The Consumer Financial Protection Bureau initiated its first enforcement action last month, filing a sealed complaint in federal court in California against an attorney and affiliated partners and companies that offered loan modification and foreclosure relief services to struggling homeowners. The bureaus complaint alleges that defendant Chance Edward Gordon, some of his colleagues and related companies in the Los Angeles area, deceived consumers with false promises of obtaining loan modifications in exchange for...
Last week, the Office of the Comptroller of the Currency and the Department of Justice announced a $12 million settlement that resolves legal and regulatory actions brought against Capital One for alleged violations of the Servicemembers Civil Relief Act, including foreclosing without a court order. The agreement requires Capital One to pay approximately $7 million in damages to service members for SCRA violations, including at least $125,000 in compensation plus compensation for any lost equity (with interest) to each service...
Officials at Ocwen Financial revealed this week that the servicer hired more employees than operationally necessary in an effort to win bids for servicing and subservicing. They said they are now in the process of right-sizing staffing levels through a number of different techniques. We over-hired to make sure we could hit the cover off the ball on the deals that we knew we had in-hand, Ron Faris, president and CEO of Ocwen, said during the servicers earnings presentation for the second quarter of 2012. Ocwen completed ...
In response to criticism that the Home Affordable Modification Program is susceptible to fraud, the Treasury Department recently established a fraud detection program with unprecedented penalties for the non-agency portion of HAMP. In certain circumstances, the Treasury will recapture any servicer, borrower or investor incentive payments, even for loan modifications completed before the new fraud detection program was announced. The process was detailed in HAMP Supplemental Directive 12-04. The Treasury said it hired ...
Performance data from mortgages serviced for the government-sponsored enterprises would be included in non-agency servicer ratings under a proposal by Moodys Investors Service. In July, the rating service proposed a major overhaul of its servicer rating process. Loan-level data submitted to Moodys as part of the Servicer Quality Assessment rating process would be supplemented with data from securitization trusts, as well as GSE performance data as needed. The data from securitization trusts which Moodys noted ...
The Department of Housing and Urban Development has expressed concern about a municipal proposal to invoke eminent domain to seize underwater mortgages and refinance them at a lower rate through the FHA Short Refi Program. HUD Press Secretary Derrick Plummer said that while the proposal to use eminent domain to help underwater homeowners remains a local issue, the department would neither support nor endorse such action. He said HUD has concerns about this approach but declined to elaborate. Eminent domain refers to the authority of states to ...
The FHA could be the vehicle of a new refinancing plan offered by Sen. Jeff Merkley, D-OR, to help homeowners who owe more on their mortgage than their homes are now worth. In a proposal called The 4 Percent Mortgage: Rebuilding American Homeownership, Merkley explained that his plan will not require taxpayer dollars but would rely on proceeds from the sale of government bonds to investors for funding. The aim, Merkley said, is give underwater homeowners the chance to ...
Total FHA delinquency rates as of June 30 were up for 30-, 60- and 90-day delinquencies as was the foreclosure rate for loans with FHA insurance, an Inside FHA Lending analysis of FHA servicing data found. The latest FHA servicers data showed an overall 16.75 percent delinquency rate, up from 16.10 percent as of April 30, the last time we reported FHA delinquency and foreclosure rate trends. Fueling this increase is an uptick in 30-60 days delinquencies, which rose to 7.20 percent from 6.61 percent over the two-month period. At the end of June, serviced FHA-insured loans totaled 7,636,852 loans, of which ... (1 chart)
As the Department of Housing and Urban Development prepares for a planned single-family loan sale in September, questions remain as to how successful the Distressed Asset Stabilization Program will be, given its restrictions and additional certification requirements. Legal experts say that the servicer and investor participation requirements are so onerous that the DASP would seem a little more than a sound bite. The DASP expands an earlier pilot program that allows private investors to purchase pools of nonperforming mortgages at a discount before ...
Revised VA HAMP. The Department of Veterans Affairs has updated the instructions for modifying mortgage loans with a VA guarantee. Changes include clarification concerning occupancy status, an updated reference to another VA guidance on prior approval procedures and extension of the applicability of the said guidance. The changes were announced in Circular 26-10-6. New VA REO Management and Servicing Contractor. The Department of Veterans Affairs has provided details for transferring VA property management (real estate-owned) and portfolio loan servicing contracts for the VA home loan guaranty program from ...