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New FTC Rule Aims to Protect Homeowners from Mortgage Relief Scams

A new Federal Trade Commission (FTC) rule bans providers of foreclosure rescue and loan modification services from collecting fees until homeowners have a written offer from their lender or servicer that they decide is acceptable. The rule also requires mortgage relief companies to provide their clients with a document describing the key changes to the mortgage that would result if the consumer accepts the offer. They must also remind consumers of their right to reject the offer without any charge.

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Three More Community-Based Lenders Closed by Regulators

State and federal regulators stepped in to close the doors on three community banks this weekend, in Florida, Pennsylvania, and Wisconsin. They bring the number of insured institutions on the FDIC's failed bank list to 149 for the year. By comparison, in all of 2009 there were 140 banks shuttered. First Banking Center in Burlington, Wisconsin, was the largest of this weekend's closings, with $664.8 million in deposits and $750.7 million in assets.

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D.C. Mayor Signs Emergency Act to Slow Foreclosures

In another attempt to save struggling homeowners from avoidable evictions, Washington, D.C. Mayor Adrian M. Fenty has signed an emergency act that amends several sections of the District of Columbia Official Code. Most prominent in the new piece of legislation is the addition of a ""foreclosure mediation"" section, which has specific requirements banks must meet before proceeding with a foreclosure. Foreclosure sales resulting from a process that skipped a step or proceeded incorrectly will be considered void.

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Servicers with Widespread Paperwork Errors May Face Regulatory Fines

Federal banking regulators are in the process of conducting an in-depth review of foreclosure practices at the nation's largest mortgage servicers, which includes on-site evaluations and examinations of loan files. Officials say in cases where problems are found, regulators will require lenders and servicers to correct not only the faulty documents but the faulty systems that allowed them to occur. One Federal Reserve governor says institutions with ""widespread problems"" could also be subject to fees and penalties.

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New York City Comptroller Wants Banks to Perform Independent Audits

New York City Comptroller John C. Liu has called on the directors at Bank of America, Wells Fargo, JP Morgan Chase and Citigroup to conduct an independent audit of their mortgage and foreclosure practices. Liu, who is a trustee of the New York City Pension Funds called upon the banks to perform the audit on behalf of the group.

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Fannie Mae’s Chief Finance Officer to Step Down at Year-End

David Johnson will resign from his position of EVP and CFO at Fannie Mae by the end of the year, the GSE said in a regulatory filing this week. Until a successor is named, Johnson's No. 2, Deputy CFO David Hisey, will assume his responsibilities. Johnson stepped into the role two months after Fannie Mae was seized by the federal government in September 2008.

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HAMP’s Progress Remains Sluggish, Officials See Other Gains in Housing

Fewer than 500,000 homeowners have received permanent assistance through the Home Affordable Modification Program (HAMP) and are still current on their new payments. During the month of October, only 23,750 permanent modifications were granted. Many have called HAMP's results disappointing, but administration officials assert that the full spectrum of housing policies have helped bring stability to a very challenging housing market.

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J.D. Power and Associates Survey Shows Borrower Satisfaction Declining

A study released Thursday by J.D. Power and Associates shows that the time from submission of a mortgage application to approval time has increased by more than a week when compared to a year ago, despite changes in RESPA guidelines intended to streamline the process. J.D. Power says this longer timeline has had a negative impact on borrower satisfaction. The nation's largest mortgage lenders - BofA, JPMorgan, and Citi - ranked lowest in the firm's customer satisfaction survey.

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Fannie Mae Launches REO Pilot Program

Fannie Mae is testing the waters for a new program that allows real estate agents to submit offers for the company's REO properties on behalf of their clients and track the status of those offers online. The program is being piloted in Orlando, Florida; San Diego, California; and Detroit, Michigan. The new feature is currently available for Fannie Mae-owned homes in these areas through the GSE's HomePath Web site. Officials say the program will provide increased transparency and efficiency in the submission process.

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Treasury Makes Key Leadership Hires for CFPB Implementation Team

The Treasury has filled two key leadership positions for the Consumer Financial Protection Bureau (CFPB) implementation team. The CFPB will have statutory oversight of mortgage lending and the power to set new rules for home loans and other consumer-facing credit products. Steve Antonakes will lead depository supervision, building the consumer supervision program for the nation's largest depository institutions. Peggy Twohig will lead the non-depository supervision team, spearheading efforts to conduct research and policy analysis.

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