Foreclosure

New York City Comptroller John C. Liu has called on the directors at Bank of America, Wells Fargo, JP Morgan Chase and Citigroup to conduct an independent audit of their mortgage and foreclosure practices. Liu, who is a trustee of the New York City Pension Funds called upon the banks to perform the audit on behalf of the group.

Fewer than 500,000 homeowners have received permanent assistance through the Home Affordable Modification Program (HAMP) and are still current on their new payments. During the month of October, only 23,750 permanent modifications were granted. Many have called HAMP's results disappointing, but administration officials assert that the full spectrum of housing policies have helped bring stability to a very challenging housing market.

The nation's mortgage delinquency rate declined in the third quarter as the job market showed signs of marginal improvements, the Mortgage Bankers Association (MBA) said Thursday. But lenders are still dealing with a massive backlog of defaults, and they stepped up initiations of foreclosure proceedings during the quarter. Even with an increase in foreclosure starts, MBA says the ratio of home loans in the foreclosure process declined, signaling servicers are pushing unpaid mortgages through the pipeline at a faster pace.

There are 7,043,000 mortgages in the United States that are at least 30 days past due or in the process of foreclosure, according to Lender Processing Services (LPS). The company provided a sneak peek at its October month-end mortgage performance data this week. The numbers show the delinquency rate was virtually unchanged from the previous month's reading, but foreclosures are on the rise. LPS says nearly four percent of the nation's home loans have been referred to an attorney for foreclosure.

The industry's robo-signing problems were the focus on Capitol Hill Tuesday. Executives from major banks, including BofA and Chase, were on hand at a Senate Banking Committee hearing to defend the validity of their foreclosure actions and detail changes that have been made to ensure the integrity of the process. But lawmakers were hardnosed and unforgiving in their accusations. And the hearing was not without incident. Testimony was interrupted by the CEO of a nonprofit advocacy group yelling for distressed borrowers to get their say.

More than half of the estimated 310,000 homeowner and condominium associations in the U.S. are struggling with financial issues stemming from the nation's foreclosure crisis, according to the Community Associations Institute. Because they are unable to collect fees from empty homes to fund services such as utilities and maintenance, vacancy rates can have a significant impact on homeowner associations. To stay afloat, they are borrowing, postponing improvement projects, levying special assessments, and restricting services.

Fannie Mae has issued a notice instructing servicers that have cases at the Law Offices of David J. Stern, P.A. to take immediate action to transfer those matters to other firms in the Fannie Mae Retained Attorney Network in Florida. By November 15, servicers must determine transfer locations for the Fannie Mae matters currently at the Stern firm, notify the new firms, and inform the GSE of the destination for the cases in question.

Foreclosure filings were reported on 332,172 properties during the month of October, according to data released by RealtyTrac Thursday. That tally represents a 4 percent decrease from the previous month. RealtyTrac says the numbers probably would have been higher except for the fallout from the recent robo-signing controversy, which may result in further declines in November. Lenders seized 9 percent fewer homes last month than they did in September, before foreclosures were frozen in certain states.

During the third quarter, 2.7 percent of current mortgage balances transitioned into delinquency, according to the New York Federal Reserve. That's up from 2.6 percent that became newly delinquent in the second quarter. Fed officials called the increase ""slight"" but noted that the rise follows a full year of declines in new delinquencies. According to the federal bank's report, about 457,000 individuals received home foreclosure notices on their credit reports between July 1 and September 30, 2010.

Mortgage Electronic Registration Systems, Inc. (MERS) has released a statement responding to the accusation by Robert G. Marshall that the company violates a state law because it doesn't pay a fee when a loan changes hands. Marshall requested that Virginia attorney general Ken Cuccinelli launch an investigation on the Reston, Virginia based MERS.