Foreclosure

Wells Fargo & Company has appointed Mike Heid president of Wells Fargo Home Mortgage. Heid previously served as co-president of the mortgage company, along with Cara Heiden, who is retiring from her position within the next few months. Wells Fargo Home Mortgage will be housed as part of the company's new consumer lending group, which will be led by Avid Modjtabai.

Ocwen Financial Corporation has enacted a unique loan modification program designed to help underwater homeowners and investors without rewarding loan delinquency. The company's Shared Appreciation Modification (SAM) reduces a delinquent borrower's principal to 95 percent of the home's current market value but requires the homeowner to later share 25 percent of the home's appreciation with the investor when the home is eventually sold or refinanced.

Fannie Mae has issued a notice to servicers alerting them of a change in the effective date for new delinquency management and default prevention standards. According to the bulletin, Fannie is pushing the date by which servicers must implement the new requirements out by a month to October 1, 2011. The revised rules are part of the directive issued by the company's regulator in late April to bring both Fannie Mae's and Freddie Mac's procedures for handling past-due mortgages in line with one another.

Several state attorneys general are voicing objections to the proposed settlement with the nation's top mortgage servicers. Connecticut AG George Jepsen has requested meetings with four of the largest lenders to discuss their mortgage servicing practices, raising concerns about complaints consumers have made to his office and state officials. Several other state counsels have also launched their own investigations and worry that an overarching liability release could prove problematic for their cases.

HUD and NeighborWorks have extended the deadline for homeowners who have experienced a loss of income to apply for the Emergency Homeowners' Loan Program (EHLP). The new deadline is Wednesday, July 27. The cut-off date had originally been set for Friday, July 22. EHLP assists homeowners who are at risk of foreclosure due to involuntary unemployment or underemployment as a result of the economy or a medical condition. Qualifying homeowners are awarded an interest free loan to pay a portion of their monthly mortgage for up to two years.

Treasury is currently reviewing a proposal to aid distressed homeowners by allowing a short sale of mortgage notes from mortgage-backed securities (MBS) trusts to new investors. The proposal was put forth by American Home Mortgage Servicing. The company says this strategy could be key to unlocking principal reduction modifications, which could save hundreds of thousands of homes from foreclosure and reduce losses for both investors and underwater borrowers.

Default rates on first and second mortgages dropped between May and June, and both measurements are down sharply from year-ago readings, according to S&P Indices and Experian. Their monthly assessment shows the default rate on first mortgages fell 7 basis points month-to-month and is 125 basis points below June 2010. Second-mortgage defaults slipped 2 and 101 basis points for the month and year, respectively. The results are based on consumer credit data from 11,500 banks and mortgage companies.

Chase has opened its newest Homeownership Center near the U.S. military base in Fort Hood, Texas, to provide one-on-one help for homeowners struggling with their mortgage payments. It is Chase's first Homeownership Center near a military base. The bank plans to open five other centers this year near military bases in Virginia, North Carolina, Tennessee, and Washington state.

While state attorneys general continue to work towards a settlement on robo-signing cases, investigations are still ongoing surrounding the practice. Two media outlets released reports this week alleging the practice is still prevalent in some states. That's prompted a response from lawmakers. Sen. Sherrod Brown says his subcommittee will hold another hearing on robo-signing, and letters have been sent to regulators from both congressional chambers requesting details on the steps servicers are taking to prevent illegal foreclosures.

The Federal Trade Commission is mailing 450,177 refund checks worth almost $108 million to homeowners who were allegedly overcharged by subprime lender Countrywide. According to the FTC, homeowners who were in default were charged excessive and unlawful fees for services such as property inspections, lawn mowing, and other services meant to protect the lender's interest in the property. The agency alleges that Countrywide also added fees and escrow charges to the accounts of borrowers in bankruptcy without notice.