Foreclosure

Problems in the commercial real estate sector have put Congress on the offensive. House members are particularly concerned with guidance issued be federal banking regulators, advising lenders to extend or restructure loans backed by income-producing or development properties. Lawmakers say there are indications these loans are not being serviced properly, and evidence that regulators themselves are triggering defaults by encouraging lenders to write down the value of performing loans when payments are current.

Connecticut Attorney General Richard Blumenthal sent cease-and-desist letters to 30 law firms and real estate companies this week ordering them to stop abrupt and illegal evictions of tenants of foreclosed properties. Blumenthal says his office has received complaints from tenants who were illegally forced out of rental homes after their landlords' properties were foreclosed - a violation of the federal Protecting Tenants at Foreclosure Act (PTFA) signed into law last year.

Overdue loans in pools of commercial mortgage-backed securities (CMBS) climbed to 6.49 percent in January, according to a report issued this week by Trepp LLC, a New York-based company that tracks the commercial real estate market. That figure is up 42 basis points from the 6.07 percent delinquency rate in December, and Trepp says it's the highest delinquency level in the history of the CMBS industry.

In an effort to bring Web-based tools to homeowners in need of foreclosure prevention assistance, Columbia, Maryland-based IndiSoft and Financial Literacy Solutions (FLS), headquartered in Coral Springs, Florida, have entered into a strategic partnership.

A group of properties located in Montgomery County, Pennsylvania valued at almost $3.4 million were sold for less than a third of their value at the September 2009 annual upset tax sale. According to a recent report by the Real Estate Tax Sale Law Network, Inc. (RETSL), a servicer who connects lenders and property owners with legal experts who know the intricacies of real estate tax sale law, the properties sold for a total of $1,066,394, equaling only 31 percent of their value.

The California State Department of Real Estate (DRE) says it revoked a record number of real estate licenses in 2009, and accepted another record number of license surrenders from real estate professionals facing disciplinary action. All told, over 775 licensees in the state had their license revoked or simply surrendered their license while facing accusations last year.

The Federal Housing Finance Agency (FHFA) recently released its monthly Foreclosure Prevention Report, which summarizes loss mitigation activity for Fannie Mae and Freddie Mac. Under the administration's Home Affordable Modification Program (HAMP), the GSEs have initiated 43,000 permanent modifications and 442,500 active trials. FHFA also reported that in 2009, the two companies refinanced more than 4 million loans for struggling homeowners.

Freddie Mac and 13 national and local nonprofit organizations have launched a pilot effort aimed at convincing discouraged delinquent borrowers to pursue mortgage workouts to save their homes from foreclosure. Freddie Mac has set up new Borrower Help Centers in Chicago, Phoenix, San Bernardino, and Washington, D.C. to provide mortgage counseling to delinquent Freddie Mac borrowers. The company is also launching a separate national phone campaign to reach distressed borrowers across the nation.

Technology provider Equator has announced the launch of its new agent-initiated short sale feature, which gives agents the ability to request a short sale on behalf of their homeowner clients, initially bypassing the lender to open up the process on their own. The company says agent initiation makes the progression easier for both the borrower and the lender, and brings short sales to fruition in dramatically less time.

In an effort to rebuild communities devastated by the foreclosure crisis, the National Association of Realtors (NAR) has partnered with the National Community Stabilization Trust (NCST), a nonprofit organization that facilitates the transfer of foreclosed and abandoned properties from financial intuitions to local housing organizations. The collaboration will bring more than 1,400 state and local Realtor associations into a side-by-side relationship with nonprofits and state and local leaders to develop targeted plans to bring stabilization to struggling neighborhoods.