Foreclosure

Word on the street is that Goldman Sachs is looking to sell off its mortgage servicing arm, Texas-headquartered Litton Loan Servicing. One publication's blog post says Litton never proved to be the distressed mortgage cash-cow that Goldman had hoped, while another financial news outlet reports that the servicing unit is indeed unprofitable at the moment. Industry data show that Litton's servicing portfolio has contracted by nearly 35 percent over the last two years.

RealtyTrac has announced the hiring of real estate veteran Charlie Engel as its new director of business development--real estate. Engel will lead the online foreclosure marketplace's efforts to drive additional real estate professional partnerships. He brings more than 10 years of sales management and business development experience to RealtyTrac.

Southern California's distressed home sales - the combination of foreclosed home sales and short sales - made up more than half of the region's resale market in February, according to a new report from DataQuick. Foreclosure resales accounted for 37.1 percent of resales last month, while short sales were an estimated 19.8 percent. Absentee and cash buyers, primarily investors, are purchasing these homes in record numbers, but DataQuick expects this spring will see an infusion of more traditional buyers.

With so much attention focused on the House's efforts to stamp out four federal foreclosure programs, a bill making its way through the Senate - which like its House counterpart would effectually terminate the Home Affordable Modification Program (HAMP) - has received less attention but is progressing nonetheless. Pundits insisted such legislation would fall flat in the Senate, but members of the chamber's Banking Committee are pushing their bill forward on the argument that the free market, on its own, is working where government programs are faltering.

House Republicans may have succeeded in passing legislation to end federal housing programs that are intended to provide assistance to unemployed homeowners and support efforts to clean up vacant foreclosed homes, but their Democratic counterparts aren't going to take it lying down. Rep. Barney Frank, the top-ranking Democrat of the House Financial Services Committee, has introduced legislation that would require the biggest banks and hedge funds to cough up $2.5 billion to keep those very same programs alive.

Two recent studies about investors who buy vacant and deteriorating homes and resell them paint vastly different pictures of the effects such actions have on neighborhoods. A report from the Federal Reserve Bank of Cleveland says many cities are being hurt by investors who purchase homes and sell them quickly without regard for back taxes on the property. But another report says investors who play the game fairly are actually contributing to the growth and overall health of ailing neighborhoods and helping families at the same time.

Radar Logic's 25-metro-area RPX Composite price slumped to its lowest value last week since its peak in June 2007. Based on data from home sales that closed during the 28 days ending January 3, 2011, the value was at $183.18 per square foot. That's 34 percent lower than the 2007 peak value of $278. The company says last week's reading is lower than the price for any other date since May 14, 2003.

According to a community advocacy group in California, home value losses from foreclosed homes in California have cost a minimum of $632 billion, and could end up costing as much as $1 trillion. California is considered one of the ""hardest-hit"" states in the country, and according to the report, one in every five foreclosures in the United States is in California. One state lawmaker has proposed legislation in an attempt to recover lost tax revenue by forcing lenders to pay $20,000 for each home foreclosure they initiate in California.

The U.S. House of Representatives voted Wednesday to pull the plug on HUD's Neighborhood Stabilization Program (NSP) and rescind $1 billion in grant money that has not yet been awarded. The NSP Termination Act (H.R. 861) passed the House with a 242-182 vote. It now moves to the Senate, where it is not expected to be met with such favor. White House officials again indicated that President Obama will veto the bill should it make it that far.

With bank-owned inventories expanding rapidly, even government agencies are looking for new ways to quickly get foreclosed properties back into the hands of responsible homeowners. For the first time in recent years, HUD is planning to sell over 150 foreclosed homes through auction. The auction will take place March 26th at the JW Marriott Desert Ridge in Phoenix, and will be conducted by the real estate auction firm Hudson & Marshall.