Foreclosure

In an effort to create a program to empower minority and women-owned business enterprises (MWBEs), Citi and the Foundation for Small Business Development joined Karen G. Mills, Administrator of the U.S. Small Business Association, to launch the Partnership for Small Business Development.

New York Attorney General Eric T. Schneiderman announced a $4 million settlement with a New York foreclosure law firm due to abuses in its foreclosure-related legal work. Founder of the firm Steven J. Baum, managing partner Brian Kumiega, Pillar Processing are required to pay $4 million to the state of New York. Baum and Kumiega are also barred from handling new foreclosure-related cases for two years. Before shutting most its operations on or about December 31, 2011, the firm was largest foreclosure defense firm in New York, and represented large mortgage servicers including Wells Fargo, JPMorgan Chase, Bank of America, HSBC, and Citibank.

The current rate at which mortgage borrowers are falling into serious delinquency closely matches the rate of distressed sales - short sales and REO sales - according to CoreLogic's latest report released Wednesday. While distressed sales are keeping the shadow inventory from growing, the quantity on record is not yet decreasing. In fact, today's shadow inventory mirrors that recorded in January 2009, though there have been 3 million distressed sales since that date.

An alarming number of homeowners see strategic default as a viable option should their home continue to depreciate. Almost half - 47 percent - of homeowners participating in an online poll from Housing Predictor say they will walk away from their mortgage if falling home values persist. The number of borrowers open to strategic default has risen sharply since the company last surveyed public opinion on the issue. In October 2010, 36 percent of homeowners polled said they would throw in the towel should housing prices continue to drop.

The number of delinquent mortgages continued declining into February based on comparisons for both the prior month and year, according to data from Lender Processing Services (LPS). The delinquency rate, which consists of loans at least 30 or more days past due but not in foreclosure, dropped 5 percent on a month-over-month basis, and 14 percent compared to the same time last year in February. Overall, 5,846,000 properties were either 30 or more days delinquent or in foreclosure in February.

Existing-home sales fell in February from an upwardly revised January sales pace, the National Association of Realtors (NAR) reported Wednesday. February sales - completed transactions - were down 0.9 percent from January to a seasonally adjusted annual rate of 4.59 million. January's total was revised up to 4.63 million from 4.57 million. The February 2012 sales pace was up 8.8 percent from February 2011. The median price of an existing home in February was $156,600, up 0.1 percent from the previous month and up 0.3 percent from February 2011. The month-over-month price increase was the first since last June.

NeighborWorks America announced $73.8 million in awards for foreclosure counseling efforts this week, which followed HUD's recent revelation of $42 million to support housing counselors. This latest round of funding will go to 32 state agencies, 18 HUD-approved intermediaries, and 86 community-based NeighborWorks organizations to provide counseling to those facing foreclosure. About 190,000 homeowners are expected to receive help. NeighborWorks also expects to train more than 2,000 counselors with what is now the sixth round of its program funding.

In response to the need for in-depth portfolio analysis, DataQuick announced the introduction of PortfolioQ in a company release. The hosted solution provides equity lenders with an in-depth analysis of outstanding liens against the property to accurately calculate current equity position and related risk.

State and local governments across the nation responded to the foreclosure crisis by introducing a wave of new laws aimed at protecting homeowners. Unfortunately, according to Alfred M. Pollard, general counsel for the Federal Housing Finance Agency (FHFA), some of these laws are hurting more than helping as the housing market struggles toward recovery. Pollard, speaking before a House of Representatives committee this week, cited estimates that state governments have introduced 550 bills related to mortgage servicing since 2009.

Since the September 2008 conservatorship, Fannie Mae and Freddie Mac have completed nearly 1.1 million permanent loan modifications, according to the FHFA's latest foreclosure prevention report. Data from the Office of the Comptroller of the Currency show that in the two years ending in the third quarter of 2011, modifications on Fannie Mae and Freddie Mac loans accounted for 40 percent of all loan modifications. Overall, the GSEs have completed more than 2.1 million foreclosure prevention actions since being taken over by the federal government.