Foreclosure

Pacific Engineering Management Company (PEMCO) in Honolulu has been awarded five asset manager contracts under the third generation of HUD's management and marketing program. PEMCO has been managing HUD's residential real estate program for more than 10 years and said its latest award represents the largest territory for the company to date, as it encompasses 26 different states in five regions across the country.

The U.S. Treasury and HUD on Monday released a new monthly scorecard, touting the success of the administration's full scope of efforts to stabilize the nation's fraught housing industry. The report shows that since April 2009, 6.1 million homeowners have refinanced into new mortgages and 2.8 million have received modified mortgages. Federal officials point out that the modification number alone is nearly three times the 1.15 million foreclosures that were completed during the same period.

While loans restructured under the federal government's Home Affordable Modification Program (HAMP) have been highly criticized for their propensity to re-default, the analysts at Barclays Capital say newly modified mortgages stand a better chance of staying current. New data also suggests that foreclosure-to-REO roll rates are ticking up while delinquency rates have peaked, signaling that servicers' efforts have caught up to market conditions and they're making progress working through the foreclosure backlog.

Wells Fargo has joined the growing faction of lenders offering mortgage assistance to customers in the Gulf Coast region who are facing hardship as a result of the BP oil spill. The company says it is working closely with its borrowers who've been impacted by the events in the Gulf, and is implementing a 90-day foreclosure moratorium for those customers currently working with the bank to resolve delinquency or foreclosure matters.

Distressed commercial real estate is being reclaimed by lenders at a rapid pace, but relatively few assets are being marketed and re-sold. According to the research firm Real Capital Analytics, lenders acquired some $10 billion of commercial property during the first five months of this year -- via foreclosure or negotiated settlement. But they disposed of just $2.6 billion of commercial REO during the same period, even though there is a large amount of ready capital eager to acquire these assets.

The Collins Center's foreclosure mediation program is spreading like wildfire across the state of Florida. The program was recently implemented by the 14th Judicial Circuit of Florida, which covers six counties, including Bay, Calhoun, Gulf, Holmes, Jackson, and Washington. This marks the fourth circuit in the Sunshine State to put the program into practice.

New incentives intended to stem deteriorating conditions in housing markets, and even spark a revival, encourage the use of foreclosure alternatives for troubled properties. Options such as short sales, deeds-in-lieu, and alternative modifications are becoming more prevalent, and their success is dependent on targeted, effective borrower contact strategies. To address this need National Creditors Connection Inc. has established a ""Short Sales Desk"" to help servicers assess whether delinquent borrowers are good candidates for a short sale or other foreclosure alternative program.

As tumbling property values push more and more borrowers underwater, the number that are opting to walk away from their mortgage obligation, even if they can afford the payments, is growing. This idea of strategic default has become a universal concern within the industry, and there are some lawmakers who are pushing to impose penalties on those that walk away. House Republicans have passed a provision that would make homeowners who strategically default ineligible for an FHA-insured loan in the future.

The government's Home Affordable Modification Program (HAMP) has been widely criticized for its substandard results, and a new report from Fitch Ratings indicates that even the small successes it's made so far may soon be reversed. The company says that within 12 months, as many as 65 percent of the prime loans modified under the federal program will likely re-default. For modifications on subprime loans, the projection is even higher - 75 percent. What's worse is that Fitch called its estimates ""conservative.""

Mortgage companies are beginning to step up and offer some relief to homeowners whose livelihood has been impacted by the BP oil spill off the coast of the Gulf of Mexico. Fannie Mae has issued an announcement suggesting its servicers immediately suspend or reduce mortgage payments for borrowers whose properties or income have been affected by the spill. CitiMortgage is suspending foreclosures and REO evictions in coastal areas of the Gulf until September 17.