Any modified FHA or VA loan can now be repurchased from a Ginnie Mae MBS if the borrower successfully completes a three-month trial period under a policy shift to align with the FHA version of the Home Affordable Modification Program. Ginnie made the announcement on Aug. 26, effective immediately. Before the policy change, loans had to have missed three full payments before qualifying for a repurchase. Issuers can buy out loans that have remained in pools while borrowers made partial payments for at least three consecutive months under an FHA or VA trial payment plan that is a condition to a permanent modification, Ginnie explained. “Until the loan has been...

The average mortgage banking firm reported increased production earnings in the second quarter of 2011 and higher loan production compared to the first three months of the year, according to the Mortgage Bankers Association quarterly performance report. The report, which collected data from 167 companies including many smaller mortgage bankers, found average pretax income fell 60.5 percent to $451,000 during the second quarter. That was the lowest level of profitability since the fourth quarter of 2008, when the average mortgage banking company lost $206,000. The MBA survey suggested that...

The financial crisis and the housing meltdown have cast unprecedented doubt about the virtue of homeownership, and many experts at a conference sponsored this week by the Federal Reserve acknowledged that homeownership has lost its universal appeal. “For low-income households I do think it’s more risky because it’s such a large share of their assets, such a large share of the wealth, so a price decline has a disproportionate effect,” explained Karen Pence, assistant director of the division of research and statistics for the Fed. “I think it’s more risky for low-income households just because it’s such a big part of their portfolio. I think it’s...

Default technology provider Commerce Velocity, based in Irvine, CA, recently upgraded its Optimizer solution to help servicer clients achieve the new requirements for Fannie Mae’s Quality Right Party Contact initiative. The original version of Optimizer enabled servicers to maximize cash flows from delinquencies, and enforce workout consistency throughout the default management process. By applying net present value calculations, cash flow projections, valuation models, and comprehensive workout guidelines, the technology provides “the most intelligent outcomes possible,” the company said. The Optimal Outcome module monitors...

A proposal to rid the agency mortgage programs of some of their real estate-owned property through bulk sales has come under fire from Radar Logic, a housing research firm. The company said house prices continued to drop in June, down 4.7 percent from a year ago, and bulk sales of REO properties could hasten the fall. The Obama administration recently launched a fact-finding mission soliciting ideas and opinions about ways to reduce the massive REO inventories held by the FHA, Fannie Mae and Freddie Mac. One solution is bulk sales to investors who would likely turn the houses into rentals. Radar Logic is afraid of possible...

Law enforcement and regulatory officials may be undermining their odds of reaching a foreclosure-practices settlement with the mortgage industry because they’re grasping for too much, too soon, letting the perfect become the enemy of the good, according to some political and legal observers. Attorneys general in all 50 states and the Department of Justice and other federal agencies continue to investigate alleged irregularities in the foreclosure practices of top servicers, including Bank of America, which is...

After declining steadily since the end of 2009, overall mortgage delinquency rates spiked higher during the second quarter of 2011, according to the Inside Mortgage Finance Large Servicer Delinquency Index. The index, which covers all loans in default status plus foreclosure and is not seasonally adjusted, rose from 10.31 percent at the end of March to 10.58 percent at the midway point in the year. All of the increase came in the…

Department of Housing and Urban Development Secretary Shaun Donovan said it was just “a matter of weeks” until there would be a settlement between federal and state agencies and much of the mortgage servicing industry over foreclosure practices in the aftermath of the “robo-signing” scandal. That was almost three months ago. Recent indications suggest the coalition of government agencies involved in the effort may be fraying. Last week, Iowa Attorney General Tom Miller, who is leading negotiations with the industry, suddenly dumped New York Attorney General Eric Schneiderman from the coalition’s executive committee, claiming the NY AG had “actively worked to undermine” the group’s efforts recently.

The exact nature of the role of Mortgage Electronic Registration Systems in foreclosure proceedings may well be decided once and for all, as the U.S. Supreme Court has been petitioned for an expanded review of a decision that upheld the rights of MERS to the deed of trust, giving MERS the right to foreclose. Jose Gomes, petitioner, v. Countrywide Home Loans, Inc., et al. is the first major MERS case to reach the Supreme Court. “This will be the first case in the country to petition the nation’s highest court regarding the foreclosure fraud that has taken place, though its emphasis will be specifically on California law,” said San Diego-based foreclosure attorney Ehud Gersten, who petitioned the high court on behalf of his client, borrower Jose Gomes, in his dispute with his servicer, Countrywide.

Inside the beltway types have resurrected discussions about a possible broad government refinance initiative to more definitively bring financial relief to large swaths of struggling homeowners. But given the possible costs involved and the bitter partisan wrangling and brinkmanship seen over the latest round of debt ceiling negotiations, political observers see the introduction of yet another government mortgage program as improbable. A year ago, a team of analysts at Keefe Bruyette & Woods led by Bose George thought talk of a broad-based government refi program would ultimately go nowhere. They still do.