Foreclosure

U.S. Reps. Jeff Miller (R-Florida) and Adam Putnam (R-Florida) have introduced legislation to provide mortgage forbearance to homeowners in the areas affected by the BP oil spill. This bill will allow for HUD to provide forbearance for those sustaining economic losses due to the oil spill. In addition, it will give HUD the opportunity to evaluate the resources and programs available within the agency that could provide further assistance to communities along the Gulf Coast.

As the GSEs and other federal agencies sell their collective inventory of repossessed homes, they will generate significant pressure on prices, according to Radar Logic. The company's analysis shows that the government's REO inventory now accounts for 46 percent of the nation's total bank-owned supply, which equates to 219,060 foreclosed homes. Add to that its share of non-performing loans heading to foreclosure, and the government's REO holdings could balloon to 3.1 million properties.

A general practice of servicers today is to consider borrowers for a standard Fannie Mae mortgage modification based solely on the homeowners' verbal statement of their financial information. But that's about to change. The GSE has issued new servicing guidelines stating that effective July 15, 2010, all servicers must verify the borrower's income, liabilities, and monthly expenses to determine that a financial hardship does exist, before a loan modification can be offered.

The landmark financial reform legislation approved by House and Senate leaders on Friday includes a provision which offers a remedy to the growing number of unemployed homeowners who are facing foreclosure. The amendment provides $1 billion to ensure homeowners who've lost their jobs don't lapse on mortgage payments. Qualified homeowners will be able to borrow up to $50,000 to assist them with monthly payments, provided they have ""a reasonable prospect"" of resuming mortgage payments within 24 months.

Mortgage servicers completed 112,088 loan modifications through their own proprietary programs in May, according to a report released this week by HOPE NOW. That compares to 47,724 new permanent modifications under the government's Home Affordable Modification Program (HAMP) during the same month. Altogether, just over 159,000 mortgage modifications were completed in May, as well as 213,000 other workouts, such as repayment and forbearance plans.

Willis North America recently announced that it has formed a distressed asset practice in order to advise clients on managing the risks associated with financially distressed, foreclosed, or abandoned commercial properties and to provide a range of insurance solutions. According to the company, this new unit will coordinate specialist capabilities from across Willis' practice areas to structure insurance programs that respond to a range of risk management and insurance issues related to distressed assets.

More than 180 foreclosure rescue companies with customers in New York have been sent cease-and-desist letters from the office of state Attorney General Andrew M. Cuomo. These letters, which came as a result of Cuomo's ongoing investigation into the mortgage rescue industry, warn the companies to immediately end all misleading and illegal conduct. According to Cuomo, thousands of New Yorkers have been affected by foreclosure rescue scams.

Performance of home mortgages serviced by the largest national banks and thrifts improved earlier this year, for the first time in more than 24 months. According to a new report from the Office of the Comptroller of the Currency, home loan delinquency rates dropped during the first quarter of 2010, with improvements in prime, Alt-A, and subprime categories. Foreclosure statistics increased, though, with the largest institutions initiating more than 370,000 new foreclosures and 1.1 million already in process.

To sway homeowners from the growing trend of strategic default, Fannie Mae has announced several policy changes designed to encourage borrowers to work with their servicers and pursue alternatives to foreclosure. Under these changes, borrowers who strategically default will be ineligible for a new Fannie Mae-backed mortgage loan for a period of seven years from the day of foreclosure. In addition, Fannie Mae said it will take legal action to recoup the outstanding mortgage debt from strategic defaulters in jurisdictions that allow for deficiency judgments.

UnitedTech Lender Services, Inc. (UTLS), holding company to the UTLS family of companies serving the mortgage default servicing industry, announced Wednesday that the company will formally open a new operations center in Irving, Texas on July 12, 2010. The new center will consolidate current operations under a single roof, including foreclosure processing, short sales, and title services. It will also house UTLS's Valuations Services and UTLS Consulting Services.