A bill that would create a legislative framework for a covered bond market in the U.S., as well as a potential competitor for the Federal Home Loan Bank system, was introduced this week in the Senate, a counterpart to a long-standing covered bond bill awaiting final approval in the House.The United States Covered Bond Act, S. 1835, sponsored by Sens. Kay Hagan, D-NC, and Bob Corker, R-TN, is nearly identical to a House bill of the same name sponsored by Rep. Scott Garrett, R-NJ, and Carolyn Maloney, D-NY, H.R. 940.
Many mortgage lenders are concerned about a new fee-for-service compensation plan proposed by Fannie Mae, Freddie Mac and their federal regulator including a change in how servicers get their fees. Under the current minimum servicing fee system, servicers take their slice of compensation out of the interest payments being passed through from borrowers to the government-sponsored enterprises. Under the proposed fee-for-service plan, servicers would pass through the entire consumer payment and then get their compensation from the GSEs. Beyond the economics of the proposed change servicers would get a flat fee, perhaps...
The Obama administrations refinance program for underwater mortgages got a much-publicized jolt of expanded guidelines that could stimulate new business, but the older Home Affordable Modification Program appears to be slowing down. An Inside Mortgage Finance analysis of recently released HAMP data reveals that only 74,630 new trial mods were started under the program during the third quarter. That was down 7.1 percent from the second quarter and represented the lowest number since the program began. Although there was an 11.8 percent increase in...(Includes one data chart)
Despite its fairly impressive success rate in fending off hostile litigation, MERSCorp and its Mortgage Electronic Registration Systems remain popular targets. This time around, its Delaware Attorney General Beau Biden filing suit in Delaware Chancery Court against them, alleging repeated violations of the states Deceptive Trade Practices Act. Since at least the 1600s, real property rights have been a cornerstone of our society, said AG Biden. MERS has raised serious questions about who owns what in America. A man or womans home is not just his or her largest investment, its their castle. Rules matter. A homeowner has the obligation to pay the mortgage on time, and lenders must follow the rules if they are seeking to take away someones house through foreclosure. The honor system wont work.
The nations five largest mortgage servicing companies now face a tab of $25 billion to bring to a conclusion the long-running negotiations with the state attorneys general over industry foreclosure practices, according to published reports of the latest behind-the-scenes developments. The deal with the big five servicers Ally Financial Inc., Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. is now said to include $5 billion in cash penalties, along with the requirement to produce $3 billion in mortgage refinances. Other aspects of the settlement are said to include principal reductions and other forms of aids to struggling homeowners. The top servicers would be released from certain claims having to do with loan servicing and origination, according to the reports but to what extent exactly remains unclear. And there would be no release from claims related to mortgage securitization.
Last week, the 14 mortgage servicers covered by the enforcement actions taken by the banking regulators in April 2011 began mailing letters to eligible borrowers that explain how to request a review of their case if they believe they suffered financial injury as a result of errors, misrepresentations or other deficiencies in foreclosure proceedings related to their primary residence between Jan. 1, 2009, and Dec. 31, 2010. Borrowers may also visit www.IndependentForeclosureReview.com for more information about the review and claim process. Assistance with requesting a review and answers to questions about the process are available. Requests for review by the servicers independent consultants must be received by April 30, 2012. As part of the enforcement actions taken by the Federal Reserve, the Office of the Comptroller of the Currency and the Office of Thrift Supervision, the servicers had to correct deficiencies in their servicing and foreclosure processes and to enlist independent firms to conduct a multi-faceted independent review of foreclosure actions taken during 2009 and 2010.
The Federal Housing Finance Agency late last month announced a number of changes to the federal governments Home Affordable Refinance Program for underwater borrowers with mortgages from Fannie Mae and Freddie Mac. But one important little detail that escaped the attention of many has to do with the borrower loss of non-recourse loan protections for borrowers who refinance. Millions of Americans live in states that have such protections that could keep them from being personally liable in the event of a default. But in many of these states, refinancing removes those protections enabling a lender to pursue tens or hundreds of thousands of dollars more than they would legally have been entitled to without the refinance.
The servicing settlement being negotiated between state attorneys general and major banks will likely require principal reduction via loan modifications and possibly refinances. Principal reduction, however, will likely only be required for certain mortgages held in bank portfolios. The Federal Housing Finance Agency has refused to allow principal reduction on mortgages serviced for the government-sponsored enterprises. Non-agency mortgage-backed security investors, meanwhile, have been more accepting of principal reduction of late but the vast majority of such mod activity is already concentrated on portfolio loans. ...
FHA claims rose in 2011 from last year with loss mitigation and property conveyances accounting for the bulk of paid claims, according to Inside FHA Lendings analysis of FHA fiscal year data. Though increasing by 7.7 percent, claims are still far below the 15.0 percent average for FHA loans, said an agency spokesperson. On Sept. 30, servicers reported 635,096 mortgages in serious default, yielding a default rate of 8.7 percent. This fiscal year, FHA reported 326,892 claims, of which 200,808 were loss mitigation-related and 91,448 were property conveyance actions. Claims related to pre-foreclosure sales and Home Equity Conversion Mortgage loans showed the most ...
The Department of Housing and Urban Development is seeking executive clearance for a final rule which would revise and update requirements for lender indemnification, lender-insurance eligibility and termination under the FHAs Single-Family Lender Insurance Process. The final rule was sent to the Office of Management and Budget for review on Oct. 18 with possible issuance in the next couple of weeks. HUD declined to discuss the details of the final rule. The three main changes to the program include a more explicit definition of what ...