VA also noted that because of the high foreclosure activity, the number of military veterans with no home also rose. To prevent the further increase in homeless rate among veterans, VA launched a five-year program designed to alleviate the homelessness problem among veterans. The agency pledged about 3.2 billion dollars to address the problem that has been plaguing many veterans who served in wars in Iraq and Afghanistan.

VA Secretary Eric K. Shinseki explained that no military veterans who served the country should ever be without a roof on their heads. Industry experts said that previous programs of VA focused on helping homeless veterans. However, with the current program, the focus would be in prevention and at the same time, rescuing veterans from homelessness.

Market data showed that out of 24 million military veterans in the country, 131,000 have no homes, with twice the numbers becoming homeless every year. An estimated 3 percent of these homeless military veterans have served in Afghanistan or Iraq. Results of a study conducted in 2007 showed that Afghanistan and Iraq war veterans lost their homes faster compared with other veterans.

Homeless experts and government officials are concerned that the number of cheap foreclosed house for sale in military bases would increase by as much as 15 percent due to the current economic downturn.

Experts said that veterans are one of the sectors in the society badly hit by the recession. And with unemployment rate more than 12 percent now, the prognosis on their situation remains bleak.

The VA has pledged to provide about $400 million to support initiatives that will prevent homelessness. The agency plans to expand its partnerships with the Department of Housing and Urban Development, Small Business Administration and other veterans programs in the federal, state and local levels. VA also plans to help businesses owned by veterans in qualifying for government contracts and overcoming the current economic downturn.

Industry experts applauded the current efforts of the VA to prevent homelessness and the spread of cheap foreclosed house for sale in military bases.

So far, several areas across the country have been experiencing a surge in home sales due to the rush of first-time homebuyers who want to take advantage of the tax credit and investors who find foreclosure properties that sell below the market value great investments.

Already, the federal government is receiving pressure from various sectors to extend the tax credit being offered to first-time homebuyers. The study showed that not extending the tax credit would affect home sales and housing starts.

It noted that the growing number of housing starts this year will be stunted if the tax credit will not be extended beyond its November deadline. Industry experts believed that gains in housing starts during the first and second quarters will be for nothing if the numbers in the third and fourth quarters will drop.

Experts pointed out that housing starts in previous months have increased due partly to the tax credit given to first-time homebuyers. They cited the decline in speculative inventories for many builders as the other factor that push up housing starts. Speculative inventories are kept at normal levels if builders will start home construction every time that they were able to sell one.

Industry experts predicted that housing starts’ recovery will continue, albeit at a slow pace, because builders in some areas in the country are still reducing their inventory. The study predicted that housing starts will reach a total of 562,000 this year, representing a 38 percent decline compared with the same period a year ago. Similarly, starts for single family homes are predicted to drop by 30 percent.

Industry experts said that many housing markets across the country have been showing improvements for some time now. But those markets that were severely affected by the collapse are just starting to show increases in housing starts. All these increases are attributed to the federal tax credit that encouraged first-time homebuyers to find foreclosure properties to buy.

Experts are quite pessimistic about the future situation in the country’s housing market and mortgage industry despite signs that property prices have bottomed out and the 5 percent mortgage rates.

Members of the MBA said that they expect the number of cheap foreclosed properties in the country to increase before leveling off, probably by late 2010. They blamed the continuing increase in unemployment rate for the anticipated rise in foreclosure rate. They said that adjustable subprime mortgages have been replaced by job losses in pushing the number of foreclosures to the roofs.

MBA chief economist Jay Brinkmann predicted that the number of job losses would increase through the next summer and will result to a staggering number of defaults due to loss of income. He added that it would also be even harder to keep distressed homeowners in their houses by loan modification.

On the mortgage customer service home front, the sector continues to struggle with the effects of the increasing number of delinquencies and demand for mortgage modifications.

As a result, industry experts said that foreclosures are expected to rise in the latter part of 2009, adding that if the numbers start to come down, it is going to be in a very slow pace.

Participants in the MBA conference had mixed emotions during the event. Loan originators were in a celebratory mood following a boost in mortgage refinancing as a result of a 5 percent drop in fixed-rate loans’ interest rates.

