People get discouraged from taking mortgage loan modifications that are in their best interest by countless paperwork steps and little support from servicers, according to a Harvard University behavioral economist who says he has a solution. Piyush Tantia, the executive director of ideas42, a nonprofit behavioral economics research and development lab at Harvard, has been experimenting with how people respond to foreclosure. Behavioral economics blends psychology and economics to analyze and predict decisions based on how people actually behave. Tantia found that people often did not ...

Mortgage lenders appear divided on whether a joint venture with home builders at this time would be profitable or just a shot in the dark. With home building and purchase-mortgage lending clearly in a slump, joint ventures are probably more important now than ever because the mortgage process has become more complicated and difficult for the consumer, according to a homebuilding industry executive. Bank of America, however, may be cold on joint ventures right now. Saddled with the misfortunes of Countrywide, BofA strategically ended a joint venture recently with ...

Bank of America said it will spend $400 million just to implement the servicing changes it agreed to in a controversial proposed settlement with a group of investors in non-agency mortgage-backed securities issued by Countrywide Financial. The proposed settlement itself would cost the bank $8.5 billion, and BofA set aside another $5.5 billion to cover other possible buyback demands. Reckoning the cost of upgrading servicing systems has been a common theme in an industry that faces even bigger expenses from punitive charges. Ally Financial this week said it will cost the company ...

The mortgage servicing sector is warily eyeing new servicing standards cooked up by the government-sponsored enterprises at the behest of their regulator that strictly mandate the servicers’ delinquency management requirements. Some lenders dread an implementation predicament while others see opportunity. In late April, the Federal Housing Finance Agency announced its Servicing Alignment Initiative that requires Fannie and Freddie to devise uniform rules for servicing delinquent mortgages they own or ...

The dramatic slowdown in mortgage lending activity during the second quarter of 2011 led to significant declines in virtually all states, according to a new analysis of agency securitization data by Inside Mortgage Trends. Fannie Mae, Freddie Mac and Ginnie Mae securitized a total of $565.5 billion of single-family mortgages during the first six months of 2011, but much of that activity was front-loaded in the first quarter. Agency mortgage-backed securities production declined 33.7 percent from the ... [includes one data chart]

Financial institutions are taking steps to prepare for an increased amount of data they will have to collect and report as a result of the regulatory deluge from the Dodd-Frank Act, according to experts participating in a webinar sponsored by Deloitte & Touche late last week. Organizations are “focused on disclosure, taking inventory of their own rules and regulations and they’re doing a series of different types ...

There is a good chance that criminal charges will be brought by the U.S. Department of Justice against the major mortgage servicers following a nationwide probe into robo-signing and other foreclosure processing issues. Officials representing the Financial Fraud Enforcement Task Force, a broad coalition of federal agencies working with state and local officials, said during a recent hearing in the Senate Judiciary Subcommittee on Administrative Oversight and the Courts, that further investigations and prosecutions stemming from ...

Fannie Mae late last week reiterated to lenders its policy on mortgage insurance coverage while it also tweaked its requirements for reporting notifications of MI rescissions, mortgage insurer-initiated cancellations and claim denials. The government-sponsored enterprise’s announcement, published June 30, reminds servicers of their “contractual obligations” to ensure that any MI coverage required by Fannie is maintained. “Mortgage insurance claims must be pursued in a way that will at all times protect Fannie Mae’s ...

The Obama administration needs to move more aggressively than planned if it wants to return the FHA mortgage insurance program to its traditional client base and market size, according to a new analysis by researchers at George Washington University. At a time when many industry and consumer groups are urging policymakers to maintain the status quo so as not to hurt a still fragile housing market, report authors Robert Van Order and Anthony Yezer say FHA loan limits should be ...

The new final rule from the Department of Housing and Urban Development does not require individuals engaged in mortgage loan modifications or working as third-party mod specialists to be li-censed under the Secure and Fair Enforcement of Mortgage Licensing Act of 2008. But the bad news is that the HUD rule doesn’t exempt them either – it pushes the issue off to the Consumer Financial Protection Bureau. The rule sets a minimum standard for states to adhere to in order to comply with the SAFE Act in licensing mortgage loan originators who don’t ...