Government

Fannie Mae sponsored a special open house event Wednesday in Philadelphia to mark the opening of its latest Mortgage Help Center. The Philly location is the ninth in a series of planned nationwide centers to provide assistance to homeowners in default or at risk of foreclosure. Fannie Mae president and CEO, Mike Williams, joined representatives from the Philadelphia area public and private sectors to mark the occasion.

The U.S. government has filed a lawsuit against Deutsche Bank and its mortgage unit, claiming that Germany's largest bank ""repeatedly lied"" to get into a program to select mortgages to be insured by FHA against default. Once part of the program, U.S. authorities say Deutsche Bank ""recklessly"" selected mortgages that violated the program rules ""in blatant disregard"" of whether borrowers could make their mortgage payments. The U.S. government is seeking $1 billion in damages and penalties.

The research firm and ratings agency DBRS says it has learned from various servicers that although Congress never authorized bankruptcy judges to modify mortgages on primary residences, these ""cram-downs,"" as they have been termed, are currently being performed in some courts. The agency's analysts say the amount of the cram-down varies by state, property value, and borrower situation but usually includes a reduction in the principal amount of the loan to fair market value.

State and federal banking regulators shut down five institutions over the weekend - two in Georgia, two in Florida, and one in Michigan. This latest round of closings brings the number of bank failures to 34 for the 2011 calendar year. The largest of the closings was the Park Avenue Bank in Valdosta, Georgia, with $953.3 million in assets.

California legislators have put two bills aimed at addressing the state's foreclosure problem to committee votes. Both failed to pass despite the fact that supporters packed the hearing rooms at the state Capitol, but neither is completely dead. They have both been scheduled for new hearings in the coming week. The Senate bill would have made it unlawful for a lender to move forward with foreclosure while evaluating the borrower for a modification. A second bill in the Assembly would have levied a $20,000 fee on lenders and servicers for every foreclosure initiated.

Fannie Mae has released new details on its book of business, which shows the share of mortgages it owns or guarantees that's past due by three months or longer has been on a steady decline for a year now. The nation's largest mortgage company reported that its seriously delinquent rate on single-family mortgage loans slipped to 4.44 percent in February of this year. That's down just 1 basis point from 4.45 percent in January, but it marks the 12th straight month that the rate has decreased.

Fannie Mae and Freddie Mac are issuing new guidelines to servicers in order to align their procedures for handling past-due mortgages. The objective is to ensure consistent servicing requirements for loans handled on behalf of the GSEs across four key areas: borrower contact, delinquency management practices, loan modifications, and foreclosure timelines. The new approach provides monetary incentives for servicers that perform well and imposes fines on those that do not.

Wingspan Portfolio Advisors, a specialty and component mortgage servicer, added 100 employees in the past 60 days to help servicers stay compliant with the interagency review issued this month by the Federal Reserve, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision. Two key enforcement actions were included in the consent orders for each servicer examined -- the hiring of an an independent consultant to review residential foreclosure actions from 2009 and 2010, and an expert assessment of risks in servicing operations.

Equator reports that over 675,000 short sales have been initiated on its platform since the short sale capabilities were launched in November 2009. The company's short sale technology module connects lenders, homeowners, and their selling agents in order to streamline the approval process for transactions. The company also reported that more than 50 percent of all short sale closings under the federal government's Home Affordable Foreclosure Alternatives (HAFA) program have taken place on its platform.

In just one week's time, the Florida Housing Finance Corporation has received nearly 9,500 applications from unemployed homeowners seeking financial assistance through the state's Hardest-Hit Fund (HHF) program. Following a successful six-month pilot run in Lee County, the state housing agency launched the program statewide on April 18, making it available to troubled homeowners in all 67 counties. Florida has received more than $1 billion from the U.S. Treasury to fund the program.