Foreclosure filings occurred on 274,399 U.S. properties during January, according to data released Thursday by online foreclosure resource RealtyTrac. The volume of filings showed a 10 percent decrease from the previous month, but still held 18 percent higher than January 2008, with one in every 466 U.S. properties having received a foreclosure filing in January 2009, according to the report. Nevada reported the highest rate with a foreclosure filing on one in every 76 units, while California saw one in every 173 units receive a filing. Arizona took the close third, with one in every 182 units receiving a foreclosure filing in the month.

Florida may have seen a 20 percent month-over-month decline in foreclosure activity, but it still posted the fourth-highest rate with one in every 214 units receiving a filing. California reported 76,761 foreclosure filings in the month, the most reported by any state despite its 14 percent decrease from December's results. Meanwhile, 40,770 Florida properties received filings in January and 14,674 units in Florida received foreclosure filings.

"The extensive foreclosure efforts on the part of lenders and government agencies appear to have impacted the January numbers — particularly the Fannie Mae (FNM: 0.00 N/A) and Freddie Mac (FRE: 0.00 N/A) moratorium on all foreclosure sales…along with Florida's voluntary 45-day freeze on all new foreclosure actions and scheduling of foreclosure sales…," said CEO James Saccacio. But it's still unknown whether the temporary lull in foreclosures will have any lasting effect with loan modifications, or whether it's simply the byproduct of an artificial dam in the foreclosure pipeline and will disappear when the foreclosure freeze at the GSEs thaws out.

Another online real estate information provider, ForeclosureS.com, reported Wednesday that completed foreclosures dropped 25 percent across the country in January. Pre-foreclosure filings also showed a significant decline for the month, dropping 12 percent from December’s data, suggesting the market might be facing some sort of recovery — or at least a temporary pause in foreclosure proceedings. “It’s not quite time to pop that celebratory champagne,” said president Alexis McGee. “But Fannie Mae and Freddie Mac’s moratorium on foreclosures before the holidays, big lenders emphasizing loan workouts, and states taking steps to slow down foreclosures are all are working together to make a difference.”

Write to Diana Golobay at diana.golobay@housingwire.com.

Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.

The Neighborhood Assistance Corporation of America and its leader, Bruce Marks, are moving their controversial and confrontational model of consumer activism towards Wall Street, as the nation's housing crisis moves onward. This past Sunday, Marks and 350 to 400 fellow protesters were bused in by his non-profit group to stage a protest in front of the Greenwich, CT home of William Frey, manager of Greenwich Financial Services.

That protest came after an earlier morning protest at the home of Morgan Stanley (MS: 18.56 +2.26%) CEO John Mack in Rye, N.Y., by the same group.

The protesters wore bright yellow hats and T-shirts with pictures of sharks and the words "Stop Loan Sharks," according to a story in the Stamford Times, which reported on the protests in conjunction with a press junket from NACA.

Frey was targeted by NACA and its supporters after he sued Countrywide over its mass loan modification program in early December. In a complaint filed by the New York-based law firm of Grais & Ellsworth LLP, investors — including Frey — say the language in their contracts require the Calabasas, Calif.-based servicer to purchase all modified loans out of affected securitization trusts. Countrywide has said it does not believe it is required to do so. See earlier coverage.

Countrywide first announced the loan modification program on Oct. 6, as part of a settlement with 15 different state Attorneys General that had sued the lender over predatory lending charges. Officials at Countrywide have insisted for months that their pooling and servicing agreements allow for loan modifications without repurchase obligations, when such modifications are done to prevent a borrower default. Only recently, however, have investor prospectus’ added language making that right explicit.

The protests are part of a NACA-organized "Predators Tour," according to the Stamford Times. In Frey's case, the tour involved two buses and 52 vans' worth of protesters and equipment, including furniture that was placed all over Frey's property.

"We did it to make them feel what it must be like for someone to have their home foreclosed upon," NACA mortgage counselor Carmen Orta told the newspaper.

According to the Stamford Times, Marks says he is funded "through purchase loans that allow people to get homes with no down payment and a fixed rate mortgage of roughly 5 percent. These loans garner the organization $2500 each."

