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Foreclosure Timelines Are Lengthening

Foreclosure timelines are getting longer, according to recent reports from Moody's Investors Service and RealtyTrac. In addition to this trend, Moody's highlighted the importance of net present value (NPV) models in the loss mitigation process for residential mortgage-backed securities. Foreclosure timelines increased for all servicers in the fourth quarter, Moody's reported. RealtyTrac also found the average time to foreclose went up in 39 states in the first quarter of this year compared to the previous quarter.

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Treasury Unveils Do-It-Yourself NPV Assessment

Treasury has launched a Web-based tool that allows homeowners themselves to conduct a net present value (NPV) assessment of their mortgage. Under the Home Affordable Modification Program (HAMP), servicers perform an NPV test to determine if modification is a more financially sound route to take than allowing the loan to proceed to foreclosure. Treasury is encouraging both homeowners who have been denied a HAMP mod and those considering applying for the program to use the new online calculator and share the results with their servicer.

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Credit Still Tight Among U.S. Lenders: Fed Survey

Banks have yet to loosen their tight grip on credit. The Federal Reserve's latest survey of senior loan officers found that most banks maintained stringent lending standards in the first quarter, while some tightened lending terms further. Compared with the previous quarter, a larger percentage of banks indicated that demand for first lien mortgages and home equity loans had weakened further. On the commercial side, a significant portion of lenders said they have increased their use of extensions for loans at or near maturity.

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