Government

Perhaps as a response to reports and complaints that the government-sponsored Home Affordable Foreclosure Alternative (HAFA) program was not working as efficiently as hoped, the Treasury Department has released updated guidelines for the program. The directive becomes effective February 1, although servicers are encouraged to implement the changes immediately, and follows a letter sent by California Realtors to Treasury officials outlining specific problems they've encountered in completing short sales under the program.

The unemployment rate in the United States slipped to 9.4 percent in December, as employers added 103,000 jobs to their payrolls, according to figures released by the Department of Labor Friday. That's down from a rate of 9.8 percent in November and a rate of 9.6 percent in each of the three months prior. Experts agree that job growth is vital to any meaningful improvement in the housing and mortgage markets. Any decline in the rate is certainly considered a win, although the December figures came in significantly lower than analysts were expecting.

Members of the 112th Congress were sworn in just days ago, and already lawmakers are making big waves. Rep. Michele Bachmann introduced legislation Thursday to repeal the Dodd-Frank financial reform bill that calls for the creation of the Consumer Financial Protection Bureau to set tighter regulations for mortgage lending and servicing, and outlines new secondary market rules intended to curb risk-taking by mortgage lenders. Congressman Barney Frank rebuked Bachmann's move as a return to the days of irresponsible and over-leveraged lending.

HUD recently deployed a new risk management tool developed by Walzak Consulting Inc. for use in its Management and Marketing III (M&M III) program for HUD field service manager and asset manager contractors who oversee the maintenance and sales of foreclosed FHA homes. The model measures and tracks the performance of HUD's REO vendors in meeting and following the department's contractual requirements and operational procedures.

A report conducted by a professor at the Rockefeller Institute of Government paints a dire picture for the nearing future of struggling neighborhoods and cities. The study analyzes the recession's impact on real estate markets in cities in the midst of a severe economic decline. It includes statistical analysis of trends in U.S. metro areas over the past 40 years, and the conclusion is that it often takes many years for housing supply and demand to become balanced again and for property prices to return to levels seen prior to the negative economic event.

A small reprieve was offered to Florida mortgage professionals by the Florida Office of Financial Regulation (OFR) at the end of December. New legislation requires all Florida mortgage professionals apply for a new operating license under the National Mortgage Licensing System (NMLS). Two days before the deadline, the OFR announced any industry professional who filed an application for a new license in NMLS by December 31 could have until March 31, 2011 to complete the application.

The Federal Housing Administration (FHA) aims to assist senior borrowers with its newly released guidance on reverse mortgages, or the Home Equity Conversion Mortgage (HECM) program. According to the federal agency, some elderly homeowners are struggling with outstanding property taxes and unpaid hazard insurance premiums. Those who neglect to pay these expenses may face foreclosure, even in instances where the homeowner's mortgage is paid in full.

The HOPE NOW industry alliance completed its fourth year in existence in 2010. The organization's latest market report estimates 1.65 million homeowners received permanent loan modifications from January to November 2010. The organization says it plans to be even more aggressive in its outreach efforts to distressed homeowners this year. Going forward, each of its members will participate in one major outreach event per month, in regions that have been most heavily affected by the mortgage and foreclosure crises.

The new Consumer Financial Protection Bureau established under the Dodd-Frank Act will be working closely with state regulators to supervise mortgage lenders and servicers. The Bureau's implementation team and the Conference of State Bank Supervisors signed a memorandum of understanding Tuesday that establishes a cooperative state and federal effort for the sharing of information related to the supervision and policing of companies that provide consumer financial services.

There has been no shortage of reports of state attorneys general seeking accountability from servicers that they allege mishandled foreclosures. Now it's being reported that attorneys general in all 50 states are near to reaching settlements with the nation's top five mortgage servicers, including Bank of America and GMAC Mortgage. The states are looking to develop separate agreements, rather than one encompassing settlement; and they plan to pursue a civil investigation rather than a criminal one.