Foreclosure

RealtyTrac released a new report Thursday detailing foreclosure activity for the month of May. Filings dropped 2 percent from April and were down 33 percent from a year earlier. RealtyTrac attributed the decline to ongoing processing delays stemming from last fall's documentation issues. But the company says it's seeing hints of renewed activity, with spikes in various stages of the foreclosure process in some states. Georgia, for example, saw a 79 percent increase in new REOs last month.

Underwater borrowers have become a focus of numerous industry surveys and analyses, and a growing concern for market participants due to the potential of negative equity to trigger default. A recent study by CoreLogic delved deeper into the statistics to examine the distribution of negative equity by default status. Aggregate negative equity among mortgage borrowers was $750 billion as of the end of last year. CoreLogic says 8 percent of that total balance involved mortgages that were in foreclosure.

Indiana has enacted a new foreclosure law surrounding the state's pre-judgment mediation program, outlining changes related to borrower notification and loss mitigation documentation. Senate Bill 582 passed both chambers of the state Legislature by a near unanimous vote, with only one senator casting a nay, and was quickly signed into law by Gov. Mitch Daniels. The law becomes effective for all new residential foreclosure filings as of July 1.

Foreclosures are claiming a smaller share of the Phoenix sales market. The ratio has dropped for three straight months, according to a new report from Arizona State University's business school. In May, foreclosures represented about 35 percent of existing-home transactions in the Phoenix area, down from 43 percent earlier in the year. Still, the university's real estate professor says he's doubtful foreclosures will cease to be the dominant force in the market. More than 3,500 foreclosures occurred in the Phoenix metro last month.

A dozen U.S. senators are pooling their influence to persuade federal regulators to work with state attorneys general and other federal agencies to ""fix the broken foreclosure process,"" as the lawmakers put it. In a letter to the OCC, the senators stressed that the regulators' consent orders do not preclude states' efforts to hold servicers accountable for any wrongful foreclosures. In a separate move, lawmakers have tagged a servicing regulation bill on as an amendment to the larger economic development legislation making its way through Congress.

Third-party investors are reselling foreclosure properties they've scooped up at auction at a rapid pace in states along the country's Western seaboard. In fact, they're moving distressed homes faster than lenders, according to a local tracking firm. ForeclosureRadar says the resell timeframe for foreclosure investors has dropped throughout its five-state coverage area. The company says it's partially due to spring selling activity, but more to do with a lack of quality, affordable homes for sale as a result of foreclosure delays.

JPMorgan Chase has dismissed David Lowman, who ran the bank's mortgage operations. Lowman joined JPMorgan in 2006 from Citigroup as chief executive officer of the bank's Global Mortgage division. He was promoted just three months later to chief executive officer of Chase Home Lending, where he was responsible for home equity and default, as well as all of Chase's consumer real estate business. He came under fire soon after evidence surfaced of flawed foreclosure paperwork and illegal seizures of servicemembers' homes.

According to Sperlonga Data and Analytics, unpaid homeowners association (HOA) fees are a clear sign of potential mortgage default. Sperlonga has launched a new service, Loss Mitigation Association Surveillance (LMAS), which is designed to help mortgage servicers reduce risk after a loan modification by alerting lenders when a borrower is falling behind on HOA fees, which are historically difficult to track. With the new service, lenders can identify potential defaults or troubled modifications months before the borrower misses a mortgage payment.

CitiMortgage and the North Texas Housing Coalition, a non-profit organization dedicated to improving and increasing affordable, working class housing in North Texas, are hosting a free homeowner assistance event in Dallas for distressed homeowners Tuesday. Part of the Citi Road to Recovery Homeowner Assistance series, the event is open to all homeowners struggling to make mortgage payments.

Ruling in favor of Avelo Mortgage, an appellate court in California declared Mortgage Electronic Registration Systems, Inc. (MERS) a proper beneficiary on the deed of trust. Citing an earlier decision involving Countrywide, Judge David Milton ruled that MERS has the authority under California law to assign a deed of trust, and that borrower agreements make it clear MERS, as nominee of the lender, has the right to exercise any interest on the lender's behalf, including the right to foreclose and sell the property.