Foreclosure

Timothy Massad has been confirmed by the Senate as Treasury's assistant secretary for financial stability, responsible for overseeing the implementation and wind down of the Troubled Asset Relief Program including initiatives to address the housing and foreclosure crisis. While Treasury has won several Senate confirmations in recent days, the Department is at risk of losing its topmost officer. Treasury Secretary Tim Geithner has notified President Obama that he will resign if lawmakers don't raise the debt ceiling by the early August deadline.

HUD announced a revised Notice of Disclosure form that emphasizes the rights of active duty military and their dependents who are protected under the Servicemembers Civil Relief Act (SCRA). Under the SCRA, military personnel on active duty are entitled to mortgage relief, including a lower interest rate on their mortgages and foreclosure protection. HUD says it is the lender's responsibility to determine military status in connection with a foreclosure.

According to the Warren Group, a Boston-based real estate data firm, foreclosure activity in Massachusetts dropped year-over-year in May, which marked the fewest number of deeds recorded in any month so far this year. Foreclosure deeds, which represent completed foreclosures, decreased almost 65 percent from a year earlier. Foreclosure petitions, which mark the first step in the foreclosure process, dropped almost 67 percent.

Freddie Mac has issued a bulletin to servicers announcing changes to the company's default management requirements. The move is part of the Servicing Alignment Initiative announced by the Federal Housing Finance Agency in late April to bring both Fannie Mae's and Freddie Mac's procedures for handling past-due mortgages in line with one another. Freddie also alerted servicers that it plans to roll out a new modification solution for borrowers who defaulted on previous modifications and who are ineligible for HAMP.

The Office of the Comptroller of the Currency has laid out its expectations for national banks' handling of mortgage foreclosures. The federal agency says all servicers under OCC supervision must observe the same stipulations handed down to a handful of servicers in April as part of the regulatory settlement for robo-signing infractions. National banks are directed to conduct a self-assessment of their foreclosure management practices by September 30, and take immediate action to correct any deficiencies.

Wells Fargo and Bank of America recently joined Fannie Mae, HUD, and JP Morgan Chase as revitalization and demolition partners to the Cleveland-based Cuyahoga Land Bank, which works to alleviate foreclosure and home abandonment in Cuyahoga County. Both lenders plan to donate vacant and foreclosed low-asset properties to the land bank with monetary contributions for demolition costs to help eliminate neighborhood blight and increase local property values.

There were 4,084,557 mortgages in the United States 90 or more days delinquent or in foreclosure as of the end of May, according to Lender Processing Services (LPS). With foreclosure sales at 78,676 at month end, the volume of seriously past due loans over-shadowed the number of completed foreclosures by 50 to 1. In fact, LPS says there are still significantly fewer foreclosure sales than there were before foreclosure moratoria were put into place last fall. The biggest drops have been seen along the East Coast.

The performance of first-lien mortgages serviced by large national banks and thrifts improved in the first quarter as troubled loans worked through the system, according to a report released Wednesday by federal regulators. Their analysis of servicing portfolios as a whole found that loans serviced for government agencies and the GSEs are outperforming those held by banks and thrifts on their own books. Nevertheless, delinquencies improved across all risk categories and for all asset owners, while newly started foreclosures declined sharply.

Northlight Financial LLC, a New York-based manager of private equity debt investments, has announced the formation of a limited partnership, Northlight LP. The fund will provide asset-backed loans to middle market companies, acquire whole loans in the secondary market, and purchase distressed assets in the commercial, industrial, and real estate sectors. It will initially deploy $100 million in capital.

The closely watched S&P/Case-Shiller index showed its strongest positive movement since last summer with the release of Tuesday's report. The analysts at Standard & Poor's described the news as a ""welcome shift from recent months."" While it may fuel cautious optimism that at least a short-range upward trend is already in the making, industry experts and market analysts put the latest numbers into context and share their views on what to expect in the months ahead.