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43 » VISIT US ONLINE @ DSNEWS.COM DEMOCRATIC SENATORS CALL FOR INVESTIGATION OF POSSIBLE DISCRIMINATION IN REO MAINTENANCE A group of Democratic senators led by Sen. Bob Menendez (D-New Jersey) wrote a letter to the leaders of several government agencies calling for an investigation to determine if banks and lenders violated the Fair Housing Act by neglecting maintenance of foreclosed and REO homes in minority-dominated neighborhoods. e senators cited a recent report by the National Fair Housing Alliance (NFHA), which alleged REO properties in minority- dominated neighborhoods were more than twice as likely to have deficiencies such significant amounts of trash and debris and unsecured, broken, or damaged doors than REO properties in predominantly white neighborhoods. e report covered more than 2,400 REO properties in 29 metro areas, owned or managed by 11 lenders. "We strongly urge you—as regulators of the entities responsible for ensuring these properties are maintained, marketed, and sold to qualified buyers—to investigate this issue," the senators wrote in their letter. "As we are sure you agree, stabilization for our country's communities most impacted by the foreclosure crisis will require financial institutions to properly maintain and market REO homes regardless of the color of the skin or nation of origin of the other homeowners who live on the block." Several organizations have come out in support of the senators' letter, including the American Civil Liberties Union, Americans for Financial Reform, Center for Responsible Lending, Lawyers' Committee for Civil Rights Under Law, Leadership Conference on Civil and Human Rights, National Association for the Advancement of Colored People, National Coalition for Asian Pacific American Community Development, National Council of La Raza, National Fair Housing Alliance, National Low Income Housing Coalition, PolicyLink, and Poverty and Race Research Action Council, according to Menendez's website. "Foreclosed properties remain in neighborhoods across the country, but we must do all that we can to make sure they are equally well-taken care of to get them in the hands of homeowners," said Shanna L. Smith, president and CEO of the National Fair Housing Alliance. "We know that poorly maintained properties have a higher likelihood of selling to absentee investors, deflate neighborhood property values and contribute to negative health outcomes for residents who live near these eyesores. e federal financial and housing regulators have an opportunity and obligation to ensure that foreclosed homes are used as agents of community stabilization, not to further depress property values and the local tax base." GSES Q1 FORECLOSURE PREVENTION ACTIONS BRING SEVEN-YEAR TOTAL TO 3.5 MILLION Fannie Mae and Freddie Mac combined to complete 65,960 foreclosure prevention actions in Q1 this year, bringing the total of such actions up to almost 3. 5 million between the two GSEs since September 2008 when the conservatorships began, according to the Federal Housing Finance Agency (FHFA)'s Q1 2015 Foreclosure Prevention Report released in late June. Out of those 3.5 million foreclosure preven- tion actions in nearly seven years, 2.9 million borrowers completed home retention actions that helped them stay in their homes. About 1.8 million of those borrowers received permanent loan modifications, according to FHFA. Bor- rowers completed 41,321 permanent loan modi- fications in Q1, a slight increase from 40,922 in Q 4. Approximately 31 percent of borrowers receiving permanent loan modifications in Q1 had their monthly mortgage payments reduced by 30 percent or more. FHFA reported that as of the end of the first quarter, approximately 17 percent of loans modified in the first quarter of 2014 had missed two or more payments. Of those nearly 66,000 foreclosure preven- tion actions completed during Q1, 56,451 were home retention actions (loan modifications, repayment plans, forbearance plans, or charge- offs-in-lieu). According to FHFA, 9,509 of those Q1 foreclosure prevention actions were home forfeiture actions (short sales or deeds-in- lieu of foreclosure). e number of residential mortgage loans that are 60 days or more delinquent declined by 9 percent during Q1 as the serious delin- quency rate for loans backed by Fannie Mae and Freddie Mac dropped to 1.8 percent, according to FHFA. By comparison with other agency- backed loans, the serious delinquency rate for loans backed by the Federal Housing Admin- istration was 5.7 percent; for Veterans Affairs loans, it was 3.2 percent; and the average for all loans was 4.2 percent. ird-party sales, foreclosure sales, and fore- closure starts all declined during Q1, according to FHFA. ird-party sales and foreclosure sales totaled 34,873 during the quarter, repre- senting a decline of 4 percent from the previous quarter. Foreclosure starts totaled 70,267 for the first quarter, a decline of about 5 percent from Q 4. Property dispositions continued to outpace property acquisitions. REO inventory for both Fannie Mae and Freddie Mac decreased by about 10 percent during the quarter down to 100,279, according to FHFA. The percentage of total home sales that were REO sales in April 2015, which has been steadily declining since peaking in January 2009 at 27.9 percent. Source: CoreLogic STAT INSIGHT 7.4%

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