News

Foreclosure timelines are on the rise, and the increase is resulting in greater losses to residential mortgage backed securities (RMBS), according to Moody's Investor Service's Servicer Dashboard for the fourth quarter 2011, released Thursday. The average loan in foreclosure has been in the process for 571 days, but judicial states are weighing heavily on that average. Foreclosures in judicial states have aged an average 654 days, while foreclosures in non-judicial states have aged an average 297 days, according to Moody's.

In select hard-hit markets, Bank of America is introducing a program that will give some of its customers who are facing foreclosure the option to remain in their homes as a tenant rather than as a homeowner. The Charlotte, North Carolina based-bank made the announcement Thursday in a release. The program, called Mortgage to Lease, will solicit fewer than 1,000 customers who qualify; there will not be opportunities to volunteer or apply for the program.

New homes sales fell 1.6 percent in February to a seasonally adjusted annual rate of 313,000, the second straight monthly decline, the Commerce Department and Department of Housing and Urban Development reported jointly Friday. Sales for January were revised downward from 321,000 to 318,000.

Last year was a good year for home bargain-hunters, according to the latest data from Radar Logic. The firm's January report revealed a 5.42 percent decline in prices from January 2011 to January 2012 and a simultaneous 7.7 percent increase in transactions. The 5.42 percent price decline over the year brought Radar Logic's composite to its lowest rate since July 2002. Radar Logic predicts prices will remain flat this year and next before increasing ""at an accelerating pace"" in 2014 and 2015.

While prices are expected to drop for the year 2012, house prices were left unchanged from December to January, according to the FHFA’s monthly House Price Index. Over a 12-month span ending in January 2012, prices fell 0.8 percent. While the drop is not dramatic, the U.S. Index shows prices are 19.2 percent below the April 2007 peak and roughly the same as the February 2004 index level. The FHFA monthly index is based on purchase prices of homes backing mortgages sold to or guaranteed by Fannie Mae or Freddie Mac.

In an effort to create a program to empower minority and women-owned business enterprises (MWBEs), Citi and the Foundation for Small Business Development joined Karen G. Mills, Administrator of the U.S. Small Business Association, to launch the Partnership for Small Business Development.

New York Attorney General Eric T. Schneiderman announced a $4 million settlement with a New York foreclosure law firm due to abuses in its foreclosure-related legal work. Founder of the firm Steven J. Baum, managing partner Brian Kumiega, Pillar Processing are required to pay $4 million to the state of New York. Baum and Kumiega are also barred from handling new foreclosure-related cases for two years. Before shutting most its operations on or about December 31, 2011, the firm was largest foreclosure defense firm in New York, and represented large mortgage servicers including Wells Fargo, JPMorgan Chase, Bank of America, HSBC, and Citibank.

Moving along side higher yields on bonds, mortgage rates continued to climb upwards, with the 30-year fixed-rate mortgage above the 4 percent benchmark for the first time since October 27, 2011, according Freddie Mac's Primary Mortgage Market Survey. The 30-year fixed-rate mortgage averaged 4.08 percent for the week ending March 22. Frank Nothaft, chief economist for Freddie Mac, attributed an improving assessment of the state of the economy by the Fed, better than expected results of the bank stress tests, and the likelihood of a second bailout for Greece as reasons for higher bond yields.

First time claims for unemployment insurance fell 5,000 to 348,000, a four-year low in the week ended March 17 and the second straight weekly decline, the Labor Department reported Thursday. Data for the prior week was revised upward, to 353,000 from 351,000, making the decline larger. The last time initial claims fell below 350,000 was in April 2008. Continuing claims, reported on a one-week lag, also fell, dropping 9,000 to 3,352,000 for the week ended March 10, after dropping 63,000 one week earlier. Continuing claims reflect the other part of the employment picture, hinting at hiring.

The current rate at which mortgage borrowers are falling into serious delinquency closely matches the rate of distressed sales - short sales and REO sales - according to CoreLogic's latest report released Wednesday. While distressed sales are keeping the shadow inventory from growing, the quantity on record is not yet decreasing. In fact, today's shadow inventory mirrors that recorded in January 2009, though there have been 3 million distressed sales since that date.