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Inside Mortgage Finance

June 28, 2012

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Home-Equity Market Still in Doldrums Despite Small Climb in Bank Unfunded Commitments

Tentative signs of stability in home prices in early 2012 have yet to spur a rebound in home-equity lending, as the outstanding balance of second mortgages fell to its lowest level in seven years. According to the Federal Reserve, the supply of home-equity loans fell 2.7 percent in the first quarter of 2012 to just $849.5 billion. The home-equity market, which includes home-equity lines of credit and closed-end second mortgages, has shrunk by 24.9 percent since peaking...(Includes three data charts) Read More

Tight Underwriting and Prospect of Discount Pricing Push More Homebuyers to Cash, HousingPulse Finds

The lure of discount pricing combined with the hassle of tough mortgage underwriting standards appears to be pushing more homebuyers away from mortgage financing and toward all-cash home purchases, the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey results suggest. According to the new HousingPulse data, the share of homebuyers relying on all-cash transactions climbed to a record high 35.2 percent in May. That was up from a 30.7 percent level a year ago and... Read More

Feds’ Foreclosure Remediation Guidance Suggests Compensation Amounts, Retains Ability to Litigate

Federal banking regulators last week released their Financial Remediation Framework for independent foreclosure review consultants to use in determining the compensation due homeowners financially injured by servicers’ foreclosure practices in 2009 and 2010, generally capping damages at $125,000 but allowing borrowers to pursue litigation if they so choose. “The guidance helps ensure that similarly situated borrowers who suffered financial injury as a result of errors in foreclosure actions on their homes are treated similarly,” said the Office of the Comptroller of the Currency, which issued the guidance in conjunction with the Federal Reserve Board. Under the framework, remediation could include lump-sum payments; suspension or rescission of a foreclosure; the provision of... Read More

Old Republic Withdraws Spinoff Plan for RFIG, Downplays Liquidity Concerns, Reentry Plans

Old Republic International Corp.’s top management said it is postponing indefinitely plans to reenter the mortgage guaranty market after cancelling a planned spinoff and reversing the partial leveraged buyout of its subsidiary, Republic Financial Indemnity Group. In a conference call this week, ORI Chief Executive Officer Aldo Zucaro stood by the company’s decision to withdraw the registration statement filed with the Securities and Exchange Commission in May for spinning off RFIG common stock to ORI shareholders. He said stakeholders, including the North Carolina Department of Insurance, Fannie Mae, Freddie Mac, banks, debtholders and shareholders, rejected... Read More

Finance Agency Files Suit to Stop Illinois From Imposing Real Estate TransferTax Assessment on Fannie, Freddie

For the second time in less than a year, Fannie Mae’s and Freddie Mac’s conservator has gone to court in Illinois to assert that the two federally chartered government-sponsored enterprises are exempt from certain local and state property assessments. Last week, the Federal Housing Finance Agency filed suit in the U.S. District Court Northern District of Illinois, Western Division, against the Illinois Department of Revenue and county clerks to block local government efforts to collect real estate transfer taxes from Fannie and Freddie. The FHFA suit was in response to litigation filed by DeKalb County and five other counties to compel... Read More

Lawyer: State Reallocation of Mortgage Settlement Money an ‘Emerging Controversy’ Among Officials

The reallocation of hundreds of millions of dollars of funds paid by the nation’s five largest loan servicers to states as part of this year’s whopping $25 billion national foreclosure settlement has ignited intra-state feuding as to how best utilize the cash windfall, according to a mortgage industry attorney. During a webinar sponsored last week by the State Attorneys General Enforcement Network, Jeremiah Buckley, founding partner of BuckleySandler, noted “emerging controversies” among state elected officials as they do battle, in some cases via the courts, to ensure the funds are used for consumer/mortgage-related purposes. The landmark agreement finalized in April between Ally Financial, Bank of America, Citigroup, JP Morgan Chase and Wells Fargo with a coalition of state attorneys general... Read More

Lawmakers, Regulators Take Additional Steps to Ease Mortgage Problems Facing Military Personnel

Mortgage lenders and servicers face increased congressional and regulatory attention and pressure over how they should respond to the unique needs and problems active-duty U.S. military personnel face handling their mortgages, particularly when they are transferred. Sen. Richard Shelby, AL, ranking Republican on the Senate Banking, Housing and Urban Affairs Committee, emphasized during a hearing this week the disruptions that Permanent Change of Station orders can cause service members. “When PCS orders are issued, service members are required to move even if they owe more on their mortgage... Read More

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