” Yun said. “Rising sales are bringing down inventory and creating much more balanced conditions around the county, which means home prices will be rising in more areas as the year progresses.”

Article continues below

Regionally, the Northeast saw the biggest unadjusted year-over-year increase in pending sales: 18.4 percent. The region was one of two to see a slight monthly decline, sliding 0.8 percent on a seasonally adjusted basis to 78.2.

The other region experiencing a month-over-month decline was the Midwest, where the index dipped a seasonally adjusted 0.9 percent to 93.3. Nonetheless, the Midwest experienced the second-biggest annual increase in pending sales: 14.7 percent on an unadjusted basis.

The index reached its highest level in the South: 114.1. That’s a 5.9 percent seasonally adjusted increase compared to February. On an unadjusted basis, pending sales were up 8.9 percent from a year ago.

In the West, pending sales rose 8.7 percent month to month, to 108, and 5.9 percent from the same time a year ago on an unadjusted basis.

In its latest monthly economic outlook, also out today, NAR upped its forecast for existing-home sales in 2012 slightly from last month, to 4.68 million — a nearly 10 percent increase from 2011. The trade group expects existing-home sales to rise an additional 1.5 percent in 2013, to 4.75 million.

NAR projects new-home sales will rise 31.6 percent in 2012, to 400,000, and increase a further 32.5 percent in 2013 to 530,000.

After falling 3.9 percent in 2011, NAR expects a 2 percent increase in the median price of existing-home sales in 2012, to $169,500. The association predicts a further 2.1 percent increase, to $173,100, in 2013.

Meanwhile, after rising 2 percent in 2011, NAR projects rents will rise 3.4 percent in 2012 and 3.8 percent in 2013.

This year, NAR predicts the average interest rate for a 30-year fixed rate mortgage will be 4.2 percent, down from 4.7 percent in 2011. By 2013, the rate is expected to rise to 4.9 percent.

NAR expects this year’s national real gross domestic product to grow 2.4 percent, followed by 3.1 percent growth in 2013. The U.S. unemployment rate is expected to average 8.2 percent this year and drop to 7.6 percent in 2013.

Realtor.com finds list prices up nationwide in March

By Inman News, Thursday, April 26, 2012.

Inman News®

Home price trends image via Shutterstock.

Editor’s note: Data from Realtor.com’s first-quarter real estate trend data report. The report analyzes data for 146 U.S. metros and includes single-family homes, condos, townhomes and co-ops.

The spring homebuying season continues its brush with optimism with median list prices of homes for sale nationwide up 5.56 percent over the last year, according to Realtor.com data updated through March 2012. The jump to $189,900 brings the national median list price close to what it was two years ago.

Continuing a distressed-market turnaround trend, the Phoenix-Mesa, Ariz., metro took the No. 1 position on the list with a 23.5 percent jump from a year ago, to $179,000. The Miami metro made No. 2 on the list with a 22.27 percent list-price increase from a year ago, to $269,000. Both Phoenix and Miami were among the top 10 metros for year-over-year reductions in for-sale inventory, ranking No. 3 and No. 5, respectively.

Florida showed especially strong in median list-price growth in the last year, with five of the top 10 metros located in the Sunshine State. In addition to Miami, Punta Gorda made the list at No. 4 (17.5 percent), along with Daytona Beach (No. 8 at 15.47 percent), West Palm Beach-Boca Raton (No. 9 at 15.38 percent) and Naples (No. 10 at 15.38 percent).

Although they didn’t make the top 10 list, strong growth in median list prices in other Realtor.com-tracked Florida and Arizona metros like Fort Myers-Cape Coral (up 15.31 percent), the West-Ariz. rural statistical area (up 13.64 percent) and Fort Lauderdale (up 8.39 percent) suggest a bottom has formed in these hard-hit housing markets.

However, Realtor.com analysts noted that the large shadow inventory of potential foreclosures in these states could undermine this optimism and keep prices low as supply floods the market.