But Marks' organization is also funded via Federal grant dollars funded by taxpayers, as well. A review of funds administered by the NeighborWorks America via the National Foreclosure Mitigation Counseling Program show that NACA received a $16 million grant, as a HUD-approved counseling intermediary, in early Dec. 2008 — a grant larger than any award given to any state housing finance agency for homeowner counseling.

"It's a war out there. We have tried other means, and peaceful means don't work," Marks told the newspaper. "It is personal. When homeowners are in danger of losing their homes, that is deeply personal to them. We need to bring the homeowner's families to the predator's families."

Write to Paul Jackson at paul.jackson@housingwire.com.

Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.

A key member of Congress and one federal regulator Wednesday urged financial institutions to enact foreclosure moratoriums, until lawmakers hash out the details of a "comprehensive" plan to address the housing crisis, which is currently in the works.

"I would ask all of you now to please make sure that we have a moratorium in effect," Frank said at a hearing before the Senate Budget Committee Wednesday, where the CEOs of eight major banks were drilled as to their usage of government aid.

The Office of Thrift Supervision joined Frank in requesting financial institutions put a temporary halt on all foreclosures. “OTS-regulated institutions would be supporting the national imperative to combat the economic crisis by suspending foreclosures until the new Plan takes hold,” OTS Director John Reich said.

The Plan unveiled yesterday by Treasury Secretary Timothy Geithner will likely commit around $50 billion of the 1.5 trillion financial stability plan to prevent avoidable foreclosures by reducing monthly payments for homeowners, but the details aren't finalized. And many lawmakers, including Frank, aren't certain $50 billion will cover the costs of the program. "[W]e need some assurance that, assuming this works as we hope it will, there will be more money available," Frank said.

A Treasury staffer said Tuesday, according to a MarketWatch report, that the program could resemble a proposal introduced by Federal Deposit Insurance Corp. Chairwoman Sheila Bair — a loss-sharing program between mortgage servicers or investors and the FDIC that deals with loans that fail six months or longer after being modified.

Geithner suggested the plan will be presented in a few weeks, which according to Frank, is "too much time." Congress is anxious for answers. Before the Senate Budget Committee Wednesday, Geithner also faced fire about how soon the Obama administration would provide details of its financial-system rescue plan — which he outlined publicly Tuesday, see full story — and about how much more those initiatives will cost taxpayers.

Lawmakers Wednesday also wanted assurance that the funds — provided by taxpayers — already committed to the bailout had not been wasted. Executives at the hearing, including the heads of Citigroup Inc. (C: 30.87 +1.61%), Bank of America Corp. (BAC: 7.29 -0.14%), Goldman Sachs Group Inc. (GS: 111.77 +2.96%), and Wells Fargo & Co. (WFC: 29.60 +1.89%), insisted they had been lending as much as they could.

Write to Kelly Curran at kelly.curran@housingwire.com.

Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.

Federal Reserve governor Elizabeth Duke on Wednesday called for efforts to not only increase loan modification and foreclosure prevention, but outlined some initiatives that might be used to deal with the segment of foreclosures politicians and industry players don't seem to readily talk about — unavoidable foreclosures. These constitute a portion of borrowers Duke said "due to resources or circumstance" are unable to maintain mortgage payments and/or refuse to pursue reasonable modifications.

"…I don't believe we can fully formulate appropriate policy responses to the crisis unless we acknowledge and address the large numbers of foreclosures that are not avoidable," Duke said in a speech given at a risk management conference in New York. "Just as public focus, experimentation, and policy debate have informed best practices with regard to loan modifications, we must also begin the work of developing responsible foreclosure and real estate inventory management protocols."

The Fed governor was careful to point out that, despite her views on such "unavoidable" foreclosures, she was eager to suggest efforts that can be taken to help borrowers than can avoid foreclosure through appropriate loan modifications. She also called attention to another under-discussed part of the housing market — borrowers that are current on payments. "One might be tempted to view these households as a lesser concern, but we must be mindful that they will be more likely to shift into one of the distressed groups if we do not reduce both the number of foreclosures and the cost of the foreclosures that do occur," Duke said.

