Government

The U.S. Treasury said Wednesday that it will continue to withhold incentives from JPMorgan Chase and Bank of America for modifications, short sales, and deeds-in-lieu completed through government programs. JPMorgan is the only servicer participating in Treasury's Making Home Affordable program that was determined to need ""substantial improvement"" in complying with program guidelines during the third quarter. Bank of America moved up a notch on the assessment scorecard to needing only ""moderate improvement.""

Attorneys General Kamala Harris of California and Catherine Cortez Masto of Nevada have entered into a joint investigation alliance targeting mortgage servicers and perpetrators of mortgage fraud. The alliance will link their offices' civil and criminal enforcement teams in order to speed up investigations and prosecutions. The partnership forged between Harris and Masto illustrates the deep rifts that have developed within the attorney general camp over robo-signing settlement negotiations.

We are five years through a 10-year adjustment process, Fannie Mae's chief economist Doug Duncan told attendees at the Five Star MPact Mortgage Banking Conference and Expo Tuesday morning. Dodd-Frank has 300 rules that must be implemented in the market. Regulators are only halfway through that list so far; the second half will be enacted over the next couple of years. While the market will recover, Duncan stressed that it will take time to adjust to new regulations.

While the government has recently enhanced its efforts to fight mortgage modification scams, mortgage fraud remains a prevalent issue throughout the industry. According to Jenny Brawley, associate director of mortgage fraud investigations for Freddie Mac, three elements drive mortgage fraud schemes: pressure, opportunity, and rationalization. The FBI characterizes mortgage fraud schemes as ""particularly resilient"" and credits them with being able to adapt to economic changes and modifications in lending practices.

The Office of the Comptroller of the Currency (OCC) has launched an investigation into the possible wrongful foreclosures of about 5,000 military members by 10 of the nation's largest banks. The Servicemembers Civil Relief Act (SCRA), signed into law in 2003, protects military members from foreclosure while on active duty. Rep. Brad Miller of North Carolina is calling for officials to pursue criminal charges should SCRA violations be substantiated.

Ally Financial's GMAC Mortgage says it will stop doing business with third-party lenders in Massachusetts. The announcement was made just one day after the state's attorney general said she is suing GMAC and four other mortgage servicers over documentation and recording errors related to foreclosures. Effective Monday, December 5, GMAC will cease purchasing new mortgage loans in the state that are originated by correspondent lenders and wholesale brokers.

Three government agencies are combining efforts to address mortgage modification scams through a joint task force. With the announcement of the task force, the participating agencies -- the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the Consumer Financial Protection Bureau (CFPB), and the Treasury Department -- released a consumer fraud alert to ensure homeowners understand that only their mortgage servicer has discretion to grant a loan modification.

The nation's unemployment rate fell to 8.6 percent during the month of November, as employers added 120,000 new jobs to their payrolls, the U.S. Department of Labor said Friday. By the government's calculations, the unemployment rate declined by 0.4 percentage point from 9.0 percent reported in October to hit its lowest level since March of 2009. Employment assessments for both October and September were revised upward. Analysts were expecting the economy to add 125,000 new jobs last month, but the rate to hold at 9.0 percent.

BOK Financial Mortgage Group announced Thursday that it is now accepting applications for the recently extended and expanded Home Affordable Refinance Program (HARP). The program applies to homeowners who currently have a Freddie Mac or Fannie Mae mortgage and who meet certain other eligibility criteria. HARP 2.0 is designed to help borrowers, including those who owe more than their home's value, to take advantage of low interest rates and other refinancing benefits.

Disenchanted with the lack of progress made after a year of negotiations between state attorneys general and the nation's five largest mortgage servicers, Massachusetts Attorney General Martha Coakley has split from the pack and filed her own individual lawsuit. Coakley is suing Bank of America, Wells Fargo, JP Morgan Chase, Citi, and GMAC for what she says were ""illegal foreclosures."" The suit also names Mortgage Electronic Registration System, Inc. (MERS) and its parent company as defendants.