The newly announced $25 billion settlement over foreclosure servicing practices is not expected to have much impact on MBS investors because most of the principal reductions that the five banks agreed to make will involve unsecuritized mortgages they hold in portfolio. The settlement involves all states except Oklahoma, two federal agencies and five major servicers, and requires the banks to work off up to $17 billion in principal reduction and other forms of loan modification relief nationwide, according to a summary of the agreement. Although the actual settlement had not been released as...
New York Attorney General Eric Schneiderman filed a lawsuit late last week against Bank of America, JPMorgan Chase and Wells Fargo, claiming that their use of MERSCorps Mortgage Electronic Registry System resulted in a wide range of deceptive and fraudulent foreclosure filings in New York state and federal courts, harming homeowners and undermining the integrity of the judicial foreclosure process. Among its specific accusations, the NY AGs office says that, out of the 13,000-plus foreclosure actions against New York homeowners in which MERS listed itself as the plaintiff, in many ...
State attorneys general reportedly have until today to agree to a potential $25 billion settlement with big mortgage lender/servicers namely Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo. Under the latest iteration being voted on, about $17 billion of that amount would consist of penalties paid by the banks, which would be used for principal reductions. Another $5 billion would go toward a reserve account that would be used to pay $1,800 checks to homeowners affected by deceptive foreclosure practices, with $2 billion to $3 billion to go toward helping ...
The Federal Housing Finance Agency might be backing away from its controversial suggestion to change mortgage servicer compensation from the current 25 basis points of outstanding principal balance to a flat fee of $10 per mortgage, per month for current loans, with no incremental fees other than existing incentive compensation for the servicing of non-performing mortgages. Considering changes to the structure of mortgage servicing compensation is an important component of improving the operations of the future mortgage market, an FHFA spokeswoman said. We received useful input on ...
Illinois. State Attorney General Lisa Madigan filed a lawsuit in Cook County Circuit Court alleging that Nationwide Title Clearing, a Florida-based company that prepares documents for use in default servicing and foreclosure actions, filed faulty documents with Illinois county recorders. The lawsuit alleges a number of violations of the Illinois Consumer Fraud and Deceptive Practices Act and the Uniform Deceptive Trade Practices Act. Madigan is asking the court to require NTC to review and correct all documents it unlawfully created and recorded in Illinois, and pay back all ...
The non-agency portion of the Home Affordable Modification Program is set for significant changes, according to an announcement last week by the Treasury Department. Investors will receive greater incentives for principal reduction mods, eligibility requirements for HAMP will be loosened and the program will be extended through the end of 2013. Implications for agency MBS investors seem limited but are very meaningful for non-agency investors, said analysts at Barclays Capital. Incentive payments to loan owners will triple for principal reduction HAMP mods. Previously, the payments ranged from six cents-on-the-dollar to 18 cents-on-the-dollar ...
The mortgage industry is skeptical about President Obamas proposal for low-cost, non-agency loan refinancing program, administered by the FHA for current, underwater borrowers. Some industry participants called the plan nothing but smoke and mirrors that would likely create unrealistic expectations. But deceptive or not, the proposal first announced by the president in his State of the Union address promises to be different from the earlier, huge unsuccessful FHA experiments in foreclosure prevention Hope for Homeowners and FHA Short Refinance programs. The proposed refi plan is a combination of ...
With the recent issuance of streamlined regulations on lender indemnification, mortgagees participating in the FHA Lender Insurance program may increasingly find themselves the targets of HUD enforcement actions. Industry compliance experts anticipate an increase in agency audits and monitoring reviews because of the Department of Housing and Urban Developments tightening of its indemnification rules. This could raise lenders compliance costs as well as legal costs if they find themselves the subject of an enforcement action, experts warned. At an unprecedented time of change in the mortgage industry ...
December was a productive month for FHA as the percentage of endorsements, fueled by strong refinance activity, rose 6.3 percent from the previous month, according to Inside FHA Lendings analysis of agency data. However, 2011 overall was not as generous. Refinance transactions totaled 30,515 for the month, up 15.1 percent from November, with borrowers FICO scores averaging in the 703-706 range. Streamline refis were up 20.2 percent and conventional-to-FHA refis also increased 11.5 percent over the same period. Total cash-out refis, likewise, bumped up 7.7 percent on a monthly basis. In the advent of President Obamas latest refinancing proposal ...
Wells Fargo reclaimed the top ranking in residential mortgage servicing at the end of 2011, a position that the firm last held back in 2006. A new Inside Mortgage Finance ranking and analysis shows that Wells continued to build its mortgage servicing portfolio through robust loan origination activity, but it wasnt easy. Wells originated $120.5 billion in new loans during the fourth quarter, but managed to increase its servicing portfolio by just $7.5 billion, a 0.4 percent increase. That relatively small increase was enough to move well ahead of Bank of America, which reported a huge $165.8 billion net...