REO

The nation's housing crisis has forced unprecedented numbers of homeowners out of their homes, made for a difficult homebuying environment, and tainted many Americans' ideal of owning a home. These factors are taking their toll on homeownership in this country. The Census Bureau says homeownership in the United States has fallen to its lowest level in more than 13 years, slipping to 65.9 percent in the second quarter. The increase in the homeownership rate seen during the housing boom has been more than completely wiped out by the bust.

The Chicago City Council has passed a local statute that will make lenders liable for the upkeep of vacant homes even when the borrower still holds the title. The ordinance was approved unanimously by council members. It amends the definition of a ""property owner"" in the municipal code to include an entity who holds a mortgage on the property, which means lenders are liable for routine maintenance and repairs even prior to foreclosing and taking control of the title if the borrower abandons the home.

The National Association of Realtors said Thursday that pending home sales rose for the month of June, marking the third of the last four months its index has increased. Pending sales last month were up 2.4 percent from May and 19.8 percent from June 2010. The measurement is a forward-looking index based on contracts but not actual closings. Some economists are warning not to read too much into the latest numbers considering contract cancellations are on the rise.

Eighty-four percent of the country's largest metro areas experienced declines in foreclosure activity in the first half of the year, according to RealtyTrac's midyear metropolitan foreclosure report released Thursday. However, RealtyTrac attributes these declines not to an improving market, but to delays in local foreclosure processes. Even the top 10 metro areas with the highest foreclosure rates in the first half of the year showed a year-over-year decrease in foreclosure activity.

Auction.com is in the midst of a three-day online auction of Texas commercial real estate properties and nonperforming notes. The company says in total, the assets up for sale are valued at more than $300 million, making it the largest conglomerate of commercial real estate assets to be auctioned online in Texas history. Barclays Capital matched the list of assets to be sold to its database of commercial mortgage-backed securities (CMBS). The firm pegs CMBS exposure to the Texas auction at about $262.5 million.

Median prices for REO and short sale transactions continue to decline. A new report from CoreLogic shows distressed home prices at the national level have fallen 10 percent since 2009. The company notes, however, that new foreclosure auction filings have dropped significantly since last October, and the industry's shadow inventory has been trimmed. With these two distressed sale drivers narrowing, CoreLogic says such transactions will likely begin to decline late in 2011 and into 2012.

The rise in foreclosures in recent years may lead to long-term vacancies, further exacerbating housing prices and the market as a whole, according to Stephan Whitaker, a Cleveland Federal Reserve Bank researcher. In a recent study, Whitaker determined a strong correlation between foreclosures and vacancy rates, suggesting foreclosure may permanently scar some homes. He found that foreclosed homes still have higher vacancy rates than neighboring houses two to five years after a sheriff's sale.

Wells Fargo & Company has appointed Mike Heid president of Wells Fargo Home Mortgage. Heid previously served as co-president of the mortgage company, along with Cara Heiden, who is retiring from her position within the next few months. Wells Fargo Home Mortgage will be housed as part of the company's new consumer lending group, which will be led by Avid Modjtabai.

For the second month since recording an official double-dip in home prices, the S&P/Case-Shiller index has posted an uptick. Data released Tuesday by Standard & Poor's shows that 16 of the 20 metros included in the study and both composites reported positive monthly increases. The 10- and 20-city composites were up 1.1 percent and 1.0 percent, respectively, in May over April. Detroit, Las Vegas, and Tampa were down over the month and Phoenix was unchanged.

First Guaranty Mortgage Corp. (FGMC) will now offer Fannie Mae HomePath and HomePath renovation products through its wholesale lending and consumer direct lending channels. HomePath is the GSE's venture for marketing and selling REO properties it takes ownership of after the foreclosure process, providing special financing terms for the purchase of select Fannie Mae-owned properties. FGMC is one of only a handful of mortgage lenders in the country to be approved to provide the HomePath product.