Loss Mitigation

Completed foreclosures continued their progressive decline, and foreclosure inventory fell to its lowest level since April 2010, CoreLogic reported Thursday. In August 2012, 57,000 homes were lost to foreclosure, down from 58,000 in July and 75,000 a year ago. The yearly decrease represents a 24 percent decline. While the national numbers are down, certain states are still seeing a high number of foreclosures, with five states accounting for 48.1 percent of all completed foreclosures.

First-time claims for unemployment insurance edged up by 4,000 to 367,000 for the week ended September 29, the Labor Department reported Thursday. The previous week's report was revised upward to 363,000 first-time claims from the originally reported 359,000.

Commercial mortgage-backed security (CMBS) delinquencies have posted substantial declines over the past two months, according to Trepp. After falling 21 basis points in August, delinquencies decreased another 14 basis points in September, bringing the delinquency rate below 10 percent, just barely. The CMBS delinquency rate is now 9.99 percent, according to Trepp, and the agency predicts the rate should continue to decline over the next few months.

In her first monthly report as California Monitor, Katherine Porter described the servicers' efforts to reform their practices before the October 2 deadline outlined in the national mortgage settlement. Porter's first evaluation examined the practice of dual tracking. The companies in the settlement were given 180 days to reform their dual tracking procedures, in addition to more than 300 additional servicing standard requirements.

Ocwen Financial Corporation will purchase Homeward Residential Holdings, Inc. for $750 million, Ocwen announced Wednesday in a release. Ocwen will buy the Dallas-based servicer and originator from private equity firm WL Ross & Co. The breakdown for the transaction includes $588 million in cash and $162 million in Ocwen convertible preferred stock.

Mortgage applications saw increased activity in the last week of September, the Mortgage Bankers Association (MBA) reported. Mortgage application volume increased 16.6 percent in the week ending September 28, according to MBA's Mortgage Composite Index. Meanwhile, the Refinance Index increased 20 percent from a week before to its highest recorded level since April 2009.

Foreclosure inventory continues to decline but remains more than eight times what it was in the decade prior to the housing crisis, according to the latest report from Lender Processing Services (LPS). Noncurrent loans make up 10.9 percent of all loans as of August, demonstrating a year-over-year change of -7.6 percent, according to LPS. As of August, the delinquency rate stands at 6.9 percent, and the foreclosure rate is 4.0 percent. LPS also noted prepayment activity was up ""significantly"" in August, nearing levels last reported in 2005.

The nation's five largest mortgage servicers had 180 days to implement the 320 servicing standards outlined in the settlement reached with the U.S. Department of Justice and 49 state attorneys general. The standards address such areas as borrower communication, single point of contact, training for loss mitigation staff, and document execution related to foreclosure actions. And as described by the attorneys general's own negotiating committee, to put all the required changes in place involved ""a massive undertaking.""

Radian Guaranty Inc. will begin offering a program that provides cash rewards to homeowners who stay current on their newly modified HAMP mortgages.

As part of Bank of America's deal in the national mortgage settlement, the bank announced Friday it plans on offering full forgiveness for second liens to certain homeowners. The bank is in the process of mailing about 150,000 letters to pre-qualified homeowners with offers to wipe out their second liens.