Index Indicates Increased Home Values in Certain Southern California Locations

Residential Price Index data indicates single family home prices appreciate based on location

Though the U.S. housing market continues to struggle, the forecast is bright for single family home prices in certain Southern California locations, according to data released today by mortgage technology company FNC Inc.(R)

FNC's new Residential Price Index, a monthly hedonic Laspeyres index, indicates that certain zip codes in San Diego, Orange, and LA counties realized increased home prices from January-April 2008 even though an overall decline was evident in those counties for the same period.

'Clearly housing prices are continuing to fall in Southern California. However, we are seeing signs that certain zip codes, typically in coastal areas, are beginning to stabilize and even appreciate from their end-of-2007 lows,' said Dr. Robert Dorsey, executive vice president for Data and Analytics at FNC. 'Even in these zip codes, markets are slow and prices are still significantly off of their 2005/2006 highs.'

To break it down, single family home prices declined 6.9 percent in San Diego County, 3.8 percent in Orange County and 6.5 percent in LA County from January through April 2008. But for the same period, 15 percent of zip codes in San Diego, 25 percent in Orange County, and 24 percent in LA County appreciated.

FNC's Residential Price Index is based on single family home purchase transaction data from the FNC National Collateral Database(TM) (NCD). The NCD blends transaction data from public records and from appraisals used in loan originations to create timely and detailed records on residential properties. Unlike a repeat sales index that only uses current sales, which can be matched with previous sales of the same property, the FNC index uses all of the properties within a region and their physical property characteristics.

The hedonic methodology used to create the index is described in a recent academic paper: Mayer and Hu (2008), written by Dr. Walt Mayer, associate professor of economics at The University of Mississippi and PhD candidate Haixin Hu.

According to Mayer, FNC's Residential Price Index provides more informative home price estimates than the more widely recognized repeat-sales methods, such as Case-Schiller and OFHEO.

'The main problem has been that hedonic methods require a tremendous amount of data that has not been available. The National Collateral Database at FNC can now meet this requirement,' Mayer said.

The hedonic methodology-based on explicit estimates of the contributory values of a wide range of property characteristics-allows mortgage industry professionals and anyone interested in real estate market trends to track and price constant-quality houses over time at the zip code level.

The precision of these estimates is improved by exploiting spatially correlated prices that arise because of shared local amenities and economic conditions. The methodology also adjusts for changes in the contributory values of the property characteristics that occur as consumer preferences change over time.

About FNC, Inc.

FNC pioneered real estate collateral information technology. Since 1999, FNC has driven down costs and streamlined loan processing for the nation's largest mortgage lenders. With its collateral management platforms and collateral-focused data and analytics, FNC provides advanced insight into the property backing a loan from origination to capital markets. No one understands real estate collateral better than FNC. Visit FNC online at www.fncinc.com .

To interview Robert Dorsey or any of FNC's mortgage industry experts, contact:

Bill Dabney, manager of public relations
FNC, Inc. Phone
662/236.8304
bdabney@fncinc.com

Source: FNC, Inc.

CONTACT: Bill Dabney, manager of public relations, of FNC, Inc.,
+1-662-236-8304, bdabney@fncinc.com

Web site: http://www.fncinc.com/