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Foreclosure

NY Delegates Respond to AG’s Removal From Settlement Committee

Twenty-one members of New York's congressional delegation sent a letter to Iowa Attorney General Tom Miller expressing concerns after he removed New York Attorney General Eric Schneiderman from the executive committee negotiating a settlement with several major servicers. The state's lawmakers say Miller's decision to oust Schneiderman ""sets a dangerous precedent"" for other attorneys general who, out of fear for what might happen, may choose silence over voicing their concerns with the proposed settlement.

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Ginnie Mae Allows Buyouts After Trial Payment Plans

Ginnie Mae has announced a new rule regarding buyouts of delinquent loans. Servicers may now buy out loans at the end of a successful trial payment plan, instead of waiting until a borrower has missed three payments. This new rule is in line with recently released Federal Housing Administration (FHA) guidelines requiring most loans to undergo a three- to four-month trial payment plan before a loan modification is made permanent. The new FHA guidelines go into effect October 1.

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HUD Extends Application Period for EHLP

HUD is once again accepting applications for its Emergency Homeowners' Loan Program (EHLP), which provides assistance to borrowers at risk of losing their homes due to unemployment or underemployment. The new deadline for applications is September 15. The original deadline of July 22 was extended to July 27, but HUD announced Monday that it is reopening the application process because the agency believes it has enough resources to help more homeowners than have currently applied.

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Chicago to Launch Foreclosure Loan Program

The city of Chicago is set to launch a targeted new loan program to help alleviate the effects of the foreclosure crisis in local neighborhoods. Through the initiative dubbed the Micro-Market Recovery Program, the city will work to foster the reoccupation of foreclosed or vacant properties in key areas of Chicago by employing both nonprofit intermediaries and for-profit capital sources to provide special funding for homebuyers and approved developers.

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On Mortgage Defaults, UFA Says Industry Headed for Recovery

The default risk associated with newly originated mortgages continues to improve, according to the analysts at University Financial Associates (UFA). The company's default risk index for the third quarter indicates that with today's economic conditions, lenders and investors should expect defaults on new loans to be 32 percent higher than loans from the 1990s. That's down from an elevated risk of 41 percent during the first part of this year. UFA says at this rate, ""normalcy may not be far away"" for default and prepayment indicators.

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Bernanke Offers No Indication of New Economic Stimulus

The marketplace was zeroed in on Ben Bernanke and Jackson Hole, Wyoming, in hopes of a signal from the Federal Reserve's chief that new stimulus measures were in the works to rekindle the stalled economy. But there was no mention of new action. Housing was the black eye of the Fed chairman's speech. He said this recession was ""unusual"" because it was linked to a very deep slump in the housing market, and with an overhang of distressed properties and still-declining home prices, the housing sector is hindering economic growth.

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Radar Logic to Propose Plan to Address Government REOs

Radar Logic plans to publish a response to the government's proposal to sell pools of foreclosed homes to investors to rent. In its RPX Monthly Housing Market Report for August, the company expressed concerns that the plan could negatively affect home prices in the broader market. Radar Logic believes the REOs sold in bulk to investors will come at lower prices than if they were sold individually - prices much lower than non-distressed sales, and these low prices could lead to low appraisals for other homes on the market.

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Freddie Mac Warns of Short Sale Fraud

Short sales are being used more frequently by homeowners, lenders, and investors to avert a foreclosure, and industry data released this week shows that these pre-foreclosure transactions are being pushed through at a faster pace. Freddie Mac says its short sales have risen from about 4 percent of completed workouts in 2000 to nearly 14 percent in 2010. The GSE warns that with the increase in short sale transactions comes an increase in fraud. It's become the top priority for Freddie Mac's fraud investigation unit.

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Government Officials Weigh New Refi Program

Word on the street is the administration is sizing up a new program that would provide millions of homeowners with new, lower interest, lower payment mortgages. The initiative would allow borrowers with loans backed by Fannie Mae and Freddie Mac to refinance at today's rates, even if they are in negative equity or have bad marks on their credit. Two Columbia business professors say such a move would save homeowners an average of $350 a month and pump an extra $118 billion into the economy.

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MERS Case Filed with Supreme Court

Among the ongoing court cases surrounding the right of Mortgage Electronic Registration Systems' (MERS) to foreclose homes, one case out of California has been elevated to the Supreme Court. A San Diego foreclosure attorney filed a petition with the Supreme Court last week asking for a review of a California appellate court's decision that affirmed MERS' right to foreclose. This is the first case to be elevated to the Supreme Court, according to the attorney for the homeowner.

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