She called on the industry to step up sustainable foreclosure prevention efforts. Servicers and lenders have been hesitant to write-down portion of the loan under Hope for Homeowners FHA refinancing program, for instance. Duke suggested Congress can eliminate the upfront premium and future appreciation-sharing agreement with the servicer. Congress might encourage more borrowers to participate by reducing the interest rate borrowers pay. She also said Congress could purchase at-risk mortgages in bulk and refinance them into the H4H or FHA programs. Congress might also use government funds to incentivize participation by servicers through a loss-sharing or a borrower payment discount-sharing agreemtn with servicers.

Where these efforts fail and foreclosure is inevitable, Congress should take steps to reduce the costs of foreclosure, Duke said. Congress should seek to minimize the amount of time properties sit vacant and maximize the eventual selling price, according to the governor. Lenders and communities are "woefully under-resourced" to deal with the volume of foreclosures that are coming down the line, Duke said. Financial institutions might also play a role in alleviating the burden by initiating clear policies on deeds-in-lieu-of-foreclosure to release any borrower unable to repay of their obligation and avoid costly foreclosures. She also cited cash-for-keys initiatives and programs to allow people to remain in the homes as renters rather than owners as other steps that can be taken to help those borrowers incapable of repayment while at the same time keep them out of foreclosure.

Read Duke's speech.

Write to Diana Golobay at diana.golobay@housingwire.com.

Completed foreclosures dropped more than 25 percent across the country in January, according to data released Wednesday by online foreclosure analytic company and real estate information provider ForeclosureS.com. Total completed foreclosures came in at 72,694 for the month, down from the 97,8411 completed foreclosures reported for December. Pre-foreclosure filings also showed a significant decline for the month, dropping 12 percent from December's data and suggesting completed foreclosures will continue to decline in coming months, according to the data.

Completed foreclosures in California alone dropped 31 percent to 14,351 foreclosures in January, the lowest level since December 2007 and less than half the foreclosures reported in the state's peak month of September 2008. According to ForeclosureS.com's data, the state accounted for 19.7 percent of the nation's foreclosures. Completed foreclosures dropped most sharply in the Midwest region, falling 32 percent from December to a total 12,716 completed foreclosures. The second-highest decline occurred in the Southwest, where completed foreclosures slumped 28 percent to a total 33,513. The Northeast showed the smallest decline of 10 percent to a total 4,495 completed foreclosures in January.

"It's not quite time to pop that celebratory champagne," said ForeclosureS.com president Alexis McGee. "But Fannie Mae (FNM: 0.00 N/A) and Freddie Mac's (FRE: 0.00 N/A) moratorium on foreclosures before the holidays, big lenders emphasizing loan workouts, and states taking steps to slow down foreclosures are all are working together to make a difference."

For example, California passed a law in September 2008 slowing foreclosure filings by increasing the wait period before a servicer can file a Notice of Default. The state saw in December a rebound to high levels of foreclosure activity, according to data reported in January by ForeclosureRadar. The high levels of pre-foreclosure filings suggested the state was seeing an influx of the foreclosures that had been temporarily held up by the legislation. And, while the new data might appear to paint California as entering some sort of recovery stage, market observers should not rule out the possible effects of a combination of other foreclosure prevention efforts like the foreclosure and eviction suspension announced by the GSEs back in November and subsequently extended months beyond its original termination date.

A recent push for all things modification may also have put downward pressure on the number of properties moving through the REO process, although some substantial glitches in modification programs may prove to have little lasting positive effect. Initial data from the Hope for Homeowners program showed only marginal success as far as turnout was concerned, with only several hundred applications reported in the first month or so of operation. A report released by Valparaiso law professor Alan White in mid-December showed only 35 percent of voluntary mortgage modifications actually reduced borrowers' monthly payments while 45 percent resulted in an increased monthly payment after all the various fees and other expenses were factored in.

Write to Diana Golobay at diana.golobay@housingwire.com.

Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.