Government

Legal actions tied to foreclosures and investor-related cases have surged. An industry study released this week shows that the Mortgage Litigation Index prepared by the Washington, D.C.-based firm Patton Boggs LLP hit an all-time high during the first quarter of this year. Active cases during the three-month period totaled 155, according to the report. It was the highest reading since the index was launched in 2007. Criminal cases more than doubled and mortgage insurance emerged as an area of growing litigation.

The number of loans held by Fannie Mae and Freddie Mac that were 60-plus-days delinquent stood at 1.7 million at the end of the first quarter of 2010, the companies' conservator said in a report to Congress this week. While the volume of past dues may seem colossal, FHFA says the figure actually represents a 1.3 percent decrease - the first decline in two years. The agency says servicers are working through the glut of GSE delinquencies at a much faster pace, too, with foreclosure prevention actions up 75 percent in Q1.

Servicers continued their loss mitigation efforts under the Home Affordable Modification Program (HAMP) last month. According to the Treasury's latest HAMP report card, 346,816 modified loans had been granted permanent status as of the end of May, up more than 15 percent from 299,092 in April. As for individual servicer performance, Bank of America led the way once again with 62,969 permanent modifications in place at the end of May. The title of highest conversion rate, though, went to HomeEq Servicing, at 86 percent.

Pre-foreclosure notices have been sent to 57,256 New York homeowners who have fallen behind on their mortgage since February 13, 2010. State law now requires that a pre-foreclosure notice be sent at least 90 days before the lender commences legal action and mandates that all servicers provide the New York State Banking Department with key information from these notifications. The details help officials identify areas of at-risk homeowners and allow housing counselors to proactively reach out to delinquent borrowers.

In an effort to protect homeowners across the state, Ohio Gov. Ted Strickland recently signed House Bill 292, which places a ban on Wall Street Home Resale Fees, also known as private transfer fee covenants. The American Land Title Association praised Gov. Strickland for taking such swift action to sign this bill. The trade association said it has worked with several organizations to fight this dangerous scheme that steals home equity, lowers home resale values, and adds another layer of difficulty to selling a home.

Pacific Engineering Management Company (PEMCO) in Honolulu has been awarded five asset manager contracts under the third generation of HUD's management and marketing program. PEMCO has been managing HUD's residential real estate program for more than 10 years and said its latest award represents the largest territory for the company to date, as it encompasses 26 different states in five regions across the country.

The U.S. Treasury and HUD on Monday released a new monthly scorecard, touting the success of the administration's full scope of efforts to stabilize the nation's fraught housing industry. The report shows that since April 2009, 6.1 million homeowners have refinanced into new mortgages and 2.8 million have received modified mortgages. Federal officials point out that the modification number alone is nearly three times the 1.15 million foreclosures that were completed during the same period.

While loans restructured under the federal government's Home Affordable Modification Program (HAMP) have been highly criticized for their propensity to re-default, the analysts at Barclays Capital say newly modified mortgages stand a better chance of staying current. New data also suggests that foreclosure-to-REO roll rates are ticking up while delinquency rates have peaked, signaling that servicers' efforts have caught up to market conditions and they're making progress working through the foreclosure backlog.

For the second weekend in a row, banking regulators closed the doors on just one institution, as opposed to the massive rounds of failures that the industry has grown accustomed to since the financial crisis took hold. This weekend, it was Nevada Security Bank in Reno that met its demise. The closing brings the number of FDIC-insured bank failures for the year to 83. Oregon's Umpqua Bank acquired the seized institution.

The damage caused by toxic drywall imported from China has left far too many borrowers in a situation of financial hardship, with replacement costs eating away at their funds to the point that some are unable to make their mortgage payments. Government-backed mortgage giants Fannie Mae and Freddie Mac announced Friday that they will grant forbearances to borrowers experiencing problems as a result of the defective wallboard, which investigations have concluded can cause health problems and corrodes wiring, plumbing, gas pipes, even fire alarms.