Loss Mitigation

Mortgage insurance claims filed by servicers on defaulted loans are showing signs of tapering off, according to data released by the risk analysis and due diligence firm Clayton Holdings. Clayton's analysts attribute the decline to the increase in servicers' foreclosure prevention initiatives and fewer loans moving into REO status. They also noted that mortgage insurance providers are spending more time reviewing individual claims and evaluating servicers' modification decisions for continued insurance coverage.

Riverside, California-based PartnerFirst, LLC, recently announced its partnership with Coraopolis, Pennsylvania-based ServiceLink, the national lender platform for Fidelity National Financial. By combining resources, the two companies are aiming to provide a ""one-stop-shop"" solution to national mortgage servicers and homeowners through the ServiceLink Short Sale Agent Network.

As defaults continue to mount, the nation's mortgage companies are struggling to communicate with increasing numbers of troubled borrowers at a time when their resources are already stretched thin. Atlanta's SunTrust Bank chose to replace its predictive dialer technology with an automated communications solution from Varolii Corporation, and the lender says the results have been dramatic - shaving more than a day off its loss mitigation timeline and cutting first payment defaults by 62 percent.

Ocwen Financial has one of the industry's most impressive track records when it comes to restructuring loans under the Home Affordable Modification Program (HAMP). The company is converting trials to permanent mods at a rate that is 10 to 20 times higher than some of the biggest banks, and its re-default rate is under 5 percent. Based on his company's success, Ocwen's president has proposed several changes to improve HAMP, including principal writedowns and requiring underperforming servicers to outsource their HAMP processes.

Loan Resolution Corporation said Wednesday that it is implementing a pre-approved short sale program to help the 8 million homeowners who are currently delinquent on their mortgages. The company says its streamlined process can turn a short sale decision within 48 hours.

Countdown To Buy, a next-generation online real estate marketplace based in Bethel, Connecticut, announced Wednesday that it has entered into a new pilot program with a banking institution to offer a sampling of foreclosed properties in Texas.

The FDIC has built up a stockpile of some $40 billion in underperforming real estate loans and other assets seized from failed banks over the past couple of years. The federal agency is a regulator and deposit insurer, not an asset manager, and it doesn't like to hold on to these loan leftovers for very long. But the agency's asset portfolio is growing faster than it can conduct auctions and offload these loans. That's led the FDIC to try a new tactic - package the loans and sell them to investors as securities on the secondary market.

The nation's largest mortgage financier says it will purchase up to 200,000 seriously delinquent loans from mortgage-backed securities (MBS) holders this month. As of the end of last year, Fannie's single-family MBS loans that were considered seriously delinquent totaled $127 billion. The GSE says after its March buybacks, it will continue purchasing loans in each of the subsequent few months until the company has ""substantially reduced"" the population of loans that are four or more months delinquent.

A number of the industry's closely-watched home price gauges indicate that stabilization has been slowly creeping into the picture since mid-2009. Analysts at Barclays Capital agree that the risk of a sharp decline in housing continues to recede with every passing month. But they caution that home prices nationally will drop another 4 to 5 percent before officially hitting bottom, and there's little chance of sustained gains any time soon thanks to an inflated supply of foreclosures.

Americans remain strongly committed to federal support for homebuyers, and many believe the government should provide more protection against foreclosure, according to the results of a recent survey published by the National Association of Home Builders. Thirty-three percent of those surveyed say they are planning to buy a home in the near future. Personal financial concerns, as well as weakness in the housing market itself, were cited as reasons this statistic wasn't higher.