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Barclays Advocates Short Sales to Lower Loss Severities

With vacant homes stretching the capacity of banks' balance sheets and homebuyer demand lackluster at best, short sales are becoming a top loss mitigation choice for private lenders and investors, particularly in especially hard-hit markets. According to Barclays Capital, the benefits of pursuing a short sale are compelling for servicers and investors who are able to liquidate delinquent loans in an expedited fashion with fewer payment and interest (P&I) advances and who take ""quasi"" possession of the property in better condition and at better prices than REO, lowering severities.

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Builder Confidence Up to Five-Year High in May

Builder confidence jumped five points in in May to 29, its highest level since May 2007, the National Association of Home Builders reported Tuesday. Economists had expected the index to edge up to 26 in May. The month-month increase was the largest since April 2009. The total index in May was up 13 points from May 2011, the strongest year-over-year gain since April 2004. All three components of the index - current sales, sales six months out, and buyer traffic - showed strong increases in May, with buyer traffic and current sales conditions each rising five points while the projection of sales six months ahead increased three points.

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NAR Reports Members’ Income Rose for First Time Since 2002

For the first time since 2002, the National Association of Realtors (NAR) reported that income for its members increased in 2011. The median income of a member rose 2.3 percent to $34,900 in 2011. Members who are licensed as brokers typically earned $48,400 in 2011, while the median for sales agents was $27,200. For NAR members who have 16 or more years of experience, income earned was $50,200. Members working 60 hours a week or more earned $80,900, and 17 percent of all members had a six-figure income.

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Higher Foreclosure Rates Bump Up Percentage of Serious Delinquencies

According to a report from Foreclosure-Response.org, the serious delinquency rate, which includes loans 90 or more days past due plus foreclosures, increased for the first time after a downward trend between December 2009 and June 2011. Serious delinquencies rose from 9.2 percent in June 2011 to 9.7 percent in December 2011 for the nation's 100 largest metropolitan areas. While the 90-plus delinquencies component of the percentage was flat at 3.8 percent and has remained largely unchanged for the past four quarters, foreclosure rates continue to rise, and now stand at 5.9 percent. In June 2011, the foreclosure rate was 5.5 percent.

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REO Allegiance CEO Recognized for Business Leadership

REO Allegiance, a national property preservation firm, recently announced that its president and CEO Lisa Sadaoui has been nominated and selected as a Leading Woman Entrepreneur and Business Owner of New Jersey by New Jersey Monthly Magazine. Nominees were selected for the award based on innovation, market potential, community involvement, and advocacy for women.

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FinCEN: Mortgage Loan Fraud Reports See Yearly Increases Since 1996

Out of seven different categories of fraud reported by depository institutions, mortgage loan fraud (MLF) saw the second great increase from 2010 to 2011 and had the highest number of suspicious activity report (SAR) filings, according to a report from the Financial Crimes Enforcement Network. MLF SARs increased nearly 31 percent to 92,028 in 2011 compared to 70,472 in 2010. Consumer loan fraud saw an even greater increasing, spiking 127 percent after reaching 32,285 filings in 2011 compared to 14,194 SARs in 2010.

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Ally’s Mortgage Unit Files for Bankruptcy; New Strategies Announced

Ally Financial announced Monday that its mortgage arm Residential Capital (ResCap) filed for bankruptcy, enabling the bank to focus on strategies to pay back remaining bailout funds still owed to Treasury. ResCap filed for Chapter 11 bankruptcy in Manhattan federal court, and Ally announced it will sell some its international operations to pay back Treasury. The financial institution will also focus on strengthening its auto and banking businesses.

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Shadow Inventory: 46 Months to Clear Distressed Housing Supply

It will take 46 months to clear the market's supply of distressed homes, or the shadow inventory, according to estimates from Standard & Poor's Rating Services based on first-quarter 2012 data. While national residential mortgage liquidation rates appeared stable over the first three months of this year, these rates varied widely between local markets. Regional variations in how quickly servicers can clear the backlog of nonperforming loans are primarily due to differences in foreclosure procedures. S&P says its months-to-clear estimate in judicial states is almost 2.5x as long as non-judicial states.

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Settlement Monitor Launches New Online Complaint Tool

Consumer advocates now have the ability to report violations if their clients suspect any as the nation's five largest servicers complete requirements under the $25 billion settlement. Speaking at a conference hosted by the National Community Reinvestment Coalition, Joseph A. Smith, Jr., the settlement monitor, announced the standup of a website portal for complaints about servicers. A statement said that the monitor will use any information gathered from the online tool to oversee implementation of the agreement with servicers.

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Three Refinancing Bills Propose Cutting Red Tape to Expand Eligibility

At a time when mortgage rates have hit record-low numbers, HUD Secretary Shaun Donovan stressed urgency in getting housing refinance bills on President Barack Obama's to-do list for Congress passed. During a teleconference Friday, which preceded Obama's stop into Reno, Nevada, to boost support for the housing proposals, Donovan outlined three bills that were introduced to Congress that week. Donovan says the bills would save homeowners an average of $2,500 to $3,000 a year.

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