Government

Since the new Real Estate Settlement Procedures Act (RESPA) changes took effect at the beginning of the year, a number of title firms have rolled out their own rate calculators to help lenders compute the Good Faith Estimate (GFE) for HUD transactions. While improved technology is a key factor to providing the type of title work that aligns with new RESPA compliance, Advantage Title Company warns that ""not all technology is good technology,"" and says GFE calculators are ""exactly what the industry needs to avoid.""

Chase announced Monday that it will provide additional help to struggling homeowners by joining the second-lien program under the administration's Home Affordable Modification Program (HAMP). Known as 2MP, the second-lien modification program is designed to work in tandem with HAMP to lower homeowners' payments on both their first and second mortgages. Qualified homeowners may see the interest rate on their second lien reduced to as low as 1 percent for five years.

The Federal Housing Administration has come under fire for the growing number of delinquencies in its portfolio, with some economists and industry observers even predicting that a bailout of the federal mortgage insurer is in the cards. But according to the agency's latest operations report it's beginning to see some improvements in the seriously delinquent column. While still considerably elevated, the rate of loans 90 or more days overdue in FHA's portfolio dropped to 9.2 percent in February, down from a reading of 9.4 percent for the month of January.

Mortgage industry lawsuits are beginning to stack up - Federal Home Loan Banks are suing lenders, lenders are suing insurers - all in an attempt to recoup losses from a crippling national housing crisis. In the latest rendition of the industry's legal series, Bank of America has brought a suit against First American Corp. over what the lender says were defective title insurance policies.

Michaelson, Connor, & Boul, Inc. of Huntington Beach, California was recently hired by HUD to ensure that FHA-approved lenders and servicers convey foreclosed properties to the agency in acceptable condition.

The first Retaining Occupancy on Foreclosure (ROOF) Agreement was recently signed in the city of Detroit. Created to help combat the blight problems in Detroit by cutting down on the number of homes left vacant after foreclosure, the goal of the program is to salvage Detroit neighborhoods and greatly reduce the number of vacant homes by keeping foreclosed homes occupied by either the owner or tenant until the property is sold at an REO sale.

In two separate reports released this week, Fannie Mae took a look at the past and made predictions for the future. On Thursday, the government-sponsored enterprise (GSE) released ""Helping Housing Recover: A Report on Fannie Mae's Mission Performance,"" describing the company's efforts to provide liquidity, stability, and affordability to the nation's housing finance system. On Wednesay, the GSE released its March 2010 Economic Outlook, cutting its mortgage origination predictions for this year.

With financing for both residential and commercial real estate mortgages still tight, and the securitization market all but stagnant by historical standards, policymakers have been pushing lenders to get the wheels of finance churning again. It's a fine line to walk with new regulatory compliance issues and constrained capital, but Rep. Scott Garrett thinks he has the answer - covered bonds. They represent a $3 trillion market and are a major source of mortgage liquidity among European nations.

Servicers are working faster and more diligently to convert trial modifications to permanent status under the Home Affordable Modification Program (HAMP). But the bitter truth is that some homeowners won't qualify for long-term relief even after making their trial payments. To offer these homeowners another option, Fannie Mae is instituting the ""Alternative Modification"" (Alt Mod) and requiring all its servicers to evaluate a borrower for the new solution before proceeding with foreclosure.

The Treasury has committed $50 billion of Troubled Asset Relief Program (TARP) funds to the Home Affordable Modification Program (HAMP) to pay servicers for helping homeowners avoid foreclosure. New estimates released by the Congressional Budget Office (CBO) show that the administration is expected to use no more than $20 billion for servicer incentives when all is said and done - indicating that HAMP will help far fewer distressed homeowners than originally promised.