REO

Home prices across the United States continue to slide in the quarterly context, but industry data released Thursday indicates that when you widen the scope, year-over-year numbers are still showing a healthy bounce-back from the depressed levels recorded in 2009. Add to that the fact that REOs are coming to market at a much slower pace, and analysts at Clear Capital say it just might mean the rapid deterioration in the housing market will have a shorter lifespan than originally feared.

Mountain Real Estate Capital, the newly formed acquisition and investment affiliate of Mountain Funding, announced this week that it has closed on its first five acquisitions. Historically, Mountain Funding has focused on value-added residential and commercial opportunities, but the company says in the current environment, it is zeroing in entirely on acquiring assets at distressed values.

Overdue loans in pools of commercial mortgage-backed securities (CMBS) continue to mount. Although the rate of increase slowed from March's breakneck pace, the research firm Trepp LLC reported Monday that the percentage of CMBS loans 30 or more days delinquent, in foreclosure, or classified as REO jumped 41 basis points last month, putting the overall delinquency rate at 8.02 percent. Fitch Ratings says the default rate for its CMBS-rated universe is even higher, hitting 8.15 percent at the end of Q1 2010.

""Mixed results"" has been the predominant theme among industry studies the last couple of weeks. The latest report from Lender Processing Services held true to form. The Florida-based company's analysis of the nation's home loan market indicates ""modest improvements"" in the number of nonperforming loans returning to current status and fewer new delinquencies. But the research firm says these steps forward are still overshadowed by a large pool of 7.39 million non-current and REO loans.

Freddie Mac reported Wednesday that it had sold 207 HomeSteps REO homes to first-time buyers and other owner-occupants at auctions in Las Vegas and Riverside-San Bernardino, California on April 24 and 25. The auctions, managed by New Vista and Real Estate Disposition Corporation (REDC), drew thousands of bidders. Freddie Mac sold 90 percent of the REO properties set aside for the auctions. Altogether HomeSteps found buyers for 107 repossessed homes in Las Vegas and 100 homes in Riverside/San Bernardino.

Treasury announced plans in March to allow principal reductions for distressed borrowers who owe more on their mortgage than the home is worth. The move has sparked a debate over the ramifications of mortgage debt forgiveness. The credit ratings agency DBRS says even investor reaction to the push for debt forgiveness has been mixed. But the firm says if done properly, principal write-downs will benefit securities investors in the long-run, and could moderate the ever-increasing delinquency pipeline and shrink swollen housing supplies.

As part of its ongoing efforts to stabilize neighborhoods across the country, Fannie Mae announced Tuesday that it has extended its seller assistance incentive on properties purchased through HomePath, the company's REO disposition operation. Through this program, qualified buyers receive 3.5 percent of the final sales price to be used toward closing cost assistance or their choice of selected appliances. The offer is available to any owner-occupant who closes on the purchase of an REO property listed on the HomePath Web site by June 30, 2010.

Sales of previously-owned homes rose higher than expected in March, reversing a three-month slide. The National Association of Realtors (NAR) said Thursday that existing-home sales jumped 6.8 percent to a 5.35 million-unit annual sales rate. Forty-four percent of last month's sales were attributed to first-time buyers racing to make the window for the homebuyer tax credit, but NAR still sees the March numbers as a signal of what will be a strong spring season and a broad home sales recovery.

The FDIC has completed sales of $2 billion in notes backed by real estate loans seized from two big bank failures - Corus Bank in Chicago and Franklin Bank in Houston, Texas. According to the FDIC, the structured note sales - the first from the agency since the early 1990s - will increase recoveries for the two bank closings and return substantial funds to the deposit insurance fund, which has taken repeated hits with the elevated number of bank failures over the past two years.

DepotPoint, Inc. recently announced that it has launched a real estate agent network and modified its proprietary short sale solution to be fully compliant with the administration's Home Affordable Foreclosure Alternatives (HAFA) program, which went into effect on April 5.