While the percentage jump is large, in a twist, some argue the foreclosure delays still persist and are hurting the recovery.

(Read More: No Money? No Worries. Home Lenders Ease Rules)

“While policy makers state that the purpose of government intervention is to help homeowners by delaying foreclosures, instead they have created an artificial shortage in bank-owned inventory (REO). The combination of the decline in REO inventory and lack of motivated sellers has left the California real estate market with an acute lack of inventory, which is putting upward pressure on prices,” say analysts at ForeclosureRadar.

(Read More: REO: CNBC Explains)

While price gains help recovery, if they happen too fast, they price would-be buyers and investors out of the market, which slows sales again. Price recovery has many believing that housing is suddenly not just back on its feet again, but surging ahead—much of the price recovery is based on lack of inventory of homes for sale, which in turn is due to foreclosure delays, which as we now see, can turn very quickly.

—By CNBC’s Diana Olick; Follow her on Twitter @Diana_Olick or on Facebook at facebook.com/DianaOlickCNBC

Questions? Comments? RealtyCheck@cnbc.com

Article source: http://www.cnbc.com/id/100553116

The new rules could make mortgage servicing more expensive, especially for those specialty servicers and level the playing field between them and the big bank servicers. That is because many of the new rules are similar to rules the big banks are already following under the $25 billion servicing settlement signed early last year with state attorneys general and the Department of Justice over “robo-signing” foreclosure abuses. The specialty servicers have no such mandates.

(Read More: Homeowners With No Mortgage Offer Recovery Clues)

“If you’re a good servicer who’s been doing sensible things, this will probably be about what you are doing now, just with a heavier enforcement regime behind it,” said CFPB Director Richard Cordray. “For servicers that have been doing a poor job, and many of them have, they will have to change their processes and get in line.”

The new rules include some very basic service standards, like clear monthly statements, prompt payment crediting and quick correction of errors; In other words, common sense that one might not expect to see mandated by a federal regulator.

“This shows just how poorly performing the mortgage servicing industry was before the crisis, and then as volumes increased in delinquencies during the crisis, it all exponentially worsened,” said Cordray.

(Read More: US Home Prices Surge Despite Distress)

Most of the rules focus on those delinquencies. First, and perhaps foremost, servicers may not move forward with a foreclosure while simultaneously working with a borrower to avoid foreclosure. This “dual tracking” led to thousands of borrowers losing their homes when alternatives were well within reach.

Article source: http://www.cnbc.com/id/100385527

Diana Olick is off today. This post was written by Stephanie Dhue, CNBC Real Estate Producer.

Robo-signing, lost paperwork and wrongful evictions have put mortgage servicers under the gun.

Banking Committee Chairman Tim Johnson on Tuesday blamed servicers, in part, for stalling a housing recovery: “Homes that should move through the foreclosure process are held up because courts and servicers are concerned that paperwork has not been completed properly.”

To address the problem, lawmakers are considering a national standard for mortgage servicers.

The four largest — Bank of America [ BAC 9.49  -0.32 (-3.26%) ], JPMorgan Chase [ JPM 39.84  -0.60 (-1.48%) ], Wells Fargo [ WFC 27.18  -0.75 (-2.69%) ] and Ally Financial [ ALLY-PB   + (+0.00%) ] — have 60 percent of the servicing market.

The industry is urging caution. Servicers are already subject to a slew of new servicing rules from bank regulators, the FHA, Fannie Mae and Freddie Mac. And more could be on the way, as banks are in settlement talks with states attorneys’ generals.

Faith Schwartz, who heads up the industry-led Hope Now Alliance, says “it is important to understand the wide variety of rules and initiatives already in progress.”

Page 1 of 2 | Next Page
Show Entire Article

Wednesday Look Ahead: Markets Twin Fears are Weak US Economy and Euro Crisis

Biggest-Ever Series of Cyber Attacks Uncovered: UN Hit

China Rating Agency Downgrades US Debt

West’s Mid-Life Crisis Points to Power Shift East

New Wave of Layoffs Suggests Jobs Report May Disappoint

More Top Stories

Article source: http://www.cnbc.com/id/43991596?__source=RSS*blog*&par=RSS

Any time I see a 74 percent jump in anything, I hear alarm bells, so when the Treasury Department reported just that big a jump in its Home Affordable Foreclosure Alternatives (HAFA) program, I figured there had to be something really big behind it.

And I was wrong.

There’s nothing big behind it, in fact there’s something very small behind it: Small numbers.

HAFA provides financial incentives for servicers and borrowers to do short sales (selling the property for less than the value of the mortgage) and deeds in lieu of foreclosure (basically just giving the property back to the bank). The program launched in April of 2010 and was later streamlined in December, 2010, based on feedback from mortgage servicers, real estate agents and homeowners.

So far, HAFA has completed 7,113 short sales or DIL’s. In April, however, HAFA saw 1,666 completed, up 74 percent from the 959 done in March.

Why the jump?

“It’s too early to draw broad conclusions,” says Treasury spokesman Andrea Risotto, noting that Treasury just began reporting the numbers two months ago. She also points to a long reporting lag because the short sale process still takes so long. But none of this is the story. The 74 percent jump exists because the numbers are just so small, and that’s the story. HAFA is doing a relatively miniscule number of short sales, when you compare the program to what the big banks are doing on their own.

Page 1 of 3 | Next Page
Show Entire Article

China May Inflation at 5.5%; Markets Expected 5.4%

Hackers Break Into U.S. Senate Computers

Lagarde, Carstens Shortlisted for IMF Race

Why US Oil Prices Are So Out Of Sync With Global Crude

US Is in Even Worse Shape Financially Than Greece: Gross

More Top Stories

Article source: http://www.cnbc.com/id/43384757?__source=RSS*blog*&par=RSS