Loss Mitigation

DecisionReady, a provider of default servicing compliance solutions based in California, announced this week that it has reviewed 1 million delinquent residential mortgage loans for loss mitigation and foreclosure process and policy compliance for leading servicers. DecisionReady technology offers compliance for early stage delinquency through loss mitigation, foreclosure, and the post-sale process to ensure regulatory rules and investor guidelines are met.

Ameriprise Bank, FSB, has partnered with CMG Financial Services, Inc., to launch the Ameriprise Home Ownership Accelerator loan product. Replacing a traditional mortgage with a combination of a home equity line of credit and a checking account, this new home financing option can help a borrower use idle cash to reduce interest costs and pay off the loan years early, Ameriprise explained.

LRES Corporation recently announced that it has welcomed Tammy Boren as the company's new senior director of operations. Boren will be responsible for the implementation of operational strategies and objectives across multiple departments. She was previously VP of client services at UTLS Default Services, Inc.

A new Florida law firm, Gerner Mayersohn May, PLLC, was recently formed in Fort Lauderdale by David E. Gerner, Esq, of Ohio-based Gerner & Kearns, Ted Eric May, Esq., of New York-based Sheldon May & Associates, and Leah Mayersohn of the Mayersohn Law Group in Florida. The new firm will provide legal counsel to clients throughout the state, focusing on mortgage banking, default services, and collections.

Alabama Governor Robert Bentley recently announced the creation of Hardest Hit Alabama (HHA), a new program that will provide $162 million for foreclosure prevention efforts in the state. The Alabama Housing Finance Authority will use the money, which was allocated by the U.S. Treasury, to provide temporary assistance to unemployed or underemployed homeowners in the state to help them stave off foreclosure while they search for work.

With loan modifications on a steady decline, the analysts at Fitch Ratings say the common thread running through the industry has become when will the servicer foreclose as opposed to how can a distressed borrower stay in their home. Fitch's analysis of loan mod trends shows little improvement in success rates. While alternatives like short sales are modestly improving loss severities, the agency says servicers report borrowers are electing to remain in their property longer by staying on through the extended foreclosure process.

Bank of America has set up a new operational division to service all defaulted residential loans. It will be led by Terry Laughlin, who will oversee the bank's mortgage modification and foreclosure programs, and is charged with resolving investors' mortgage repurchase claims. The decision to establish a new, separate division to handle the company's problem loans came out of the bank's ""self-assessment of default servicing"" following the robo-signing scandal.

Moody's Investors Service studied two million loans backing residential mortgage-backed securities (RMBS) pools and found that a loan that is modified and then reported as current is three times as likely to default over the ensuing twelve months as a current loan that has not been modified. The agency's also put the practices of eight major servicers under the microscope. It found that six-month re-default rates vary considerably, from 20 percent for Citi and Litton to 33 percent for Bank of America.

California's attorney general says the $6.5 million settlement from two former Countrywide executives will be used to establish a fund to help foreclosed homeowners. The settlement comes from a litigation that began more than two years ago against Angelo Mozilo and David Sambol. According to the lawsuit, Countrywide lured buyers with low teaser rates and failed to inform them of the downsides of adjustable-rate loans. The suit alleged that Mozilo and Sambol knew of these practices and did nothing to stop them.

Bank of America has agreed to sell the lender-placed and voluntary property and casualty insurance assets and liabilities of Balboa Insurance Company to QBE Insurance Group of Australia. BofA inherited Balboa Insurance when it purchased Countrywide Financial Corp. Bank of America and its affiliates are expected to receive an upfront cash payment of approximately $700 million for the deal with QBE, as well as additional future payments.