Federal officials deny that theyre growing weary of and disinterested in the ongoing foreclosure crisis, even while observers are calling for more effective solutions. Folks in Washington tell me there is a general sense of foreclosure fatigue in our nations capital, wrote Jean Braucher, a professor of law at the University of Arizona, in the finance blog Credit Slips. Its just so boring to keep thinking about all the people losing their homes year after year. Cant we move on to something new? This attitude goes along with a failure to do anything meaningful to get out of the five-year-old mortgage crisis, still...
When it comes to modifying non-agency mortgages, early loan modifications greatly increase the rate of success, and principal reductions are the most effective type of loan mod, according to a new study by the MBS strategy group at Amherst Securities Group. Modification activity has undergone a dramatic reshaping over the past few years, which has dramatically improved modification success, the study said. In particular, payment reductions are much larger now, and that is...
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...
The reallocation of hundreds of millions of dollars of funds paid by the nations five largest loan servicers to states as part of this years 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...
The Office of the Comptroller of the Currency and the Federal Reserve Board late last week put out guidance that will be used to calculate the compensation or other remedy that borrowers will receive for financial injury identified during the independent foreclosure review that was set up last spring in the wake of the industrys foreclosure practice debacle. The Financial Remediation Framework provides examples of situations where compensation or other remediation is required for financial injury due to servicer errors, misrepresentations or other deficiencies...
In Rosenfield v HSBC Bank, the U.S. Court of Appeals for the Tenth Circuit recently ruled that borrowers cannot seek rescission after the Truth in Lending Acts three-year statute of repose expires, even if the borrower had sent a notice of rescission within the three-year period. Beyond the ruling of the facts of the case, the courts decision is another blow to the Consumer Financial Protection Bureau. Early this year, the CFPB had argued in a friend-of-the-court brief that TILA Section 125 (U.S.C. Section 1635) gives consumers a statutory right to rescind qualifying mortgage...
Nearly 6 in 10 mortgage modifications went 60 or more days delinquent 18 months following the date of their modification, according to a new study from TransUnion. The study only looked at loan modifiers and non-modifiers, with comparable VantageScore credit scores, who had originally been 120 or more days past due on their mortgage loans. It found the recidivism rate the rate at which modified mortgages again went 60 or more days past due was 41.9 percent 12 months after modification. After 18 months, that rate had risen to 59.1 percent. Arizona, California, Florida...
Berkshire Hathaway became the lead bidder for Residential Capitals loan portfolio this week while Nationstar Mortgage remained the stalking horse bidder for ResCaps mortgage servicing rights and origination platform. ResCaps parent company Ally Financial was previously the top bidder for ResCaps loan portfolio. Auctions for the MSRs, origination platform and loan portfolio are expected in October. An investigation by the Consumer Financial Protection Bureau helped a borrower receive a ... [Includes two briefs]
A new secondary market policy announced by Wells Fargo last week is sending ripples across the industry and could potentially cause the FHA Streamline Refinance program to falter in the coming weeks. Major FHA lenders have quietly adopted similar policies as FHA refinance volume, fueled by increased streamline refi business, more than doubled over the week. Wells Fargo raised eyebrows by announcing it will do FHA streamline refis only on loans in its own servicing portfolio and will not accept streamline refis from third-party originators. The top FHA producer in the first quarter of 2012 said focusing on ...
Advocates for FHA condominium rule changes may have to wait a bit longer for a proposed rule currently in development, according to Acting FHA Commissioner Carol Galante. Galante said the Department of Housing and Urban Development is reviewing the current FHA condo rules for future revisions that would remove the roadblock to buyers, sellers and lenders. A proposed rule is in the works but it could take considerably more time to finish and finalize it, she said without providing a timetable. In the meantime, new guidance is on the way to ...