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Virginia rank: 43 90+ Day Foreclosure Unemployment Delinquency Rate RateRate march 2012 2.42%1.77% 5.6% year ago 2.67%2.00% 6.2% percent point change -9.6%-11.4% -9.7% Top County CHARLOTTE COUNTY 90+ Day Delinquency Rate Foreclosure Rate march 2012 3.14%4.53% year ago 2.62%2.01% percent point change 20.0%125.1% Top Core-Based Statistical Area WINCHESTER, VA-WV 90+ Day Foreclosure Delinquency Rate Rate march 2012 2.08%2.24% year ago 2.92%2.63% percent point change -28.9%-14.9% note: The 90+ Day delinquecy rate is the percentage of outstanding mortgage loans that are 90plus days delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the March 2012 foreclosure rate. All figures are rounded to the nearest decimal. The unemployment rate reflects preliminary March 2012 figures released by the Bureau of Labor Statistics. All other data courtesy of Lender Processing Services. IN THE NEWS Payment to Treasury Drags Freddie Mac to Net Worth Deficit Freddie Mac reported a net income of $577 million for the first quarter of 2012. That, combined with $1.21 billion in unrealized gains on securities investments, resulted in comprehensive income of $1.79 billion during the January-to-March period. The GSE's finances didn't sit in the black for very long, however, after the company made a $1.8 billion quarterly dividend payment to its primary shareholder, the U.S. Treasury. As a result, Freddie's net worth as of the end of March was a deficit of $18 million. To cover the shortfall, the Federal Housing Finance Agency is requesting a $19 million draw from Treasury. With that draw, Freddie Mac has required $72.3 billion in taxpayer support since the company was placed into conservatorship. During that time, Freddie has paid $18.3 billion in dividends to Treasury. The McLean, Virginia-based GSE says provisions for credit losses declined from $2.6 108 billion in the fourth quarter of 2011 to $1.8 billion in the first quarter of 2012. Freddie says the decrease is a reflection of fewer loans transitioning to seriously delinquent status. For the first quarter of this year, the company counted 3.51 percent of its single-family portfolio with a total unpaid principal balance of $72.9 billion as seriously delinquent, or 90plus days past due. Freddie Mac acquired 23,805 REO homes through foreclosure during the first quarter, but sold 25,037, reducing its REO inventory to 59,323 as of the end of March. The company was out $171 million over the first three months of 2012 for REO operations expenses, which consists of property maintenance, valuation adjustments, disposition gains or losses, and recoveries from credit enhancements, such as mortgage insurance. Single-family credit losses over the firstquarter period totaled $3.4 billion, according to the GSE. Freddie Mac says it refinanced approximately 85,000 mortgages with loan-to-value (LTV) ratios above 80 percent during the first quarter of 2012. The GSE noted in its 10Q filing with the Securities and Exchange Commission (SEC) that 20 percent of its single-family credit guarantee portfolio is underwater with an estimated current LTV ratio greater than 100 percent. Loans originated from 2005 to 2008 have been most affected by declines in equity, the GSE stated. Loans of these vintages comprised approximately 30 percent of Freddie's guarantee portfolio but accounted for 88 percent of its credit losses during the first quarter of this year. Freddie Mac completed approximately 40,000 single-family loan workouts during the first quarter of 2012, including 13,677 loan modifications through government and proprietary mod programs. Short sales and deeds-in-lieu of foreclosure almost equaled the number of loan modifications during the period at 12,245. In the first quarter of this year, the GSE issued $2.6 billion in new repurchase requests to lenders based on breaches of representations and warranties. Outstanding repurchase requests climbed to $3.2 billion as of the end of March, after the company collected $850 million and cancelled $1.2 billion upon the servicer providing missing documentation or successfully appealing the buyback request. Freddie Mac said in its SEC filing, "As of March 31, 2012, two of our largest seller/servicers had aggregate repurchase requests outstanding … of $1.7 billion, and approximately 47 percent of these requests were outstanding for four months or more." The GSE says ultimately, the amount it's able to recover from buybacks may be "significantly less" than its estimates of potential loss exposure. Sperlonga Registers 225,000 HOAs for Database Project Sperlonga Data and Analytics registered the 225,000th homeowners association (HOA) in its database, but its work is still not complete. Based in Arlington, Virginia, Sperlonga is an affiliate of MMREM, a national asset management firm, and was created to bridge the gap between HOAs and servicers to help stakeholders minimize losses associated with HOA claims. According to the company, HOAs and similar ownership groups number about 350,000 across the United States. Prior to Sperlonga's efforts to maintain information on HOAs, lenders and servicers had no consistent way to find associations, or even to become aware of HOAs attached to their transactions until claims for unpaid accounts surfaced, sometimes delaying or even ruining resales. Matt Martin, founder and chairman of Sperlonga and CEO of MMREM, realized the problems that occurred due to the difficulty of reaching HOAs and settling unpaid claims. In 16 states, HOA claims can take precedence over first mortgage rights, which puts lenders and investors at risk. "We created Sperlonga Data & Analytics to find associations and put them together with servicers wanting to avoid these expensive problems," said Martin. "There are tremendous amounts of money at stake for both sides." Sperlonga EVP Tim Walsh explained that the first 100,000 were the easiest to get on record because they were more visible, but the vast majority of HOAs are smaller and run by homeowners who rotate the duties with annual elections, which makes finding addresses and contact information very difficult. While a trade group of HOAs does exist, called the Community Associations Institute, it has about 35,000 members, which is about 10 percent of the associations in the United States. Walsh said Sperlonga's goal is to have 300,000 communities on record by the end of the year, and eventually all of them. "It's an important project for the financial community and for America's estimated 26 million HOA member homeowners," said Walsh.

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