“It is one more in a whole series of attacks on the banks and re-hashing what has already been hashed,” Ross says. “In doing this billion settlement, or at least they are trying to do it, this is one more way the government can attack the banks, fine the banks and squeeze the banks. The more they do this, the less banks are going to make mortgages. If you are a bank and you have Cordray coming after you and now this fraud task force coming after you, why would you make another mortgage?”

Ross adds that the remaining defaulted mortgages in the market need to be sold, worked out and modified by the private sector and out of Fannie Mae and Freddie Mac. On Monday, the taxpayer owned mortgage giant came under fire after an NPR/ProPublica investigation alleged that the agency utilized a mortgage financing vehicle that prevented homeowners from refinancing by keeping American homeowners trapped in high-cost mortgages with interest rates well above 4%.

On Tuesday, the Federal Housing Finance Agency—the board that regulates Fannie and Freddie—responded in a statement that the organizations have historically used the structuring of collateralized mortgage obligations as a tool to manage its retained portfolio.

But even with continued low interest rates from the Fed, home pricing has taken another tumble across the country. The latest S&P Case-Shiller indices show home prices for 20 cities fell by 1.3%, a 3.7% decline from November 2010—a slide back to mid-2003 levels.

As a result, home prices are now lower than they were a year ago, notes David M. Blizter, chairman of the index committee at S&P Indices. The only positive for the month was Phoenix, one of the hardest hit real estate markets in recent years, showing 0.6% in gains. But cities like Atlanta continue to illustrate relative weakness, down 2.5% over the month, after having fallen by 5% in October, 5.9% in September and 2.4% in August. In addition, Las Vegas, Seattle and Tampa all reached new lows.

“The trend is down and there are few, if any, signs in the numbers that a turning point is close at hand,” he says, in the report.

In response to the latest S&P data, Richard K. Green, director of the USC Lusk Center for Real Estate, tells GlobeSt.com that it is difficult to interpret house prices right now due to large numbers of investor sales, particularly in hard-hit states like California, Arizona and Florida.

“What happens is investors buy with cash, and sellers are willing to sell at a discount to buyers with cash because they don’t have to worry about waiting about whether the mortgage is going to come through,” Green says. “We are seeing a lot of contracts canceled because people apply for mortgages and don’t get them. To some extent, the price pressure downward is a function of the fact that we have an unnaturally large amount of cash-financed sales at the moment.”

Since home price trends have been deflated by inflation, in turn, apartment rents have risen. But Green says if this trend continues, potential buyers may gradually go back to single-family from multifamily based on deals in the marketplace. “Affordability is remarkably strong because interest rates are so low and rents are rising, which means rental housing is becoming less attractive relative to owner housing,” he says. “You throw that together and you think there has to be a recovery somewhere out there sometime soon.”

Others are also optimistic. Michael Slattery, senior vice president of the Real Estate Board of New York, an industry group representing the rental and sales market throughout the city’s five boroughs, tells GlobeSt.com that lower mortgage rates are “certainly enticements” to people who want to buy, but extra due diligence is required.

“Since the Great Recession, the standards for qualification have become much more stringent,” Slattery says. “Although you can get a good deal, the qualifications that you need to meet make it that much more difficult to satisfy the requirements. It’s been a mixed blessing. It’s been attractive and a help, but it has become much more difficult to find financing based on the requirements that are needed.”

David DeRosa, managing member of Farmingdale, NY-based Island Properties & Associates, believes that the money now being lended out will be stronger -- and the additional oversight will prevent another crisis.

“It stops the conglomerates – the larger banks – that made so much money from selling these mortgage-backed securities to each other," he says. "That’s where they got themselves in trouble. They were constantly making billions of dollars on paper and then all of a sudden, this paper wasn't worth anything. It forces that kind of oversight.”

Both the National Apartment Association and its sister organization, the National Multi-Housing Council, declined to comment for this story.