Loss Mitigation

While the national trend shows home prices are rising and the supply of foreclosures is shrinking, on a more microscopic level, there are still metros where investors can find foreclosures at steep discounts and in greater abundance. RealtyTrac compiled a list of the 20 best (and worst) metro areas to buy foreclosures in 2013. RealtyTrac ranked Palm Bay, Florida as the No. 1 metro for foreclosure purchases. From 2011 to 2012, the metro saw foreclosure activity increase 308 percent, and it has a 34 months' supply of foreclosure inventory. Five other Florida metros were represented on the top 20 list.

Keeping her promise to Senator Bob Corker (R-Tennessee), Federal Housing Administration commissioner Carol Galante announced a series of changes that will allow the agency to better manage risk and strengthen its anemic Mutual Mortgage Insurance (MMI) Fund. The first major change will be the consolidation of FHA's Standard Fixed-Rate Home Equity Conversion Mortgage (HECM) and Saver Fixed Rate HECM pricing options. In addition, the agency plans to increase its annual mortgage insurance premium (MIP) by 0.10 percent for most new mortgages and by 0.05 percent for jumbo loans.

In a report, a taxpayer watchdog agency accused Treasury of lacking a concrete plan to help Ally pay back taxpayers and move toward financial stability. ""Four years after its first Government bailout, Ally still owes taxpayers $14.6 billion,"" SIGTARP stated in the report.

After experiencing a downturn, spending on home improvement may finally register an increase in 2012, with the market appearing to be ""poised for a solid rebound,"" according to a recent report from the Harvard Joint Center for Housing Studies. The Joint Center estimates spending on home improvement rose 9 percent in 2012 after falling in previous years. The study found that as the housing market improves, the homes that burdened the economy are now being renovated.

Despite seeing a month-over-month drop, the 10- and 20-city Case-Shiller Home Price Indexes registered their strongest year-over-year improvement in two and a half years on a non-seasonally adjusted basis, Standard & Poor's, which publishes the indexes, reported Tuesday. The 10-city index fell 0.2 percent, and the 20-city index dropped 0.1 percent from October to November. On an annual basis, however, the 10-city index was up 4.5 percent, and the 20-city index rose 5.5 percent.

After much debate and consideration, an idea that had been brewing in San Bernardino County to address negative equity through the use of eminent domain was rejected Thursday by the Joint Powers Authority (JPA) board. According to a release from San Bernardino County, the board decided against proposals that would consider the use of eminent domain.

The Pending Home Sales Index (PHSI) fell 4.3 percent to 101.7 in December, the sharpest month-month drop since April the National Association of Realtors (NAR) reported Monday. Economists had expected a smaller 0.3 percent decrease to 106.1 from November's originally reported 106.4. The November index was revised down to 106.3. NAR economist Lawrence Yun blamed a tight inventory for the weakening index. Yun also noted the lack of homes costing less than $100,000, especially in the West.

The new servicing rules recently issued by the Consumer Financial Protection Bureau (CFPB) will benefit the mortgage servicing industry by creating uniform standards, but it will also increase compliance costs for the servicers, which will put pressure on smaller-sized entities, according to a report from Fitch Ratings. ""[S]imilar to other servicing-focused initiatives, the CFPB rules will further increase compliance costs for the industry, extend timelines, and potentially drive further consolidation within mid to smaller servicers,"" Fitch stated.

Freddie Mac's Standard Short Sale program has been in effect for close to three months, and the GSE continues to work to publicize the program and inform borrowers of their options, most recently in a blog post Tuesday on Freddie Mac's website. ""Early results indicate that this program is beginning to take hold with homeowners and realtors,"" stated Tracy Mooney, SVP on the Executive Perspectives Blog. Mooney expressed an expectation that the program will reduce short sale timelines by between 50 and 75 percent.

Pending home sales in California were brought down by lack of inventory while the share of distressed sales increased, according to data from the California Association of Realtors (C.A.R.). C.A.R.'s Pending Home Sales Index (PHSI) decreased 20.5 percent month-over-month as the index slipped from November's revised 103.5 to December's 82.3. After seeing declines, the combined share of all distressed property sales ticked up to 36.4 percent in December, up from 35.1 percent in November.