Bank of America is in the process of contacting 57,000 seriously delinquent FHA borrowers to determine who would qualify for special loss mitigation options under a recent settlement agreement with the Department of Housing and Urban Development. Previously undisclosed, the settlement was confirmed by HUD officials, who declined to give further details about what led up to the agreement. A BofA spokesman said a HUD inquiry into the bank’s servicing practices found that 38 percent of the 1.5 million FHA mortgage loans currently serviced by BofA were delinquent but have not been offered loss mitigation options in accordance with...

Bank of America is currently sitting on $1.4 billion of real estate it acquired upon foreclosure of delinquent FHA-insured loans. The properties are not included in BofA’s inventory of foreclosed properties at June 30, 2011, but remain on the bank’s balance sheet until they are conveyed to the FHA, the bank disclosed in its 2Q11 filings. BofA expects to be reimbursed once the properties are transferred to the FHA for principal and, up to a certain limit, costs incurred during the foreclosure process and interest incurred during the holding period. The bank suspended its foreclosure activities in October 2010 as it began a...

A federal district court in Dallas dismissed a civil lawsuit against the Department of Housing and Urban Development and HUD Secretary Shaun Donovan because the plaintiff, a mortgage lender and servicer, lacked standing to bring suit. U.S. District Court Judge Barbara Lynn for the Northern District of Texas, however, gave American Home Mortgage Servicing, Inc. (AHMSI) another opportunity to amend and refile its complaint. Ruling against AHMSI on standing, Lynn never got to the core of the complaint, which accused HUD of failing to pay insurance claims submitted by AHMSI on 161 defaulted FHA-insured mortgage loans, which it serviced. AHMSI claimed...

Short of a market miracle, the chances of other Ginnie Mae mortgage-backed securities servicers catching up with market leaders Wells Fargo and Bank of America are practically nil. Wells Fargo and BofA appear to have a solid lock on 55.0 percent of Ginnie Mae servicing outstanding based on a combined portfolio total of $634.0 billion at the end of June. Overall, the supply of Ginnie Mae servicing grew 3.8 percent during the second quarter. Wells Fargo commanded a 28.2 percent share of Ginnie Mae servicing during the second quarter, up 4.7 percent from the first quarter. Not far behind is second-ranked BofA with a 26.6 percent share, thanks to... [Includes one data chart]

The Federal Housing Finance Agency, the Treasury Department and the Department of Housing and Urban Development this week announced a “request for information” on how to best sell Fannie Mae, Freddie Mac and FHA-owned real estate owned properties. The regulators are looking for ways to dispose of REO inventory while improving loss recoveries and adding to the supply of rental housing, according to the RFI. “While the [government-sponsored enterprises] will continue to market individual REO proper-ties for sale, FHFA and the enterprises seek input on ...

Wall Street and the Chicago City Council are at loggerheads over a revised ordinance establishing mortgage lender liability for vacant and abandoned buildings caught in the foreclosure process. Tentatively set to take effect Sept. 18, the ordinance addresses the issue of vacant and abandoned foreclosed properties for which ownership is unclear. It holds banks responsible for the upkeep and security of such properties even before they assume title to those properties. In a recent analysis, Moody’s Investors Service warned that such lender liability laws increase mortgage lending transaction costs, which will worsen if...

The Mortgage Bankers Association urged the Federal Housing Finance Agency to include other fee structures and not just seek public comment on one servicing fee structure in a forthcoming proposal. The FHFA has been working behind closed doors with Fannie Mae, Freddie Mac and Ginnie Mae to devise a new servicing compensation structure for mortgages securitized by the agencies, which account for over 90 percent of new lending. Industry groups and others have been consulted during the process, which is expected to result in an exposure document subject to public comment. The MBA cautioned the FHFA against showing preference for any...

A report by RealtyTrac shows that foreclosure activity decreased on a year-over-year basis in 178 of the nation’s 211 metropolitan areas with a population of 200,000 or more. The report found a decrease in foreclosure activity in the top 10 metropolitan areas in the first half of 2011 compared to the first half of 2010. Seattle was the only exception with a nearly 10 percent increase in foreclosure activity from the first half of 2010. Seattle’s foreclosure rating is now 57th among all metro areas, up from a 97th ranking in the first half of 2010. California, Nevada and Arizona cities represented the top 10 metro foreclosure rates and 15 of the top...

Four of the top five mortgage servicers continued to gradually pare down their portfolios during the second quarter of 2011, while Wells Fargo inched further toward the top of the industry, according to a new ranking and analysis by Inside Mortgage Finance. Absent any blockbuster mergers or servicing acquisitions over the past few years, the major trend in the servicing business has been the winding down of distressed subprime and Alt A portfolios. Bank of America, still the largest servicer in the industry, has seen its portfolio shrink steadily since ... [includes one data chart]