However, the increase in mortgage refinancing is expected to slow down by next year as interest rates will start to rise. Experts predicted that the total mortgage volume will decline to $1.5 trillion next year from $2 trillion this year even if home purchase loans are projected to rise by 12 percent.

Other projections made by the group are the increase of fixed mortgage rate by 5.6 percent before the end of 2010 and the decline in refinancing activity which could lead to more cheap foreclosed properties.

He pointed out that housing prices will drop further and more foreclosures will come in which may result to a shaky economy for years. Thornberg of Beacon Economics was one of the economists who predicted the onslaught of the housing crisis and its devastating consequences.

He predicted that recovery in Montana would be a slow one, adding that a near recession would occur by 2011 because the problems that resulted to the financial crisis have not actually been fixed.

He said that the unemployment rate will drop, albeit at a slow pace, and will reach 8 percent by 2012. He also said that the short-term prognosis for the state’s economy is not very good. He pointed out that there could be an improvement in the forecast only if the dollar value continues to drop to boost the export industry.

But he stressed that the major factor that could really create a true recovery comes from healthy consumers. These are people who have enough savings, have manageable debts and lives in areas with no or few foreclosure property for sale.

Thornberg likens the aggressive government programs to stimulate the economy and the housing market to a tourniquet in which it only stabilizes but does not puts an end to the healing process. He said that Montana has performed better compared with other states during the recession and the housing market collapse. He pointed out that Montana is a stable state compared with others in the Rocky Mountain region.

For this year, Montana posted an unemployment rate of 7 percent compared with the 10 percent jobless rate nationwide and 9 percent rate in Idaho.

According to market data, Montana lost about 4,400 jobs in the construction industry. But industry experts pointed out that the job losses are significantly lower compared to other places in the country.

Additionally, the median home price in the state is relatively stable at $220,000. It is however expected that a million foreclosure property for sale would soon hit the market, probably in 2010.

But despite bad experiences by other buyers of fixer upper houses, you can still turn a fixer upper into a sound rental investment or a great place for your family. Just make sure you know what is required of you if you buy a fixer-upper.

The best way to estimate your repair costs for a fixer-upper is to hire a contractor to help you inspect the property. You should be able to visualize what you would do to make the property profitable or useful for you and your family.

A vision of living in a big place surrounded by trees within city limits was what guided the Wrights in Minnesota when they bought a 3,600-square-foot eight-bedroom fixer-upper farmhouse on 2.6 acres on Highwood Hills for $316,000. The property has open fields, a lawn, a tree house, a garbage dump, a collapsed garage and a dilapidated horse corral.

Aside from the damaged exterior buildings, there was also no working heating system, the kitchen cabinets have no doors and the electricity has temporary hook-up.

But the Wrights persisted and with determination, they were able to restore the house into a beautiful ranch farm property. All in all, they spent $15,000 for repairs that included new fixtures, new cabinets, new floors, new toilets, new sinks, new walls and new appliances. They bought from Craigslist and other bargain sellers and did most of the repair work.

In its most recent appraisal, the house was valued at $48,800 and the land was valued at $337,900.

For other prospective buyers of cheap fixer upper houses, it is a great help if you have passion for do-it-yourself projects so you can cut costs. You can leave the major repairs to experienced contractors and then you do minor repairs and improvements.

When preparing your finances for the home purchase, remember that FHA and the other government agencies guaranteeing home loans do not approve the loans if the properties do not pass their quality standards, so make sure you have alternative financing.

The FHA offers a 203k home loan which incorporates repair expenses into the loan, but you have to pass certain requirements to get this type of loan.

All in all, make a thorough research of available cheap fixer upper houses that you can afford to buy with your savings and with help from a lender.

Over the past year, Vaz and his firm have already spent $9.94 million in buying distressed properties. Now, the Conti Organization has around 2,000 housing units valued at over $40 million. It has closed ten property transactions in two years.

For this year, Conti has started its second investment fund with $10 million. It plans to acquire distressed and foreclosed apartment properties and then renovate them.

Among the distressed multifamily properties that Vaz has already acquired this year is the Villa Bonita Apartments located in Dallas. The apartment building was formerly part of a development at Eastfield Village. It paid $3.2 million to acquire 232 housing units from a bank and then renamed the development as Villa Bonita.

Conti has already completed about 90 percent of the $800,000 needed rehabilitation of the complex and around 76 percent of the units are already occupied. It expects the occupancy level to rise as the rehabilitation project is completed.

