Home sales increased 12 percent in July in California compared with the same period a year ago, while the median price of an existing home declined 19.6 percent, C.A.R. reported yesterday. “The federal tax credit for first-time buyers played a critical role in the purchase decision of many buyers,” said C.A.R. President James Liptak. “Nearly 40 percent of first-time buyers said they would not have purchased a home if the tax credit was not offered. Because the tax credit has helped so many first-time buyers become homeowners, it is critical that Congress extends the credit beyond the Dec. 1 deadline, and includes all buyers, not just first-timers.”

Closed escrow sales of existing, single-family detached homes in California totaled 553,910 in July at a seasonally adjusted annualized rate. Statewide home resale activity increased 12 percent from the revised 494,390 sales pace recorded in July 2008. Sales in July 2009 increased 8.1 percent compared with the previous month. The statewide sales figure represents what the total number of homes sold during 2009 would be if sales maintained the July pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The median price of an existing, single-family detached home in California during July 2009 was $285,480, a 19.6 percent decrease from the revised $355,000 median for July 2008, C.A.R. reported. The July 2009 median price rose 3.9 percent compared with June’s $274,740 median price.

“July marked the fifth consecutive month of month-to-month increases in the median price,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “This was the largest increase on record for the month of July based on statistics dating back to 1979. The yearly decline in July also was the smallest in the past 19 months.”

“We’re in the midst of an unprecedented series of scams and exploitation in our state,” California Attorney General Jerry Brown said at a Los Angeles news conference Wednesday. “This is not some garden-variety problem. This is out of control. It’s huge.”  Atty. Gen. Jerry Brown orders nearly 400 companies to post $100,000 bonds and register with his office or risk prosecution. More than two dozen firms are told to defend their loan modification ads.  State officials are turning up the heat on businesses that target struggling homeowners, ordering nearly 400 mortgage foreclosure consultants to post $100,000 bonds and register with the state attorney general’s office or risk prosecution.  Authorities acknowledge that they have been caught off guard by the rapid proliferation of such businesses — many of them less than reputable.  The growth has outpaced attempts to enforce state regulations requiring bonding and registration for consultants offering to help homeowners who can’t make mortgage payments, and authorities have been inundated with complaints about shady operators.

Brown said he was giving the unregistered companies, which can be found on a list posted on his website, 10 days to “get their act together” or his office would take legal action.

Letters ordering companies to register were sent Friday and the 10-day warning period began Monday, he said.

In addition, Brown ordered more than two dozen companies to back up advertising claims about their loan modification efforts. The 27 companies have touted unusually rapid mortgage adjustments and a 90% success rate for staving off foreclosures — which law enforcers find highly suspicious, Brown said.

Letters to businesses ordered to substantiate their ads were sent Monday, and they have 20 days to prove their claims or face lawsuits, he said.  “Too many homeowners are paying money in advance because they are desperate, and they’re coming up empty-handed because they are being scammed,” Brown said.

California Real Estate Commissioner Jeff Davi said the DRE (Department of Real Estate) had received 1,067 reports of loan modification scams since October.  The complaints resulted in 317 legal actions taken against fraudulent businesses, he said.

Sales of new homes went up 11 percent in June, compared to May, and were at a seasonally adjusted annual rate of 384,000, according to estimates released jointly by the US Census Bureau and the Department of Housing and Urban Development.  The median sales price of new houses sold in June 2009 was $206,200.  The average sales price was $276,900, according to the report.  The seasonally adjusted estimate of the new houses for sale at the end of June was 281,000, representing an 8.8 months supply at the current sales rate.

Good news for existing homeowners with FHA loans.  The United States Department of Housing and Urban Development Secretary Shaun Donovan recently announced that the Federa Housing Administration has implemented changes to its loan modification program to ensure consistency with the Obama Administration’s Home Affordable Modification Program.  By August 15th, FHA borrowers will be able to signficantly reduce their monthly mortgagte payments by seeking a loan modification through their current mortgage company or loan servicer under the new FHA-Home Affordable Modification Program (FHA-HAMP.)  FHA expects all servicers to implement the changes by August 15th.  The program permanently reduces a family’s monthly mortgage payment through the use of a partial claim, which defers the repayment of the mortgage principal through an interest-free subordinate mortgage that is not due until the first mortgage is paid off.  The program will allow HUD to bring the borrower’s payment down to an affordable level.  This will be accomplished by bringing the mortgage current, buying down the loan by up to 30 percent of the unpaid principal balance and deferring these amounts in a partial claim.

“We’re bringing another important tool to the table to help struggling families who are desperate to keep their homes,” said Donovan.  “Tens of thousands of FHA borrowers will now be able to modify their mortgages in the same manner as so many others how are taking advantage of the administration’s Making Home Affordable program.  This is just the latest tool we are providing to help homeowners prevent foreclosures through the Making Home Affordable program.  Earlier this month we announced an expansion of the Home Affordable Refinance Program to borrowers who are up to 125% percent underwater.  Together, these actions will significantly increase the help available to homeowners.”

Even as the country’s unemployment rises, foreclosure rates in three states hit hardest by the housing bust (California, Arizona, and Florida,) stabilized in June.  This offers hope that the worst of the real estate crisis is over, according to The Associated Press monthly analysis of economic stress in more than 3,100 US counties.  The latest results of AP’s Economic Stress Index show foreclosure and bankruptcy rates held steady from May in some states.  Yet mounting unemployment is hampering an economic recovery in some regions, especially the Southeast and industrial Midwest.  In June, foreclosure rates held steady for Arizona, California, and Florida at 4.1 percent, 3.5 percent and 3.4 percent.  Respectively, according to Realty Trac, which maintain a nationwide database of foreclosures.

Nationally, seasonally adjusted home resales in June were up 9 percent from January.  New-home sales surged 17 percent in the same period.  Construction is up nearly 20 percent since the year began, and prices rose in May for the first time since June of 2006.