Loss Mitigation

Maine attorney general Janet T. Mills announced last week that negotiations with GMAC Mortgage LLC and Bank of America had resulted in a temporary halt in foreclosure sales in the state. The two lenders have agreed not to proceed to judgments on any pending matters in Maine until they have completed an internal review of their foreclosure procedures and discussed the procedures with the attorney general.

The National Association of Realtors (NAR) issued a notice this week explaining Wells Fargo's new rules surrounding short sale transactions when a foreclosure is pending. Earlier this month, Wells Fargo advised NAR that it has modified its existing guidelines to allow the postponement of a scheduled foreclosure in connection with a short sale, but only in limited situations. Specifically, Wells Fargo must have an approved short sale contract in hand, and the transaction must close within 30 days of the scheduled foreclosure sale.

In October, the Florida Housing Finance Corporation launched a program designed to help unemployed and underemployed homeowners who are struggling to pay their mortgages. The pilot program is currently being offered to Lee County homeowners but will be expanded statewide in early 2011. This week the corporation announced they will open the eligibility requirements for the program, allowing homeowners who are up to 180 days delinquent on their mortgages to qualify for the service.

A new Federal Trade Commission (FTC) rule bans providers of foreclosure rescue and loan modification services from collecting fees until homeowners have a written offer from their lender or servicer that they decide is acceptable. The rule also requires mortgage relief companies to provide their clients with a document describing the key changes to the mortgage that would result if the consumer accepts the offer. They must also remind consumers of their right to reject the offer without any charge.

McGeough Lamacchia, a real estate agency headquartered in Waltham, Massachusetts, recently extended its services to include the Rhode Island market. Specializing in short sales, the agency says it hopes to expand into additional markets across New England. According to a statement from the company, it has successfully completed more short sale transactions than any other real estate firm in Massachusetts and currently holds a number one MLS ranking in short sales.

In another attempt to save struggling homeowners from avoidable evictions, Washington, D.C. Mayor Adrian M. Fenty has signed an emergency act that amends several sections of the District of Columbia Official Code. Most prominent in the new piece of legislation is the addition of a ""foreclosure mediation"" section, which has specific requirements banks must meet before proceeding with a foreclosure. Foreclosure sales resulting from a process that skipped a step or proceeded incorrectly will be considered void.

NCS, a provider of income, identity, and credit intelligence, has launched VOE CONFIRM, an advanced employment verification solution that enables lenders to confirm potential borrowers' ability to repay. Verification is provided within 24 to 48 hours. Lenders submit their employment verification requests through NCS's secure Web site, and NCS staff members make personal phone calls to verify the employment information given by the potential borrower.

New York City Comptroller John C. Liu has called on the directors at Bank of America, Wells Fargo, JP Morgan Chase and Citigroup to conduct an independent audit of their mortgage and foreclosure practices. Liu, who is a trustee of the New York City Pension Funds called upon the banks to perform the audit on behalf of the group.

Mortgage Cadence, LLC announced it will support Fannie Mae's Loan Quality Initiative (LQI) with the direct integration of EarlyCheck. According to the company, the integration will validate critical data prior to delivering a loan to Fannie Mae and reduce funding and pooling delays after submission. EarlyCheck was developed by the GSE to ensure that delivered loans meet standard and negotiated terms with fewer delivery stops by providing identity checks, property and occupancy checks, and eligibility verification.

Fewer than 500,000 homeowners have received permanent assistance through the Home Affordable Modification Program (HAMP) and are still current on their new payments. During the month of October, only 23,750 permanent modifications were granted. Many have called HAMP's results disappointing, but administration officials assert that the full spectrum of housing policies have helped bring stability to a very challenging housing market.