Loss Mitigation

Florida-based PREO operates an online marketplace aimed specifically at turning distressed properties into family homes. On Wednesday, the company announced the official launch of its new Web site, which PREO says can shrink the timeline for short sales to weeks instead of months.

The majority of Americans say walking away from a mortgage should never be an option for homeowners, even those who are struggling to make their payments, according to a survey conducted by FindLaw.com. No reliable figures exist to pinpoint exactly how many homeowners choose strategic default, which entails walking away and refusing to make monthly payments, but industry experts agree that it has become a growing concern in the fallout of the housing crisis.

National Creditors Collections Inc. (NCCI), a provider of field contact, loss mitigation, and onsite inspection services, recently starting using the RxOffice loss mitigation portal from IndiSoft, a technology development firm specializing in default management. NCCI plans to use the technology to enhance its field contact efforts for hard-to-reach homeowners.

Although the Treasury Department has vowed to hold mortgage servicers publicly accountable for their adherence to Home Affordable Modification Program (HAMP) guidelines, some senators want to go one step further. They have proposed establishing a new federal agency as a means of recourse for ""families who face foreclosure but believe their mortgage servicers are breaking the rules."" Legislators say if the bill passes, HAMP has the potential of reaching its original goal of helping 3 to 4 million homeowners.

Servicers swamped with borrower inquiries and follow-up requirements are turning to specialty providers for quick resolution, according to Wingspan Portfolio Advisors, a specialty and component servicing firm. Wingspan says demand for its ""high-touch"" services has increased rapidly over the last six to nine months, largely due to the robo-signing crisis and related foreclosure slowdowns.

According to a new poll from the market research firm Harris Interactive, 22 percent of people with mortgages have difficulty making their monthly payments. The poll also reveals that 21 percent think they are underwater and owe more on the loan than their home is worth. Compared to the results of last year's poll, those struggling to pay their mortgage has declined by 7 percent, but the company says the improvement is deceptive since it likely reflects the fact that borrowers previously experiencing trouble have already lost their homes.

The U.S. House of Representatives voted to pull the plug on HUD's Emergency Homeowner Loan Program last month, but that hasn't stopped HUD from moving ahead to put the money into the hands of distressed homeowners. The fund was established to provide zero-interest bridge loans of up to $50,000 for unemployed homeowners to continue making their mortgage payments while they look for a new job. HUD just deployed nearly $200 million of the $1 billion allotted to state agencies.

The percentage of single-family mortgage loans counted as seriously delinquent has dropped back for both Fannie Mae and Freddie Mac. According to Fannie Mae's latest monthly status report, the GSE's seriously delinquent rate has declined to 4.45 percent. Freddie Mac's most recent report shows its seriously delinquent rate to have fallen to 3.78 percent. Both companies have posted steady declines for three consecutive months, and they've recently announced changes to their servicing guidelines that could impact the way delinquent loans are handled.

The nation's largest mortgage servicers foreclosed on 95,067 homes during the fourth quarter of 2010, a 49 percent drop from the number of completed foreclosures during the previous quarter, according to a new report from two regulatory agencies. Newly initiated foreclosures also decreased but by a much smaller ratio of 8 percent. Because new foreclosures outpaced completed foreclosures, the inventory of foreclosures in process increased to 1,290,253, representing 3.9 percent of all serviced loans among the largest national firms.

Sens. John McCain and Orrin Hatch have introduced legislation to permanently end government support for Fannie Mae and Freddie Mac. The GSE Bailout Elimination and Taxpayer Protection Act, which is the Senate companion version of House legislation introduced in mid-March, seeks to accelerate the timeline for putting Fannie and Freddie on a path toward privatization. It would put an end to the two companies' conservatorship in two years.