Foreclosure

New York Attorney General Eric Schneiderman secured $25 million from three of the nation's top servicing shops after filing a lawsuit early last month regarding foreclosures he says were improperly processed through Mortgage Electronic Registration System (MERS). Bank of America, JPMorgan Chase, and Wells Fargo will each pay the state of New York $5.9 million, according to settlement documents obtained by Reuters. MERS itself has faced a number of lawsuits regarding its participation in the foreclosure process, and results have been mixed from state to state.

While homes prices continue to be on the decline, rent prices are actually on the rise and showed a 3 percent increase from January 2011 to January 2012, as opposed to home values, which dropped 4.6 percent during that same period, according to the January Zillow Real Estate Market Reports. Zillow data also showed year-over-year gains for 69.2 percent of metropolitan areas covered by the index while only 7.3 percent of metros saw increases in home values. Based on the Zillow Rent Index, the states with the greatest increases in median rent over a year were New Jersey (+16.5), New York (+13.7), Kansas (+10.2), Indiana (+10), and Michigan (+10.0).

For West coast states, the foreclosure wave is reported to be dying down as third parties, who are typically investors, snatch up foreclosed homes, according to the February 2012 Foreclosure RadarReport. While third party sales were down month-over-month, as a percentage of all sales, third parties purchased 37.6 percent of foreclosures. Compared to the year before, foreclosure sales to third parties increased 84.62 percent in Oregon, 61.33 percent in Nevada, 39.72 percent in California, 23.31 percent in Arizona, and 7.35 percent for Washington.

With Hispanics as the largest minority group in the U.S., mortgage industry professionals should also expect Latinos to be key players when it comes to America's home buying future, according to the 2011 State of Hispanic Homeownership report released by the National Association of Hispanic Real Estate Professionals. According to the report, 34 percent of Hispanics said they are likely to buy a home in the next three years, compared to 24 percent of all Americans.

The Association of Mortgage Investors (AMI) says the $25 billion settlement signed by the five largest servicers is expected to draw billions of dollars from uninvolved investors, which include seniors and unions. While HUD acknowledges the settlement could affect some investor-owned loans, the agency stated that when considering the projected losses from foreclosures on investors, applying loan modifications, including principal reductions, will actually cost less. AMI, on the other hand, fears the cost of improperly applied modifications will lead to re-defaults.

Some Bank of America borrowers may be in for principal reductions in amounts exceeding $100,000, according to the latest developments in the settlement the bank and four other large servicers made with state and federal regulators. While the other four servicers in the national settlement are being required to diminish principal so underwater borrowers have loan-to-value ratios of 120 percent or less, BofA will be reducing principal for about 200,000 homeowners to fall in line with current market values.

The $25 billion mortgage servicing settlement agreement was filed in federal court Monday, according to an announcement from the Justice Department, HUD, and 49 state attorneys general. The court documents provide details of the servicers' financial obligations under the agreement, which include payments to foreclosed borrowers, more than $20 billion in consumer relief, and new servicing standards that will change foreclosure practices and policies for foreclosure prevention.

Increasing struggles for office properties, most notably in Atlanta, overshadowed what was otherwise a flat February for delinquencies among loans held in commercial mortgage-backed securities (CMBS), according to the latest index results from Fitch Ratings. By the agency's assessment, CMBS late-pays fell two basis points last month to 8.30 percent. The decline was led by a large hotel loan - Innkeepers - that was brought current. Fitch's delinquency index includes 2,536 loans totaling $32.6 billion.

Freddie Mac reported a gain in the fourth quarter and less losses overall for the year 2011 compared to the previous year, according to the GSE's fourth quarter and year 2011 report released today. Freddie Mac reported a net income of $619 million for the 2011 fourth quarter. During the third quarter ending September 30, 2011, a net loss of $4.4 billion was reported. Freddie Mac will request $146 million from the U.S. Treasury for the company's fourth quarter net worth deficit.

A multiple listing service (MLS) based in Palm Beach Gardens, Florida is requiring real estate agents to disclose if a property they are listing is bank-owned. The requirement was reported on Inman News March 7, following another story published March 4 on Palm Beach Post that revealed some banks are not wanting agents to tell if a property is indeed bank-owned.