Foreclosure

Foreclosure activity last month slowed down along the West Coast, according to the tracking firm ForeclosureRadar. The company monitors filings and auctions in Arizona, California, Nevada, Oregon, and Washington, and said the numbers were down across the board. Foreclosure sales saw a similar decline in the firm's coverage area, and bank-owned inventories were mostly flat, suggesting fewer REOs were sold. ForeclosureRadar's CEO says activity should continue to be sluggish for a while.

As part of its crackdown on mortgage scams targeting homeowners facing foreclosure, the Federal Trade Commission (FTC) has charged a national operation with marketing bogus loan modification services. The complaint alleges that U.S. Mortgage Funding Inc., Debt Remedy Partners Inc., Lower My Debts.com LLC, and their principals mislead consumers to believe they are affiliated with or approved by consumers' lenders. They tell consumers not to contact their lenders and to stop making mortgage payments, claiming that falling behind on payments will demonstrate the consumers' hardship and need for a mortgage modification.

An Internet hacker group, going by the name Anonymous, claims to have proof that Bank of America committed mortgage fraud by ""knowingly hiding foreclosure info from federal auditors."" The group has obtained a slew of inter-departmental emails from a former employee of Balboa Insurance, a BofA subsidiary that the company sold last month. The whistleblower says he was instructed to remove document tracking numbers so supporting paperwork could not be matched to the corresponding loans. The bank called the ""extravagant assertions"" untrue.

Following last week's statement by Bank of America CEO Brian Moynihan that principal reductions are unfair and not in everyone's best interest, more banks and even some attorneys general have spoken out against the controversial clause in the settlement proposal. Wells Fargo CEO John Stumpf voiced his disapproval of principal write-downs, saying such provisions would entice people to default on their loans. Some attorneys generals said they feel write-downs would force servicers to break their contracts with investors.

The California Association of Realtors (CAR) sought to bring attention to what the organization describes as the state's ""ineffective"" short sale process Thursday by placing an open letter advertisement in California's seven largest daily newspapers. The letter, signed by CAR president Beth L. Peerce, called on lenders and industry regulators to streamline and improve the short sale process.

Senators and banks across the country are joining forces in order to provide mortgage protection for members of the military. After reports that some members of the military and their families are struggling to remain in their homes, senators announced an act to protect servicemembers from abuses. In a similar effort, two of the top servicers have announced plans to help protect members of the military from foreclosure and high credit costs.

Rhode Island may be the smallest state in the country, but its foreclosure rate is keeping pace with the big guys. According to a special report issued by HousingWorks RI, a nonprofit coalition of nearly 140 local organizations, through the fourth quarter of 2010 Rhode Island continued to rank highest in New England in both foreclosure starts and serious delinquencies. Roughly one in every 10 mortgaged homeowners in the state has been affected by the foreclosure crisis over the last two years.

On Friday the U.S. House voted to end the Emergency Homeowner Loan Program for borrowers who are unable to make their mortgage payments because of unemployment. The fund was established under the Dodd-Frank Act to provide interest-free loans to homeowners for up to 24 months while they look for new employment. This is the second House vote to end a foreclosure mitigation program that some lawmakers claim just isn't working. The bills are not expected to pass the Senate.

New data from Clear Capital indicates that the slow-down in foreclosure activity may be having a positive effect on property values in some parts of the country. However the company's report states that despite a national trend toward flattening of home prices, the western United States is dragging down encouraging developments in other regions, with the West expected to set new double dip price lows as early as next month should the trend continue.

The U.S. House of Representatives has passed legislation to end the Federal Housing Administration's (FHA) Short Refi Program aimed at helping homeowners who owe more on the mortgage than their home is worth obtain a new FHA-insured loan with a reduced principal. In a 256 to 171 vote Thursday evening, the House approved the FHA Refinance Program Termination Act, the first of four bills targeting federal foreclosure mitigation programs.