The industry's shadow inventory of repossessed and soon-to-be repossessed homes that aren't visible as properties for sale has contracted, according to CoreLogic. Analysis released by the company Wednesday shows that the shadow inventory of residential properties as of January 2011 fell to 1.8 million, down from 2.0 million a year earlier. For the first time, CoreLogic also examined how loan modifications and short sales could reduce shadow inventory levels.

Default Attorney Group (DAG), a consortium of creditors' rights law firms from across the United States, announced Wednesday that the organization has welcomed two new firms to its membership. Potestivo & Associates P.C., which offers representation in Michigan and Illinois, and Reisenfeld & Associates LPA, LLC, which covers Ohio, Indiana, and Kentucky, have both joined the group of seasoned legal professionals serving the mortgage lending and servicing community.

The U.S. House of Representatives passed legislation Tuesday evening to end the administration's flagship foreclosure prevention initiative, the Home Affordable Modification Program (HAMP). The HAMP Termination Act (H.R. 839) was approved with a 252 to 170 vote. Pundits are calling it a largely symbolic vote since the bill is not expected to win as much favor in the Senate, although Republican senators have already introduced their own bill to pull the plug on the federal mod program.

The Securities and Exchange Commission (SEC) said last week that Bank of America must entertain shareholders' request to open up its foreclosure practices for an independent audit. The SEC ruled that BofA must include the option on the ballot at its annual stockholder meeting this spring. But the company's shareholders aren't waiting for a formal investigation. They filed a lawsuit this week with the New York State Supreme Court claiming they were damaged by the bank's intent to hide defects in the paperwork used to process foreclosures.

Wolters Kluwer Financial Services on Tuesday announced the launch of Pre-Foreclosure Manager, a hosted solution for U.S. mortgage servicers to create, mail, track, and manage borrower default notices. The nation's servicers face a rising number of loans entering default in addition to increasing regulatory pressures. Wolters Kluwer Financial Services says its new technology offers a solution to address large spikes in foreclosure volumes with limited in-house resources and reduce the risk of non-compliance.

Halo Companies, Inc. announced Tuesday that famed football star, Heisman trophy winner, and two-time nominee to the Pro Football Hall of Fame, Tim Brown has joined the Halo Companies advisory board. Halo is a publicly-traded nationwide asset management and consumer financial services company that provides solutions to financially distressed consumers which can be applied individually or utilized as a comprehensive workout strategy.

Data released Tuesday morning by Standard & Poor's show that home prices are continuing to trend downwards. The 20-city composite reading of the S&P/Case-Shiller home price index fell 1.0 percent in January 2011 when compared to the previous month. The 20-city composite is down 3.1 percent from its January 2010 level. San Diego and Washington D.C. were the only two markets to record positive year-over-year changes, while 11 cities posted new cycle lows during the first month of this year.

New data released by Lender Processing Services (LPS) Monday clearly illustrates that foreclosure timelines are growing longer and longer. The company reports that the average loan in foreclosure right now has been delinquent for a record 537 days, and 30 percent of loans in foreclosure have not made a payment in over two years. As of the end of February, LPS says foreclosure inventory levels stood at more than 30 times monthly foreclosure sales volume.

The Office of the Comptroller of the Currency (OCC) has issued a notice to the chief executives of all the lenders it regulates warning them of the risks involved in real estate-owned exchange programs. Several companies have started marketing real estate-owned exchange programs to national banks as a means to reduce problem assets on their balance sheets, but the OCC says these programs ""can raise significant safety and soundness, legal, and accounting concerns.""

Potestivo & Associates, P.C., a legal services provider to the default servicing industry, has announced the promotion of supervising attorney, Michael J. Woods, to AVP and managing attorney of the firm's Rochester Hills, Michigan office. Woods has been with the firm since 2006 and supervises its foreclosure and loss mitigation processes.