Government

HUD Secretary Shaun Donovan is asking Congress to release additional funds to help communities combat the ongoing effects of the housing crisis and home foreclosures. He says the Obama administration is committed to working with lawmakers to secure a third round of funding for HUD's Neighborhood Stabilization Program (NSP). The federal agency has disbursed $6 billion through NSP to help local governments and non-profit developers buy and rehabilitate or demolish vacant and foreclosed homes in their communities.

As of April 30, Wells Fargo had completed 36,094 permanent modifications under the administration's Home Affordable Modification Program (HAMP). According to Treasury, Wells Fargo ranks third for the number of permanent modifications completed to date, trailing behind Bank of America, with 56,398 permanent modifications, and JP Morgan Chase, with 39,507.

Subprime mortgage servicer Ocwen Financial Corporation has converted the highest percentage of trial loan modifications for distressed homeowners to permanent status under the administration's Home Affordable Modification Program (HAMP). According to the Treasury's just-released HAMP report on servicer performance, 83 percent of the Florida-based company's customers who had trial modifications through the federal program have now been moved into permanent modifications.

In a servicing policy update issued Monday, Fannie Mae introduced a new Web-based technology tool that automates key functions required of servicers to evaluate borrowers for the Home Affordable Modification Program (HAMP). The GSE's Workout Evaluator automates HAMP's net present value (NPV) test and the modification ""waterfall"" methodology required under the program. It is only for use by Fannie Mae servicers modifying Fannie Mae loans.

The Treasury Department released April data for the administration's Home Affordable Modification Program (HAMP) Monday, showing that permanent modifications have been initiated for 299,092 struggling homeowners. That's an increase of 68,000 or almost 13 percent over March. Government officials stressed that HAMP servicers must be held accountable for their individual performance. New in this month's statistics is information about servicer-specific conversion rates.

Regulators seized control of four community banks over the weekend, in Illinois, Georgia, Michigan, and Missouri. This latest round of closures brings the total number of insured institutional failures for the year to 72 - already more than double the number of banks to go under this time last year. Midwest Bank and Trust Company in Illinois was the largest of the most recent shut-downs.

The Senate's financial reform package is getting thicker. A host of legislative amendments have made their way to the floor, and a good share of them have been directly related to mortgage underwriting and trading. The latest measure approved calls for the Securities and Exchange Commission (SEC) to set up a regulatory board that will decide which agencies will provide credit ratings on newly issued mortgage-backed securities. Many are calling it one of the strongest reforms yet to rein in Wall Street's questionable business practices.

Leroy Hayden has pleaded guilty to a criminal charge in connection with a $136 million fraud scheme that sent Pine Brook, New Jersey-based U.S. Mortgage Corp. and its subsidiary CU National Mortgage into bankruptcy in early 2009. Hayden held the position of servicing manager at U.S. Mortgage from 2004 to 2009. According to federal court documents, during that time he conspired with others to fraudulently sell Fannie Mae hundreds of loans belonging to various credit unions.

HUD Secretary Shaun Donovan unveiled a new strategic plan for the federal agency in an address to all HUD staff nationwide on Wednesday. Donovan says the plan will serve as the agency's roadmap toward accomplishing its mission of creating strong, sustainable communities and affordable homes for all. At the top of Donovan's goal list is strengthening the housing market by reducing foreclosures.

Senators unanimously approved an amendment to the financial reform package that would exempt qualified mortgages from the 5 percent risk retention requirement on loans bundled and sold to investors. The amendment requires regulators to establish a category of well-underwritten loans called ""Qualified Residential Mortgages"" using back-to-basics standards proven to reduce consumer defaults, such as income documentation and established payment-to-income ratios.