The volume of defaulted real estate coming onto the market nationwide has reached unprecedented proportions, with more than 40 percent of homes for sale representing lender real-estate-owned properties.

Foreclosure filings fell six percent during the month of May, according to the U.S. Foreclosure Market Report released by RealtyTrac on Thursday. Despite the monthly decline, the nation’s foreclosure numbers are nearly 18 percent higher than they were in May 2008.

The Treasury Department announced new rules late Wednesday that limit executive compensation for lenders who have received bailout money from the government. Such restrictions have stirred controversy within the financial sector and are the primary reason many banks want to start repaying the taxpayer funding they received through the Troubled Asset Relief Program (TARP).

Cincinnati-based Convergys Corporation has announced the immediate availability of its new Convergys Loan Modification Solutions. The company says these solutions leverage live agent assistance; outbound communications via voice, email, or text; and analytics to encourage loan retention and help servicers respond to increasing consumer demand.

Pro-Teck Services, a real estate collateral valuation provider based in Waltham, Massachusetts, announced on Wednesday that Ronald Ahlensdorf Jr. has joined the company as senior director of business development.

Long-term mortgage interest rates have climbed to their highest levels since late last year, casting a dark cloud on any early signs of a housing recovery and stalling the recent wave of refinances many struggling homeowners employed to get out from under unsustainable mortgages.

NeighborWorks America has boosted funding for foreclosure prevention guidance through its National Foreclosure Mitigation Counseling Program, yet an alarming number of distressed homeowners who have been instructed by advisors to contact their mortgage servicer have had a hard time reaching them or received disappointing resolutions.

Reston, Virginia-based MERSCORP, Inc. (MERS) unveiled a new program on Tuesday that informs borrowers of ownership changes regarding their mortgage. The company says its program supports new federal legislation, which is designed to help homeowners keep their homes by bringing greater transparency and accountability to the mortgage lending process.

The Bank of Lincolnwood, Illinois, was closed last Friday by state regulators – yet another small community bank crushed under the weight of the nation’s economic crisis. So far this year, 37 financial institutions have been forced to shut their doors.

Stonegate Mortgage Corporation, headquartered in Fishers, Indiana, near Indianapolis, recently announced that it has added $175 million in home loans to its portfolio and more than 2,000 borrowers to its customer base through its acquisition of Swain Mortgage Company.