In the first week of September, Conti put into action its goal of buying distressed homes in Houston. It paid $3.45 million to acquire the 266-unit apartment complex called Lenox Court Apartments, which has been foreclosed by a national insurance firm. It has renamed the apartment building and has allotted over $1.4 million for renovations.

So far this year, Conti has already acquired 2,000 housing units, still far from its goal of purchasing 10,000 units by the end of the year. Vaz said that he is currently negotiating deals that could help the firm reach its goal.

Conti is just one of many real estate investment firms targeting distressed multifamily complexes in the Dallas-Fort Worth area. Brian O’Boyle, manager of the Dallas unit of Georgia-based Apartment Realty Advisors, said that 45 apartment buildings will be purchased by the end of the year and that an additional 130 apartment buildings will change owners in 2010 and in 2011.

Bostonian Investment Group, a multifamily investment firm based in Boston, has been raising $100 million to acquire distressed multifamily buildings in North Texas.

Another Dallas-based property investment company, J Alexander Realty Group, is raising its own $10 million to buy smaller apartment complexes.

Meanwhile, a Los Angeles-based investment firm called Learning Links Centers, has been readying up to $40 million in funds for buying distressed homes and multifamily complexes in the Dallas area over the next 12 months.

The property portfolio for sale includes 4 noted buildings located in prime areas: One Chase Manhattan Plaza and Four New York Plaza which are both near Wall Street, a skyscraper in downtown Seattle formerly occupied by Washington Mutual and which still houses the Seattle Art Museum, and a landmark 1929 Art Deco structure in Houston which was once leased by Texas Commerce Bank.

According to analysts, J.P. Morgan has accumulated a lot of space after acquiring Bear Stearns Cos. and Washington Mutual in 2008. The properties for sale have a combined area of 7.1 million square feet and could raise over $1 billion.

In New York, J.P. Morgan has moved many of its investment banking operations and employees into Bear Stearns’ former headquarters in Manhattan, which is near J.P. Morgan’s operations on Park Avenue.

According to analysts of Real Capital Analytics, it may take time and some sales strategies to sell such a large property portfolio in these times of tight financing and corporate effort to reduce costs. Across the U.S., only $5.7 billion worth of office spaces were sold in the first half of this year, a significant drop from the 30.9 billion worth of office spaces sold in the first half of 2008.

In Manhattan, only 8 office towers were sold in the first half of this year, again a big drop from the 43 office properties sold in the same period last year. In the first half, the average price of office space sold was $470 per square foot, a substantial drop from the $877 average price per square foot in the same period last year.

Real estate analysts said that J.P. Morgan needs to offer incentives to be able to sell the buildings, such as sale-leaseback deals to help ensure a flow of income for the buyer. Dan Fasulo of Real Capital said that any buyer of Chase Manhattan Plaza would first need to be assured that J.P. Morgan would lease a large portion.

Analysts cite as examples the New York City buildings offered for sale by HSBC and New York Times Co. They said HSBC got offers from established developers when it offered a sale-leaseback contract for the next ten years. New York Times sold its Manhattan building when it signed a sale-leaseback deal with W.P. Carey.

Find foreclosure properties for sale.

The median price of a previously owned single-family detached home declined to $174,100, the biggest drop rate since 1979 based on NAR sales records.

Meanwhile, total home sales increased by 3.8 percent to an adjusted yearly rate of 4.76 million compared to sales in the first quarter, but decreased by 2.9 percent compared to the second quarter last year.

In 129 out of the 155 metro areas surveyed, home prices decreased and in 39 states, home sales increased compared to the first quarter.

According to IHS Global Insight economist Patrick Newport, home sales across the country are showing signs of recovery.

However, other economists like Scott Anderson of Wells Fargo said home prices have not bottomed out yet. He contended that there are volumes of inventories of homes for sale that are being held because of various reasons.

Housing analysts said home prices are still falling despite positive forecasts by a group of economists surveyed. Based on the median of over 50 economic forecasts gathered by Bloomberg, the national economy will grow by two percent or more in four consecutive quarters through June next year.

In the Northeast, the median home price for existing homes declined by 9.7 percent to $246,000 in the second quarter compared to last year’s second quarter. Home sales increased by 15 percent compared to the first quarter but decreased by 8.4 percent compared to last year’s second quarter.

