Foreclosure

The U.S. government has filed a lawsuit against Deutsche Bank and its mortgage unit, claiming that Germany's largest bank ""repeatedly lied"" to get into a program to select mortgages to be insured by FHA against default. Once part of the program, U.S. authorities say Deutsche Bank ""recklessly"" selected mortgages that violated the program rules ""in blatant disregard"" of whether borrowers could make their mortgage payments. The U.S. government is seeking $1 billion in damages and penalties.

An estimated 210,000 homeowners received permanent, proprietary loan modifications from mortgage servicers during the first quarter of 2011, according to data released by HOPE NOW Monday. That's down nearly 20 percent from the fourth quarter of last year, and 40 percent fewer than the third quarter of 2010. While the quarterly totals indicate a significant slide in modification activity, servicers reported an uptick during March, but HOPE NOW's data also show an increase in foreclosure activity for the month.

Home sales in the Phoenix metro are heating up thanks to the popular foreclosure market, according to ForeclosureDeals.com. The site reports that there were more than 10,000 home sales in the Phoenix area in March with nearly 1,500 of those sales foreclosure homes. The company says foreclosure properties there offer discounts from traditional home prices as high as 50 percent or more, making them popular with buyers. Lenders also report higher than normal turnout at foreclosure sales and auctions in Arizona as a whole.

The research firm Delta Associates says distress in the commercial sector is maintaining its plateau. The company's analysts report that despite a $5 billion increase in the volume of commercial properties in foreclosure and lender REO over the last two months, the level of distress has remained in the $175 billion to $190 billion range since the spring of last year. They warn that the months ahead, though, could test the staying power of the stabilization seen thus far.

California legislators have put two bills aimed at addressing the state's foreclosure problem to committee votes. Both failed to pass despite the fact that supporters packed the hearing rooms at the state Capitol, but neither is completely dead. They have both been scheduled for new hearings in the coming week. The Senate bill would have made it unlawful for a lender to move forward with foreclosure while evaluating the borrower for a modification. A second bill in the Assembly would have levied a $20,000 fee on lenders and servicers for every foreclosure initiated.

Fannie Mae has released new details on its book of business, which shows the share of mortgages it owns or guarantees that's past due by three months or longer has been on a steady decline for a year now. The nation's largest mortgage company reported that its seriously delinquent rate on single-family mortgage loans slipped to 4.44 percent in February of this year. That's down just 1 basis point from 4.45 percent in January, but it marks the 12th straight month that the rate has decreased.

A new mediation program to help ease those affected by residential mortgage foreclosures will soon be available in Peoria County, Illinois. The program's anticipated start date is June 1. The program, approved by the Illinois Supreme Court, is modeled after one that began last June in Will County. Both programs operate with no expense to taxpayers and are sustained by an increase in filing fees paid by lenders seeking to foreclose.

Bay National Title Company, a Florida-based firm formerly known as Bay Title & Escrow, recently announced the acquisition of Criterion National Real Estate Solutions of Jacksonville, North Carolina. Both firms specialize in providing title insurance and settlement services to the REO and foreclosure industry. The management of Criterion has been retained by Bay National.

Struggling Minnesota homeowners with loans owned by Fannie Mae can now expect faster response times to their mortgage situations. The Minnesota Home Ownership Center recently partnered with the GSE to accelerate the mortgage resolution process. The Center's counselors will work directly with Fannie Mae staff on behalf of borrowers to find solutions. Assistance is free of charge.

Bank of America has assembled what you might call a ""Dream Team"" of default servicing executives to head up critical areas within its Legacy Asset Servicing unit. Collectively, this new team has more than 70 years experience working with distressed borrowers. The nation's largest mortgage servicer has brought in a former default and loan servicing exec of JPMorgan, someone who previously ran all of Wells Fargo Home Mortgage's default operations, and a top executive from Fannie Mae's national servicing operation.