Home prices in Boston hold relatively steady

Though home prices have continued their decline around the country, financial value of homes in the Boston area have remained relatively strong. Boston was one of only two major cities to post gains in home prices in August 2008.

Although the gains were modest, prices went up by just 0.1 percent, the fact that Boston experienced any growth in the midst of the market downturn is a good sign.

Only Cleveland, Ohio posted biggest gains, with growth just over 1% in August. Some of the cities in the hardest-hit areas such as Phoenix and Las Vegas reported declines of about 2.5 percent in August alone. Since last year, home prices in Phoenix and Las Vegas have dropped more than 30 percent. Boston, in comparison, has experienced declines closer to about 5% over the course of the year.

According to an article by Les Christie writing for CNN Money, the steep decline of home values translates into a high rate of vacant homes. About one million homes, or nearly 3 percent of all existing homes, are vacant.

Since the end of the summer, it has become more difficult to fill the empty homes, in part because of September’s banking crisis which restricted access to credit. First-time buyers and other potential buyers must contend with banks that are more unwilling to lend now than in the past.

"I'm optimistic," Richard DeKaser, chief economist for National City Corp remarks to CNN. "More credit will be available and housing inventories will be reduced. The deterioration will give way to a more balanced market."

--Bridget O'Sullivan

MORTGAGE ANALYSIS: Looking to refinance or buy a new home? You're in luck. As a Consumer United member, you are eligible for a discounted 15- and 30-year regular fixed-rate mortgage. Nothing complicated or exotic, just a straight-forward mortgage where the payments don't change. Click here for a free analysis.

Suspected fraud fuels sub-prime mortgage hysteria

As the sub-prime mortgage situation continues to worsen, the FBI confirms that they're investigating lenders for possible fraud. According to articles in The Wall Street Journal and CNN Money, Countrywide Financial Corporation could be involved in the suspected fraud within the industry.

The company’s practices of representing their losses and underwriting loans are said to be under examination. In addition, the company has also come under scrutiny after sending out letters to customers this week informing them that some personal data may have been compromised.

A former employee is cited as the cause of the leak and Countrywide is providing two years of credit monitoring services for free to customers believed to be impacted. This comes at a difficult time for Countrywide, the country’s biggest home-loan lender.

Though Countrywide is the biggest lending company involved, it's not the only company under investigation. CNN Money reports that the FBI is looking into the lending practices of a total of 16 mortgage companies.

As other major financial institutions continue to experience the negative effects of the subprime mortgage market, the FBI would not release the names of the lenders under investigation.

"The FBI has been investigating potential fraud in the mortgage/sub-prime lending industry, however, we can not confirm or deny which companies are under investigation," FBI spokesman Richard Kolko told CNN.

Click here for more information.

--Bridget O'Sullivan