Loss Mitigation

First-time homebuyers continued to desert the housing market in July, according to a new industry study released Monday. Campbell Surveys says first-time homebuyers accounted for only 39 percent of the home purchase market last month. That's down from a peak of 48 percent as recently as March. The research firm, though, reported that short sales remain one of the few bright spots in the housing market. Time-on-market for short sales continued to decline, from an average of 20.5 weeks in February to 15.8 weeks in July.

Members of the U.S. House of Representatives are calling on President Obama and the GSEs' regulator to ""use all of [their] powers to recover money"" from companies that shifted losses on to Fannie Mae and Freddie Mac. They say legal action should be used to recoup funds from the underwriters of faulty mortgages and the issuers of underwater securities that have saddled Fannie and Freddie with hundreds of billions of dollars in bad loans and cost taxpayers almost $150 billion to date.

Lender Processing Services, Inc. (LPS) said Thursday that it is forming a strategic partnership group to establish a network of default-related service providers. The company says the goal of the network is to lower the cost of default services and create efficiencies for borrowers, mortgage servicers, and investors. Members will include attorneys, title companies, foreclosure trustees, publication and posting providers, and service of process companies.

The administration released new numbers Friday on the Home Affordable Modification Program (HAMP). Housing analysts and market observers say the results are disappointing at best. The latest report shows that nearly half of the homeowners approved for trial modifications have fallen out of the program. And during July, servicers converted just 36,695 HAMP trials to permanent status, a significant slow-down considering growth in permanent mods averaged more than 50,000 a month throughout the first half of this year.

Financial Asset Services, Inc. (FAS) has launched a new door knock service to help mortgage servicers with loss mitigation. The company says successful door knocks can lead to discussions of short sale transactions or deed-in-lieu negotiations for the servicer and allow homeowners to leave the property on their own terms.

One in four real estate professionals polled by Clear Capital said the BP oil spill has brought home sales to a halt and is pushing already depressed property values lower along the Gulf Coast, with the impact even spreading beyond the coastal region to nearby areas that have seen no physical damage from the environmental catastrophe. Areas of Alabama and the Florida Panhandle are reporting an estimated 5-15 percent decline in home values and a drop in sales volume in June ranging from 25 percent to 33 percent.

In its efforts to protect homeowners and avoid another mortgage and foreclosure crisis, the New York State Banking Department has issued new rules regarding the business practices of mortgage loan servicers. The regulations, which go into effect October 1, include halting foreclosure actions for borrowers being considered for, or currently in, a trial or permanent modification, as well as developing procedures for consumer complaints and ensuring homeowners do not have to submit multiple copies of required documents.

About 50 percent of the loans held by Fannie Mae and Freddie Mac come from the nation's four largest banks - Bank of America, JPMorgan Chase, Wells Fargo, and Citi. Lately, the GSEs have become more aggressive in forcing originators to buy back bad loans. Based on Fannie and Freddie's current ""distressed"" numbers (a combined $354 billion in delinquent mortgages and REOs), Fitch Ratings estimates that the big four could be on the hook to repurchase as much as $180 billion in nonperforming assets.

The number of permanent Home Affordable Modification Program (HAMP) mortgage restructurings completed by Bank of America through July has reached more than 76,000, a number that BofA says continues to lead the industry. In addition, nearly 100,000 Bank of America customers have received non-HAMP modifications this year, including many that did not qualify under the federal program. BofA also reported that it completed 25,000 short sale transactions during the second quarter of this year.

Las Vegas-based real estate software firm eBrokerHouse has announced that its users have closed over $1 billion in traditional, REO, and short sale transactions since the company launched its Web-based management software just 16 months ago. The company's president, Thomas Moore, credits the ability of their software to manage all types of listings, buyers, and virtually every aspect of an agent's business as a main reason why eBrokerHouse hit this milestone so quickly.