A Senate subcommittee chairman has called upon the Federal Housing Finance Agency to recalculate and resubmit its principal reduction analysis to account for the Obama administration’s proposed enhanced incentives after an expert testified last week about a number of flaws in the study the FHFA used to justify its policy stance against writedowns of Fannie Mae and Freddie Mac loans. Sen. Robert Menendez, D-NJ, called for the FHFA do-over during a hearing of the Senate Banking Subcommittee on Housing Transportation and Community Development, where Amherst Securities’ Laurie Goodman said there...

The feds aren’t done cracking down on mortgage servicers and before the smoke clears, more than a half dozen companies are going to be facing fines that have been pending since federal regulators announced their servicing consent decrees last April, an official from the Federal Reserve told members of Congress this week. Last month, the Fed announced it had assessed monetary sanctions totaling $766.5 million against Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo for failing to appropriately oversee their subsidiaries’ mortgage loan servicing and foreclosure processing...

The settlements reached by five major mortgage servicers with a handful of states over their use of the Mortgage Electronic Registration System has not weakened the legal position of MERSCorp itself, according to industry experts. The new agreements signed by New York Attorney General Eric Schneiderman with Wells Fargo, Bank of America, JPMorgan Chase, Citigroup and Ally Financial has the banks paying a total of $25 million to the state in exchange for a release of further claims regarding the banks’ use of MERS throughout the servicing and foreclosure process and a pledge not to challenge...

Homebuyers rely on real estate agents to recommend specific lenders in about one-third of the mortgage-financed home purchases now taking place in the U.S. housing market. And despite the fact that many real estate brokerage firms have some sort of partnership with specific lenders, relatively little business appears to be generated by these arrangements. These are some of the major findings contained in a comprehensive new study of the home purchase mortgage market and the role real estate agents play in generating mortgage business for lenders. The study, “Key Factors in the Referral of Homebuyers to...

In a development that ultimately could affect legions of homeowners who couldn’t get a permanent loan modification, the U.S. Court of Appeals for the Seventh Circuit recently gave the go-ahead to a borrower class action against a mortgage servicer for not providing a permanent loan modification under the Home Affordable Modification Program. “We believe this affects hundreds of thousands of people, if not more – not just at Wells Fargo, but also with respect to other banks – who haven’t been able to get their loan modifications like they should have, given their compliance with their trial plans...

Home-equity lending in 2011 fell to its lowest level in more than 20 years as crumbling house prices and rigid underwriting continued to hammer away at second mortgage lending. Banks, savings institutions and credit unions reported a total of $803.6 billion of home-equity loans in their portfolios at the end of the year, down 7.2 percent from the previous December. Depository institutions accounted for the lion’s share, 92.1 percent, of the $873.0 billion home-equity market. Finance companies were the only other significant player in the market, with $49.0 billion at the...(Includes two data charts)

Federal Housing Finance Agency.FHFA Office of Inspector General. FHFA’s Supervision of Freddie Mac’s Controls over Mortgage Servicing Contractors Faulted. The Federal Housing Finance Agency’s Office of Inspector General found some areas in which the Finance Agency could improve its supervision of Fannie Mae’s and Freddie Mac’s controls over its mortgage servicing contractors. “FHFA has not clearly defined its role regarding oversight of servicers, sufficiently coordinated with other federal banking agencies about risks ...

Earlier this month, private-equity firm Fortress took its mortgage servicer unit, Nationstar Mortgage Holdings Inc., public, the second such offering for a mortgage servicer in a month, even as some large bank servicers increasingly look for the exits. The move might look like healthy creative vs. destructive capitalism to some, but it’s a disturbing trend on at least one public policy level, according to housing policy expert Karen Shaw Petrou, managing partner at Federal Financial Analytics, a Washington, DC, think tank. “From a purely market perspective, there’s no problem if banks lose and PEs win ...

In Wigod v. Wells Fargo Bank, the U.S. Court of Appeals for the Seventh Circuit earlier this month gave a mortgage borrower the green light to move ahead with class action litigation against the servicer of her mortgage for its failure to provide a permanent loan modification under the Home Affordable Mortgage Program. In this case, the borrower, Lori Wigod, and the servicer, Wells Fargo, entered into a HAMP trial period plan with the understanding that if Wigod complied with the terms of the plan for four months, Wells would offer her a permanent loan modification...

Law firm K&L Gates and the National and Washington Lawyers’ Committees for Civil Rights launched a pro bono legal challenge to an allegedly discriminatory and otherwise unlawful foreclosure rescue scam targeting Hispanic homeowners in northern Virginia. Plaintiffs Jose and Margarita Viera allege they have been the victims of defendants Bella Homes LLC and a number of its management officials and agents in a scheme that zeroes in on Hispanic homeowners who were having difficulty making their mortgage payments. “The crux of the complaint is that ...