CoreLogic has released the CoreLogic Home Price Index and HPI Forecast for August 2018, which shows home prices rose both year over year and month over month. Home prices increased nationally by 5.5 percent year over year from August 2017. On a month-over-month basis, prices increased by 0.1 percent in August 2018.

Looking ahead, the CoreLogic HPI Forecast indicates that the national home-price index is projected to continue to increase by 4.7 percent on a year-over-year basis from August 2018 to August 2019. On a month-over-month basis, home prices are expected to decrease by 0.4 percent from August to September 2018. The CoreLogic HPI Forecast is a projection of home prices calculated using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices, according to the number of owner-occupied households for each state.

“The rise in mortgage rates this summer to their highest level in seven years has made it more difficult for potential buyers to afford a home,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The slackening in demand is reflected in the slowing of national appreciation, as illustrated in the CoreLogic Home Price Index. National appreciation in August was the slowest in nearly two years, and we expect appreciation to slow further in the coming year.”

According to the CoreLogic Market Condition Indicators, an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, 38 percent of metropolitan areas have an overvalued housing market as of August 2018. The MCI analysis categorizes home prices in individual markets as undervalued, at value or overvalued, by comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals (such as disposable income).

Also, as of August 2018, 18 percent of the top 100 metropolitan areas were undervalued, and 44 percent were at value. When looking at only the top 50 markets based on housing stock, 46 percent were overvalued, 12 percent were undervalued and 42 percent were at value. The MCI analysis defines an overvalued housing market as one in which home prices are at least 10 percent higher than the long-term, sustainable level. An undervalued housing market is one in which home prices are at least 10 percent below the sustainable level.

In 2018, CoreLogic together with RTi Research of Norwalk, Conn., conducted an extensive consumer housing sentiment study, combining consumer and property insights. The study assessed attitudes toward homeownership and the drivers of the home buying or renting decision process. August data indicates that, while home prices are cooling, they are still rising in most markets. Home sales are down in some metros, in part because sellers believe prices will continue to rise and that by waiting, they can sell their homes for a better price.

Many intend to use proceeds from the sale of their current home to fund the downpayment of their next home. Fully 66 percent of homeowners who are considering buying in the next 10 years will need to sell their current homes to finance their next one. Meanwhile, 35 percent of recent homebuyers said they used funds from the sale of their previous home to finance the down-payment of their current home.

“In some markets, homebuyers and sellers are remaining cautious and taking a pause as price appreciation continues to rise,” said Frank Martell, president and CEO of CoreLogic. “By waiting to sell, homeowners believe they will get the greatest return on their investment; the more money they have for a down-payment, the easier the purchase payments will be for their next home.”

A New Jersey man pled guilty to charges that he conspired to defraud financially distressed homeowners, investors, and financial institutions of fees and income from mortgage and real estate transactions.

Hasan Hussain, 57, of Princeton, N.J., pled guilty to charges that he conspired to defraud them of rental income, mortgage payment funds, property ownership and proceeds from the sale of their properties. Also, he pled guilty to aggravated identity theft in connection with the fraud. Hussain had already been convicted in federal court in Massachusetts and incarcerated for masterminding a real estate fraud.

At sentencing on Jan. 8, 2018, Hussain faces up to 32 years in federal prison, five years of supervised release, and a fine of $1,250,000. A co-defendant in this matter, Ricardo Abreu, who pled guilty earlier this year, is scheduled to be sentenced on Oct. 30, 2018.

Hussain’s guilty plea was made before U.S. District Court Judge John J. McConnell Jr., and the case is being prosecuted by Assistant U.S. Attorneys Sandra R. Hebert, Richard B. Myrus, and William J. Ferland. Citing Department of Justice policy governing ongoing cases, Jim Martin, media relations for the department, declined The Mortgage Leader’s request for an interview.

Hussain admitted he used several business entities to trick distressed property owners, who were seeking loan modifications, into paying him fees, moving out of their homes, and then he sold their homes in short-sale transactions.  As part of the plea, Hussain further admitted that he convinced lenders to agree to artificially low sale prices for the distressed property owners’ homes by having other individuals damage the properties prior to the short sales.

As a result, Hussain or individuals or businesses associated with him, acquired the properties at reduced prices, flipping them to investors at much higher prices. During his change of plea, Hussain admitted that these investors were defrauded of their funds, or good credit, or both when they agreed to purchase properties from Hussain.

Hussain further admitted that he assisted investors to acquire federally backed mortgages through fraudulent applications, which resulted in losses to the lenders or the Federal Housing Administration.  Some of the tactics employed by Hussain as part of the scheme included misuse of identities and cutting and pasting signatures on property deeds and financial documents.

As part of his plea agreement, Hussain admitted that his scheme resulted in losses between $550,000 and $1.5 million dollars; that 10 or more victims were harmed; and that at least some of his victims were particularly vulnerable, as a result of their personal situation.