REO

Interest from first-time homebuyers is steadily growing due to concerns over rising interest rates and prices, while investor interest remains strong, according to results from the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The survey found first-time homebuyers accounted for 34.5 percent of home purchase transactions in February, leading to the second monthly increase. Meanwhile, investor purchases reached a four-month high after accounting for 34.5 percent of transactions in February, according to the survey results.

CoreLogic's Home Price Index (HPI) posted its largest annual increase in nearly seven years in February. When including distressed sales (short sales and REO transactions), home prices in February increased by 10.2 percent from February 2012, the data provider reported Wednesday. The annual gain marks the largest increase since March 2006. From January to February, prices still moved in a positive direction, but rose by just 0.5 percent.

Since the housing crisis, many large banks have sold off servicing portfolios to smaller, emerging companies. According to a recent study, these portfolios often begin to perform better after the transfers. Opera Solutions found faster liquidations and better long-term performance for modified loans after portfolios were sold. According to the study, two servicers stand out for acquiring the ""lion's share"" of servicing rights--Ocwen and Nationstar. At Ocwen, which acquired the most loans, the study detected higher levels of foreclosures and REO rates immediately following acquisitions. However, after a period of months, Ocwen's portfolios stabilized and improved.

Since the foreclosure crisis, several studies have linked foreclosures to falling property values for neighboring homes. However, one researcher from the Federal Reserve Bank of Boston recently set out to discover the impact of foreclosed properties on neighbors who aren't looking to sell their homes. The study found the likelihood of a neighbor complaining about a particular home doubles once a homeowner enters the foreclosure process. Once a property is in REO, the likelihood increases nine-fold, according to the study.

Lower rental yields might cause investors to lose interest in the housing market, but according to Capital Economics, that scenario is unlikely to play out this year. Currently, the increase in home prices is outpacing the rise in rents, which ""is weighing on rental yields,"" the firm noted in a report authored by the property economist Paul Diggle. However, Capital Economics stated the reduction in rental yields is actually ""very gradual"" and the ""the total return from housing remains attractive."" Thus, investors, who analysts say are driving the recovery, are not expected to exit the market just yet.

Industry leaders gathered in Las Colinas, Texas, Thursday for the Five Star Institute's 2013 REO and Short Sale Executive Summit to discuss issues and market conditions impacting the distressed asset space. A number of the nation's leading financial institutions and government agencies were represented at the event designed to facilitate open dialogue and collaboration for developing solutions to today's most pressing REO and short sale challenges.

Carrington Property Services, LLC (Carrington) and LendingXpress, a platform from SWBC, formed an exclusive partnership to bring REO asset management services to smaller-scale financial institutions. As part of the agreement, LendingXpress will market Carrington's REO asset management solution to its customer base of credit unions and community banks.

Foreclosure inventory seems to be making a comeback after experiencing steady declines following the national mortgage settlement, RealtyTrac revealed in a report Thursday. In the first quarter of 2013, the number of properties that were in the foreclosure process or bank-owned rose 9 percent year-over-year to 1.5 million, according to data from the online foreclosure marketplace. The most recent figure represents a 12 percent increase from the five-year low seen in May 2012. The report also found 35 percent of the homes in the foreclosure process were abandoned by the homeowner.

Fannie Mae and Freddie Mac continue to administer foreclosure prevention efforts while experiencing declines in delinquencies, foreclosures, and REO inventories, according to a report from the Federal Housing Finance Agency (FHFA). The GSEs enacted 541,219 foreclosure prevention actions in 2012, contributing to a total of 2.7 million foreclosure prevention efforts since the enterprises came under government conservatorship in 2008, according to the report. Over the year, delinquencies also fell by a substantial 14 percent with the FHFA reporting declines in every state except New Jersey and New York.

Radar Logic reports a seasonal price dip in January but a 12.7 percent increase year-over-year. The firm continues to find heavy investor influence in many markets, though investor activity may be shifting somewhat into new markets. Radar Logic's RPX Composite Index, which measures prices in 25 metros, posted a 2 percent decline in January. Prices remain 31 percent below their June 2007 peak. Institutional investors are playing an active role in many markets but appear to be shifting out of some markets where they previously played a major role and into some smaller markets previously largely ignored by the group.