For the third month in a row, home prices posted both yearly and monthly gains, according to CoreLogic's May Home Price Index report. When including distressed sales, home prices increased 2 percent in May 2012 from May 2011 and moved up by 1.8 percent month-over-month. When excluding distressed sales, prices made even greater strides, with the year-over-year increase at 2.7 percent and month-over-month increase at 2.3 percent. Distressed sales include short sales and REO transactions, according to CoreLogic.

The drop in existing home sales reported by the National Association of Realtors Thursday likely stemmed from a lack of distressed properties on the market, according to IHS Global Insight. In May, existing-home sales fell to a seasonally adjusted annual rate of 4.55 from 4.62 million in April, which is a monthly decline of 1.5 percent, the NAR reported. Existing home sales were still up from a year ago in May 2011 by 9.6 percent. According to the NAR report, investor purchases made up 17 percent of homes sales in May, down from 20 percent in April and 19 percent in May 2011. The report also revealed that distressed home sales, or foreclosures and short sales, declined monthly and yearly as well.

Experts surveyed by Zillow expect home prices to decline slightly in 2012, and predict they will bottom in 2013, according to the June 2012 Zillow Home Price Expectations Survey. The survey included 114 respondents with backgrounds ranging from economists, real estate experts, and investment and market strategists. The respondents├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ó June prediction for home prices is that they will fall 0.4 percent in 2012, and then rise by 1.3 percent in 2013. In 2014, they expect home prices to rise by 2.5 percent, then rise by 3 percent in 2015.

While other experts and analysts have concluded home prices are on the rise and the recovery is under way, Radar Logic released a report challenging the upbeat viewpoint. The argument made by Radar Logic is that as buyers absorb the supply of homes for sale in certain markets and prices start to stabilize as a result, home owners who have been waiting on the sidelines to sell will do so once prices start to improve. This will increase supply once again, and home prices will stop appreciating as supply exceeds demand. Home values decreased by 0.8 percent year-over-year in April 2012.

Negative reports on the economy may be shaking up confidence, but Capital Economics released a report Friday stating that in their view, the foundations for a sustainable recovery are still in place. The employment situation in the U.S. and issues overseas such as the euro-zone crises are all taking a toll on the economy and consumer confidence. Yet, there are still reasons to make the argument that the recovery is not going to be derailed. Home sales and prices have increased, and mortgage affordability stays high.

As the employment situation continues to raise concerns, fixed rates fell even lower, slipping yet again to new record lows, according to a survey from Freddie Mac released Thursday. The 30-year fixed-rate mortgage averaged 3.67 percent (0.7 point) for the week ending June 7, falling from last week's average of 3.75 percent. The 15-year fixed rate declined even further below 3 percent to 2.94 percent (0.7 point), down from last week's 2.97 percent. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.68 percent.

For the first time since August 2010, home prices rose on both a quarterly and yearly basis, according to the May 2012 Home Data Index report released by Clear Capital. Quarter-over-quarter, prices appreciated 0.4 percent, the first quarterly increase since November 2011. Year-over-year, prices rose by 0.1 percent, according to the index. The increases were attributed to stronger regional growth in the West, Northeast, and South, as well as a rise in REO-only prices. Among the four regions, the growth was greatest in the West.

A lawsuit was filed against GFI Mortgage Bankers alleging it charged African American and Hispanic borrowers higher interest rates and fees on mortgage loans because of their race rather than their creditworthiness, the U.S. Justice Department announced in a statement Tuesday. The complaint was filed in the Southern District of New York under the federal Fair Housing Act and Equal Credit Opportunity Act. According to the statement, GFI knew that its loan officers priced loans based on factors that resulted in thousands of dollars in overcharges for minority borrowers.

Morgan Stanley may have sold its servicing sector off, but it's still going to be under a watchful eye for its previous practices. The Federal Reserve issued a consent order against Morgan Stanley Tuesday to address servicing and foreclosure issues from the company├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós former subsidiary Saxon Mortgage Services. According to the Fed, Saxon was ranked the 34th largest residential servicer and serviced a portfolio of more than 225,000 residential loans. The Fed stated Saxon initiated at least 60,313 foreclosure actions from January 1, 2009 to December 31, 2010.

Reverse Mortgages, special types of home loans that allow people to draw on home equity without monthly mortgage repayments, has become an answer for many older Baby Boomers when dealing with urgent financial issues, according to a study from the MetLife Mature Market Institute. Boomers aged between 62 and 64 currently represent one-in-five prospective borrowers of reverse mortgages, or Home Equity Conversion Mortgages, which was once associated with a much older age group.