News

The state of Illinois saw seven of its locally-based banks closed down by regulators over the weekend. So far this year, 57 institutions have landed on the FDIC's failed bank list. Ten of those are from Illinois. This latest round of Midwest closures is expected to cost the FDIC a combined $973.9 million.

The private-label mortgage debt drought has come to an end. Redwood Trust Inc. priced the industry's first non-agency, non-government residential mortgage-backed security (RMBS) in two years on Friday. Bidding by investors for the $222.4 billion pool of home loans was so strong that it sold at lower yields than Redwood initially offered.

Commercial real estate prices appeared to be stabilizing toward the end of last year, but a new study shows price declines have returned. Moody's Investors Service says its index for commercial property values fell 2.6 percent in February. It was the first decline recorded by the company in four months. The share of distressed sales in Moody's repeat-sales database has increased significantly over the last year. In early 2009, less than 20 percent of resales were identified as distressed. In February of this year, that proportion reached nearly one-third.

xplair Technology, LLC, a San Diego-based provider of portfolio management software, hardware services, and support, announced Thursday that it has added a Loss Mitigation Midsourcing module to its Web-based residential mortgage platform, illumair Management System (iMS). This new module was designed to meet reporting requirements for government-sponsored entity programs, including the Home Affordable Modification Program, the Home Affordable Foreclosure Alternatives program, and Fannie Mae's Deed-for-Lease.

With defaults continuing to mount and declining property values still widespread, the industry is seeing an increase in short sales. Such transactions are expected to burgeon even further now that the federal government has implemented its Home Affordable Foreclosure Alternatives (HAFA) program. With the new policies and still-precarious market conditions, short sales are gaining in popularity among lenders and distressed homeowners alike, but as with any modus operandi that rapidly picks up steam, this proliferation can open the gate for fraudulent activity.

The Loan Modification Scam Prevention Network, led by Fannie Mae, Freddie Mac, the Lawyers' Committee for Civil Right Under Law, and NeighborWorks America, is launching a national campaign to prevent loan modification scams through public education, complaint reporting, and coordination with local, state, and federal enforcement agencies.

Foreclosure activity in Massachusetts increased significantly during the month of March. The number of foreclosures initiated by lenders in the Bay State jumped 22 percent from the prior month and 8 percent from a year earlier, according to the latest report from the Warren Group, a Boston-based real estate research firm. Foreclosure deeds and auction announcements also surged.

With the U.S. Department of Agriculture's (USDA) loan guarantee program said to be just days away from exhausting its federal funding, a bill requiring lenders to fund the program was unanimously passed by the House Financial Services Committee on Thursday. This action clears the bill for consideration by the U.S. House of Representatives, which is expected to take up the bill as early as next week.

The North Carolina Office of the Commissioner of Banks (NCCOB) says new mortgage rules aimed at reducing unnecessary foreclosures in North Carolina have been approved by the Rules Review Commission and will take effect for licensed mortgage servicers on June 1, 2010. Under these new rules, mortgage servicers will be required to stop foreclosure efforts pending the consideration of a request by the homeowner for assistance, and they will be required to respond promptly and clearly to homeowner requests for assistance.

Lending institutions started formal foreclosure proceedings on fewer California homes last quarter. MDA DataQuick reports that a total of 81,054 notices of default were filed at county recorder offices during the January-to-March period. That's down 4.2 percent from the prior quarter and 40.2 percent from a year ago. DataQuick says it's seeing signs that the worst may be over in the hard-hit entry-level markets, but problems are slowly spreading to more expensive neighborhoods.