In the Midwestern states, the median home price declined by 8.6 percent to $146,800 compared to last year’s second quarter.

In the South, the home price dropped to $158,600, marking a drop of 10.3 percent. In the West, the median home prices dropped to $212,600, marking a significant 26.6-percent decrease.

The biggest price declines occurred in the Fort Myers-Cape Coral metro area, where the median sales price dropped to $84,000, a staggering drop of 53 percent from last year’s second quarter.

The other metro areas with the biggest declines are the Las Vegas area and the metro area comprised by San Bernardino, Riverside and Ontario.

According to a NAR study, distressed sales reduce the value of every nearby house by an average of $8,667 as appraisal rules are applied.

Industry experts pointed out that unless authorities, mortgage lenders and homeowners do something to address the rising defaults in the state, Oregon’s foreclosure filings will surge beyond the mark of one out of 525 houses facing the potential of being added on REO properties for sale.

Also last month, Oregon saw a rise of almost 90 percent in property losses. Furthermore, over 3,000 distressed homeowners across the state received notices of default or foreclosure auction or were repossessed. The figures represented a slight decline from April but were 20 percent above the same-time level a year ago.

In the first quarter of this year, foreclosure filings were issued on 10,547 distressed homeowners, a 29 percent jump from the last quarter of the previous year and a whopping 151 percent increase from the year-ago first quarter. The drastic increase in the state’s unemployment rate is being blamed for putting Oregon on the throes of the foreclosure crisis.

Several efforts are being made to help homeowners save their properties from foreclosures. The Senate Bill 628 aims to stave off REO properties for sale in Oregon. Under the bill, banks would be required to discuss with distressed homeowners possible solutions to avoid foreclosures.

The meeting between lenders and homeowners will be made before trained mediators who would help work out affordable payment plans. In the event that lending institutions and banks failed to come in an agreement with distressed homeowners, banks will be required to pay a fee if they decide to resell the distressed properties.

Nationwide, the Obama Administration launched the Making Home Affordable program in an effort to reduce the number of homeowners losing their properties to foreclosure. According to the Department of Treasury, over 120.000 borrowers were able to renegotiate for affordable payment plans with their lenders since the program was launched.

However, despite efforts of the national government to contain foreclosures, about 1 million houses became REO properties for sale since March. And it is expected that more and more Americans will see their houses go into foreclosure proceedings in the coming months.

Appraisers used previous home sales to gauge trends in home values, which have been deteriorating in many housing markets because of falling home prices.

Home builders have been struggling to survive as low foreclosure listing prices continue to clobber their new home sales and force them to reduce new home prices to break-even points and even force them to sell homes past break-even points to cut their losses.

Robert Curran, home building analyst at Fitch Ratings, said that homebuilders have been struggling against foreclosure listing prices since the foreclosure crisis began. He said that many homebuilders are even competing with their own company-built homes, which are being sold at low prices.

Oftentimes also, low past foreclosure listing prices are considered in appraisals, further reducing home valuations. According to Bill Garber, head of external relations at the Appraisal Institute, most mortgage lenders require appraisers to use home sales completed within 3 months, instead of the 6 or more months required before the foreclosure crisis began.

With the increase in foreclosure listing sales in recent months, the home sales data usually considered by appraisers include low-priced foreclosures, especially in foreclosure-battered markets like Phoenix, Las Vegas and the Inland Empire region of California.

David Ledford, a top executive of the National Association of Home Builders, said that mortgage lenders have been burned by appraisers who inflated home values during the housing boom, so now lenders are pressuring these appraisers to make very conservative estimates. Ledford insisted that making conservative estimates is contributing to the downward direction of home values.

Homebuilders also charge that most appraisers do not consider added values when appraising a new home, such as energy efficiency features.

In response to homebuilders’ contention about appraisers, Garber of the Appraisal Institute said that appraisers do not make the housing market and that they simply translate into numbers what is happening in the market.

Even so, both homebuilders and appraisers agree that falling home valuations are largely caused by falling home prices, particularly foreclosure listing prices. The Standard & Poor’s/Case-Shiller Price Index in the first three months of this year showed a decline of 19.1 percent in home prices in major U.S. cities.