Loss Mitigation

Overall, little change was reported in the performance of first-lien mortgages serviced by national and federal savings banks during the 2011 fourth quarter, but the percentage of initiated foreclosures did see a steep drop, according to the Office of Comptroller of the Currency (OCC) Mortgage Metrics report. The percentage of current and performing loans decreased to 87.9 percent, a mere 0.1 percentage point drop from the previous quarter, but a 0.4 percent increase compared to the same period a year ago.

After a forecast from Moody's Analytics hinted that the Federal Housing Administration (FHA) is at risk of requiring a taxpayer bailout, the FHA released a myths and facts sheet and categorized speculation about a bailout as myth. ""Sweeping changes enacted by FHA since 2009, including an important series of recent steps such as the enforcement actions that resulted in over $900 million in compensation to FHA from settlement agreements with major banks, and further increases to FHA's insurance premiums, it is unlikely that FHA would require additional resources from the U.S. Treasury in FY 2012,"" the FHA stated.

The Case-Shiller Home Price Indexes fell for the fifth straight month in January, with the 10- and 20-city composites each dropping 0.8 percent from December, Standard & Poor's, which compiles the indices, reported Tuesday morning. The 10-city index slid to its lowest level since May 2003 and the 20-city index dropped to its lowest level since December 2002. Home prices fell in 16 of 19 major cities during the month of January.

The commercial real estate (CRE) sector faces $362 billion in maturing debt this year, according to the latest estimates from Trepp LLC. For the five-year period of 2012 to 2016, the company's research team estimates $1.73 trillion of CRE maturities, with the largest one-year sum of $371.1 billion dropping in 2013. They also reported that nearly two-thirds of the maturities through 2016 are underwater or close to sinking underwater, which could reduce borrowers' chances for extending the loan term upon reaching the balloon date.

Wingspan Portfolio Advisors, a Dallas-based servicing company, announced Monday that Ed Delgado will join the company as COO, effective April 2, 2012. Formerly CEO of the Five Star Institute, Delgado has more than 20 years' experience in mortgage banking, including tenures at Wells Fargo and Freddie Mac in senior executive roles. In conjunction with being named COO of Wingspan, Delgado will remain affiliated with Five Star as chairman of the National Servicing Association (NSA), a newly formed nonprofit trade association representing more than 90 percent of mortgage banks in the United States.

Investors are making it a practice to endure through obstacles that come with the discounted price of short sales and pursued them at a greater pace in February compared to previous months, according to the latest results of the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The percentage of investors buying homes climbed from 20.9 percent of all transactions in September 2011 to 24.2 percent in February 2012, according to the survey. The investor share of short sales also rose, going from 25.9 percent to 30.6 percent during the same six-month period.

NPR reported Friday that Fannie Mae and Freddie Mac might consider principal reduction as a means to help underwater homeowners. Edward DeMarco, acting director of the FHFA, has stood firm in his decision to not allow for principal reduction, despite mounting criticism from Democrats and petitioning from organizations to have DeMarco fired. ""NPR and ProPublica have learned that both firms have concluded that giving homeowners a big break on their mortgages would make good financial sense in many cases,"" NPR stated in its story.

In select hard-hit markets, Bank of America is introducing a program that will give some of its customers who are facing foreclosure the option to remain in their homes as a tenant rather than as a homeowner. The Charlotte, North Carolina based-bank made the announcement Thursday in a release. The program, called Mortgage to Lease, will solicit fewer than 1,000 customers who qualify; there will not be opportunities to volunteer or apply for the program.

New York Attorney General Eric T. Schneiderman announced a $4 million settlement with a New York foreclosure law firm due to abuses in its foreclosure-related legal work. Founder of the firm Steven J. Baum, managing partner Brian Kumiega, Pillar Processing are required to pay $4 million to the state of New York. Baum and Kumiega are also barred from handling new foreclosure-related cases for two years. Before shutting most its operations on or about December 31, 2011, the firm was largest foreclosure defense firm in New York, and represented large mortgage servicers including Wells Fargo, JPMorgan Chase, Bank of America, HSBC, and Citibank.

First time claims for unemployment insurance fell 5,000 to 348,000, a four-year low in the week ended March 17 and the second straight weekly decline, the Labor Department reported Thursday. Data for the prior week was revised upward, to 353,000 from 351,000, making the decline larger. The last time initial claims fell below 350,000 was in April 2008. Continuing claims, reported on a one-week lag, also fell, dropping 9,000 to 3,352,000 for the week ended March 10, after dropping 63,000 one week earlier. Continuing claims reflect the other part of the employment picture, hinting at hiring.