Loss Mitigation

The national residential delinquency rate and new foreclosures initiated both dropped in the fourth quarter. Is it a sign that the industry has finally turned the corner on the housing crisis? The Mortgage Bankers Association (MBA) says yes. ""We are likely seeing the beginning of the end,"" Jay Brinkmann, MBA's chief economist, said. According to MBA, the delinquency rate has fallen to 9.47 percent, down 17 basis points from the third quarter of 2009. Foreclosure starts are down 22 basis points.

The National Groups, the parent company of the National Default Servicing, LLC suite of mortgage service operations, announced Thursday that Mitchell Oringer and Richard T. Fikani have joined the firm, filling two new leadership positions.

Wells Fargo & Co. announced Wednesday that as of January 31, 2010, it had 137,128 active trial and completed modifications in place under the Home Affordable Modification Program (HAMP). Of these, 17,652 were permanent modifications--double the number of permanent modifications reported as of the end of December, and 7,554 were permanent modifications pending completion.

Retreat Capital Management Group has added a number of new solutions to its offerings that the company says will address servicers' largest obstacles in completing short sales and modifications under the federal government's foreclosure prevention programs, including short sale processing and document pick-up.

More than 1,000 current and college-bound students nationwide answered the call during the 2009 Foreclosure.com scholarship program, submitting essays on ""How to Solve the Foreclosure Crisis."" The Florida-based company awarded a total of $9,000 in scholarships to five students for their innovative ideas on how to curb the distress in the housing market.

The nation's two largest mortgage financiers have been stuck in the red for some time, and they regularly require cash draws from the Treasury to stay afloat. The GSEs' recent announcements to buy back some $200 billion in seriously delinquent loans from mortgage-backed securities holders over the next few months mean they'll have to come up with some extra cash fast. Analysts at Barclays Capital estimate that Freddie Mac will need to sell off $10 billion to $20 billion of its debt to fund the purchases, while Fannie Mae will need to raise about $60 billion.

The bankrupt commercial property developer and shopping mall manager General Growth Properties (GGP) has become a hot commodity, with firms lining up to get a piece of the Chicago-based company. On Tuesday, the nation's largest mall-operator, Simon Property Group, Inc. made public a $10 billion unsolicited bid to acquire the rival GGP - a deal that would have pulled the company out of bankruptcy. GGP quickly rejected the offer, and since, speculation has run rampant about other investment firms that may soon come knocking.

Following multiple revisions and dismal closings, the Hope for Homeowners (H4H) program may experience revitalization. Irvine, California-based Banker's Portfolio, LLC, an innovative solution provider for the resolution of distressed assets, has secured a forward commitment for the purchase of the H4H securities and is rolling out the H4H product to existing mortgage investors, loan servicers, and asset managers as an alternative to foreclosure.

Mortgage servicers have significantly stepped up efforts to convert trial modifications to permanent status under the Home Affordable Modification Program (HAMP), nearly doubling the number in just one month's time. The U.S. Treasury released its January report card Wednesday and it showed that 116,297 homeowners are now in permanent modifications. Another 76,482 have been extended offers for a permanent restructuring, needing only the borrower's signature to complete the conversion. The Treasury said the data ""marked record progress.""

That looming shadow of housing inventory that's graced so many headlines lately has put the entire industry on edge. And that uneasiness was validated in a report published by Standard & Poor's Tuesday. The ratings agency said this hidden supply of REOs and pending foreclosures will likely take 33 months - or nearly three years - to clear if liquidation rates hold steady. What's even more unsettling is that S&P called its estimate ""conservative.""