Foreclosure

Fannie Mae's second-quarter loss narrowed from the previous quarter, but still in the red, the GSE says it needs to draw another $5 billion from Treasury, bringing its tally of taxpayer-funded support to $104.8 billion since the company was placed into conservatorship. The company reported a net loss of $2.9 billion for the April-to-June period, compared to a net loss of $6.5 billion in the first quarter of the year. Fannie Mae acquired 53,697 REO homes through foreclosure over the three months ending in June.

Senator Jack Reed (D-Rhode Island) has sent a letter to the director of the Federal Housing Finance Agency (FHFA) recommending the agency require Fannie Mae and Freddie Mac rent out foreclosed properties rather than immediately attempting to sell them at bargain prices. Reed believes renting the properties would help the market on all fronts by reducing foreclosure inventories, providing affordable housing, and creating jobs in hard-hit industries.

Bank of America and the Department of Housing and Urban Development (HUD) have reached a settlement regarding 57,000 delinquent government-issued mortgages serviced by the bank. Under the agreement, BofA must pursue loan modifications with the 57,000 borrowers that it previously did not offer foreclosure alternatives. However, the servicer will not be held liable for foregoing such efforts in the past, though the actions are required by HUD.

The U.S. Department of Justice has filed a civil lawsuit against Robert S. Luce, founder and president of MDR Mortgage Corp. a mortgage lending business located in Palatine, Illinois. The complaint centers around 90 Federal Housing Administration (FHA) loans that went into default. According to the complaint, HUD was required to pay more than $1.6 million in insurance claims on the loans, which Luce and MDR were not authorized to originate.

After heading higher for three straight months, the nation's unemployment rate declined to 9.1 percent in July, down from 9.2 percent in June, according to figures released Friday by the U.S. Department of Labor. The economy added 117,000 jobs last month. July's numbers beat analysts' forecasts. Investors are hoping the news will help dispel fears of a double-dip recession and quell some of the sell-off frenzy seen in the stock market yesterday, which led to the largest one-day drop in the Dow since the financial upheaval following Lehman Brothers' collapse.

Studies have shown that minorities have been disproportionately impacted by the nation's housing crisis. The National Association of Real Estate Brokers, Inc. (NAREB) is taking steps to ease that impact. NAREB is partnering with Wall Street investors to launch an $800 million Homeowner's Assurance Program (HAP) to bring foreclosure mitigation to minority families and clean up neighborhood blight in their communities.

Data released by Lender Processing Services (LPS) Thursday indicates foreclosure and delinquency numbers are on the rise again. The company says foreclosures were initiated on 217,486 loans in June, up more than 10 percent from May. The national delinquency rate also increased to 8.15 percent. As a supplement to this month's report, LPS examined its historical data and found that nearly half of all loans originated in the U.S. since 2005 would not qualify as a Qualified Residential Mortgage (QRM) under regulators' current proposal.

Realtors continue to be dissatisfied with short-sale transactions, with 77 percent categorizing short sales as ""difficult"" or ""extremely difficult"" according to the California Association of Realtors' (CAR) member survey. The current assessment shows an increase of 7 percent from the previous survey conducted in December 2010. Respondents cited servicers' slow responses to short-sale offers as a primary reason for their dissatisfaction. CAR says short sales account for a fifth of all transactions in California.

The combination of declines in home prices and in the value of the dollar is making U.S. homes very affordable for some foreign buyers, according to Capital Economics. The 33-percent drop in housing values since the beginning of 2006 translates to an even greater decline when the dollar value is compared with Canadian, Chinese, and European currencies. While international investors likely won't bring recovery to the American housing market in the near-term, the research firm says they may provide a boost to a handful of states.

Varolii Corporation announced a new product to alleviate costs and streamline new processes servicers will have to adopt under the Single Point of Contact regulation requirements for all HAMP modifications. Varolii estimates its product will reduce servicer staffing requirements by 15 percent, while increasing borrower contact by 17 percent. The Varolii SPOC Mortgage Servicing Solution routes calls to the appropriate agents and incorporates borrowers' communication preferences.