After a tough 2009, we had high hopes for the real estate market in 2010. Thinking that conditions couldn't get much worse, many believed that home values would start the process of recovery but instead it was largely more of the same. Let's take a look at five of the most important real estate stories of 2010.

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Robo-Signing
Probably the biggest news story of 2010 regarding real estate was the robo-signing scandal. A small home in New England became the center of the controversy when it was revealed that a small home in foreclosure had documents which were signed by somebody unfamiliar with the case, a practice that is illegal in most states. These signers were later called robo-signers because of the large amount of documents they were signing each day. This caught the attention of all 50 state attorney generals, which caused a brief stoppage of foreclosures by the largest banks. (To learn more, see the Top 5 Things To Know About Robo-Signers.)

What some believed would be a major controversy that could cause large scale financial damage to the already beaten down banks has largely become a non-issue as banks settle the robo-signing lawsuits for a relatively small amount of money.

See-Sawing Mortgage Rates
This past year saw the lowest mortgage rates in more than 50 years. In November, the average interest rate on the 30-year fixed mortgage was 4.17%, down more than 1% in less than one year. Then, in just over one month, the rate jumped up to 4.83% by the end of December. This increase was theoretically stiffened by the Federal Reserve purchasing billions of dollars in bonds, known as quantitative easing, thus increasing the cash banks hold. Although many investment vehicles have a history of wild swings up and down, mortgage rates don't often move as quickly and violently as they did in 2010. (Learn more in What Is Quantitative Easing?)

Unemployment
The low mortgage rates dropped to levels that allowed many who couldn't otherwise afford a home to purchase one - but did that fuel a buying spree? Sadly, it didn't, and most economists and real estate experts blame the nearly 10% unemployment rate for the lack of buying interest in the many homes on the market.

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Jingle Mail
2009 was a terrible year for "jingle mail," those people who sent the keys to their home to their mortgage company and walked away; 2010 saw very little improvement. In an MSNBC survey, 48% of those polled said that they would consider walking away from their mortgage responsibilities. With more adjustable rate mortgages (ARMs) scheduled to reset, adding as much as $1,000 to homeowners' payments, it's likely that some of the 48% polled may actually drop those keys in the mail in 2011.

Nicholas Cage
Nicholas Cage, who is famous for his film roles and as an international real estate investor, found himself in the tabloids when many of his properties were sold for a substantial loss by his business manager, seized by the bank or foreclosed upon. Although most of us can't identify with multi-million dollar properties all over the world, we can identify with one key rule: any investment must be seen as something that could both appreciate in value as well as rapidly drop. Unfortunately Nicholas Cage learned that lesson the hard way. (Check out 10 Habits Of Highly Effective Real Estate Investors.)

The Bottom Line
Real estate in 2010 will not go down as a bright year for home owners. Many are still hurting and as we look forward to 2011, let's hope that businesses begin hiring again so the housing crisis that still grips the United States will see brighter days next year.

For the latest financial news, see Water Cooler Finance: Canadian Takeover And U.S. Tax Breaks.

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