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Existing Home Sales Expected to Hit Highest Level Since 2006

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The National Association of Realtors announced on Thursday that the total number of existing home sales in 2015 is expected to reach the highest level we’ve seen since 2006.

“There is a sizeable pent up demand,” said Lawrence Yun, the NAR’s chief economist.

According to Yun, we should expect to see approximately 5.3 million existing homes sold by the end of this year, which would be a significant jump from 4.9 million in 2014. Additionally, it would be the first time in nearly a decade that the number has surpassed 5.0 million.

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Tips & Advice

Experts Suggest Using Your Home to Fund Retirement Plans

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For many retirees, the idea of giving up their family home is a tough proposition to accept. But according to Steven Sass, a research economist at the Center for Retirement Research at Boston College, that’s exactly what’s needed for many individuals to afford retirement.

“People have a serious behavioral resistance to touching their savings or home equity in retirement,” Sass told CNBC. “We think a lot more retirees need to think about using their house for income.”

According to the latest University of Michigan Health and Retirement study – conducted in 2010 – the average household entering retirement has a net worth of just over $300,000, including their home.

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News

Foreclosure Numbers Dropping Drastically

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Although foreclosure numbers continue to rise and fall each month, when looking at the data year-over-year, the numbers have made a significant downward shift.

According to the data released by CoreLogic on Tuesday, the number of properties in some state of foreclosure in March was down 25 percent from a year ago, while completed foreclosures were down 15.5 percent.

Additionally, completed foreclosures are now down a whopping 65.2 percent from the peak in September 2010.

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Home Prices Seeing Double-Digit Gains in Many Metro Areas

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Home prices are on the rise nationwide, an in many metropolitan areas, the median price jumped by 10 percent or more in the first quarter of 2015.

According to the National Association of Realtors (NAR), 51 of the 174 metropolitan statistical areas tracked by NAR saw price gains in the double digits.

“Sales activity to start the year was notably higher than a year ago, as steady hiring and low interest rates encouraged more buyers to enter the market,” Lawrence Yun, NAR chief economist, told Mortgage News Daily. “However, stronger demand without increasing supply led to faster price growth in many markets. Sales could soften slightly in some of these markets seeing sharp price appreciation unless housing supply markedly improves and tempers its unhealthy level of growth.”

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Home Construction Jobs on the Rise

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When Friday’s job market report was released, there was a clear bright spot in one particular sector: housing construction.

According to the Labor Department’s monthly findings, overall employment in construction – which includes residential, non-residential and civil projects – rose by 45,000 in April for the biggest advance since January 2006.

“The housing numbers in this report are checking off all the boxes,” Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC in New York, told Bloomberg Business. “None of these things would be happening if the housing market weren’t picking up.”

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Goldman Sachs Facing $120 Million Suit Over Mortgage Securities

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The New York Court of Appeals decided 5-2 on Thursday that a $120 million suit facing Goldman Sachs should move forward.

Goldman Sachs was hit with the suit by ACA Financial Guaranty Corp., which claims the financial corp “lied about a pool of securities backed by subprime mortgages during the period leading up to the financial crisis.”

According to Reuters, Goldman spokesperson Michael DuVally says the firm is disappointed with the decision but “confident that…these contrived claims will fall.”

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House Flippers Seeing Record Returns

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Good news for house flippers and anyone looking to get in on the action, as there are huge profits to be had from the undertaking.

According to CNBC, only four percent of home sales in the first quarter of this year were flips, but of the ones that did sell, their flippers made an average gross profit of $72,450. That number is up from $61,684 in the first quarter of 2014.

“The strong returns for home flippers in the first quarter demonstrates that there is still a need in this recovering real estate market for move-in ready homes rehabbed to more modern tastes,” Daren Blomquist, vice president at RealtyTrac, told the news site, “particularly given the dearth of new homes being built.”

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Los Angeles Suing Wells Fargo for Fraud

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The city of Los Angeles is suing Wells Fargo for allegedly committing fraud and taking advantage of its customers, CNBC is reporting.

According to the news site, the court papers filed by the LA city attorney suggest that the bank participated in “unlawful and fraudulent” conduct that was first uncovered by the Los Angeles Times in 2013. As the suit alleges, Wells Fargo employees would open unnecessary accounts and credit lines for unsuspecting customers without their consent – helping sales people to meet their monthly quotas.

“Wells Fargo’s culture is focused on the best interest of its customers and creating a supportive, caring and ethical environment for our team members,” the bank said in a statement. “That includes training, audits and processes that work together to support our Vision & Values and our commitment to customers receiving only the products and services they need and will benefit from.”

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Warren Buffett Defends Clayton Homes Against Negative Claims

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On Saturday, Warren Buffett defended Clayton Homes – Berkshire Hathaway’s lending unit – from a series of negative declarations, including the accusation that it had partaken in some predatory lending.

“We are not forcing loans on anybody. If they had a loan with us they didn’t like, they can pass off and borrow from somebody else,” Buffett told CNBC. “We have 300,000 loans on the books and in the last 3 years I’ve not received one letter of complaint from anybody.”

As previously reported, two separate accounts published in April suggested that Clayton Homes may have been swindling its borrowers, slapping them with high borrowing costs on houses with falling values.

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Census Analysis Finds Many Americans Spend Half or More of Income on Rent

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More than one in four renters has to spend at least 50 percent of their total household income to pay for housing and utilities, according a new analysis of Census data. That number is up 26 percent from 2007, shooting up to 11.25 million.

The findings were revealed on Friday by Enterprise Community Partners, a nonprofit that helps finance affordable housing.

“It means making really difficult trade-offs,” said Angela Boyd, a vice president at Enterprise Community Partners. “There are daily financial dilemmas about making their rent or buying groceries.”

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