REO

First time claims for unemployment insurance rose 8,000 in the week ended March 2, the Labor Department reported today, the third straight weekly increase after revisions to earlier data. Continuing claims, reported on a one-week lag, increase 10,000 to 3,416,000, the second straight weekly increase.

Home prices across much of the country are still overvalued, but the gap is narrowing, according to Fitch Ratings. The agency has revised its Sustainable Home Price (SHP) model, and the results show that residential property values are now on track to fall an additional 9.1 percent nationally before arriving at a level that is supported by market fundamentals. Though home prices are falling nationally, Fitch notes that price movement in some regional markets is still quite volatile due to the volume and pace of distressed sales being processed.

The housing market is healing, a Capital Economics report stated, but the road to recovery will be a long and gradual one. The research firm expects to see home sales and homebuilding continue with increases, while house prices are expected to finally stop falling later this year. While certain areas of the housing market appear to be moving in a positive direction, Capital Economics still points out that with the growth come constraints, such as Eurozone issues and tightened lending standards.

While home prices declined on a year-over-year basis in January 2012, a month-over-month gain was seen when excluding distressed sales, according to CoreLogic's January Home Price Index (HPI). Prices declined 3.1 percent in January 2012 compared to a year ago in January 2011. But, when excluding distressed sales, year-over-year prices declined by 0.9 percent, and a month-over-month gain of 0.7 percent was seen for January. Distressed sales include short sales and REO transactions.

Data through the end of January shows significant movement in both foreclosure starts and sales, and it has some market watchers saying the lull in foreclosure activity seen over the past year-and-a-half may very well be coming to an end. Lender Processing Services' (LPS) latest market report says foreclosure starts jumped 28 percent between December and January, and foreclosure sales soared 29 percent. It also shows that 47 percent of all foreclosures started during the month were repeat foreclosures.

Last month, year-over-year home price declines were at their lowest level since April 2011, but REO saturation levels rose in three of four regions, according to Clear Capital's latest Home Data Index. Whether this REO increase is an anomaly or the beginning of a new wave of REOs as banks pick up the pace now that they've reached a settlement with the state attorneys general is yet to be determined. Nationally, home prices fell 1.9 percent year-over-year, according to Clear Capital. The West and Midwest experienced the greatest declines, 3.2 percent and 4.3 percent, respectively.

During January, approximately 74,000 homeowners received permanent loan modifications from mortgage servicers, according to modification data released by HOPE NOW, a voluntary, private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors. While the January numbers are a decrease compared to the previous two months, it was a record-breaking month for foreclosure sales. For the first time since October 2009, foreclosure sales, which reached approximately 79,000, outpaced loan modifications.

The first details on how mortgage servicers must fulfill their end of the $25 billion federal-state settlement can be found within the 233 pages of Wells Fargo's annual filing with the Securities and Exchange Commission. As expected, first-lien principal reductions carry the most weight in terms of credit towards each servicer's financial obligation. Forgiveness of past due payments for unemployed homeowners garner dollar-for-dollar credit, as do costs associated with demolishing vacant, foreclosed properties.

Pre-foreclosure short sales and sales of foreclosed REOs totaled 907,138 in 2011, RealtyTrac reported Thursday. These foreclosure-related transactions made up 23 percent of all residential sales in the U.S. last year, with short sales accounting for 9 percent and REOs accounting for 14 percent. Short sales increased more than 40 percent on a year-over-year basis in several states, including Michigan, Georgia, and Arizona. RealtyTrac expects short sales to continue to gain momentum in 2012 as lenders become more aggressive disposing of distressed assets.

California Attorney General Kamala D. Harris outlined the six parts in the proposed California Homeowner Bill of Rights during a press conference on Wednesday. The first part of the bill the California AG announced was the Foreclosure Reduction Act, which will address dual tracking issues. Other requirements in the bill include a $25 levy each time servicers record a notice of default, fines against owners of blighted property from $1,000 to $5,000 per day, and a $10,000 civil penalty for ""robosigned"" documents.