Foreclosure

When the Treasury Department released its latest progress report for the Home Affordable Modification Program (HAMP) in late July, it showed the redault rate for permanently modified loans to be around the two percent mark. An outcry from analysts - and some of you discerning DSnews.com readers - immediately followed, questioning the validity of the government's math. Last week, the Treasury quietly corrected its redefault assessment. The revised numbers are between 6 and 10 percent.

RealtyTrac reported Thursday that foreclosure filings increased four percent in July -- an abrupt departure from the previous three months, which saw consecutive declines in foreclosure activity. However, even with filings on a total of 325,229 properties during the month, July's numbers represented a 10 percent decrease compared to July 2009. It was the 17th consecutive month with a foreclosure activity total exceeding 300,000. One in every 397 U.S. homes received a filing in July.

The Obama administration said Wednesday that it will provide additional support to help unemployed homeowners through two targeted initiatives. The Treasury will make another $2 billion available to housing finance agencies in 17 states and the District of Columbia to implement local programs for unemployed homeowners. HUD is also launching a $1 billion program to provide up to 24 months of assistance to homeowners who are at risk of foreclosure because of lost income.

This past week Indiana Attorney General Greg Zoeller filed lawsuits against three for-profit foreclosure companies, claiming they have not complied with the state's statutes by demanding money up-front for services not yet performed. Zoeller has formed a Homeowner Protection Unit (HPU) meant to track down foreclosure consultant companies that may be operating illegally in Indiana or are failing to comply with Indiana's new laws meant to protect consumers.

Could the U.S. economy slip back into the throes of the recession that nearly crippled the nation's financial system and protracted any semblance of a housing recovery? The analysts at Moody's think so. They say the odds of a near-term double-dip recession have increased to one in four. And they warn that if the economy sinks back into recession, housing activity will follow. If such a scenario were to play out, Moody's says home prices are likely to fall by another 20 percent before they stabilize in early 2012.

A former Fannie Mae VP has gone public with accusations that the nation's largest mortgage company mishandled its stewardship of the Home Affordable Modification Program (HAMP). The whistleblower claims that HAMP was impeded by intentional delays and slip-ups because Fannie executives placed their institution's short-term financial interests above helping homeowners avoid foreclosure. A spokesperson for Fannie Mae told DSNews.com that there is ""no merit to [the] allegations.""

The percentage of borrowers underwater on their mortgage declined during the second quarter, but that welcome change of pace could come to an abrupt end as home values are again beginning to fall in markets across the country. Zillow reported Monday that as of the end of June, 21.5 percent of single-family homeowners with a mortgage owed more on the loan than their home is worth. That's down from 23.3 percent in the first quarter of this year, and 23 percent during the second quarter of 2009.

Figures released Friday put July's job loss at 131,000 with the unemployment rate holding steady at 9.5 percent, though 71,000 jobs were added to the private sector. A recent report released by the Pennsylvania Association of Realtors revealed job loss as one of the top factors contributing to home foreclosures in the state. Across the country, too many Americans have learned that the loss of one's job can be directly related to the loss of one's home.

The U.S. Federal Reserve is in the same boat as the banks now, dealing with a mortgage portfolio that's riddled with deficiencies and delinquencies. The central bank's New York branch has been saddled with a heap of souring loans from the assets it picked up to support the 2008 bailout of Bear Stearns. And now, as more and more of these loans - both residential and commercial - fall into default, the New York Fed is faced with a dilemma: to foreclose or not to foreclose.

Fannie Mae's second-quarter losses narrowed considerably from the demoralizing financials of the past several years that found the nation's largest mortgage financier underwater itself in a sea of red ink. The GSE reported Thursday that it lost $1.2 billion last quarter. It was Fannie's smallest loss in more than three years. The company also said it needs far less money from taxpayers this quarter - $1.5 billion. The company acquired 68,838 single-family REOs through foreclosure in Q2, and its seriously delinquent rate dropped to 4.99 percent.