Foreclosure

Short sales shot up 19 percent between the first and second quarters, with 102,407 transactions completed during the April-to-June period, according to RealtyTrac. Over the same timeframe, a total of 162,680 bank-owned REO homes sold to third parties, virtually unchanged from the first quarter. RealtyTrac's study also found that the time to complete a short sale is down, while the time it takes to sell an REO has lengthened. Discounts on both types of distressed properties increased last quarter.

The delinquency rate on loans in U.S. commercial mortgage-backed securities (CMBS) rose 22 basis points in July to hit 9.24 percent, according to Moody's. The increase follows two months in which delinquencies edged lower, and marks the seventh consecutive month the rate has come in above the 9 percent mark. The balance of loan delinquencies increased by $835 million last month. Moody's says CMBS delinquencies are likely to remain in the high single-digit range for the near term.

Iowa Attorney General Tom Miller has announced the removal of New York Attorney General Eric Schneiderman from an executive panel of state officials working with servicers on a settlement for alleged improper foreclosure practices. Miller, who is head of the committee, says the state of New York has actively worked to undermine the very same multi-state group it had been working very closely with over the previous nine months. He called Schneiderman's actions ""unacceptable.""

After recently establishing a partnership with Fannie Mae to offer Fannie Mae Short Sale Assistance Desk (SSAD) training for real estate professionals, the Five Star Institute has just announced a second partnership with Wingspan Portfolio Advisors. Wingspan will promote Five Star's beginning and advanced short sale courses within its extensive network of real estate professionals - the Wingspan Real Estate Network (WREN). Conversely, Five Star will promote WREN to agents who sign up for its short sale and SSAD training.

American Home Mortgage Servicing, Inc. (AHMSI) is pursuing legal action against Lender Processing Services (LPS) and affiliate DOCX to recover millions of dollars in losses the servicer allegedly incurred from improper documentation related to more than 30,000 mortgages and services preformed between April 2008 and November 2009. For its part, LPS said it was ""surprised"" by AHMSI's action and is prepared to vigorously defend itself against the allegations.

New York, Nevada, Massachusetts, and Delaware attorneys general continue to voice opposition to a blanket settlement with the nation's top servicers, but HUD and the Justice Department are taking steps to persuade at least one of them to comply. Officials from both agencies are specifically asking New York Attorney General Eric Schneiderman to abandon his objections and approve the settlement. He's reportedly holding out to ensure he can pursue his own legal actions related to the securitization side of the business.

The delinquency rate of first-lien residential mortgages increased to 8.44 percent of all loans outstanding as of the end of the second quarter of 2011, the Mortgage Bankers Association (MBA) reported Monday. Although the rate is down 141 basis points from a year earlier, it rose 12 basis points when compared to the first quarter of 2011. The biggest increase came from loans in the earliest stage of delinquency - just one installment, or 30 days past due. Analysts called this the ""most worrying"" aspect of the report.

Housing has become an industry afraid of its shadows. That shadow inventory of repossessed and soon-to-be repossessed homes has professionals from every side of the business worried about the impact such a sizeable volume of distress will have on property values and overall market fundamentals. But according to Standard & Poor's, the obscurity hiding in the corner is getting smaller. The agency's current estimate of time-to-clear the market's distress is 47 months. That represents a five-month decline from its first-quarter estimate.

Bank of America has named Ron Sturzenegger to replace Terry Laughlin as head of the bank's Legacy Asset Servicing division, the unit that manages problem home loans and investors' mortgage repurchase claims. Laughlin has now officially assumed his new role as chief risk officer, as announced by the company last month. Sturzenegger joined Bank of America in 1998. He most recently has served as a catalyst team member for Project New BAC, focused on the company's home loans business.

California's attorney general and the state's Department of Justice have taken down a fraud ring of legal firms and attorneys that officials say swindled thousands of homeowners out of millions of dollars by convincing them to take part in mass lawsuits against their lenders. Attorney General Kamala Harris has sued three law firms, four lawyers, and 14 other defendants. Officials with the state and HUD have seized the defendants' assets and bank accounts.