News

The winning bidders for the REO-to-rental pilot initiative have been selected and the deals are expected to close in the early third quarter, the Federal Housing Finance Agency (FHFA) announced Tuesday. The pilot program was first launched in February in select markets where inventory is high and rentals are in demand. Investors interested in bidding for properties were asked to submit an application to qualify and were evaluated based on factors including financial ability, asset management experience, property management expertise, and familiarity with select locations. There were about 2,500 single-family Fannie Mae owned REOs up for sale through the program.

The American Securitization Forum (ASF) released on Monday a white paper regarding FHFA's proposed single securitization platform, revealing that while originators and investors disagree on how to implement it, they concur that a single agency would be beneficial. The consensus among ASF members was that in order for the GSEs' securities to be exchangeable, standardization would have to occur in four key areas: Loan delivery and pooling requirements; remittance requirements; underwriting guidelines and refinance programs; and servicing standards and loan repurchase policies.

The delinquency rate for commercial mortgage-backed securities (CMBS) moved up 12 basis points in June to 10.16 percent, reaching an all-time high, according to a report from Trepp. The delinquency rate includes loans 30 days delinquent or in foreclosure. In May, the rate surpassed 10 percent at 10.04 percent. A year ago, the delinquency rate was 9.37 percent and prior to breaking through the 10 percent barrier, the delinquency rate was 9.80 percent in April. Trepp cited weak performance among lodging, office and retail loans as reasons for the rise in the delinquency rate.

Barclays released a statement Monday morning announcing that chairman Marcus Agius is stepping down in the wake of a scandal that rocked the bank. This follows news from last week that Barclays had manipulated interbank lending rates starting as early as 2007. Barclays was fined £290 million (approximately $450 million) by British and U.S. authorities for manipulating the London Interbank Offered Rate. The Barclays board will commence the search for a successor immediately. Agius will remain in post until a successor is found.

For the third month in a row, home prices posted both yearly and monthly gains, according to CoreLogic's May Home Price Index (HPI) report. When including distressed sales, home prices increased 2 percent in May from a year ago and rose 1.8 percent month-over-month. When excluding distressed sales, prices made even greater strides, with the year-over-year increase at 2.7 percent and month-over-month increase at 2.3 percent. Distressed sales include short sales and REO transactions. When excluding distressed sales, prices made even greater strides and are expected to continue increasing into June.

In San Bernardino County, an idea is being explored that would apply the concept of eminent domain to solve the problem of underwater homes in the area. Through eminent domain, the government can take private property from an owner if it can be argued that a greater public interest would be served by doing so. The use of eminent domain proposed in San Bernardino County involves the forced purchase of homes from underwater borrowers at ""fair"" market value.

With high foreclosure rates still presenting a major hurdle to housing and economic recovery, GAO conducted a study to evaluate and find opportunities to enhance foreclosure mitigation efforts. The report asserts that government agencies participating in foreclosure mitigation programs need improve their existing strategies to help borrowers. The report specifically addressed loans modified by the Treasury (through HAMP), the United States Department of Agriculture (USDA), FHA, and the GSEs.

After conducting a survey with current and former clients, YouWalkAway.com reported that lenders are taking longer before beginning the foreclosure process. The agency surveyed underwater homeowners it has or is working and found that from January 2012 to June 20, 2012, respondents who received a foreclosure start notice were 11 months behind on their payment. Last year, it took an average of 9 months of nonpayment before the foreclosure process started.

The number of completed foreclosures in May decreased yearly and increase slightly from the previous month, CoreLogic reported Friday. The number of completed foreclosures last month totaled 63,000 compared to 77,000 in May 2011 and 62,000 in April 2012. Since the financial crisis began in September 2008, 3.6 million homes have been lost to foreclosure. May also saw a yearly drop in the number of homes sitting in foreclosure inventory with about 1.4 million homes, or 3.4 percent, in foreclosure compared to 1.5 million, or 3.5 percent a year ago.

In May, consumer spending fell less than 0.1, or by $4.7 billion, reversing the 0.15 percent increase in April, the Bureau of Economic Analysis reported Friday. Personal income meanwhile grew $25.4 billion or 0.18 percent, down from April's 0.22 percent growth.