Loss Mitigation

Data released by S&P Indices and Experian showed a decline in mortgage default rates for the fourth straight month. The agencies' index of first mortgage defaults fell to 2.33 percent in March and is down 41 percent from a year earlier. Second mortgage defaults dropped to 1.42 percent, down 49 percent over the past year. Not only has the ratio of on-time mortgage payments improved, but the report indicates consumers are making headway on their debt obligations overall, with declines in monthly default rates across all major credit lines.

The New Democratic Coalition has added the nation's housing finance system to its list of things to ""modernize."" They've outlined principles for following through with the wind-down of Fannie and Freddie while maintaining a limited government role to ensure access to the 30-year fixed-rate mortgage. But the debate is intense over whether the 30-year mortgage should stick around. With or without it, one research group says the numbers prove government guarantees aren't necessary to entice private investors.

Mortgage Cadence recently announced that its Mortgage Cadence Reprise system can assist servicers in meeting proposed requirements to mortgage servicing procedures. Mortgage Cadence Reprise is a Web-based solution that provides servicers with automation technology, and the company says it will allow servicers to effectively respond to mortgage reform in the servicing industry while providing the customer service expected by state attorneys general and federal regulators.

Wells Fargo reported record earnings of $3.8 billion for the first quarter of 2010. That's up 48 percent from the same period last year, and up 10 percent from the fourth quarter of 2010. The lender's first-quarter profit beat analysts' estimates, but the market didn't look too kindly on the underlying numbers that showed revenue was down $1.2 billion from the previous quarter. That decline included a $741 million drop in mortgage banking fee income. While revenue slipped, Wells Fargo says its numbers were boosted by improving loan quality.

State attorneys general have not only lost the collaboration of federal regulators in their effort to craft a universal settlement with servicers to resolve issues exposed by recent robo-signing investigations, but individual counsels are falling from their own ranks. Oklahoma Attorney General Scott Pruitt is reportedly breaking from the group to pursue his own agreement with mortgage servicers that specifically addresses his state's concerns.

US Debt Ventures, a Florida-based private equity firm, recently purchased a pool of non-performing mortgages valued at $500 million from a large financial institution. Consisting of approximately 7,000 first, second, and third liens from across the nation, the purchase is part of the company's strategy to acquire and work out large portfolios of distressed mortgages.

Lender Processing Services (LPS) reports that the nation's mortgage delinquency rate plunged to 7.78 percent at the end of March. That figure includes loans that are at least 30 days past due but not yet in foreclosure. March's delinquency rate is down nearly 12 percent from the month before and 20 percent below a year ago. At the same time, though, the nation's foreclosure rate edged up to 4.21 percent. Altogether, LPS says there are 6,333,000 homes in the U.S. that are delinquent or in foreclosure.

An appellate court has given judges of the foreclosure court system in Lee County, Florida, 20 days to respond to a petition filed by the American Civil Liberties Union (ACLU), which alleges the county circuit courts ignore procedural safeguards in order to rush foreclosures through and clear out their backlog of cases. The ACLU says this special ""mass foreclosure docket"" in Lee County sees as many as 200 cases a day, a pace that ""systematically denies homeowners an opportunity to defend their homes against foreclosure.""

The Federal Trade Commission (FTC) has mailed 1,410 refund checks totaling $2.3 million to consumers allegedly defrauded by Home Assure LLC, a so-called mortgage foreclosure rescue service. The FTC alleged that the company charged consumers an up-front fee of $1,500 to $2,500, and falsely claimed its ""special"" relationships with lenders would enable the company to secure favorable loan modifications or stop foreclosure altogether - promises the federal agency says the company did not keep.

John McGeough and Anthony Lamacchia, founders of McGeough Lamacchia Realty Inc. traveled to Washington, D.C., last week to educate policy makers on the benefits of short sales. McGeough Lamacchia Realty is a full-service real estate firm in Waltham, Massachusetts, specializing in short sales. The company's two principals conducted meetings with officials at Capitol Hill, the FDIC, the U.S. Treasury, and the National Association of Realtors.