Bank of America and JPMorgan Chase will once again receive servicer incentives for modifying loans after more than seven months during which these payments were withheld by the Treasury Department for unsatisfactory performance in the Home Affordable Modification Program. The two banks will also get all the withheld incentives as part of the multistate foreclosure settlement. In June 2011, Bank of America, JPMorgan and Wells Fargo were all called to the carpet by the Treasury for their HAMP performance following a 10-month audit of participating servicers. The main issue was timeliness – while mods...

The refinance wave that lifted mortgage origination volume in the fourth quarter of 2011 appears to be holding steady in early 2012, according to a new Inside Mortgage Finance analysis. Average monthly securitization of refinance loans by Fannie Mae and Freddie Mac increased by 3.6 percent from the fourth quarter of 2011 to the first two months of this year. That’s somewhat faster than the 1.2 percent increase in average total securitization volume by the two government-sponsored enterprises. The refi market may gain momentum in the coming months. The Mortgage Bankers...(Includes four data charts)

The Obama administration this week announced price cuts for refinancing loans already insured by the FHA in an effort to provide relief to underwater homeowners, estimating that as many as 3 million borrowers could take advantage of the program. Beginning June 11, the FHA will lower its upfront mortgage insurance premium from 1.0 percent to .01 percent for streamlined refinancing of FHA loans originated before June 1, 2009, and reduce the annual fee for such refis from 1.15 percent to .55 percent. To qualify for the streamline refinancing, borrowers must be current on their existing FHA...

Mortgage lenders have become so risk-averse and sensitive to potentially punitive judicial or regulatory overkill that they’re demanding near-pristine credit histories and imposing their own credit overlays on top of existing underwriting standards that are already considerably tougher than they were during the years of the mortgage boom. And that’s unlikely to change and may in fact get worse unless federal policymakers make dramatic changes to the legislative and regulatory landscape. That was the main take-away that Paul Miller, managing director and group head of financial services research at...

The Justice Department and some members of Congress are unconvinced the mortgage industry is up to the task of fairly making and servicing mortgages in a tough housing market. That’s motivating them to use all of the tools at their disposal – and considering new ones – to combat discrimination and other abusive behavior. “In the coming year, we will continue our efforts to provide justice to those families who were harmed by discriminatory conduct during the mortgage boom and to hold lenders responsible for their actions,” U.S. Assistant Attorney General Thomas Perez said in testimony before the Senate Judiciary...

The Federal Housing Finance Agency is not backing away from its plan to overhaul servicing compensation on government-sponsored enterprise mortgages, but an official has acknowledged that the change will come more slowly than first expected. FHFA Special Advisor Mario Ugoletti told attendees at the Mortgage Bankers Association’s Mortgage Servicing Conference & Expo in Orlando two weeks ago that “servicing compensation reform [is] not dead or on the back burner,” contrary to the industry’s hopeful expectations. Ugoletti said any revisions to servicing compensation practices ought to result in enhanced...

The extension of the Home Affordable Modification Program announced in late January was coupled with changes, including the new eligibility of investor-owned properties. While the expansion of the program could allow for a half million more participants, there are complaints that it is no more than a taxpayer bailout of speculators. Timothy Massad, the assistant secretary for financial stability at the Department of Treasury, said the inclusion of investor-owned properties will help low- to moderate-income renters, because the foreclosure of investor-owned properties disproportionately affects them. An advocate for...

The Federal Housing Finance Agency’s hands-off approach to regulating Freddie Mac’s relationship with servicers is a problem, according to a new report from the regulator’s inspector general. While the FHFA has taken some steps, like its Servicing Alignment Initiative, the IG said that the regulator should be looking directly at the books of servicers and other counterparties, instead of taking the government-sponsored enterprises’ versions of events. The regulator’s ability to keep track of the GSE servicer risk might be “impaired by its lack of direct access to servicer books and records relating to the...

The Consumer Financial Protection Bureau has provided some potentially significant insight into some of the positions it may end up taking on the rules that will govern the final integrated mortgage disclosure it’s developing. The disclosures were released as part of the CFPB’s announcement that it is putting together a Small Business Review Panel under the provisions of the Small Business Regulatory Enforcement Fairness Act. The panel is part of the broader initiative to integrate the mortgage disclosure forms that borrowers receive when applying for and closing on a loan...

Last week, the Federal Reserve Board released action plans that Bank of America, Citigroup, EverBank, JPMorgan Chase, MetLife, PNC, SunTrust, US Bancorp and Wells Fargo developed and will have to implement per the consent orders issued last April in order to correct alleged deficiencies in residential mortgage loan servicing and foreclosure procedures. The Fed also released engagement letters between the institutions and the independent consultants they retained to review foreclosures that were in process in 2009 and 2010...