Government

Real estate debt and delinquencies are on a continuing decline, according to the Federal Reserve Bank of New York’s latest Quarterly Report on Household Debt and Credit. Mortgage and home equity lines of credit (HELOC) balances fell at a combined $146 billion, with $134 billion from mortgages and $12 billion from HELOC, which are, respectively, 11 percent and 11.

The American Guild of Appraisers (AGA) petitioned the Fed and the Consumer Financial Protection Bureau to overturn a regulation that allows appraisers to be paid a fraction of what can be defined as a customary and reasonable fee, a release from the AGA stated. In 2010, Dodd-Frank rules were enacted to establish certain requirements for appraisals, including one to “ensure that creditors and their agents pay customary and reasonable fees to appraisers,” according to the Dodd-Frank website. But last year, the Fed introduced a new law that the AGA views as undermining the original Dodd-Frank requirement.

Two more banks went under over the weekend, and one of those banks did not find another financial institution to take over. Home Savings of America in Little Falls, Minnesota was left in the hands of the Federal Deposit Insurance Corporation (FDIC) after not finding another bank to purchase its assets.

After more than a year of intense negotiations, 49 state attorneys general and the nation’s five largest mortgage servicers reached a $25 billion settlement on February 9. While the agreement allotted specific amounts to go towards certain areas of relief, many are wondering how the settlement will affect those represented. Moody's Analytics has released a report offering up an analysis of the settlement's expected impact on both banks and borrowers.

The Federal Housing Finance Agency’s (FHFA) released a report showing U.S. home prices fell slightly in the fourth quarter of 2011, but overall, 12 states plus the District of Columbia saw prices increase, according to the seasonally adjusted purchase-only house price index (HPI). The HPI was 0.1 percent lower in the fourth quarter than the previous quarter. The HPI is calculated using home sales price information from Fannie Mae and Freddie Mac mortgages. Seasonally adjusted prices also fell 2.4 percent compared to a year ago starting with the 2010 fourth quarter.

Freddie Mac sees cautious signs of improvement in the housing market and overall economy and expects more warmth in 2013, according to its latest monthly outlook. ""The US economy continues to build on the momentum from the end of last year,"" said Freddie Mac VP and chief economist, Frank Nothaft. Positive signs Freddie cites include job gains, declining unemployment, and high affordability.

With more than 100,000 vacant properties in the state, Ohio Attorney General Mike DeWine designated part of Ohio’s $335 million from the national settlement with the nation’s largest servicers for property demolition. However, not everyone agrees with the decision. ""We would have much rather spent that money helping families and creating homes rather than knocking houses down that we believe are owned by some very well-resourced banks,"" said Chris Warren, Cleveland's chief of regional development, according to the Huffington Post.

Treasury is heading to the coastal cities of Miami and Tampa, Florida, this week in order to offer assistance to homeowners struggling with their mortgage payments. Treasury will host a ""Help for Homeowners"" outreach event in each of the hard-hit Florida cities where homeowners can meet one-on-one with their servicers. Before the homeowners arrive, though, Treasury has blocked off time for real estate professionals to meet with the servicers on behalf of their clients and to participate in short sale workshops led by the servicers themselves.

A recently released Supplemental Directive from Treasury increases incentives for second lien investors when loans receive principal reductions. The increased incentives apply to permanent HAMP modifications with principal reductions through the government's Principal Reduction Alternative (PRA) that have trial period plans starting March 1 or later. Increased incentives are also available when second liens are completely or partially eliminated through the Second Lien Modification Program (2MP) on loans modified starting June 1.

To avoid losing homes to foreclosure due to long response times for short sale transactions, three senators introduced legislation to speed up the short sale process. Senators Lisa Murkowski (R-Alaska), Scott Brown (R-Massachusetts), and Sherrod Brown (D-Ohio) proposed the bill addressing the issue of short sales time lines on February 17. The legislation, also known as the Prompt Notification of Short Sales Act, will require a written response from a bank no later than 75 days after receipt of the written request from the buyer.