Loss Mitigation

Short sales are being touted by some as the ""go-to"" alternative to foreclosure, but that doesn't mean there aren't risks involved in completing these transactions. In order to warn consumers and real estate agents about the potential perils and pitfalls of short sales, the California Department of Real Estate (DRE) has issued a consumer alert, Jeff Davi, DRE commissioner, announced Thursday.

Fannie Mae announced Thursday that it has entered into a new partnership with the Orlando agency of Consumer Credit Counseling Service of Central Florida and the Florida Gulf Coast (CCCS) in order to accelerate response time and provide financial counseling to struggling Florida homeowners whose mortgages are owned by Fannie Mae and serviced by SunTrust. Under this partnership, CCCS will initiate a grassroots mail and telephone campaign focusing on eligible homeowners who are delinquent in their mortgage payments.

As part of its ongoing efforts to help homeowners avoid foreclosure, Chase announced Wednesday that it will host multi-day homeowner assistance events exclusively for struggling Chase homeowners in eight major markets across the United States. These events will take place over the next five months, during which up to 40 Chase counselors will work with homeowners for up to 12 hours a day for four or five days in a central location, such as a civic center or community college.

In an effort to assist struggling homeowners with their mortgages, HOPE NOW, the administration's Making Home Affordable Program, and NeighborWorks America co-sponsored a three-day homeownership preservation event last week in Uniondale, New York. The event had representatives from 16 mortgage servicers and more than a dozen local HUD-approved housing counselors on hand to provide assistance to the 2,353 at-risk borrowers in attendance.

The U.S. Department of Justice says in light of the mortgage crisis, it has made fair lending a top priority and will be reviewing the Treasury's Home Affordable Modification Program (HAMP) for possible violations. Assistant Attorney General Thomas E. Perez told lawmakers that the Justice Department is focusing on potential fair lending violations ""where much of the lending activity is occurring today - in mortgage modifications."" With HAMP being the largest loan modification undertaking in history, that makes it a prime target for scrutiny.

Delinquencies on single-family loans guaranteed by Freddie Mac fell to 4.13 percent in March, down from 4.20 percent in February. It's the first monthly decline reported by the mortgage giant since April 2007, and some say a sign that efforts to improve loan performance are finally gaining ground. Freddie Mac attributed the drop in delinquencies to a higher volume of mortgage modifications and completed short sales.

Hoping to obtain advice on how to improve government foreclosure prevention programs, the Department of Treasury's Assistant Secretary for Financial Stability, Herb Allison, made an unprecedented stop in Cleveland on Monday to hold a roundtable and hear from local homeowners and housing advocates first-hand. Allison, who is second to Treasury Secretary Timothy Geithner, oversees both the Troubled Asset Relief Program and the Hardest Hit Fund program that is providing more than $2.1 billion to address the foreclosure crisis in 10 states. Ohio is receiving $172 million through this program, the sixth highest allocation.

In an effort to provide greater insight into the health of the U.S. economy, Standard & Poor's and Experian have teamed up to create a series of consumer credit default indices that will seek to measure the balance-weighted proportion of consumer credit accounts that go into default for the first time each month.

Colorado lawmakers are hoping to mitigate the effects widespread foreclosures are having on local communities in the state. This week, Gov. Bill Ritter signed into law a bill that he says will secure neighborhoods against abandoned properties that have fallen into foreclosure by cutting in half the minimum time frame for a foreclosure sale, as mandated by the state.

Only 10 percent of the $41 billion of distressed commercial real estate from a year ago has been resolved and is no longer held by the lender, according to new data from the research firm Real Capital Analytics. The company's analysis shows that securities trusts and domestic lenders have settled a comparably small portion of their distress from last year. Of those loans resolved, commercial mortgage-backed securities holders are more likely to have restructured the mortgages, while domestic banks are more likely to have foreclosed.