Government

Nevada's Supreme Court sided with homeowners on three foreclosure cases regarding violations of the state's Foreclosure Mediation Program and Mediation Rules, for lack of proper paper-work.

Senator Richard Blumenthal, D-Connecticut, announced an investigation of mortgage servicers Monday. The investigation will be conducted through the Senate Judiciary Committee and will examine foreclosure policies and procedures at top mortgage servicers. ""The rate of foreclosure and families that struggle with their mortgage payments is one of the single largest barriers to economic recovery that we still see today,"" Blumenthal says.

Rep. Marcy Kaptur, D-Ohio, submitted a resolution (H.Res. 344) calling for a temporary foreclosure moratorium to the House Financial Services Committee Friday. ""[T]he United States finds its housing market in a precarious and unstable state, where homeowners' mortgage balances are routinely larger than the current value of their homes and where people are losing their homes at an alarming rate,"" Kaptur states in the resolution. Kaptur notes that in April 2011, there were 219,000 new foreclosures, 7,300 each day.

One year after the passage of the Dodd-Frank Act, Rep. Barney Frank, D-Massachusetts, speaks out with criticism for Republicans and industry participants who oppose the law or wish to change it. Frank's criticisms for Republicans include disapproval of their attempts to alter the proposed Consumer Financial Protection Bureau. Maintaining that risk retention is the most important part of the bill, Frank also censured industry members who oppose the proposed qualified residential mortgage (QRM) definition.

The FDIC has filed suit against former IndyMAC Bancorp Inc. CEO Michael Perry for $600 million in losses caused by risky mortgage loans. The FDIC accuses Perry of purchasing $10 billion in risky residential loans.

Regulators closed three banks over the weekend – two in Colorado and one in Illinois. Colorado Capital Bank, Castle Rock, Colorado, and Signature Bank, Windsor, Colorado, were closed by the Colorado Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. First Chicago Bank & Trust, Chicago, Illinois, was closed by the Illinois Department of Financial and Professional Regulation, which also appointed the FDIC as receiver.

Congressman Bill Posey of Florida has introduced a bill which would allow lenders to classify modified mortgages as accruing rather than non-accruing. Posey claims federal bank regulators are hindering the ability of community banks to modify home loans and keep homeowners out of foreclosure. A subcommittee of the House Financial Services Committee held a hearing Friday to review Rep. Posey's Common Sense Economic Recovery Act.

A judge has denied Bank of America’s motion to dismiss a case involving tens of thousands of homeowners who claim the bank denied them help through the Home Affordable Modification Program (HAMP). Homeowners are asking that Bank of America provide permanent loan modifications to eligible borrowers and award damages to homeowners wrongfully denied modification. The attorney for the homeowners claims the bank is depriving homeowners of federal bailout funds that could save them from foreclosure.

The national unemployment rate edged up in June to 9.2 percent, as the economy added just 18,000 jobs. The numbers were worse than market forecasts. Economists were expecting the rate to remain unchanged at 9.1 percent and job gains to be between 85,000 and 100,000. Declines in the labor market have added significantly to the volume of seriously delinquent mortgages. On Thursday, the administration announced that it was extending the mortgage forbearance period to 12 months for unemployed homeowners in government programs.

Treasury has released an update to its Home Affordable Modification Program, which provides enhanced incentives to servicers that modify loans quickly rather than letting them linger in delinquency. Incentives vary based on the number of days a mortgage loan is delinquent before receiving modification, ranging from $1,600 to $400. The directive is effective October 1, and applies to all permanent HAMP modifications with trial period plans effective on or after that date.