Foreclosure

House Speaker Nancy Pelosi and fellow members of the California Democratic Congressional Delegation are petitioning federal regulators and the U.S. Department of Justice to launch a formal investigation into servicers' foreclosure practices. The request was prompted by the recent reports of systemic mishandling of foreclosure affidavits by three major mortgage servicers. Delegation members say they have received thousands of complaints from their constituents, which ""appear to outline a clear pattern of misconduct on the part of lenders and servicers.""

Homebuilder Lennar Corporation has acquired around $740 million in loans and distressed real estate from three large financial institutions. The combined portfolio includes both residential and commercial properties and consists of approximately 397 loans and 306 properties.

Questions about the legality of foreclosure proceedings have prompted Old Republic National Title Insurance to decide it will no longer insure titles to homes foreclosed by JPMorgan Chase and GMAC Mortgage. Chase and GMAC both halted foreclosure sales in 23 states and are reviewing legal filings that they say may have been signed without a notary's presence or without verifying the supporting documents.

There was something for everyone in September when looking at the delinquency rate for loans held in commercial mortgage-backed securities (CMBS), according to the research firm Trepp LLC. For commercial real estate bears, the fact that the rate once again set a record at 9.05 percent is a sign that the real estate crisis is not yet over in the commercial sector. The bulls, however, can point to the fact that the September increase in the delinquency rate is the second smallest for 2010.

Three major mortgage lenders have halted foreclosures in states where the process is handled through the court system after suspicions surfaced that employees did not follow legal procedures in preparing the required documentation. These paperwork problems are widely expected to draw out the already devastating foreclosure crisis in the affected areas. We've dug a little deeper to provide a list of the states where judicial foreclosures are the standard and that are most likely impacted by the foreclosure suspensions announced.

The latest in a string of government extensions is an extension to Fannie Mae's Alternative Modification (Alt Mod) to the Home Affordable Modification Program (HAMP). The extension is being provided so servicers will have enough time to complete the processing of modifications for borrowers who meet the eligibility requirements for the Alt Mod program, which remain the same.

If governmental policy on foreclosure prevention does not change, 11.5 million borrowers are in danger of losing their homes, according to the analysts at Amherst Securities. That staggering figure equates to one out of every five borrowers - an astronomical 20 percent default rate. So how can the administration fix deficiencies in its loan modification program? Amherst analysts say the answer lies in cutting borrowers' principal balances and boosting housing demand, including opening up financing channels for investors.

Marshall & Ilsley Corporation (M&I), a financial services institution based in Milwaukee, Wisconsin, has extended its foreclosure moratorium through December 31, 2010. The initial moratorium, which applies to owner-occupied residential loans in all M&I markets for customers who agree to reach a successful repayment agreement, was announced December 18, 2008, as part of the company's Homeowner Assistance Program.

The Wayne County Treasurer in Michigan concluded its September online auction of tax-foreclosed properties by generating more than $4.1 million in tax revenue for the county, an increase of more than 600 percent from last year's live, on site auction. The treasurer tapped Bid4Assets.com to conduct its first online auction due to the record number of tax foreclosed properties available.

Wells Fargo will no longer delay foreclosure proceedings in hopes that a short sale deal will come through. At the requests of its mortgage investors, including Fannie Mae and Freddie Mac, the bank has stopped granting extensions for distressed homeowners to complete short sales. Going forward, borrowers must close on short sales by the date quoted in their approval letter. The policy change will allow the bank's foreclosure proceedings to advance, even if a short sale is already in negotiation.