The Obama administration and Fannie Mae are requiring mortgage servicers to participate in special foreclosure prevention programs that extend forbearance periods for unemployed homeowners from 12 to 24 months to help them avoid foreclosure while seeking re-employment. The current unemployment forbearance programs have mandatory periods that are inadequate for most unemployed borrowers, said Department of Housing and Urban Development Secretary Shaun Donovan. The FHA will extend the forbearance period for unemployed homeowners to 12 months. Servicers participating in the Making Home Affordable Program may also be directed to extend the minimum forbearance period to...

Credit unions posted a significant increase in mortgage production volume during the first quarter of 2011, compared to the same period last year, but the industry has not yet broken through to a broader role in the market. Federally insured credit unions originated $21.5 billion in home mortgages during the first three months of the year, up 16.6 percent from a year ago, according to data from the National Credit Union Administration. But that was down 35.7 percent from the $33.5 billion that credit unions originated in the fourth quarter of 2010. The credit union share of the total mortgage market held steady at 6.6 percent of total... [Includes two data charts]

Experts sharply disagreed on the Federal Reserve Board’s controversial new rules on loan officer compensation during a hearing this week in the House Financial Services Committee, with some claiming it is a confused mess and others saying it’s a shield for low-income and minority borrowers. Marc Savitt, president of the Mortgage Center and testifying on behalf of the National Association of Independent Housing, said the rule caused massive job loss among small mortgage businesses and fewer consumer loan options. “As an active participant in meetings with the FRB during the comment period, it was evident the FRB was unwilling to...

The dramatic slowdown in mortgage lending activity during the second quarter of 2011 led to significant declines in virtually all states, according to a new analysis of agency securitization data by Inside Mortgage Trends. Fannie Mae, Freddie Mac and Ginnie Mae securitized a total of $565.5 billion of single-family mortgages during the first six months of 2011, but much of that activity was front-loaded in the first quarter. Agency mortgage-backed securities production declined 33.7 percent from the ... [includes one data chart]

The mortgage servicing sector is warily eyeing new servicing standards cooked up by the government-sponsored enterprises at the behest of their regulator that strictly mandate the servicers’ delinquency management requirements. Some lenders dread an implementation predicament while others see opportunity. In late April, the Federal Housing Finance Agency announced its Servicing Alignment Initiative that requires Fannie and Freddie to devise uniform rules for servicing delinquent mortgages they own or ...

Bank of America said it will spend $400 million just to implement the servicing changes it agreed to in a controversial proposed settlement with a group of investors in non-agency mortgage-backed securities issued by Countrywide Financial. The proposed settlement itself would cost the bank $8.5 billion, and BofA set aside another $5.5 billion to cover other possible buyback demands. Reckoning the cost of upgrading servicing systems has been a common theme in an industry that faces even bigger expenses from punitive charges. Ally Financial this week said it will cost the company ...

Mortgage lenders appear divided on whether a joint venture with home builders at this time would be profitable or just a shot in the dark. With home building and purchase-mortgage lending clearly in a slump, joint ventures are probably more important now than ever because the mortgage process has become more complicated and difficult for the consumer, according to a homebuilding industry executive. Bank of America, however, may be cold on joint ventures right now. Saddled with the misfortunes of Countrywide, BofA strategically ended a joint venture recently with ...

People get discouraged from taking mortgage loan modifications that are in their best interest by countless paperwork steps and little support from servicers, according to a Harvard University behavioral economist who says he has a solution. Piyush Tantia, the executive director of ideas42, a nonprofit behavioral economics research and development lab at Harvard, has been experimenting with how people respond to foreclosure. Behavioral economics blends psychology and economics to analyze and predict decisions based on how people actually behave. Tantia found that people often did not ...

It would be “wholly inappropriate” for the Treasury Department and the Federal Housing Finance Agency to permit Fannie Mae and Freddie Mac to pursue a potential role in a new yet-to-be-launched $2 billion bond program, according to the top Republican members of the House Financial Services Committee.In an effort to shut down thoughts of potential expansion of the two government-sponsored enterprises into a new line of business, Committee Chairman Spencer Bachus, R-AL, Vice Chairman Jeb Hensarling, R-TX, and four of the committee’s subcommittee chairman dispatched a letter last week to Treasury Secretary Tim Geithner and FHFA Acting Director Edward DeMarco to express their “concern.”

Another bipartisan bill to overhaul the federal mortgage finance system introduced by two House members this week would eliminate but effectively merge Fannie Mae and Freddie Mac, replacing the two GSEs with a “secondary market facility” that would issue and guarantee mortgage-backed securities.The bill, H.R. 2413, the Secondary Market Facility for Residential Mortgages Act of 2011, would create a single entity, owned by the federal government, that would issue MBS. The MBS would have an explicit government guarantee paid for by a guarantee fee set by the Federal Housing Finance Agency.