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Short sales are growing throughout the nation as distressed homeowners and servicers continue to seek alternatives to foreclosure and home buyers increasingly opt for the significant discounts that come with short sales. With 9,145 completed short sales, the Los Angeles area had more short sale transactions than any other metropolitan statistical area (MSA) in the second quarter of this year, according to a recent blog post from RealtyTrac. These short sales came with an average discount of 32 percent and at an average price of $350,237.

State attorneys general and the nation's five largest mortgage servicers could be within weeks of reaching a $25 billion agreement to settle allegations that foreclosures were improperly processed. Details of the settlement terms obtained by DSNews.com indicate that individual servicer penalties will be based on the number of foreclosures they've completed. Collectively, $5 billion would come in the form of cash fines and $20 billion would be satisfied with principal-reducing modifications and refinancing for underwater borrowers.

Long-term, fixed-rate mortgages are often seen as a safe loan product, but one Federal Reserve economist says adjustable-rate mortgages (ARMs) are not as risky as some perceive them to be and did not play a major role in the recent housing crisis. To those who believe payment shocks caused by ARMs were a major player in the foreclosure crisis, Paul Willen, senior economist at the Federal Reserve Bank of Boston, says, the ""data refute that theory."" He says those with ARMs were almost as likely to have seen a payment reduction as a payment increase.

State and federal regulators shuttered All American Bank in Des Plaines, Illinois, over the weekend, bringing this year's failed-bank tally to 85. The FDIC brokered a deal with International Bank of Chicago to take over the failed lender's operations and purchase all of its assets. All American Bank is the ninth FDIC-insured institution in the state to go under this year.

Federally funded mortgage relief programs continue to struggle to reach homeowners, according to the Special Inspector General of the Troubled Asset Relief Program (SIGTARP). A new report from the watchdog agency says only $2.5 billion of the $45.6 billion in TARP funds earmarked for housing programs has been spent. Regarding the Home Affordable Modification Program (HAMP), the agency estimates that as many as 600,000 homeowners who are eligible will not receive a permanent mod before the program expires next fall.

More than 42 percent of prospective home buyers believe home values increase by about 7 percent each year, according to a recent survey by Zillow. This estimation is out of line for the current economic times and high even for years prior to the housing crisis. In a normal market, home values tend to increase by only 2 percent to 5 percent per year, according to Zillow. While home buyers revealed a lack of understanding of home values, respondents answered about 65 percent of questions correctly.

The Federal Housing Finance Agency (FHFA) has lowered its projection for just how much taxpayer funding is needed to support the nation's two largest mortgage financiers. FHFA estimates that Fannie Mae and Freddie Mac will need between $220 billion and $311 billion from the American people when all is said and done. Those figures represent capital assistance from September 2008, when the two mortgage giants were placed into conservatorship, through the end of 2014.

Thirty-three senators have put out a letter encouraging the Obama administration and the Federal Housing Finance Agency (FHFA) to work quickly in developing a program to make vacant foreclosed homes available for rent. The administration is currently sifting through responses to the request for information (RFI) it issued in August regarding an REO rental program. The senators want federal officials to respond with a timeline for when they expect to finish reviewing the RFIs and their next steps.

The National Groups has named Carla Ulufanua managing director of REO management. Ulufanua previously held the role of REO operations manager handling business for the GSEs. In her new role, Ulufanua will run the day-to-day operations of the REO team across both government and private sector clients. The National Groups provides outsourcing services that span the spectrum of default servicing, including loss mitigation, REO management, valuations, and settlement and title services.

The industry's four largest mortgage servicers all say they will be taking part in the revamped Home Affordable Refinance Program (HARP). Bank of America, Chase, Citigroup, and Wells Fargo have each expressed their support of the program and the changes that will allow more underwater homeowners to refinance. Government officials expect the program's revisions to expand its reach and increase competition for mortgage refinancing, with an estimated 1 million homeowners to receive assistance under the new guidelines.