Foreclosure Crisis Near Its End?

Daily Real Estate News | Friday, August 30, 2013

  

Foreclosure inventories nationwide fell 32 percent in July compared to a year ago, another sign that the foreclosure crisis may finally be over, according to CoreLogic's latest foreclosure report released Thursday.

In July, 949,000 homes were in some stage of foreclosure, down from 1.4 million a year ago. That represents a decrease in foreclosure inventory from 3.4 percent of all homes with a mortgage in July 2012 to 2.4 percent in July 2013.

Completed foreclosures — which is a measure of all homes actually lost to foreclosure — were also down. In July, there were 49,000 completed foreclosures, down from 65,000 a year ago. That's a drop of 25 percent year-over-year. Prior to the housing crisis, completed foreclosures were averaging 21,000 a month. That means the number of foreclosures up for sale nationwide is gradually shrinking.

“Completed foreclosures and delinquency rates continue their rapid descent in July,” says Anand Nallathambi, president and CEO of CoreLogic. “Every state posted a year-over-year decline in foreclosures, and serious delinquencies fell to the lowest level since December 2008. Not surprisingly, non-judicial states have come the farthest the fastest in reducing the shadow inventory and lowering delinquency rates.”

The following five states had the highest foreclosure inventory (as a percentage of all homes with a mortgage), according to CoreLogic:

• Florida
• New Jersey
• New York
• Connecticut
• Maine

Meanwhile, the following five states had the lowest foreclosure inventory:

• Wyoming
• Alaska
• North Dakota
• Nebraska
• Colorado

Source: CoreLogic

Mortgage Fraud Shows First Notable Signs of Falling

Daily Real Estate News | Monday, August 26, 2013

  

The number of mortgage fraud cases dropped in 2012 — the first decline since the U.S. Treasury Department began tracking fraud in 2002.

The department’s Financial Crimes Enforcement received 69,277 mortgage loan fraud suspicious activity reports in 2012, 25 percent fewer than in 2011.

That majority of the suspicious activity with mortgages occurred during the final years of the housing crisis. Fifty-seven percent of the fraud reported in 2012 involved mortgages that originated in or before 2007. In 2011, that percentage stood at 58 percent of loans originated in or prior to 2007.

The state with the highest number of mortgage fraud cases is California, which also had the highest incidence of fraud in 2011 as well. Nevada, Florida, Arizona, and the District of Columbia rounded out the top five.

Source: “Feds See a Decline in Mortgage Fraud for the 1st Time,” Credit.com (Aug. 23, 2013

Second Chance for Foreclosed Homeowners

Daily Real Estate News | Monday, August 19, 2013

  

The Federal Housing Administration is giving some former home owners another shot at home ownership. The FHA sent a letter to mortgage lenders stating that it would offer mortgage insurance to borrowers who once filed for bankruptcy, or who lost their homes through foreclosure or short sale during the recession.

Still, potential borrowers must show they can meet all other FHA requirements and that they are no longer financially constrained. Borrowers also will have to undergo housing counseling and FHA is requiring lenders to verify that at least a year has passed since the foreclosure or “economic event" that caused the foreclosure or bankruptcy.

"FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage," according to the letter FHA sent to lenders.

Source: “FHA offers mortgage backing to the once bankrupt,” HousingWire (Aug. 16, 2013)

FTC Halts Allegedly Phony Mortgage Relief Scheme

Victimizing Thousands of Consumers, Marketers Falsely Touted Legal Assistance and "Forensic Audits" for Homeowners Facing Foreclosure

Press Release Federal Trade Commission

The Federal Trade Commission filed suit in federal court to halt a mortgage relief scheme that allegedly deceived and preyed on distressed homeowners by charging them $2,000 to $4,000 based on bogus foreclosure rescue claims.

The defendants allegedly falsely claimed they would provide legal help to save consumers’ homes from foreclosure and lower their mortgage payments, then charged them up-front fees in violation of federal law, delivering little or no help, and driving them deeper into debt.

The temporary restraining order signed by the court shuts down the defendants’ websites, freezes their assets, and provides for appointment of a receiver pending trial.

The defendants marketed their scheme in a variety of ways, which included using an official looking mailer that implores consumers to act quickly before they “FORFEIT LEGAL RIGHTS,” or face a “statute of limitations and government program deadlines,” according to the FTC. Three individuals – Ratan Baid, Madhulika Baid, and William D. Goodrich – and seven companies falsely promised lower monthly payments and interest rates, and conversion of adjustable-rate mortgages to fixed ones, the FTC complaint alleged. Many consumers who called the toll-free numbers were falsely guaranteed a loan modification that supposedly would make their payments more affordable, that they would get results within 60 to 90 days, or that Goodrich, an attorney, would use his impressive legal experience on their behalf, according to the complaint.

The defendants also marketed their scheme online, through telemarketing calls and with television and radio ads, according to the complaint. The defendants’ websites touted a range of financial services, including bankruptcy advice, credit counseling, and “forensic mortgage audits.” One of the sites described how these “audits” can help consumers hold onto their homes or lower their mortgage payments. It falsely claimed that the “audits” could uncover any “lending violations” committed by lenders, and that the information could be used “to gain leverage in a successful loan modification,” the complaint stated.

In reality, however, the defendants generally did not provide the promised loan modification or help consumers avoid foreclosure, either directly or through the “forensic mortgage audits.”

The complaint charges the defendants with violating the Federal Trade Commission Act and with violating the Mortgage Assistance Relief Services Rule, which bans mortgage foreclosure rescue and loan modification services from collecting fees until homeowners have a written offer from their lender or servicer that they deem acceptable.

The complaint also names as defendants Apex Solutions, Inc.; William D. Goodrich, Attorney, Inc.; A to Z Marketing, Inc.; Apex Members, LLC; Backend Inc.; Expert Processing Center, Inc.; and Smart Funding Corp.

The Commission vote authorizing the staff to file the complaint and seek temporary restraining orders against the defendants in this case was 4-0. The FTC filed the complaint and request for a temporary restraining order in the U.S. District Court for the Central District of California on June 18, 2013, and the court entered the temporary restraining order the following day.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.