Fourth quarter data from CoreLogic reveals negative and near-negative equity mortgages account for 27.9 percent of all residential properties with a mortgage nationwide, and the company says recent legislation could make a gloomy situation even darker for the hardest-hit states. Negative equity increased in the last quarter of 2010, rising from 10.8 million properties underwater in the third quarter to 11.1 million in the fourth. Today, about 23 percent of all residential properties with a mortgage are already underwater.

Freddie Mac said in a bulletin to lenders that performance of loans with loan-to-value ratios of less than 5 percent has been ""unacceptable,"" and starting June 1, the GSE will no longer purchase them. At that time the company will require borrowers to have at least a 5 percent down payment. Currently Freddie accepts loans with a 3 percent down payment. The GSE says the change is part of an effort to support responsible lending and sustainable homeownership.

Recent data released by FNC reveals that 2008 and 2009 were the worst in terms of market distress, with more than 25 percent of foreclosed properties liquidated at a more than 40 percent discount. The data reveals that since then, only the bottom quartile of foreclosure sales have been so discounted. The remaining 75 percent has seen modest improvement. The company says the way it measured the data used for the study gives a more precise look at the impact of discounts in distressed areas.

While both the House and Senate seem to have similar ideas - that changes in foreclosure prevention are needed, and fast - the groups seem to have completely different takes on how to achieve those changes. This week members of a House committee reviewed proposals advocating for the termination of four foreclosure prevention programs and voted to send two of those proposals to the full House. Meanwhile, senators sent a letter to several government agencies, urging them to modify the very programs the House will consider terminating.

On Thursday banks received the much awaited proposal that many speculated would detail the potential ramifications for their part in the foreclosure and robo-signing mess. According to various reports, the proposal could force banks to reduce principal loan balances for borrowers who are delinquent or underwater, or pay a multi-billion dollar fine. Reports have surfaced that banks are pushing back against proposed mandatory write-downs, claiming that such a practice could invite fraud.

As the House prepares to debate on the future of the Federal Housing Administration's Short Refinance option, FHA Commissioner David Stevens implored House subcommittee members to give the program a chance. The program is a voluntary option for lenders to agree to offer principal write downs and restructure loans for underwater borrowers. Stevens said as of February 11, 23 FHA-approved lenders are participating in the program and 245 FHA case numbers have been requested, of which 44 loans have been endorsed.

While the housing crisis is what triggered the economic downturn and pushed so many lenders under early on in the receession, it seems the biggest threat has now shifted from residential mortgages to souring commercial real estate (CRE) loans. Commercial real estate proved to be the downfall of the 12 banks that failed last month, according to a report by Trepp, LLC. The company says CRE loans made up 72 percent of the failed banks' nonperforming assets, while residential loans were a distant second, comprising just 20 percent.

On Wednesday, a hearing was held by the Insurance, Housing and Community Opportunity Subcommittee to determine the fate of four federal foreclosure mitigation programs. The Home Affordable Modification Program (HAMP), HUD's Neighborhood Stabilization Program, the Federal Housing Administration (FHA) Refinance Program, and the Emergency Mortgage Relief Fund all have bills in play advocating for their termination. Witness testimony was mixed on whether the programs should continue or come to an end.

The Mediation Center Southeast announced on Wednesday the expansion of the Foreclosure Meditation Program, a woman owned nonprofit that is a court approved alternative to the Residential Mortgage Foreclosure Mediation (RMFM) program in Florida. According to a press release, through the Foreclosure Mediation Program, The Mediation Center Southeast strives to provide an effective mediation program - not just a program that is compliant with the Florida Supreme Court Administrative Order.

Two more rulings have defended the right of Mortgage Electronic Registration Systems (MERS) to foreclose on behalf of lenders. A case in New Hampshire and another in California affirmed the right of the company to act as a nominee on behalf of its members and foreclose on properties. In recent weeks, courts in Massachusetts and Kansas have also upheld the standing of MERS in foreclosure cases, although a New York court ruled MERS cannot act on behalf of lenders.