Foreclosure Starts Rise as Servicers Process Backlog of Delinquent Loans

Foreclosure starts among private-label residential mortgage-backed securities (RMBS) have been rising toward historic averages over the past six months, which will lead to an influx of distressed properties bringing downward pressure to the housing market, according to recent RMBS Performance Metrics from Fitch Ratings.

According to Fitch, foreclosure start rates for severely delinquent RMBS loans have stayed above 10 percent since September — a rate they have not reached since November 2009 — and have been working their way toward their 14 percent average between 2000 and 2010.“Rising foreclosure start rates are likely a sign that servicers are playing catch-up on actions that have been delayed over the past year,” states Diane Pendley, managing director of Fitch Ratings.

Freddy Mac Adds Washington to Winter Sale Locations

Freddie Mac has expanded its winter REO sales incentive program to the states of Alaska, Kansas, Kentucky, Missouri, Oregon, and Washington. That makes the promotional offer now active in 33 states and the District of Columbia.

“We’re expanding our winter promotion to focus additional incentives to encourage strong sales activity in our ‘cold weather’ states over the next several months,” said Chris Bowden, VP of HomeSteps.

Offers must be received by HomeSteps between November 15, 2011 and January 31, 2012, with escrow closed on or before March 15, 2012. This offer is valid only on HomeSteps homes sold to owner-occupant buyers.

The program also extends additional incentives to these owner-occupant buyers. Freddie Mac will pay up to 3 percent of the final sales price towards the borrower’s closing costs. Some homes are also eligible for a two-year Home Protect limited warranty that covers electrical, plumbing, air conditioning, heating, and other major systems and appliances.

Quicker Approvals

Banks are not only approving more short sales, they’re doing it in less time. In the second quarter, short-sale homes, also known as pre-foreclosures, sold an average 245 days after default, down from 256 days in the previous period, according to Irvine, California-based RealtyTrac. That reversed three straight quarters of increases.

"I use an attorney practice specializing in convincing the banks that a short sale benefits them as well as the seller. Our ratio of closed short sales outbeats other local agents", say Chris White, RE/MAX Metro and Eastside.