News

For many homebuyers, mortgage financing is hard to come by these days. Lenders have tightened up credit requirements in an about-face from the lax lending of pre-crisis days that's fueled record-high delinquencies. According to two separate industry surveys, cash transactions set a new record in February, accounting for 33 percent of home purchases. One report notes that the increase in cash purchases paralleled a rise in activity among investors who have their sights set on distressed properties that can be scooped up at a discount.

Default Resource, a provider of REO management, valuation, and loss mitigation services, has announced the hiring of James Zeldin as EVP and chief sales officer. Zeldin brings more than 20 years' experience in default management, origination services, REO management, and business process consulting to Default Resource. He previously served as SVP of business development for Altisource Portfolio Solutions and its predecessor company, Ocwen Financial Corporation.

State attorneys general say they are willing to work with mortgage servicers to reach a settlement deal that would resolve the joint investigation of industry practices that led to last fall's robo-signing scandal and widespread foreclosure moratoriums. But no slap on the wrist will do. The group wants to see ""fundamental changes"" to the way servicers run their business when it comes to handling delinquent borrowers or they'll turn to the courts for resolution.

Mortgage servicers were plagued with lawsuits in the last quarter of 2010, according to an industry data source. The percentage of legal actions against servicers rose 42 percent in the last three months of 2010, and actions associated with loan modifications tripled. The report said that 151 mortgage-related lawsuits were reported in the fourth quarter, jumping from 106 in the quarter before. Secondary marketing litigation nearly doubled, and criminal cases also rose.

Morningstar, Inc., a provider of independent investment research, announced Monday that its Realpoint unit has launched an operational risk assessment practice to evaluate the performance of mortgage servicing firms. Morningstar says the new practice, which is part of Realpoint's credit ratings business, will complement the company's convention of providing transparency and insight to investors in mortgage-backed securities.

Lender Processing Services, Inc. (LPS) gave the media an advance look Monday at the company's February mortgage performance report to be released later this week. In what can be viewed as an anomaly of the current housing crisis, LPS' data show that both the national mortgage delinquency rate and the share of homes that are in the process of foreclosure drifted lower last month. Altogether, LPS says there are 6,856,000 properties in the United States with mortgages that are at least 30 days past due or in foreclosure.

On Monday the Treasury announced that it will wind down the remaining $142 billion mortgage-backed securities (MBS) portfolio it carries. This news comes just as the federal government is making plans to drastically reduce its role in the mortgage marketplace. Beginning this month, Treasury plans to sell up to $10 billion in agency-guaranteed MBS each month, with the goal of fully extinguishing the portfolio in a little over a year and turning a profit for taxpayers.

Existing-home sales fell in February following three straight monthly increases, according to data released by the National Association of Realtors (NAR) Monday. Sales of previously owned homes dropped 9.6 percent last month to an annual rate of 4.88 million. The latest figures came in much lower than analysts were expecting. NAR attributed the February results to the twin headwinds of tight credit and appraisal problems that resulted in contract cancellations. Distressed homes accounted for nearly 40 percent of the pre-owned sales volume in February.

Word on the street is that Goldman Sachs is looking to sell off its mortgage servicing arm, Texas-headquartered Litton Loan Servicing. One publication's blog post says Litton never proved to be the distressed mortgage cash-cow that Goldman had hoped, while another financial news outlet reports that the servicing unit is indeed unprofitable at the moment. Industry data show that Litton's servicing portfolio has contracted by nearly 35 percent over the last two years.

RealtyTrac has announced the hiring of real estate veteran Charlie Engel as its new director of business development--real estate. Engel will lead the online foreclosure marketplace's efforts to drive additional real estate professional partnerships. He brings more than 10 years of sales management and business development experience to RealtyTrac.