DS News - Digital Archives

quarter of 2007 when 53,943 NODs were recorded, according to DataQuick. NOD filings peaked in the first quarter of 2009 at 135,431. The number of NODs filed in Q1 decreased by 8.5 percent from the previous quarter, and by 17.6 percent from the first quarter a year ago, DataQuick reported. "Foreclosure activity goes up when property values decline, and the worst of that decline was happening three years ago. Right now, property values in many areas appear flat," said John Walsh, DataQuick president. NOD filings were more concentrated in ZIP codes with median sale prices below $200,000. Those areas saw 8.9 NODs filed for every 1,000 homes, while ZIP codes with a median sales price from $200,000 to $800,000 had 5.6 NODs filed per 1,000 homes. For ZIPs with even higher sale prices—above $800,000—2.3 NODs were filed for every 1,000 homes. When a lender filed a NOD, homeowners in California were a median nine months behind on their primary mortgage, and borrowers owed a median $17,897 on a median $319,418 mortgage. Mortgages least likely to go into default last quarter were in Marin, San Francisco, and San Mateo counties, according to DataQuick. The probability of going into default was highest in Tulare, Sacramento, and San Joaquin counties. Fewer homes were lost to foreclosure, too, with Trustees' Deeds (TD) recorded totaling 30,261 during the first quarter, down 29.7 percent from 43,052 TDs in the first quarter a year ago. This year's first quarter also recorded the lowest level of TDs since 2007. "[R]emarkably, whole batches of presumed 'toxic' mortgages continue to perform," said Walsh. "There's no doubt that housing, especially negative equity, is one of the biggest drags on a struggling economy, but it's not necessarily playing out the way some pundits thought." TDs were also concentrated in more affordable neighborhoods. In areas where the sales price was below $200,000, 5.9 homes were lost for every 1,000 compared to ZIP codes with $800,000-plus median prices that had 0.8 foreclosures per 1,000 homes. The most active banks in the formal foreclosure process for the 2012 first quarter were Bank of America (10,419), Wells Fargo (7,577), Bank of New York (5,380), and JPMorgan (5,343). The trustees who pursued the highest number of defaults last quarter were ReconTrust Co. (mostly for Bank of America 86 and Bank of New York), Quality Loan Service Corp. (Bank of America), NDEx West (Wells Fargo), and Cal-Western Reconveyance Corp. (Wells Fargo). Out of 8.7 million homes and condos in California, 1.45 million have received a foreclosure proceeding during the past five years, but 835,000, or 9.6 percent, have actually been lost to foreclosure, according to DataQuick. It took an average of 8.5 months for foreclosed homes to make their way through the foreclosure process in the first quarter of 2012, compared to 9.7 months during the previous quarter. Interthinx Incorporates Google's Satellite Images to FraudGUARD After finding property valuation mortgage fraud risk has risen since 2006, Interthinx responded to its own research by incorporating satellite images from Google Maps as a solution. Interthinx stated that the inclusion of satellite image data within the company's FraudGUARD system improves loan quality, provides users with a more comprehensive fraud prevention report, and enables a more concise overall risk review. "According to our findings, property valuation fraud risk has more than doubled since 2006, which could expose lenders to buyback requests that could cripple their companies," said Ian Anthony, director of product management at Interthinx. "Our product team recognized the threat and alerted our customers. They responded by comparing photos from appraisal reports or broker price opinion (BPO) photos to satellite images through multiple steps." Interthinx's FraudGUARD software contacts the Google Satellite image database in real-time, which returns a 360-degree street-level view of the property. The new Interthinx product enhancement can also highlight risk associated with borrower employment and intent to occupy by pinpointing potential misrepresentations of employer location. In addition, the distances between the property, borrower's current residence, and employer location can also be quickly identified. Headquartered in Agoura Hills, California, Interthinx is a national provider of risk mitigation solutions focusing on mortgage fraud, collateral risk and valuation, regulatory compliance, forensic loan audit services, loss mitigation, and loss forecasting. California Homeowner Bill of Rights Passes Out of Committees but Faces Obstacles California Attorney General Kamala Harris' Homeowner Bill of Rights has made it out of committee deliberations in both chambers, but the legislative reform package is hitting some hurdles in the state's Capitol now that it's up to the full Assembly and Senate to choose sides. Although a national set of mortgage servicing standards is inevitable, and in fact already being drafted by the Consumer Financial Protection Bureau, Harris is pushing for measures that will institute permanent reform in her state because the terms of the $25 billion national mortgage settlement are effective for just three years. Harris first introduced the collection of bills she's deemed to make up the full Bill of Rights in February. They address such issues as eliminating dual tracking of foreclosure proceedings and workout negotiations, requiring servicers to provide distressed borrowers with a single point of contact, increasing fines against owners of blighted properties, providing additional foreclosure protections to tenants, and allowing homeowners to file suit against the lender if foreclosure procedures are not followed precisely. Backers of Harris' push to institute homeowner protections argue the bills ensure Californians and their communities are afforded due process and the practices that caused and then exacerbated the housing crisis in the state are not allowed to happen again. Those rallying on the other end, however, warn the package of legislative measures could induce homeowners to intentionally default to take advantage of what would become built-in safeguards, while dictating lenders and investors abandon their own contractual rights as creditors and giving rise to frivolous lawsuits. On top of the debate over the proposed Homeowner Bill of Rights, Gov. Jerry Brown wants to extract more than $400 million from the $18 billion California is slated to receive under the national servicing settlement and use it to shore up holes in the state's budget. Brown's proposal has drawn the ire of homeowner advocates and political activists alike.

• Cover