Government

With the effective date of the administration's Home Affordable Foreclosure Alternative (HAFA) program just around the corner, lenders and servicers are preparing for an influx of short sale and deed-in-lieu requests. In an effort to provide industry professionals with the technology they will need to service the hundreds of thousands of loans estimated to be eligible for HAFA, Equator Financial Solutions, a Los Angeles-based software provider of default servicing solutions, is launching a HAFA software solution.

New loans made by the nine U.S. banks with the largest unsettled government bailouts declined 35 percent from December to January, according to federal data released this week. The Treasury's monthly lending survey of the top Troubled Asset Relief Program (TARP) recipients with funds outstanding shows that the nine banks in the upper echelon originated approximately $36 billion in new loans during the first month of this year - the smallest total since last October.

The allowance of broker price opinions in the administration's Home Affordable Foreclosure Alternatives (HAFA) program has created a major controversy. As DSNews.com previously reported, four appraisal organizations recently wrote a letter to Treasury Secretary Timothy Geithner, voicing concerns over the use of BPOs for short sales under HAFA. In response to this opposition, Vicki Cox Golder, president of the National Association of Realtors (NAR), wrote her own letter, supporting HAFA and its allowance of BPOs.

Wells Fargo said Wednesday that it has agreed to participate in the administration's Second Lien Modification Program (2MP). Wells is only the second major servicer to sign on to the junior lien component since it was introduced nearly a year ago. Under 2MP, when a borrower's first lien is modified under HAMP and the second lien servicer is a 2MP participant, that servicer must offer either to modify the second lien or to accept a lump sum payment from Treasury in exchange for fully extinguishing the second lien.

HOPE NOW says its members completed 99,499 proprietary loan modifications in January, almost double that of the 50,364 permanent mods finalized under the Home Affordable Modification Program (HAMP) industry-wide during the same month. Although HOPE NOW is seeing substantial success with non-HAMP modifications, the organization is also taking a lead in helping servicers collect borrowers' documents at its localized outreach events, in order to speed the process of converting trial HAMP mods to permanent status.

Loan Resolution Corporation announced Tuesday that the company is adding 100 positions this month to meet the marketplace's growing demand for short sales - demand that is expected to intensify even further when the government's Home Affordable Foreclosure Alternatives (HAFA) program takes effect in April and short sales become a mandate in servicers' waterfall of loss mitigation options.

Senate Banking Committee Chairman Chris Dodd has introduced new reform legislation that would create a new independent agency to set the rules for mortgages and place tight restrictions on how large lenders conduct their business. Even though he lacks bipartisan support for the bill, Dodd says he's moving forward to reach a compromise that can be passed. But already, mortgage industry groups are voicing their concerns with the reform package - the Consumer Financial Protection Bureau, in particular.

The Federal Reserve offered the same guarded outlook and careful phrasing that the markets have been hearing for several months when its board members emerged from their meeting Tuesday. The committee voted to hold its benchmark federal funds interest rate at 0 to 0.25 percent. And although some analysts are growing uneasy with the Fed's pledge of indefinitely low rates, policymakers reasserted that ""economic conditions will warrant exceptionally low levels for an extended period."" The central bank also stuck by its plan to cease purchases of mortgage bonds at the end of this month.

Over the weekend, regulators closed down Manhattan's Park Avenue Bank, citing ineffective management and inadequate capital. And on Monday morning, the failed bank's former president and chief executive, Charles J. Antonucci Sr., found himself in handcuffs - the first person to be charged by the federal government with defrauding the Troubled Asset Relief Program (TARP).

The Government National Mortgage Association (Ginnie Mae) guaranteed more than $29.3 billion in mortgage-backed securities (MBS) in February, the association announced Monday. Total single-family issuance for February was more than $28 billion, Ginnie Mae's multifamily MBS issuance was more than $730 million.