Foreclosure

The number of consumers rolling their delinquency status on mortgage payments from 30 to 60 days past due and 60 to 90 days past due peaked in July 2009, according to a new study from TransUnion. It's interesting to note that the National Bureau of Economic Research has declared the end of the nation's latest recession to be June 2009, one month before the roll-rate crest. TransUnion says although we may have left the worst of the recession behind, from a credit perspective we were just hitting the toughest period for consumer default.

Freddie Mac announced Tuesday that it has terminated its relationship with the law offices of David J. Stern, P.A. in Plantation, Florida. Fannie Mae, too, says it has suspended business with the so-called Florida foreclosure mill. The Stern law firm is one of the largest in the state, processing thousands of cases a month, and had been retained by both Fannie and Freddie as a preferred legal counsel for its servicers to go to handle pending foreclosures and home repossessions.

Fitch Ratings puts the industry's shadow inventory - meaning loans that are seriously delinquent, in foreclosure, or REO - at 7 million homes. The agency says based on recent liquidation trends, it will take more than 40 months to clear this distressed inventory. While the volume of newly delinquent mortgages has begun to improve, liquidation rates have been constrained by weak demand and initiatives to modify loans. On top of that, Fitch says the recent discovery of defects in the foreclosure process is prolonging the housing correction.

The percentage of home loans 90 or more days past due held by the nation's two largest mortgage companies has declined yet again. Both Fannie Mae and Freddie Mac have reported a steady drop in their single-family delinquency rates since February of this year. According to the latest figures from Fannie, its serious delinquency rate fell to 4.70 percent in August. Freddie's dropped to 3.80 percent at the end of September. Movement in the two GSEs' multifamily delinquency rates was mixed.

Mortgage servicers have completed 1.4 million permanent loan modifications so far this year, according to the latest estimates from HOPE NOW. Servicers have been granting permanent loan modifications through proprietary and HAMP programs at a steady pace of about 150,000 per month. But consumer advocates and federal watchdogs say their efforts are unfortunately overshadowed by the sheer volume of delinquencies. HOPE NOW says there are still over three million homeowners at least two months behind on their mortgage payments.

National Creditors Connection, Inc., a provider of field contact, loss mitigation, and onsite inspection services, has developed a nationwide property inspection/occupancy verification service to provide servicers with a snapshot of property condition and occupancy of a loan in foreclosure. The company says this service accommodates industry standard requirements set forth by the GSEs and will help servicers determine the best resolution for troubled loans.

Title insurers are voicing their confidence in mortgage servicers' ability to correct foreclosure paperwork problems. They've decided not to require banks to consent to agreements vouching for the validity of foreclosures, after talks between the two groups reportedly fell through surrounding large-scale indemnity arrangements. A blanket indemnity agreement to cover insurers against ""robo-signed"" foreclosures had been drafted, but title insurers say banks' actions to remediate deficiencies make it unnecessary.

According to the Center for Responsible Lending, since the housing crisis took hold, 2.5 million homeowners have already lost their homes and another 5.7 million are at risk of foreclosure. It's projected that between 10 and 13 million foreclosures will have occurred by the time this crisis abates. The Center argues that the power to stop unnecessary foreclosures and stabilize local housing markets lies with state legislatures. The group says lawmakers should impose mandatory loss mitigation standards for all servicers prior to foreclosure.

Stewart Lender Services (SLS), a subsidiary of Stewart Title Company, opened a new National Processing Center in Coppell, Texas. Coppell is a city within the Dallas area. The center, which is equipped to staff around 110 people, will offer centralized mortgage loan origination and loss mitigation services, including short sales, for its customers.

Lenders cannot proceed with foreclosure sales in the District of Columbia unless the security, or ownership, interest of the lien holder has been properly recorded in public filings, according to Washington, D.C.'s attorney general. Under District law, each deed or other document transferring a mortgage interest must be filed with the Recorder of Deeds within 30 days of execution, and Attorney General Peter Nickles stressed that this requirement is not satisfied by private tracking through the Mortgage Electronic Registration Systems(MERS).