Foreclosure

The National Association of Real Estate Brokers (NAREB) has reached an agreement with Agent Alarm LLC, a national security company, that aims to address and curb the recent wave of attacks and acts of violence against real estate professionals in America. One of the most serious attacks in 2011 resulted in the death of Vivian Martin, a local real estate agent living and working in Youngstown, Ohio. Martin was beaten to death by three men in an abandoned home who were posing as potential buyers looking to purchase a home she had listed.

Katherine Porter, a professor at the University of California, Irvine School of Law was appointed as the California monitor to ensure compliance from the five largest servicers - Bank of America, JPMorgan, Wells Fargo, Citigroup, and Ally Financial - as stated in the $25 billion settlement, announced Attorney General Kamala D. Harris. Upon federal court approval of the settlement, Porter will verify if the lenders are meeting their obligations to California homeowners.

Home sales in California showed signs of improvement for February compared to the previous month of January and year before in February 2011, according to data from the California Association of Realtors (C.A.R.). For February, sales were up 2.1 percent from January's revised 517,120 and up 5.5 percent from the revised 500,480 sales pace recorded a year ago. While the state followed the national trend of declining home prices, C.A.R. reported other signs are pointing towards stabilization.

Details of the $25 billion settlement involving state and federal officials and the five largest servicers will change how liens are prioritized, and in turn, opponents say, will benefit banks but hurt investors. Typically, in cases involving delinquent loans, the second liens are written off before a first lien takes any losses. Under the settlement, first and second liens will share in the losses equally, with both getting written down proportionally instead of wiping out the second lien, which tends to yield a higher return since it includes a higher risk.

Appraisers, lenders, and investors appear to be routinely overestimating the values of homes prior to foreclosure, especially in the weakest housing markets, according to two economists with the Federal Reserve Bank of Cleveland. Their report suggests that more accurate pricing could speed the clearing of REO inventories, save lenders money by reducing the carrying costs associated with bank-owned homes, and bring greater stability to housing markets across the country.

The FHFA's decision to not allow for principal reductions on Fannie Mae and Freddie Mac loans came under sharp criticism during a Senate subcommittee hearing Thursday. John DiIorio, CEO of 1st Alliance Lending, a mortgage origination firm, argued in support of principal reduction, even when analyzing the benefits from a bottom-line perspective, not simply as a form of aid. Laurie Goodman, senior managing director of Amherst Securities, said there were a number of flaws in an FHFA study used to defend the decision to not apply principal forgiveness, and discussed three major criticisms and ""technical flaws.""

While foreclosure inventory showed a year-over-year decline for January 2012, REO inventory held by servicers grew faster in January than the pace at which REO properties sold, according to CoreLogic's National Foreclosure Report for January 2012. The distressed clearing ratio, which calculates the rate at which REO properties are sold, was 0.69 for January 2012, down from 0.80 in December 2011. A higher ratio indicates a faster pace of REO sales relative to the pace of completed foreclosures. On a year-over-year basis, the number of foreclosures actually dropped, going from 80,000 in January 2011 to 69,000 in January 2012, according to CoreLogic's National Foreclosure Report.

First time claims for unemployment insurance fell 14,000 in the week ended March 9, the Labor Department reported Thursday, the first drop in four weeks. Continuing claims, reported on a one-week lag, also fell, dropping 81,000 to 3,343,000, after two straight weekly increases. The four week moving average for initial claims was flat at 355,750, unchanged from the previous week, while the four week average for continuing claims declined 25,250 to 3,394.250.

Depending on whether the data was based on a judicial or non-judicial state, foreclosure activity told differing stories in RealtyTrac's Foreclosure Market Report released today for February 2012. When clumping states together based on foreclosure processes, February foreclosure activity in the 26 judicial states increased 24 percent from February 2011 and 2 percent from the previous month of January. For the 24 non-judicial states, the numbers moved in near opposite directions, with foreclosure activity decreased to 23 percent from February 2011 and down 5 percent from January, according to a RealtyTrac release.

Oklahoma residents seeking restitution under the state's mortgage settlement with the nation's largest mortgage servicers must apply for benefits by September 13, 2012. The agreement between Attorney General Scott Pruitt and Bank of America, Citigroup, Ally's GMAC, JPMorgan Chase, and Wells Fargo gives the state $18.6 million, all of which will be used to compensate residents wronged in the foreclosure process. Under the nationwide settlement, Oklahoma would have received an estimated $10.2 million, and most of it would have been ""paid"" in the form of credits for loss mitigation activities fulfilled by the servicers.