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Most mortgage fraud takes place in the short sale and REO space, according to Rob Hagberg, associate director of fraud investigations at Freddie Mac. ""This area is ripe with fraud,"" he said during a webinar hosted by CoreLogic. While servicers and others in the industry have adapted to some fraud schemes and put measures in place to detect and prevent fraud, schemes continue to evolve as fraudsters find new ways to manipulate sales. Both short sale and REO fraud often require fraudsters to convince servicers a home is worth less than it actually is.

KeyBank Real Estate Capital, the commercial real estate business unit of KeyCorp, entered into agreements with Bank of America and Berkadia Commercial Mortgage that will lead it to become one of the nation's largest commercial mortgage servicers. According to a company release, the KeyBank agreement with BofA includes a CMBS special servicing portfolio of about $14 billion.

Metro areas continued to post price gains in the first quarter, rising alongside national median price increases, the National Association of Realtors reported. Out of 150 metro areas the NAR tracks, 133 displayed price growth in the first quarter of this year compared to the same quarter a year ago. The association also provided first quarter data on national median prices and found the median price for an existing single-family home rose 9.3 percent year-over-year.

The national mortgage delinquency rate ticked up to 7.25 percent on a seasonally-adjusted basis in the first quarter compared to 7.09 percent in the fourth quarter of last year, the Mortgage Bankers Association (MBA) reported in its delinquency survey. While the rate increased 16 basis points from the previous quarter, it's still 15 basis points lower compared to the rate a year ago the same quarter. The share of loans that began the foreclosure process in Q1 remained at its record low level of 0.70 percent, which is the lowest it's been since Q2 2007.

According to Zillow, homebuyers participating in its Mortgage Marketplace Survey answered basic questions on mortgage information incorrectly nearly one-third (32.5 percent) of the time. For example, 34 percent of first-time homebuyers are not aware that they might be able to get a home loan with a down payment of less than 5 percent. Prospective buyers aren't the only group who demonstrated a lack of basic mortgage knowledge. About one in five homeowners said they did not believe underwater borrowers could refinance.

According to Freddie Mac, the 30-year fixed-rate mortgage (FRM) averaged 3.42 percent (0.7 point) for the week ending May 9, up from last week, when it averaged 3.35 percent. Frank Nothaft, VP and chief economist for Freddie Mac, explained the rise in fixed rates this week was a reaction to April's better than expected employment report.

A former senior bank official of a Delaware bank that received government funds pleaded guilty to bank conspiracy fraud, according to a joint announcement from the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and the U.S. Attorney's office for Delaware.

Foreclosure activity in April fell to a 74-month low across the country, but many judicial states are experiencing rising foreclosures. Furthermore, judicial foreclosure auctions reached a 30-month high, according to RealtyTrac's April U.S. Foreclosure Market Report. April's scheduled judicial foreclosure auctions, which reached their highest level in 30 months, demonstrated a 22 percent monthly increase and a 31 percent yearly increase. In contrast, non-judicial foreclosure auctions reached an 88-month low, having fallen 43 percent from last April.

About 96,000 borrowers who received a check under the foreclosure review settlement should expect a second payment since their checks were for a lesser amount than what they should have received. The second round of payments to make up for the difference is only for eligible borrowers who had their mortgage serviced by former subsidiaries of Goldman Sachs and Morgan Stanley. Rust Consulting, the paying agent, announced the supplemental checks are scheduled to be sent around May 17. In a release, Rust Consulting said ""a clerical error"" led to the lesser amount.

In the first quarter of this year, the mortgage giant reported pre-tax income of $8.1 billion, the largest in its history. Fannie Mae attributed the improvement to ""strong credit results driven by an increase in home prices, including higher average sales prices on Fannie Mae-owned properties, a decline in the number of delinquent loans, and the company's resolution agreement with Bank of America."" The GSE also announced it will pay $59.4 billion to Treasury.