Foreclosure

The nation's two largest mortgage companies saw the number of actions carried out to prevent foreclosures on their loans more than double in 2010 when compared to 2009. Servicers of Fannie Mae and Freddie Mac loans completed 946,305 foreclosure prevention workouts in 2010, according to data from the GSEs' regulator, the Federal Housing Finance Agency (FHFA). In 2009, they completed 431,098. FHFA also stressed that the performance of recently modified loans has improved relative to loans modified in earlier periods.

On Thursday banks received the much awaited proposal that many speculated would detail the potential ramifications for their part in the foreclosure and robo-signing mess. According to various reports, the proposal could force banks to reduce principal loan balances for borrowers who are delinquent or underwater, or pay a multi-billion dollar fine. Reports have surfaced that banks are pushing back against proposed mandatory write-downs, claiming that such a practice could invite fraud.

According to the Warren Group, a Boston-based provider of real estate data and research, Massachusetts foreclosure activity posted double digit decreases in both starts and completed foreclosures in January. Foreclosure petitions and deeds dropped in every county in the state. The agency says, though, that it's likely the reduction is caused by lenders slowing their processes rather than improved financial stability among homeowners.

As the House prepares to debate on the future of the Federal Housing Administration's Short Refinance option, FHA Commissioner David Stevens implored House subcommittee members to give the program a chance. The program is a voluntary option for lenders to agree to offer principal write downs and restructure loans for underwater borrowers. Stevens said as of February 11, 23 FHA-approved lenders are participating in the program and 245 FHA case numbers have been requested, of which 44 loans have been endorsed.

The House Financial Services Committee voted Thursday to scrap two foreclosure relief programs - one that gives underwater homeowners a federal refinancing option through FHA's Short Refi Program, and a second that provides temporary assistance to unemployed homeowners through the Emergency Mortgage Relief Fund. The two bills now move to the full House for debate. The committee was also planning to consider two separate bills to end the Home Affordable Modification Program (HAMP) and HUD's Neighborhood Stabilization Program, but votes on these have been pushed to next week.

RealtyTrac, an online marketplace for foreclosure properties, launched a new foreclosure search widget in February for real estate agents and brokers. The widget allows users to INSERT IGNORE a fully functional nationwide foreclosure property search on their Web sites, which delivers real-time foreclosure data from RealtyTrac.

Data released by Lender Processing Services (LPS) Wednesday shows that while foreclosure starts decreased in the first month of 2011, they still outnumber foreclosure sales by almost three to one. According to the company's analysis, lenders initiated 230,000 foreclosure actions in January, down 11.4 percent from the previous month. Foreclosure sales totaled approximately 80,000 during the same month. At the same time, deterioration in the 90-plus days delinquent category increased for the first time since May 2010.

An internal review by SunTrust has uncovered problems with the paperwork in thousands of foreclosure cases, according to a regulatory filing with the Securities and Exchange Commission. The company says its assessment indicated approximately 4,000 files contained documents with ""technical issues"" in the complaint verification, affidavit preparation, and notary processes. SunTrust is refiling defective documentation in pending foreclosure actions and expects this process to be completed by the end of March.

On Wednesday, a hearing was held by the Insurance, Housing and Community Opportunity Subcommittee to determine the fate of four federal foreclosure mitigation programs. The Home Affordable Modification Program (HAMP), HUD's Neighborhood Stabilization Program, the Federal Housing Administration (FHA) Refinance Program, and the Emergency Mortgage Relief Fund all have bills in play advocating for their termination. Witness testimony was mixed on whether the programs should continue or come to an end.

Treasury released its new numbers for the Home Affordable Modification Program (HAMP) Wednesday, just hours before a House subcommittee convened a hearing to terminate the government's flagship foreclosure prevention program and three other federal housing programs. As of the end of January, active permanent HAMP mods totaled 539,493, but critics say the numbers aren't high enough and the House subcommittee's looming ""kill-bill"" hearing was a sensitive subject for officials.