The Phoenix metro area has had a particularly notable shift in fortunes. In March 2011, it was No. 4 in the top 10 metros Realtor.com tracks for year-over-year median list-price declines. The median list price was down 14.2 percent from March 2010. List prices are a leading indicator, and may reflect optimism about a market that doesn’t always translate into actual sale prices.

The current median existing-home price in the Phoenix metro area is $124,500, less than half of the metro’s peak list price of $267,000, seen in the summer of 2006 at the height of the housing boom.

Prices may not be shooting up, but homes are once again selling at a rapid clip in many markets, draining multiple-listing services and turning up the competitive pressure on buyers. Yep, that’s right: Multiple offers are back.

In this installment of Buying Advice, we’ll check in on these tight housing markets at the start of the spring selling season. (You can see the 10 tightest major housing markets around the country in this slide show.)

We’ll also round up the latest national housing statistics and answer a reader’s question on whether it’s prudent to rent out the home he can no longer afford and try to get a mortgage for a more affordable smaller house.

(For next month’s column: Buyers, has a low appraisal kept you from purchasing a home? Have you lost a home to an all-cash investor this season? Please share your experiences with us at msnrealestate@microsoft.com.)

Dude, where’s my house?
In markets such as Portland, Ore.; Memphis, Tenn.; Seattle; and Salt Lake City, listings are practically evaporating as they come on the market.

“There’s not an awful lot out there for sale,” says Niels Brownlow, a broker with Coldwell Banker Barbara Sue Seal in Portland — especially, he says, on the lower end, as investors and first-time buyers vie for bargains.

“‘If (a buyer) is not there the first day a home comes on the market, it’s gone,” Brownlow says. Indeed, Brownlow says he recently had someone make an offer on a condo in Portland’s downtown area without even seeing it.

Portland’s neighbor to the north, Seattle, is also getting highly competitive, as 36% of the inventory has melted off the market, according to data from Realtor.com. (Realtor.com is an MSN Real Estate partner.)

“I’m seeing multiple offers on just about every one of my listings,” says Jed Kliman, with Windermere Realty.

The competitive environment has already begun to nudge prices up in some coveted Seattle neighborhoods such as Ballard and Queen Anne.

Indeed, a lot of what’s left for buyers in hot markets such as Salt Lake City is “junk parts,” says Dave Winters of Re/Max Associates. “When a quality property that is priced accurately comes out on the market, it’s not going to sit around.”

Bargain prices and historically low interest rates are bringing buyers back. The belief among buyers, agents say, is that the housing market has already turned the corner and that there won’t be a better time to land an affordable home.

Home prices show signs of stabilizing
Portland Business Journal by Wendy Culverwell , Business Journal staff writer
Date: Wednesday, April 4, 2012, 10:00am PDT

Home prices in Portland and the nation show signs of stabilizing.

Home prices showed signs of stabilizing in February as CoreLogic reported a slowdown in price declines.

The Santa Ana, Calif.-based real estate research firm (NYSE: CLGX) said Wednesday its national index of U.S. home prices fell two percent in February compared to the prior year. Home prices have declined for seven consecutive months, but the pace is decreasing, said Mark Fleming, chief economist.

“Excluding distressed sales, we already see modest price appreciation month over month in January and February.”

For the Portland area including Vancouver, home prices declined three percent compared to one year ago. Excluding distressed sales, home prices were down 1.8 percent from the prior year and 2.3 percent compared to January.

Separately, the Regional Multiple Listing Service said the average Portland area home commanded a price of $255,100 in February, 4.3 percent more than the prior year. The median price of $211,000 fell by 1.3 percent.

According to CoreLogic, the states with the highest home price appreciation were West Virginia, Michigan, Florida, Arizona and South Dakota. The states with the greatest depreciation were Delaware, Connecticut, Rhode Island, Illinois and Georgia.

Oregon ranked 19th in the nation with a 2 percent statewide price decline for single family homes, including both distressed and non-distressed properties. Excluding distressed sales, Oregon home prices declined 1.7 percent in February, CoreLogic said.

