From our President

The Associated Press reports that pended home sales increased by a surprising 6.7% last month This is news that we've all been waiting for.

The number of U.S. homebuyers who agreed to purchase a previously occupied home in April posted the largest monthly jump in nearly eight years, a sign that sales are finally coming to life after a long and painful slump.

The flip side of the coin is that median home prices decreased, but that's an unfortunate but necessary consequence of the fact that a great deal of these pended sales are steeply discounted foreclosures and fire sales. But the good news is that these properties are selling and that there are people out there willing to buy them. For the longest time, we've been confronted with the iconic images of a suburban Middle-America street lined with for sale signs in front of houses that weren't selling.

Will this momentum be enough to drive the rest of the market?

A recent article from RIS media reports that an unexpected burst in real estate activity around the country is a signal that the long expected "bottom of the market" has come and gone. The harbinger of better times comes in the form of fantastic market figures from those U.S. regions with the highest rates of mortgage defaults and foreclosures, where, for the longest time, an overabundance of devalued housing stock stagnated on the market while anxious buyers sat on the sidelines waiting for the market to hit bottom.

Many commentators believe that improvements in those regions where property values and real estate transactions have decreased the most will be the catalyst for the recovery of the U.S. real estate market as a whole.

Property is selling, and although these sales are being driven by fire-sale prices, the important fact is that the market is working again in those parts of the country where it had come to a distressing halt. We can't expect to see property values rise again if nothing ever sells.

Mortgage defaults have transformed lending institutions into unwilling owners of houses with very uncertain prospects of future value. Banks, not being in the business of owning property, sought to get rid of their real estate as quickly as possible, even at bargain basement prices. Now, there's talk that stabilization in these worst of markets will motivate banks to ease off on dumping property, instead shifting their priorities to minimizing losses by pricing foreclosed property more aggressively, moderating how much they bring on market at any given time and being more amenable to pre-foreclosure short sales. This chain of events makes me cautiously optimistic that property values in the hardest hit markets will cease to plummet, and that this will have a positive effect on the national real estate market, and eventually our economy as a whole.

In fact, April figures for pending home sales nationwide show an increase of 6.7%, representing the biggest monthly gain in more than seven years according to figures from the National Association of Realtors.

There's some interesting speculation that Fannie Mae and Freddie Mac may start to refinance mortgages with loan-to-value ratios above 105% at very favorable terms. These opportunities are aimed at homeowners who have been paying their mortgage on time, but who are finding themselves owing more than their home is worth.

Currently, opportunities to refinance with favorable terms exist for borrowers with loan-to-value ratios up to 105%. Though raising the permitted loan-to-value ratio is being considered by the administration, there's no firm date for when this will happen.

A recent article in Bloomberg News explores some logistics of an .expanded mortgage refinancing scheme