REO

In an effort to improve the system of maintaining and selling its inventory of Federal Housing Administration (FHA) foreclosed homes, HUD has awarded 55 new contracts - 23 to companies who will serve as asset managers and 32 companies who will serve as field service managers - under the third generation of its management and marketing program, known as M&M III. Currently, HUD's foreclosure inventory amounts to approximately 44,000 homes. The agency says the M&M III program is expected to create 1,200 new jobs nationwide.

The volume of troubled residential properties has been growing since 2005, but Standard & Poor's says regional inventory levels and trends will determine the detriment of this shadow supply. In the New York City metro area, for example, the company estimates that it will take 103 months for shadow inventory to clear, assuming current liquidation rates. That's nearly 3.5 times the national average of 34 months. By contrast, the Phoenix area has the lowest level of shadow inventory, at 16 months.

Over the past year, the mortgage risk analysis firm Clayton Holdings says it has witnessed an overall increase in short sale activity. Because of the growing emphasis on keeping borrowers out of foreclosure, servicers are becoming more inclined to employ alternative loss mitigation strategies. And Clayton says the added benefit to servicers - the one with dollar signs in front of it - is that loss severities for properties sold through short sale are 13 percent lower than loss severities for REO sales.

Keystone Asset Management Inc. has relocated to a new corporate facility and is launching a brand new image campaign as part of its growth and strategic development. As a national provider of REO outsourcing, default management and property valuation services, the company says it is affirming its commitment to the default industry with the purchase of a new office building in Colmar, Pennsylvania, aimed at increasing workplace efficiencies and featuring client-based processing stations.

Foreclosure activity dropped 3 percent from April to May, according to new data from RealtyTrac. It's the second month in a row the company has recorded a decline. In May, a total of 322,920 properties received a foreclosure filing. That figure equates to one in every 400 U.S. housing units. RealtyTrac says the data confirms that foreclosure activity is leveling off, even as lenders work through the big backlog of forestalled foreclosures and delayed repossessions that have built up over the past two years.

First Preston Management, a national real estate marketing and management firm, has been selected by HUD to provide property management services for HUD's single-family asset portfolio in 11 states, including Arizona, Idaho, Iowa, Minnesota, Montana, Nebraska, Nevada, North Dakota, South Dakota, Wisconsin, and Wyoming.

Green River Capital (GRC), an REO asset management and loss mitigation provider headquartered in West Valley, Utah, has launched a new full-service valuation company, Infinity Valuation Services (IVS), which will focus exclusively on distressed properties. IVS provides appraisals and property inspections, as well as broker-price opinions (BPOs) by leveraging Green River's established, nationwide network of 8,000 REO brokers who are well-versed in the distinct parameters that come with valuing foreclosures, short sale properties, REOs, and other non-performing assets.

Equator has initiated 200,000 short sale transactions through its technology platform since the system was first launched just seven months ago. Another 15,000 short sales have been initiated on the Equator platform that conform to the guidelines of the federal government's Home Affordable Foreclosure Alternatives (HAFA) program.

As foreclosures continue to flood the market, lenders are becoming overwhelmed with repossessed properties that may stay vacant or unfinished for months or years, making them susceptible to various types of damage. To avoid this risk, some lenders are seeking to maximize the value of their REO assets. In an effort to help lenders with this process, Aon Risk Services, the risk management and insurance brokerage business of Chicago-based Aon Corporation, has launched the Comprehensive Asset Maximization program.

Home prices nationally bumped up 0.9 percent in April, according to new data from Integrated Asset Services (IAS). That follows a 1.1 percent monthly gain in March -- the first time in eight months that IAS' home price benchmark inched into positive territory. But even with April's increase, IAS says home prices nationally are 23.9 percent below the peak hit in July of 2007, and with market pressure coming from the expiration of the tax credit and the industry's shadow inventory, IAS says even the recent improvements may be fleeting.