Foreclosure

Delaware Attorney General Beau Biden filed suit Thursday against MERSCORP and its subsidiary, Mortgage Electronic Registration Systems (MERS). Biden charges the company with violating Delaware's Deceptive Trade Practices Act. He alleges MERS violated the act in three major ways: by maintaining inaccurate information and withholding information from borrowers; by filing foreclosures without the authority to do so; and by not enforcing its own rules. MERS says there is ""no merit"" to Biden's accusations.

The economic environment of the last several years has added to the ranks of first-time defaulters. According to a survey conducted earlier this year by Deloitte, 11 percent of bank customers fall into this category, meaning they have experienced their first default or serious delinquency because of the recent financial crisis and recession. Deloitte contends that servicing and default management strategies should be tailored to match these customers' needs to capture what will likely be a profitable segment over time.

Special servicers resolved $63.5 billion in distressed commercial mortgage-backed securities (CMBS) loans in the 18 months from January 2010 to June 2011, according to Fitch Ratings. This amount is more than three-fourths the amount resolved between 2007 and 2009. Modification is the most common resolution strategy for larger balance loans. Fitch reports that the recovery rate for CMBS loans resolved by special servicers has remained at or better than 86 percent since 2007.

Refinance applications and appraisal complications are holding up home sale closings, according to a HousingPulse survey released Monday. The report states that the normal timeline for a closing is about 30 days. That timeline has been extended to between 45 and 60 days. However, the delay is even more exacerbated among short sales and sales of foreclosed homes - which according to the survey made up 44.4 percent of the market in September.

Gerner & Kearns, Co., L.P.A. has announced the appointment of Susan B. Klineman, Esq. as a senior associate in the firm's default services practice group. Klineman will also serve as managing attorney over the firm's newly opened office in Indianapolis, Indiana. Klineman has an extensive history in the practice of creditor's rights law. She received her J.D. from the Indiana University School of Law in 1993 and is admitted to practice law in the states of Indiana and Ohio.

HUD has approved a program aimed at putting foreclosed homes back into the hands of owner-occupant buyers. In select states, from now into October of next year, buyers need a down payment of only $100 to purchase a HUD-owned REO home. The buyer must be an owner-occupant, utilizing financing insured by the Federal Housing Administration (FHA). Contacts in the field say one of the most exciting features of this incentive program is that it can also be applied to an FHA 203k loan, which can be used to fund repairs and renovations on the home.

Having fallen to its lowest level in three years, California's rate of foreclosure filings rose up to come back in line with recent rates, according to the latest information from DataQuick. Filings increased by nearly 26 percent between the second and third quarters. At the same time, the share of properties purchased at foreclosure auctions by investors or other non-lender, non-government entities is growing. Homes that foreclosed in the third quarter took about 9.9 months from the notice of default to the final foreclosure.

How many homeowners in the United States are behind on their mortgage payments? It's 6,373,000, according to Lender Processing Services (LPS). The number is staggering, but it's actually on the decline, down from 6,397,000 as of the end of August, and 6,538,000 at the end of July. LPS has released a few high-level numbers from its mortgage performance report due out later this month, and there's evidence that servicers are pushing loans that have been languishing in non-payment status through the pipeline at a faster pace.

Foreigners may get an added bonus when they invest in residential real estate in the United States - a visa. Senators from New York and Utah are proposing a bill that would offer residence visas to foreigners when they spend at least $500,000 in the U.S. residential real estate market. Investors may split their spending between two or more properties, as long as they spend at least $250,000 on one home and $500,000 or more total. Economists say low prices resulting from high levels of foreclosures in some states have served to entice foreign buyers.

Sales of previously owned homes slipped 3 percent between August and September, according to data released by the National Association of Realtors (NAR) Thursday. That follows a jump of nearly 19 percent between July and August. The decline was widely expected as sales activity follows the typical seasonal cycle and heads lower with the mercury in the thermometer. Distressed homes accounted for 30 percent of sales in September. Eighteen percent were foreclosed homes and 12 percent were pre-foreclosure short sales.