The mortgage industry is skeptical about President Obama’s 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 Development’s 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 Lending’s 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 Obama’s 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 wasn’t 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...

The deadline for the state attorneys general to determine whether they will join the multistate settlement of mortgage foreclosure and servicing practices has been extended from Feb. 3 to Feb. 6. While some AGs have definitively stated whether they are in or not, Nevada’s Catherine Cortez Masto and others are still seeking more information about the settlement terms. For a settlement that’s taken more than 15 months to negotiate, few are surprised the deadline has been pushed back. If anything, the mere three-day delay is welcome news for observers used to more than a year of back and forth. The new...

The U.S. residential housing market used to provide the lion’s share of business for non-agency asset securitization, but experts at this week’s American Securitization Forum say it will take years for the sorely damaged housing market to recover and the nationalized mortgage finance system to be overhauled. Supply and demand fundamentals in the housing market are severely broken, said Laurie Goodman, senior managing director at Amherst Securities Group. There are some 2.9 million borrowers in foreclosure or more than 12 months delinquent, plus another 400,000 units of real estate-owned properties. With...

Analysts have mixed expectations for residential mortgage servicing in 2012, with some seeing it as a year of foreclosure-prevention reforms and others anticipating a higher level of vigilance in new deals and loan quality. Although issuance of non-agency MBS will be modest again in 2012, new deals will have more comprehensive reviews of originators, more reliable and better-quality loan-level data, and stronger enforcement of breaches of representations and warranties, according to Moody’s Investors Service. New deals will better address legal issues relating to foreclosure challenges. Some of the deals...

The never-ending board game over mortgage foreclosure processing errors flailed through another week of meetings between state attorneys general, top lenders and federal officials that were so “informal” many didn’t confirm that they were in attendance. A leaked copy of a new draft settlement indicates that the latest offer on the table includes $17 billion in principal reductions and a $5 billion reserve account for state and federal programs. According to the Associated Press, some of that account would pay for $1,800 checks to homeowners affected by banks’ deceptive practices. Another $3...

It’s not just federal regulators and lawmakers that are complicating the business of mortgage servicing while the industry continues digging itself out of a housing market collapse of near-biblical proportions. States have become increasingly active and aggressive, and there’s little sign that’s about to end any time soon. “Three years ago, servicers were just beginning to understand the extent to which state legislative efforts could complicate, extend and expand the cost of the foreclosure process,” said Nanci Weissgold and Morey Barnes Yost, attorneys in the consumer financial services practice ...

The Democratic and Republican state attorneys general are scheduled to meet separately Monday, Jan. 23, to discuss the foreclosure practices settlement terms sent out last week, amidst varying criticism that the agreement will be either a shakedown for banks or an inadequate answer to homeowner woes. Monday’s meetings come after Housing and Urban Development Secretary Shaun Donovan announced last week that the pending settlement was “very close” and would benefit about 1 million families through principal reduction for homeowners and, in some cases, direct compensation for people wrongfully ...