Senate Democrats have rolled out a bill that, like legislation passed by the House last month, is aimed at preventing mortgage brokers from steering borrowers into higher-cost loans in order to collect bigger fees, and bars prepayment penalties on subprime and high-cost loans.

The Homeownership Preservation and Protection Act of 2007, introduced Wednesday by Sen. Chris Dodd, D-Conn., would require loan servicers to implement loss mitigation strategies before initiating foreclosure proceedings against borrowers.

The Senate bill would also require lenders to follow existing federal guidelines for subprime and nontraditional mortgage loans, and lower the threshold for loans to fall under even stricter requirements for high cost mortgages as defined by the Home Ownership Equity Protection Act, or HOEPA.

Initial foreclosure filings rose 93 percent from January through November compared to the same period last year, foreclosure research company Foreclosures.com reported this week, and the number of homes that ended up as bank-owned properties rose 41 percent.

An estimated 1.08 million homes, or 14.8 of every 1,000 households, entered the foreclosure process nationwide in the first 11 months of the year. And 526,936 households, or 6.6 homes out of every 1,000 households, reverted to lender ownership.

An estimated 72,101 homes nationwide were repossessed by lenders in November alone, up 31.8 percent compared to October. Bank-owned properties are also known as real estate-owned, or REO, properties.

and get clues from other nearby markets as forewarnings. One lesson we’ve learned very well from US housing market:

When 2nd tier cities started to get crazy in price escalation, we know that the bubble has entered into the late-phase of a big bubble. Hot monies always seek better profit from 2nd/3rd tier cities when first tier cities get over priced.

When 2nd tier cities started to drop in price, first tier cities won’t be far behind.

If we always remember this lesson, we will have an upper hand in managing the bubble.

Yields on 10-year Treasury notes dropped below 4 percent for the first time in two-and-a-half years Monday, as investors pulled money out of equities for the safe haven of bonds.

Yields on the 10-year Treasury note fell to 3.83 percent Monday, down from a recent high of 5.26 percent on June 12. The 10-year Treasury note is closely watched in the real estate industry because it tends to track with interest rates on 30-year fixed rate mortgages.

How the Interest Rate on an ARM is Determined: There are two phases in the life of an ARM. During the first phase, the interest rate is fixed, just as it is on an FRM. The difference is that on an FRM the rate is fixed for the term of the loan, whereas on an ARM it is fixed for a shorter period. The period ranges from one month to 10 years.