Foreclosure

The percentage of borrowers at least 60 days past due on their mortgage increased for the 12th straight quarter, hitting 6.89 percent by the end of 2009, according to new data released by TransUnion Tuesday. This precursor to foreclosure increased 10.24 percent from the previous quarter, and compared to the year-ago delinquency rate of 4.58 percent, past due mortgages are up a staggering 50 percent, TransUnion said.

Moody's Investors Service is forecasting another 8 percent decline in home prices before a bottom in property values is reached. That's actually an improvement over previous estimates, but it's the duration of depreciation that's the headline grabber. Last month, Moody's analysts were predicting the price floor to be reached in the third quarter of this year. Now they say it won't be hit until the end of the fourth quarter, largely because of the ""underwhelming"" success of the administration's Home Affordable Modification Program (HAMP).

Las Vegas has the highest foreclosure rate of any metro in the country, but lenders there have become more willing to accept short sales as an alternative to foreclosure. The Greater Las Vegas Association of Realtors (GLVAR) reports that 21.1 percent of all existing-home sales in the area last month were short sales. GLVAR called it ""one of the more promising trends"" for the month.

Theoretical analysis conducted by the Leavey School of Business at Santa Clara University found that banks would suffer fewer defaults among modified mortgages if they would shorten the duration of the restructured loans, rather than lengthening as they tend to do, and if they would forgive part of the loan - a method many are unwilling to apply because of the accounting impact. The study concludes, however, that principal write-downs maximize a borrower's willingness to pay, thereby maximizing the loan's economic value to the lender.

Losses from defaults on commercial real estate loans maturing in the next few years could go as high as $300 billion, threatening to topple nearly 3,000 community banks nationwide, a federal watchdog group has concluded. Market analysis by the Congressional Oversight Panel, charged with keeping tabs on the government's Troubled Asset Relief Program (TARP), shows that none of the banks classified by federal guidelines as having a ""CRE Concentration"" are among the nation's largest holding companies.

With tumbling property values leaving nearly a quarter of borrowers owing more on their mortgage than the home is worth, some may find it tempting to walk away - either to get out from under the debt completely or to force the servicer's hand for a modification. This idea of ""strategic default"" has become a universal concern within the industry, but one New Jersey company says it has a plan to counter such calculated flights of exodus. According to the Loan Value Group LLC, it's time to pay current borrowers to stay that way.

Since its inception in August 2009, the National Association of Women REO Brokerages (NAWRB) has been seeking to launch a nonprofit program. That goal was realized this week with the official incorporation of the NAWRB Community Enhancement program. This nonprofit venture is dedicated to developing infrastructure for parks and community centers in neighborhoods strongly affected by the nation's growing foreclosure rate.

Following the recent enhancements to the federal government's HOPE for Homeowners (H4H) program, Wolters Kluwer Financial Services has updated its library of H4H mortgage documents and consumer education materials. HUD's enhanced program includes several provisions meant to increase lender and borrower participation, including reduced program fees, streamlined borrower certification requirements, and new underwriting guidelines.

As one of the nation's largest mortgage servicers, CitiMortgage is still contending with a deluge of foreclosures that just doesn't seem to be abating. The company is launching a new pilot initiative Friday that will allow distressed CitiMortgage borrowers to avoid foreclosure and remain in their homes for six months if they agree to sign over their property deeds. Citi will also provide relocation assistance to ease the transition to another residence.

The relentless wave of foreclosures that has swelled and battered the housing industry for a good three years seems to have retreated in January, but it's not enough to mean the storm has passed. New data released by RealtyTrac Thursday shows that foreclosure filings were reported on 315,716 U.S. properties during the month, a decrease of nearly 10 percent from December. It's a pattern we've already seen this time last year, and RealtyTrac says if history repeats itself, there will be another flood over the next few months.