REO

Tight credit conditions for first-time buyers and a foreclosure pipeline full of homes bought with subprime loans mean that house prices at the low end of the market will continue to fall at a faster rate than prices at the middle and high end, according to Capital Economics. The bulk of these low-end homes consists of distressed properties, which already carry steep discounts as lenders and investors try to capture a piece of the limited demand out there to get these homes off their books and back into the hands of responsible homeowners.

In May, field services company JMA Services assembled a golf charity event with the Troops First Foundation (T1F), securing guaranteed houses for combat-wounded veterans returning from theatres of war in Iraq and Afghanistan. Nearly 70 lenders, servicers, and GSE representatives attended the charity event in McKinney, Texas. Proceeds from the event benefited T1F's Operation Front Door, a program in partnership with JMA Services that provides matching funds to disabled veterans relying on federal programs to make home purchases.

Michigan's Oakland and Ingram Counties have filed lawsuits against Fannie Mae and Freddie Mac, alleging the GSEs avoided paying the state property-transfer tax on thousands of REO homes by claiming false exemptions. Oakland County says there are hundreds, perhaps thousands, of deeds recorded by Fannie and Freddie where they claimed exemptions. Officials maintain the exemptions cost Oakland County at least $250,000 per year.

Bendett & McHugh, P.C. recently announced that it has promoted Renee Bishop to the position of attorney manager and department head of the firm's real estate, REO, and eviction departments. Bishop has performed management responsibilities in these areas at the firm for a number of years now. She has been with Bendett & McHugh for nine years and has almost 15 years of real estate and eviction experience.

Woodward Asset Capital recently announced improvements to its OfferSubmission and VerifiedShortSale products, which were developed to speed transaction times, prevent fraud, and ensure loss recovery for asset owners. Updates include rules-based offer routing and decisioning, enabling the loan servicer, senior management, outside third-party investors, and mortgage insurers to weigh-in on sale negotiations between the asset manager and buyer's agent in real time, shaving days off the sales cycle.

Backlogged foreclosures, severe oversupply, and negative equity are pulling home prices down further, according to Radar Logic. The company tracks 25 major metropolitan areas across the country. Its latest index recorded a decline in the composite reading of 5.1 percent in April when compared to April 2010. The monthly sales rate remained more than 9 percent below April 2010. While sales of non-foreclosed homes increased more quickly than sales of foreclosed homes, RadarLogic says foreclosures are selling at an average discount of 39 percent.

After the headline news that home prices double-dipped, forecasters are predicting a 2011 turning point for the U.S. housing market, according to the investment and risk management firm MacroMarkets. The company polled 108 economists and real estate experts this month to gauge their predictions. Nearly two-thirds believe the bottom for home prices arrived in the first quarter or will arrive sometime before year-end. The consensus, though, is that we should not be expecting a rebound in home values, but rather a level of price stability.

Twenty-eight percent of homebuyers in California who signed their name on the dotted line last month are buying REO properties. At the same time, short sale deals made up some 19 percent of the state's pending home sales in May. These are the latest figures released by the California Association of Realtors. While the state's 48 percent distressed market share is significant by all accounts, some areas of California are nearly fully saturated in distressed sales. In Madera County, REOs and short sales claimed 90 percent of all pending sales last month.

Asset management and loss mitigation provider Green River Capital is expanding its REO services to the commercial mortgage industry. The new services include the disposition of assets, property maintenance, lease verification, and property valuation. Focusing its commercial REO efforts on small balance properties, the firm will also handle evictions and repairs and offer full title services.

Federal Reserve Chairman Ben Bernanke says its all the distress in the housing sector that's pulling home prices and consumer confidence down and keeping buyers away from the market, despite the fact that the Fed's bond-buying program has succeeded in keeping interest rates low and housing affordable. Bernanke says he'd like to see more efforts to modify loans, but when that's not appropriate, the industry needs to speed up the process of foreclosure and disposition to clear the market.