On of the big questions Peter Coy and I take up in our cover story on the recent “Obama recovery” is why unemployment has been falling faster than growth would suggest it should. Economists have several theories: Maybe the economy is growing faster than we realize and future revisions will make this clear; maybe it’s a statistical aberration and the unemployment rate will begin to rise again; or maybe the pace of growth of workers’ productivity has slowed, which would cause employers to hire more workers but hurt the country’s overall economic competitiveness. “Everyone has their favored explanation,” Peter Orszag, Obama’s first budget director, told us, “but no one knows yet which is right.”

Bank of America Corp. BAC -1.91% is launching a pilot program that will allow homeowners at risk of foreclosure to hand over deeds to their houses and sign leases that will let them rent the houses back from the bank at a market rate.

While the initial scope of the “Mortgage to Lease” program is small—the bank began sending letters Thursday offering leases to 1,000 homeowners in Arizona, Nevada and New York—it represents a big change in the way banks deal with borrowers who can’t afford their mortgages.

Until now, banks have focused the bulk of their borrower outreach on modifying mortgages, usually by reducing the monthly payments. When that doesn’t work, most foreclosure alternatives require homeowners to leave their house, typically through a short sale, in which the bank approves the sale for less than the amount owed. Banks often insert clauses forbidding the new owner from renting the property back to the former owner.

The new approach is unlikely to be expanded unless banks conclude that avoiding eviction reduces costs associated with taking back, maintaining and reselling properties. If a significant number of borrowers are willing and able to rent the homes, Bank of America could ultimately sell the properties to investors that agree to keep them as rentals.

Already, in a growing number of housing markets, investors are buying foreclosures and converting them into rentals, often filling them with families that have gone through foreclosure.

Executives last year began to ask themselves “isn’t there a way to sort of combine that whole process and keep the borrower in the property? It’s just better for the market,” said Ron Sturzenegger, the Bank of America executive who last summer was put in charge of the unit that handles troubled mortgages.

Bank of America became the nation’s largest mortgage originator after its 2008 purchase of Countrywide Financial Corp., but over the past year it has retreated from the mortgage market. The initial pilot is limited to loans that Bank of America holds on its books. Homeowners can’t apply for the program—only those who receive letters from the bank can participate.

Borrowers would agree to a what is known as a “deed-in-lieu” of foreclosure, where they essentially sign over ownership of the property to the lender. This is less costly to the bank and also does less damage to a borrower’s credit than a foreclosure.

In exchange, former owners would be offered one-year leases with options to renew the leases in each of the following two years at rents that the bank determines are at or below the current market price. Borrowers would have to demonstrate an ability to pay the market rent.

For example, based on a sampling of home values and rental rates in Phoenix recently, a consumer with a $250,000 mortgage and monthly payments of $1,600 could swap the house for a lease, renting the home for $900, depending on the condition of the property and the neighborhood.

Consumer advocates and some investors have long called for less disruptive alternatives to foreclosures, given the limits of loan-modification programs. “You still have a lot of people that are facing foreclosures, and this is a way to keep people in their homes that is obviously much better,” says Dean Baker, co-director of the Center for Economic Policy and Research.

Foreclosures, particularly if properties are vacant, can drag down housing values in a neighborhood.

Borrowers selected for the program must be at least two months past due on their mortgage and face considerable risk of foreclosure. Bank of America is reaching out to borrowers who have exhausted other alternatives to foreclosure or who haven’t responded to earlier solicitations. Homeowners with second mortgages or other liens won’t be selected.

Mr. Sturzenegger said the success of the current pilot would determine whether Bank of America expands the effort. “We’re optimistic but realistic. If we get a great takeup rate and the process works, we’ll roll it out,” he said.

The program is the latest example of how banks are experimenting with ways to deal with a large overhang of foreclosed properties. Some lenders have begun offering incentive payments of up to $30,000 to borrowers who agree to short sales.

Fannie Mae rolled out a “deed-for-lease” program in late 2009 but it hasn’t been widely used. Some industry analysts say that banks haven’t aggressively marketed the initiative.

Already, investors have approached Mr. Sturzenegger about purchasing pools of leased properties from Bank of America. One of those investors is Laurie Hawkes, president of American Residential Properties, a Scottsdale, Ariz.-based firm that has bought nearly 800 homes in the Phoenix area as rentals. If homes are realistically priced, Ms. Hawkes says her firm would “definitely” be interested in buying them.

