Foreclosure

Treasury has launched a Web-based tool that allows homeowners themselves to conduct a net present value (NPV) assessment of their mortgage. Under the Home Affordable Modification Program (HAMP), servicers perform an NPV test to determine if modification is a more financially sound route to take than allowing the loan to proceed to foreclosure. Treasury is encouraging both homeowners who have been denied a HAMP mod and those considering applying for the program to use the new online calculator and share the results with their servicer.

Fannie Mae and Freddie Mac recently announced they will be issuing new guidelines this summer that will align their procedures for handling past due mortgages and implement a new incentive and penalty structure based on individual servicers' performance. Moody's Investors Service says this new directive - in particular the monetary motivation involved - will likely shift servicers' focus to loans backing the GSEs' mortgage bonds and away from loans in private-label residential mortgage-backed securities (RMBS).

First-time homebuyers - a segment that typically targets distressed homes - currently make up just one-third of the market, according to the research firm Campbell Surveys. While this is what would be considered their ""normal"" market share, the company says this is not enough demand to absorb the excess supply coming from defaulting homeowners and will likely make for a poor spring and summer buying season. Survey respondents in April reported that potential first-time buyers are having trouble finding foreclosed homes in move-in ready condition.

Residential mortgage foreclosure rates continue to fall in Texas, dropping to 1.89 percent during the first quarter of 2011 - well below the national average of 4.52 percent. The Lone Star State now has the sixth lowest foreclosure rate in the country. Mortgage bankers in the state say the numbers provide further evidence that Texas has one of the best lending landscapes in the country.

CitiMortgage and Los Angeles Neighborhood Housing Services will host a free homeowner outreach event for distressed homeowners in Torrance, California on Tuesday. Part of the Citi Road to Recovery Homeowner Assistance Series, the event is open to all homeowners needing help with their mortgage payments.

Fannie Mae's latest market outlook continues to call for a ""modest improvement"" in housing activity this year, although the prevalence of distressed properties on the market has led to renewed weakness in home prices and the industry's shadow inventory looms large. The GSE's chief economist notes that as the economic recovery approaches its two-year anniversary in June, housing has not yet contributed to economic growth in any meaningful way and is significantly underperforming compared to previous market recoveries.

Chase, the consumer banking and home lending business of JPMorgan Chase & Co., opened a new Homeownership Center in Milwaukee, Wisconsin on Friday. The facility provides Chase borrowers who are struggling to make their mortgage payments with resources to help them avoid foreclosure. Trained advisors are on hand to help distressed homeowners evaluate their finances, review possible workout options, and answer any questions.

The already clogged foreclosure system in Florida could come to a near standstill this summer after state legislators voted not to extend a special round of funding approved last year, which awarded $6 million to the state court system to increase personnel and resources for handling foreclosure actions. That line item didn't make it back into the budget for the new fiscal year, which begins in July. One judge in Palm Beach County has already started cancelling scheduled foreclosure hearings.

The U.S. Treasury released updated guidance for the Home Affordable Modification Program (HAMP) this week requiring certain servicers to provide borrowers with a single point-of-contact through the entire default resolution process. The new directive applies only to the largest servicers, however Treasury says all servicers participating in HAMP are encouraged to adopt the new guidance. The rule also carries over to the government's short sale and unemployment programs.

Foreclosure filings and foreclosure sales at auction in Colorado's metropolitan counties declined during April, according to a report by the Colorado Division of Housing. It was the fifth consecutive month where both filings and sales were down in the state when compared to the same month a year earlier. Foreclosure filings hit a 31-month low in March of this year but have risen slightly since.