Government

The nation's homeownership rate held steady at 66.9 percent during the third quarter. With foreclosures still mounting, bank repossessions at an all-time high, and many consumers abandoning the idea of the ""American Dream,"" homeownership is at its lowest mark since the end of 1999. Renting is not only gaining ground as the most practical means of housing for a larger number of consumers, but some say it could be the answer to keeping millions of struggling borrowers in their homes and stabilizing foreclosure-ridden communities.

Insufficient automation could cause non-compliance issues for mortgage lenders, credit unions, and banks when it comes to the extensive regulatory changes emerging as a result of the Dodd-Frank Reform Act, according to Bruce Backer, president of LoanSifter. Mortgage lenders are most affected by title XIV of the act, which sets national underwriting standards for residential loans, and Backer says even more reforms are headed our way when the Consumer Financial Protection Bureau begins establishing additional regulations for the industry.

Freddie Mac announced Tuesday that it has terminated its relationship with the law offices of David J. Stern, P.A. in Plantation, Florida. Fannie Mae, too, says it has suspended business with the so-called Florida foreclosure mill. The Stern law firm is one of the largest in the state, processing thousands of cases a month, and had been retained by both Fannie and Freddie as a preferred legal counsel for its servicers to go to handle pending foreclosures and home repossessions.

The percentage of home loans 90 or more days past due held by the nation's two largest mortgage companies has declined yet again. Both Fannie Mae and Freddie Mac have reported a steady drop in their single-family delinquency rates since February of this year. According to the latest figures from Fannie, its serious delinquency rate fell to 4.70 percent in August. Freddie's dropped to 3.80 percent at the end of September. Movement in the two GSEs' multifamily delinquency rates was mixed.

Mortgage servicers have completed 1.4 million permanent loan modifications so far this year, according to the latest estimates from HOPE NOW. Servicers have been granting permanent loan modifications through proprietary and HAMP programs at a steady pace of about 150,000 per month. But consumer advocates and federal watchdogs say their efforts are unfortunately overshadowed by the sheer volume of delinquencies. HOPE NOW says there are still over three million homeowners at least two months behind on their mortgage payments.

HUD has issued new guidelines which ease the requirements for loan amounts the Federal Housing Administration (FHA) can insure. The federal agency's previous policy was that the total of all liens against a subject property, including the FHA-insured first mortgage and any subordinate liens, could not exceed the maximum amount insurable based on geographic location. But HUD's latest Mortgagee Letter eliminates that requirement for both purchase and refinance transactions.

Fannie Mae and Freddie Mac have both issued notices to servicers that they must work closely with state housing finance agencies to provide mortgage assistance to homeowners who've lost their jobs. Treasury awarded $7.6 billion for housing agencies in certain states to develop programs that provide temporary relief to unemployed homeowners. Effective immediately, GSE servicers are instructed to accept all monthly mortgage payments from housing finance agencies on behalf of borrowers enrolled in state-specific programs.

Fannie Mae's Payment Reduction Plan (PRP) program will sunset on December 31, 2010. The GSE's PRP program was introduced in 2009 to provide a borrower with temporary payment relief while the servicer and borrower worked together to find a permanent foreclosure prevention solution. According to a notice issued by Fannie on Friday, all PRPs must be initiated by December 31st and must end within six months of commencement, or no later than July 1, 2011.

According to the Center for Responsible Lending, since the housing crisis took hold, 2.5 million homeowners have already lost their homes and another 5.7 million are at risk of foreclosure. It's projected that between 10 and 13 million foreclosures will have occurred by the time this crisis abates. The Center argues that the power to stop unnecessary foreclosures and stabilize local housing markets lies with state legislatures. The group says lawmakers should impose mandatory loss mitigation standards for all servicers prior to foreclosure.

Lenders cannot proceed with foreclosure sales in the District of Columbia unless the security, or ownership, interest of the lien holder has been properly recorded in public filings, according to Washington, D.C.'s attorney general. Under District law, each deed or other document transferring a mortgage interest must be filed with the Recorder of Deeds within 30 days of execution, and Attorney General Peter Nickles stressed that this requirement is not satisfied by private tracking through the Mortgage Electronic Registration Systems(MERS).