According to a report by the Washington Post, Ally Financial announced Tuesday it is withdrawing all foreclosures in Maryland signed by an employee who admitted to being a “robo-signer.”
Jeffery Stephan testified under oath that he signed off on thousands of foreclosure documents every month without verifying their accuracy or signing them in the presence of a notary.

Because of the controversy and potential paperwork errors, Ally has agreed to dismiss and re-file 250 active foreclosure cases in the state that he approved. But because the company does believe that the borrowers are actually in default, it is going to begin the foreclosure process again, adding months to an already lengthy procedure.

According to the Warren Group, a Boston-based provider of real estate data, the number of completed foreclosures in Massachusetts jumped almost 32 percent in 2010 to 12,233, up from 9,269 in 2009. However, it did not surpass the record 12,430 foreclosures in 2008.

As of the end of December, 6.87 million mortgages in the United States were delinquent or in the process of foreclosure, according to Lender Processing Services (LPS).

The company provided the media with a preview of its soon-to-be-released mortgage performance report this week, covering data through the end of last month.

The numbers show that while the nation’s volume of non-current home loans remains elevated, it’s been steadily declining for several months now. LPS reported that 6.92 million mortgages were delinquent or in the process of foreclosure at the end of November, and in October, it was just above 7 million.

Of the 6.87 million mortgages in the country that were behind on payments at the end of last year, 2,196,000 have been referred to an attorney for foreclosure,according to LPS’ analysis. Another 4,674,000 are 30 or more days delinquent but not yet in foreclosure, with 2,117,845 of these at least 90 days overdue.

LPS says the nation’s total mortgage delinquency rate – which includes loans at least a month past due but not yet pushed to a foreclosure attorney – stood at 8.83 percent as of December month-end. That’s down 2.1 percent from November, and 17.9 percent below the delinquency rate a year earlier.

LPS defines the foreclosure inventory rate as loans that have been referred to a foreclosure attorney but have not yet reached the final stage of foreclosure sale. That rate was 4.15 percent at the end of December. The foreclosure pre-sale inventory rate rose 1.7 percent from November and is up 9.3 percent year-over-year in LPS’ study.

The company’s data show the states with the highest percentage of non-current loans (defined as the total number of foreclosures and delinquencies as a percent of all active loans in that state) include: Florida, Nevada, Mississippi, Georgia, and New Jersey.

The lowest percentage of non-current loans can be found in: Montana, Wyoming, Arkansas, South Dakota, and North Dakota.

LPS’ mortgage performance results are derived from its loan-level database of nearly 40 million mortgages. The company plans to provide a more in-depth review of this data in its December Mortgage Monitor report, scheduled for release February 4.

On January 18 recent data from Barclays Capital examines the ramifications of the fourth quarter foreclosure debacles on REO roll rates.

Data released Friday shows the foreclosure-to-REO rate dropped 57 percent in judicial states the last few months of 2010, and dropped 42 percent in the non-judicial states.

In New York, the roll rate ground to a near stop, dropping a whopping 91 percent in December when compared to the rate from January to October 2010.

The New Jersey rate dropped 73 percent during the same period.The New York-based firm says the substantial drop in New York rates can most likely be attributed to the October ruling that mandated lenders’ foreclosure attorneys must file an affirmation with the court certifying that foreclosure documents filed have been reviewed and verified for accuracy.

The report also reveals that some servicers have shown dramatic drops in roll rates while others have shown insignificant drops and even increases in roll rates.

Fannie Mae has issued a notice to its servicers, instructing them to postpone foreclosure proceedings for unemployed homeowners who are receiving financial help through Hardest-Hit Fund programs run by state housing finance agencies. According to the GSE’s newly released directive, if a housing finance agency (HFA) notifies a servicer that a borrower has been approved for assistance, the servicer must not refer the mortgage loan to foreclosure or conduct a scheduled foreclosure sale for 45 days.

In a recent report by ForeclosureRadar it shows unexpectedly mixed foreclosure activity in its coverage area for the month of December.The California-based firm tracks foreclosures and provides auction updates for Arizona, California, Washington, Nevada, and Oregon.
According to the company, foreclosure starts were down in Arizona, California, and Washington; flat in Nevada; and higher in Oregon. Foreclosure sales were down in Arizona and Oregon; flat in California and up in Nevada and Washington.
According to a statement by Foreclosure Radar, the results were surprising because most of the big lenders service all of the states they cover. The company speculated that the differences in activity across the states could be in part because of the differing laws between states that servicers must abide by.

The Department of Veteran Affairs (VA) has instructed mortgage servicers to advance $1,500 to borrowers completing short sales or deeds-in-lieu (DIL) of foreclosure on VA loans in order to assist with relocation costs. The federal agency says it has a longstanding policy of encouraging servicers to work with veteran borrowers to help them retain their homes or, when that is not feasible, to mitigate losses by pursuing alternatives to foreclosure.

The task force assembled by federal banking regulators to investigate the industry’s servicing and foreclosure practices after the robo-signing scandal broke is expected to release the results of its findings as early as February.

John Walsh, acting head of the Office of the Comptroller of the Currency, says on-site reviews by task force examiners is “largely complete” and federal agencies have begun the next phase of formulating actions that should be taken to “fix problems in the mortgage servicing and foreclosure area.”

Consumer advocacy groups have been joined by federal lawmakers in their campaign against a mortgage lending rule change proposed by the Federal Reserve. The Fed has recommended revising a stipulation that allows homeowners to stop a foreclosure on the grounds that the lender violated disclosure requirements outlined in the Truth-in-Lending Act (TILA). With consumers’ rights at the forefront of regulatory reform, the Fed’s decision is attracting criticism. A group of senators is calling the proposal “unfortunate and unnecessary.”

Foreclosure Inventory is rising. Market data analyzed by Lender Processing Services (LPS) shows evidence of delays in the resolution of unpaid mortgages in the wake of widespread reports of robo-signing and reveals congestion in areas where delinquent loans are losing strength.

The clogged foreclosure pipelines servicers have been struggling to get a handle on since the housing crisis set in are ballooning further and adding to that looming shadow inventory of properties that will ultimately become REO, and some analysts warn will slow home price appreciation.

According to the latest mortgage performance report from the Florida-based technology and analytics firm, the volume of loans moving to REO continued to drop in November as foreclosure suspensions by major lenders interrupted and pushed back foreclosure sales. While the 90-plus day delinquency category had been steadily declining, LPS says in November the number of loans moving to seriously delinquent status beyond 90 days far outpaced the number of foreclosure starts moving out of the 90-plus day category.

The company reports that as of the end of November, nearly 2.2 million loans were 90 days or more past due