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REO

Fitch Says 7M Homes in the Shadows Will Take 40 Months to Clear

Fitch Ratings puts the industry's shadow inventory - meaning loans that are seriously delinquent, in foreclosure, or REO - at 7 million homes. The agency says based on recent liquidation trends, it will take more than 40 months to clear this distressed inventory. While the volume of newly delinquent mortgages has begun to improve, liquidation rates have been constrained by weak demand and initiatives to modify loans. On top of that, Fitch says the recent discovery of defects in the foreclosure process is prolonging the housing correction.

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NCCI Expands Services to Property Inspection, Occupancy Verification

National Creditors Connection, Inc., a provider of field contact, loss mitigation, and onsite inspection services, has developed a nationwide property inspection/occupancy verification service to provide servicers with a snapshot of property condition and occupancy of a loan in foreclosure. The company says this service accommodates industry standard requirements set forth by the GSEs and will help servicers determine the best resolution for troubled loans.

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Capital Economics Warns of Another Dip Ahead

The analysts at Capital Economics say that dreaded double-dip is already underway, in both housing activity and residential property prices. The research firm is forecasting home prices in the United States to steadily decline over the next 12 months and have fallen back by over 5 percent by the end of next year, taking them to a new cycle low. The company's analysts say there are currently about 1.5 million too many homes up for sale, and that excess supply will likely grow by another 4.9 million due to elevated foreclosure activity.

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Title Insurers Forego Guarantees on Foreclosure Paperwork Accuracy

Title insurers are voicing their confidence in mortgage servicers' ability to correct foreclosure paperwork problems. They've decided not to require banks to consent to agreements vouching for the validity of foreclosures, after talks between the two groups reportedly fell through surrounding large-scale indemnity arrangements. A blanket indemnity agreement to cover insurers against ""robo-signed"" foreclosures had been drafted, but title insurers say banks' actions to remediate deficiencies make it unnecessary.

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Wells Fargo Owns Up to Finding Errors in 55,000 Foreclosure Affidavits

For weeks, Wells Fargo has insisted that it's not a part of the robo-signing debacle, but that changed with an announcement late Wednesday that it will submit new affidavits for approximately 55,000 pending foreclosures in 23 judicial states. Wells Fargo says it has identified instances where employees did not adhere to legal procedures in conducting final reviews and did not execute notarizations properly. The bank reaffirmed that it does not plan to institute a moratorium on foreclosure sales.

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Foreclosure Activity Up in 65% of U.S. Metros in Q3: RealtyTrac

Data released by RealtyTrac Thursday shows that foreclosure activity rose in 65 percent of the nation's major metropolitan areas during the third quarter. Cities in California, Florida, Nevada, and Arizona once again claimed the nation's highest foreclosure rates, accounting for 19 of the 20 metros at the top of RealtyTrac's list. The only exception was Boise City-Nampa, Idaho. However, the largest increases in foreclosure filings were reported from Seattle, Chicago, and Houston.

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Foreclosure Freezes Come on Heels of Rise in Distressed Sales: Report

The proportion of foreclosure and other distressed property sales continued to climb in September, with damaged REO experiencing the sharpest rise, according to a report released this week by Campbell Surveys. The company says the new data suggests that any significant delay in foreclosures resulting from the recent legal controversy surrounding paperwork accuracy could have major repercussions for the housing market in the coming months.

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Study: Shadow Inventory to Keep REO Supply Elevated for Several Years

An estimated 4.1 million borrowers are in the process of foreclosure or are more than 90 days delinquent. Their homes make up what's been termed the shadow inventory -- a pent up supply of REOs that could drive down home prices and perhaps cause another wave of defaults. Guhan Venkatu, an economist at the Federal Reserve Bank of Cleveland, says even under the most benign projections, the stock of REO properties is likely to remain elevated for the next several years.

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Fidelity National Requires Lenders to Vouch for Foreclosure Accuracy

Fidelity National Financial, the nation's largest title insurer, will soon begin requiring lenders to provide the company with an indemnity agreement that guarantees the accuracy of their foreclosure documentation before Fidelity will insure the title of a repossessed home. The new policy was prompted by the recent foreclosure freezes enacted by at least five major mortgage servicers and disclosures of errors made in the processing of foreclosure paperwork, and is effective for all foreclosure sales closing on or after November 1.

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Massachusetts Foreclosure Petitions Drop but Foreclosure Deeds Climb

Foreclosures started by lenders in Massachusetts during September declined from August by 23 percent and dropped 6.7 percent from a year earlier, according to a new report by the Boston-based research firm the Warren Group. Lenders filed 2,358 petitions to foreclose in September, the first step in the foreclosure process. Meanwhile, the number of completed foreclosures increased for the ninth straight month in Massachusetts.

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