Foreclosures have slowed sharply in some states amid heavy scrutiny of allegedly forged paperwork used by processing firms. Banks completed 860,000 foreclosures last year, down from 1.1 million in 2010, according to CoreLogic Inc.

“One of the outcomes of the ‘robo-signing’ scandal is that it is more difficult to foreclose,” said Mr. Baker. “It’s more worthwhile for banks to pursue alternatives.”

Write to Nick Timiraos at nick.timiraos@wsj.com

A version of this article appeared Mar. 23, 2012, on page C1 in some U.S. editions of The Wall Street Journal, with the headline: BofA Tests an Option to Foreclosure.

He was the mastermind behind TV juggernauts “Jeopardy” and “Wheel of Fortune,” and the host of a popular, syndicated talk show. Later in life he was a real estate investor. A unique L.A. property he owned just returned to the market for $6.995 million.

If you guessed Merv Griffin, you guessed right.

Griffin’s former home is listed on the Bel Air real estate market for the first time in 20 years. Griffin sold the home to another celebrity in 1992 for $3.65 million.

Not much has changed since Griffin bought it Rose said. “It’s what Merv enjoyed — that old Hollywood feel to it.”

One aspect that attracted Griffin, as well as numerous other Hollywood A-listers, to the area is its location. While the enclave is secluded, “a little off the beaten path,” says Rose, it’s still easily accessible and gives residents multiple ways to get to the city.

It’s these factors that led Farrah Fawcett, Wilt Chamberlain, Prince, Mariah Carey and Beyoncé to buy homes in the area.

Some of the current neighbors are even in the process of increasing the security and privacy of the area with the installation of a gate to the main road.

Located at the end of the long drive ending in a circular motor court, Griffin’s former home boasts 5,600 square feet of living space, four bedrooms and five-and-a-half bathrooms. Details like octagonal wood-paneled ceilings and enormous lodge-like posts add dramatic flair to the property.

Outside, the 2.5-acre grounds feature an infinity pool and spa as well as a tennis court installed by Griffin, who was an avid tennis player.

Zillow

High ceilings, carved beams and an open floor plan define the home.

Zillow

Bank of America Corp., the second- largest U.S. lender by assets, will stop selling new home loans to Fannie Mae after a dispute over faulty mortgages.

Starting this month, the Charlotte, North Carolina-based company will deliver only loan modifications and refinancing to U.S. government-controlled Fannie Mae, the bank said today in its annual filing with securities regulators.

Chief Executive Officer Brian T. Moynihan has been cutting expenses and jobs to revive profitability while fending off legal disputes tied to faulty home mortgages, with Fannie Mae among the biggest claimants. The bank’s 2008 acquisition of Countrywide Financial Corp., the largest home lender during the U.S. housing bubble, saddled Bank of America with responsibility for shoddy loans that contributed to about $42 billion in costs.

“This decision will not affect the credit available to our customers, and we will rely on other sources of liquidity to continue to ensure we are lending to our customers and supporting the housing-market recovery,” said Jerry Dubrowski, a spokesman for the bank, in an e-mailed statement. “We remain focused on supporting our customers with loan modifications and refinancing through the Making Home Affordable program.”

The bank will either sell new loans to Freddie Mac, the other U.S.-controlled mortgage finance firm, or retain them on its balance sheet, said a person with direct knowledge of the lender’s plans.

No Impact on Business

Dubrowski said the decision won’t have a material impact on its business. The bank has ended the past practices of Countrywide, “which had a significant relationship with Fannie Mae,” he said.

Andrew Wilson, a spokesman for Washington-based Fannie Mae, said the mortgage-finance company had no comment on the bank’s decision.

Concern about the mounting cost of faulty home lending weighed on Bank of America’s stock last year. After posting the worst performance in the Dow Jones Industrial Average for 2011, the firm is leading the 30-company benchmark this year with a gain of more than 40 percent.

To contact the reporter on this story: Hugh Son in New York at hson1@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net