Foreclosures Jump, Prevention Programs Soar

RealtyTrac reported 635,159 third quarter foreclosure filings nationally, 30 percent higher than the prior period and double the level during third quarter 2006. The filings, which included default notices, auction sale notices and repossessions, were made on 446,726 properties.

One filing was made on every 196 households during the latest period, according to the foreclosure tracking service.

Out of the 45 states that reported an increase from 2006, Nevada had the highest rate with one foreclosure filing for every 61 households, the U.S. Foreclosure Market Report indicated.

To combat its No. 1 ranking, Nevada governor’s office announced the launch of foreclosurehelp.nv.gov to give borrowers access to foreclosure-related information, housing counselors and tips to avoiding foreclosure scams. The state plans to meet with the mortgage industry over the coming weeks to discuss how the public and private sectors can collaboratively provide solutions for borrowers. Additionally, a series of housing fairs will be held throughout the state to connect troubled borrowers with lenders, non-profit agencies, and other state agencies.

California trailed Nevada with one filing for every 88 households — though the Golden State held the highest volume of filings, with 148,147 third quarter filings on 94,772 properties, RealtyTrac said.

DataQuick Information Systems, another foreclosure tracking service, reported California saw a record number of third quarter foreclosures, 72,571 notices of default filed — surging almost 35 percent and 167 percent above the levels in the respective linked and year-ago quarters. Most of the loans that went into default in July through September were originated between July 2005 and September 2006.

With one foreclosure for every 95 households, Florida had the third highest rate, RealtyTrac reported. The state also had the second highest volume of foreclosures, with 86,465 filings on 60,992 properties.

Ohio, with 46,818 foreclosures on 35,242 properties, had the third highest volume of filings, according to RealtyTrac.

Vermont, with just 25 filings on 10 properties, had the fewest filings, RealtyTrac’s report indicated. Vermont also had the lowest rate — at one filing for every 12,294 households.

U.S. Treasury Secretary Henry Paulson, speaking after meeting with the Hope Now alliance, called for servicers and borrowers to take early action, according to a transcript of his comments provided by the Treasury.

“There are two parts to the effort to avoid foreclosures — first, making contact with a borrower who is in trouble, and second, determining if there is an affordable mortgage product for that borrower and taking action,” he said.

He noted the housing and mortgage market decline is still unfolding.

“I view the housing and mortgage market decline as the most significant current risk to our economy,” he concluded.

Nationwide Short Sale Co. announced its new Web site educates troubled borrowers on its “innovative” short sale strategy as a more viable alternative to foreclosure and potential bankruptcy. The company said it is able to broker deals between borrowers and lenders before foreclosure becomes an issue, adding that it is able to “negotiate, market, and see a home through the final sale process.”

IndyMac Bank will market thousands of REO properties on Foreclosure.com, according to a press release. The online service will reportedly help the bank boost its prospective REO buyers by 300 percent compared to offline marketing.

HEART Financial Services, a recently unveiled home retention assistance business, will be using Computer Sciences Corp.’s EarlyResolution default management software as a service solution to recommend customized workout programs for delinquent borrowers whose loans have been referred for foreclosure or bankruptcy legal representation.

Stewart Lender Services Inc. announced it now offers a pre-foreclosure report designed to help attorneys and lenders determine the current condition of a property title when the borrowers are in financial distress. The new report, priced within Fannie Mae’s expense guidelines, gives a snapshot of the property and includes a two-owner search, vesting information, open liens, judgments, pending law suits and tax information.

The Neighborhood Assistance Corporation of America will help Countrywide Financial Corp. borrowers identify solutions to help them save their homes. The organizations announced the agreement will help the lender’s more than 2,700 home retention specialists leverage additional resources of NACA’s 33 offices nationwide. Borrowers will receive individual counseling and help developing a plan to prevent foreclosure. NACA then submits the plan to Countrywide for approval and implementation.

“The Countrywide agreement has already had a huge impact with homeowners having their loans restructured to as low as five percent,” NACA said in the announcement.

Chicago’s ShoreBank is running a “rescue loan program” to help borrowers in danger of default refinance their adjustable-rate mortgages into fixed-rate loans. The bank identified 10,000 borrowers in its market who have subprime ARMs that will reset in the next 18 months and believes at least 20 percent qualified for a fixed-rate loan but were enticed into an ARM.

Out of the first 30 applicants for the program 13 have closed and four have been denied. ShoreBank is building capacity to service the 10,000 borrowers and hopes to raise $52 million to fund the program, according to a transcript of a NewsHour news report.

The Pennsylvania Housing Finance Agency is offering loans are for borrowers who cannot afford their current mortgage payments and are not eligible for other foreclosure prevention programs. Dubbed the Homeowner Equity Recovery Opportunity, or HERO, the program provides refinances of primary residences based on the actual value of the homes involved, and carry an interest rate of 7.95 percent. HERO loans are made by the agency, which may negotiate to reduce the amount owed on the homes.

An investment of $5 million by PNC Bank for HERO will be used to originate the loans and to leverage a planned initial housing agency bond issue of $25 million that will provide actual financing for loans. The City of Philadelphia’s commitment of $1 million in bond proceeds will be used as a “loan-loss reserve” by the agency, which will match it with funds of its own for HERO loans, the office added.

The National Foundation for Credit Counseling now has a Spanish version of its recently launched Homeownership Crisis Resource Center, an online resource that provides borrowers facing foreclosure access to certified housing counselors, an online locator and a tool to help borrowers assess and act toward resolving their situation.

New Vista Asset Management announced it has tapped ETCREO Management to help it handle foreclosure disposition services nationally and market real estate owned properties to minority first-time borrowers. The company noted an estimated 50 percent of foreclosures are impacting minority families.