Foreclosure

Foreclosure prevention actions on loans held by Fannie Mae and Freddie Mac declined during the first three months of this year, driven primarily by loan modifications. Permanent loan mods dropped for the third consecutive quarter to 86,201. Short sales were essentially flat at 25,705. According to the GSEs' regulator, even with the drop-off in loss mitigation actions the two companies' delinquency rates ""remain below industry levels."" In the first quarter, foreclosure starts declined while completed foreclosures increased.

Goldman Sachs has agreed to sell its residential mortgage servicing subsidiary to Ocwen Financial Corp. Ocwen will pay $263.7 million in cash to acquire Litton Loan Servicing. In addition to the cash purchase price, Ocwen will lay out another $337 million to take care of some of Litton's outstanding debt. The deal will result in Ocwen's acquisition of a servicing portfolio of approximately $41.2 billion in unpaid principal balance of primarily non-prime residential mortgage loans.

Fannie Mae laid out new standards for mortgage servicers Monday related to the management of delinquent loans. The move is part of the Servicing Alignment Initiative announced by the company's regulator in late April to bring both Fannie Mae's and Freddie Mac's procedures for handling past-due mortgages in line with one another. The new rules are intended to address identified servicing issues such as the commencement of foreclosure actions while loss mitigation talks are ongoing and breakdowns in borrower communication.

HUD says foreclosures will have to be re-filed on some of its REO homes due to a Michigan court ruling. In April, the Michigan Court of Appeals issued a judgment stating that MERS does not meet the requirements under state statute to act as the foreclosing agent in non-judicial proceedings. HUD says most of the major title insurers in Michigan have ceased issuing title insurance for any repossessed properties involving MERS and a non-judicial foreclosure. The agency is directing mortgagees to re-foreclosure on any affected homes to cure the title defect.

HOPE LoanPort (HLP), a Web-based tool that streamlines home retention applications on behalf of borrowers at risk of foreclosure, recently welcomed nonprofit counseling agencies in Alaska and Kansas to its system. Used by housing counselors, housing finance agencies, investors, and major mortgage servicers, HLP now assists struggling homeowners in 49 states and the District of Columbia.

The delinquency rate on loans held in commercial mortgage-backed securities (CMBS) fell slightly in May from the new record high set the month before, according to Trepp LLC. The research firm says the percentage of CMBS loans 30 or more days delinquent, in foreclosure, or REO has fallen back 5 basis points to 9.60 percent. Trepp says while it seems small, May's decline is actually the biggest rate drop in about two years. The value of delinquent loans within commercial mortgage bonds now stands at $61.5 billion.

NeighborWorks America has appointed Eileen M. Fitzgerald as the organization's new CEO, effective June 1. Fitzgerald has served as acting CEO of the nonprofit community development and housing counseling network since January 2011 when Kenneth Wade stepped down from the position.

Nearly one-quarter of calls from homeowners who believe they are victims of a foreclosure rescue scam originate in California, according to statistics released by the Homeownership Preservation Foundation (HPF), which operates a national hotline to direct homeowners to accredited counseling services. While California's reported fraudulent activity was significantly higher than other states, only Los Angeles ranked in the top five cities, indicating that purported scam activity isn't concentrated in any one area of the state.

LenderLive Settlement Services has expanded its title-related and portfolio management service offerings in response to new regulatory compliance requirements affecting lenders and servicers. In today's environment, LenderLive says it is even more imperative that servicers have all title and mortgage documentation in order. The company notes that there have been instances where foreclosures or other loan actions have been delayed because the title information could not be verified.

Rep. Elijah Cummings has requested to see copies of the engagement letters between 14 mortgage servicers and the private consultants they've hired for foreclosure reviews. As part of the consent agreements with federal regulators to settle robo-signing allegations, the servicers are required to retain independent, third parties to review all 2009 and 2010 foreclosures. Consumer advocates have criticized the decision to allow the servicers to do the hiring, and Cummings says he wants to ensure regulators are holding them accountable.