Loan servicers must deal with increasing paperwork and time demands, and they are often unequipped for new reporting requirements resulting from the Dodd-Frank Act. Firms such as SourceHOV say they can provide servicers with a strategy for dealing with the additional work new regulations are creating. One of the more onerous requirements is the need to handle qualified written requests. Servicers are also required to acknowledge receipt of any request. “Servicers really have two options when it comes to compliance,” said Michael Zwall, the director of mortgage services for SourceHOV, a consulting firm. “First, a servicer can decide to develop ...

A trio of House lawmakers from both parties rolled out legislation this week designed to prevent Fannie Mae, Freddie Mac and their regulator from blocking state and local clean energy initiatives that allow homeowners to install green upgrades.PACE, or property-assessed clean energy, programs enable local governments to finance renewable energy and energy efficiency projects such as solar panels, insulation and water conservation systems for their homes and commercial buildings. The financing is paid for by raising the individual homeowner’s tax.

Illinois Governor Pat Quinn (D) announced late last week the creation of a special fund that will use the state’s allocation of federal Hardest Hit Fund dollars to purchase distressed loans in the Chicago area and permanently modify them to affordable levels. The Mortgage Resolution Fund will extract $100 million of Illinois’ $445.7 million of HHF resources for the cause. The MRF will buy delinquent loans from lenders and capital markets trading desks at net present value, and each qualifying debt will be “brought into alignment with current values.” Chicago has suffered a ...

Purchase-mortgage lending has been in a slump since the housing market crashed three years ago, but a downturn in refinance activity is pushing lenders across the country to push financing for homebuyers with special deals and incentives. Last week, Fifth Third Mortgage Company, a subsidiary of Fifth Third Bank and the 13th largest mortgage originator according to Inside Mortgage Finance, announced reduced interest rates for purchase-money borrowers. During the first quarter, only 22 percent of the company’s production came from purchase mortgages, below ...

More borrowers who have remained current on their mortgage are choosing strategic defaults, raising fears of a renewed increase of underwater borrowers with higher origination balances walking away from their mortgage obligations, according to a recent report by Moody’s Investors Service. Moody’s analysts found that between 12 to 24 percent of performing mortgage loans, depending on the asset type, have loan-to-value ratios that are higher than those of defaulted mortgages. They also have risen more steeply compared to other ...

Closing and origination costs on a sample $200,000 purchase mortgage rose by almost 9 percent in 2011 nationwide, according to a survey by Bankrate, an online aggregator of financial rate information. In its annual closing cost survey, the group found that nationwide closing costs averaged $4,070, up from $3,741 last year. New York’s closing costs were highest at $6,183, followed by Texas at $4,944 and Utah at $4,906 on the same size mortgage. Arkansas had the lowest closing costs with $3,378, followed by ...

The Consumer Financial Protection Bureau, a potential nemesis regarded warily by the mortgage finance industry, officially opened for business this week without a Senate-confirmed director, but not without new brouhaha over the position. President Obama nominated Richard Cordray, the CFPB’s chief of enforcement, to be the first official director of the new agency. Prior to joining the bureau in January, Cordray was the Ohio attorney general for two years. Before that, he served for two years as Ohio’s state treasurer. It came as no surprise that Obama did not ...

Republican senators this week renewed their vow to block confirmation of a permanent director of the new Consumer Financial Protection Bureau unless the Obama administration agrees to revamp key parts of the agency’s structure and make it more accountable. Some, like Adam Levitin, a law professor at the Georgetown University Law Center, believe the CFPB is actually more accountable than any other federal agency. During testimony at a hearing in the Senate Banking, Housing and Urban Affairs Committee this week, he noted that the CFPB is subject to ...

Most mortgage loans made in recent years meet several of the major requirements to be classified as “qualified mortgages,” but debt-to-income tests could be problematic, according to a new Government Accountability Office report released this week. Loans that meet nine provisions specified in the Dodd-Frank Act would be classified as qualified mortgages and provide the lender some legal protection that the new law’s ability-to-repay standard has been met. The Federal Reserve has proposed a regulation to implement the DFA requirements but left some key issues – such as ... [includes one data chart]

Mortgage lenders operating as a “series limited liability company” should reevaluate the structure in the wake of an enforcement action by the Department of Housing and Urban Development against an FHA lender alleging violation of FHA branch rules and the Real Estate Settlement Procedures Act. A recent settlement agreement between HUD and Prospect Mortgage of Sherman Oaks, CA, could be the wake-up call for other mortgage companies that use a series limited liability company, or a “series LLC,” to originate FHA-insured loans, according to compliance experts. Lenders may have to decide whether to ...