Activity in the Home Affordable Modification Program’s Principal Reduction Alternative is heavily concentrated, according to an analysis by Inside Nonconforming Markets. Bank of America and Wells Fargo combined account for 51.4 percent of the non-agency principal reduction mods, based on new disclosures by the Treasury Department. The servicers’ PRA activity is outsized even compared with their overall non-agency HAMP activity. BofA and Wells combined account for 33.6 percent of active non-agency HAMP mods ... [Includes one data chart]

Housing economists challenged the Federal Housing Finance Agency’s controversial stance against permitting Fannie Mae and Freddie Mac to allow principal forgiveness in loan modifications, telling U.S. senators this week that mortgage loan writedowns would go a long way to cure the ongoing housing crash and foreclosure crisis. Testifying before the Senate Committee on Banking, Housing and Urban Affairs, Moody’s Analytics Chief Economist Mark Zandi told lawmakers that government policy encouraging more mortgage modifications, particularly those involving “substantial principle writedowns” would...

Days after Consumer Financial Protection Bureau chief Richard Cordray appeared reluctant to commit to publishing a formal regulatory agenda before a key House committee, the bureau turned around last week and quietly issued just such a document, albeit an iteration that did not list key projects under the CFPB’s newly expanded powers it acquired with an appointed director. That suggests the agenda was put together prior to Cordray’s recess appointment and perhaps without his awareness, some observers suggest; otherwise, surely he would have mentioned it when he was ...

The Consumer Financial Protection Bureau has released for public comment the eighth iteration of its consumer mortgage disclosure prototype forms, dubbed “hemlock” and “butternut,” specifically asking for input as to how the prototypes work with the CFPB’s current application disclosure prototype. “These prototypes use a format for closing costs that’s similar to the format on the initial disclosure to enable the two forms to work well together,” the CFPB said. “Consumers should be able to see if their final loan terms and costs are different from the numbers they were originally offered ...

Federal Reserve.Federal Deposit Insurance Corp. Office of the Comptroller of the Currency.National Credit Union Administration. Guidance on Junior Liens Reissued. Federally regulated financial institutions have to monitor all credit quality indicators relevant for home loan borrowers, under guidance that was reissued by the Federal Reserve, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the National Credit Union ...

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 ...

Government regulators continue to wrestle with the controversial risk-retention rule mandated by the Dodd-Frank Act that is widely seen as one key to the prospects for reviving the non-agency MBS market. Officials from one of the agencies involved in the rulemaking told attendees at this week’s annual meeting of the American Securitization Forum that regulators are still studying the landslide of comment letters that came in response to a proposed rule published in April 2011. The extended comment period closed in August. “It is in the nature of the rulemaking process that an advanced notice of proposed...

Government oversight of mortgage lending has dramatically increased in the last two years, and the current trajectory established by the Dodd-Frank Act suggests things are going to get a lot worse before they’re going to get any better. The Dodd-Frank Act will generate a heavy load of new regulations for the industry to implement, and the process is not yet halfway done, said Rod Alba, senior regulatory counsel at the American Bankers Association, during an Inside Mortgage Finance Publications webinar this week. “We are in the midst of at least 24 months’ worth of overheated regulatory pronouncements,”...

The Supreme Court of the United States plans to hear oral arguments late next month in Freeman v. Quicken Loans, a case that could have wide-ranging implications for lenders subject to the Real Estate Settlement Procedures Act. The issue before the high court is whether RESPA Section 8(b) 12 USC 2607(b) prohibits a real estate settlement services provider from charging an unearned fee only if the fee is split between two or more parties.The language of that provision of the statute states that no person “shall give and no person shall accept any portion, split or ...

In Marr v. Bank of America, N.A., the U.S. Court of Appeals for the Seventh Circuit has affirmed that borrower testimony alone can overcome the Truth in Lending Act’s “rebuttable presumption” that a borrower has received two notices of his right to rescind a refinance transaction, despite a written acknowledgement by the borrower to the contrary. In this case, the borrower argued that he wasn’t given two right-to-rescind notices as required under TILA, even though he had signed a document indicating he had. He said he had filed away and left undisturbed the documents he received when ...