The Association of Mortgage Investors has sent letters to a handful of large banks expressing concerns on behalf of its members who hold residential mortgage-backed securities certificates. The mortgage investors called for enforcement of repurchases based on what they described as ""significant breaches"" of representations and warranties that have been discovered in the underwriting of loans, and voiced concerns that servicers are putting more effort into modifying their own loans than those of investors.

The National Association of Realtors said Thursday that pending home sales rose for the month of June, marking the third of the last four months its index has increased. Pending sales last month were up 2.4 percent from May and 19.8 percent from June 2010. The measurement is a forward-looking index based on contracts but not actual closings. Some economists are warning not to read too much into the latest numbers considering contract cancellations are on the rise.

Eighty-four percent of the country's largest metro areas experienced declines in foreclosure activity in the first half of the year, according to RealtyTrac's midyear metropolitan foreclosure report released Thursday. However, RealtyTrac attributes these declines not to an improving market, but to delays in local foreclosure processes. Even the top 10 metro areas with the highest foreclosure rates in the first half of the year showed a year-over-year decrease in foreclosure activity.

Trepp, LLC estimates decreases in all types of bank loan delinquencies in the second quarter of 2011. Delinquencies are expected to decline among residential mortgages, commercial mortgages, construction loans, and commercial and industrial loans, according to the research firm. Based on its research and analysis of earnings reports and call report filings from smaller banks, Trepp says the credit recovery that began in mid-2010 has resumed, after stalling in the first quarter.

The rise in foreclosures in recent years may lead to long-term vacancies, further exacerbating housing prices and the market as a whole, according to Stephan Whitaker, a Cleveland Federal Reserve Bank researcher. In a recent study, Whitaker determined a strong correlation between foreclosures and vacancy rates, suggesting foreclosure may permanently scar some homes. He found that foreclosed homes still have higher vacancy rates than neighboring houses two to five years after a sheriff's sale.

Ocwen Financial Corporation has enacted a unique loan modification program designed to help underwater homeowners and investors without rewarding loan delinquency. The company's Shared Appreciation Modification (SAM) reduces a delinquent borrower's principal to 95 percent of the home's current market value but requires the homeowner to later share 25 percent of the home's appreciation with the investor when the home is eventually sold or refinanced.

Freddie Mac announced its new Servicing Success Program Monday. The program features two major components - the Servicer Success Scorecard and the Servicer Success File Reviews - both designed to further the GSE's efforts to track and recognize ""servicing excellence."" The scorecard delineates new expectations based on investor reporting and remitting default management. The second piece of the program, the file reviews, will identify potential challenges with servicers' loss-mitigation actions.

Several state attorneys general are voicing objections to the proposed settlement with the nation's top mortgage servicers. Connecticut AG George Jepsen has requested meetings with four of the largest lenders to discuss their mortgage servicing practices, raising concerns about complaints consumers have made to his office and state officials. Several other state counsels have also launched their own investigations and worry that an overarching liability release could prove problematic for their cases.

Less than half of homeowners - 49 percent - currently believe their home is worth more than the amount they still owe on their mortgage. July marks the second month in a row but only the third time since late 2008 that the Rasmussen Reports rate has fallen below 50 percent. High-income homeowners were more confident in their home values that low-income homeowners, and investors were more confident than owner-occupants. One-third of homeowners believe they are underwater with their mortgage, and 18 percent of respondents weren't sure.

Treasury is currently reviewing a proposal to aid distressed homeowners by allowing a short sale of mortgage notes from mortgage-backed securities (MBS) trusts to new investors. The proposal was put forth by American Home Mortgage Servicing. The company says this strategy could be key to unlocking principal reduction modifications, which could save hundreds of thousands of homes from foreclosure and reduce losses for both investors and underwater borrowers.