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HUD Issues Guidance on Appraisals for Agency REOs

HUD released a Mortgagee Letter this week announcing the validity period for appraisals used to establish listing prices for the federal agency's REO properties. The letter also outlines situations when a second appraisal is permitted for purchasers of REO properties utilizing Federal Housing Administration (FHA) financing.

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Freddie Mac Readies Mezzanine Refinancing for Multifamily Mortgages

As the commercial real estate market continues to deteriorate, economists warn that overleveraged apartment owners may find it near to impossible to refinance their outstanding debt. Freddie Mac is keenly aware of the impact this lack of credit could have on the marketplace, and the GSE is taking steps to implement a new lending program that taps third-party mezzanine lenders to ensure funding is available for those multifamily property owners facing loan maturities.

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FHA Commissioner Defends Low Downpayments

With defaults on mortgages insured by the Federal Housing Administration (FHA) continuing to mount, lawmakers are pressing the federal agency to raise its minimum downpayment requirement from 3.5 percent to 5 percent. But in testimony on Capitol Hill Thursday, FHA Commissioner David Stevens flatly rebuffed the idea, citing statistical evidence that shows such an across-the-board increase would result in a 40 percent drop in the agency's loan volume.

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Foreclosure Specialist Admonishes HAFA Program

President Obama's Home Affordable Foreclosure Alternative (HAFA) program has been under intense fire this week. On Monday, a coalition of appraisal groups sent a letter to the Treasury opposing the program's use of BPOs, and on Thursday, the chief foreclosure expert at Ushud.com warned that HAFA is ""rife with problems that will adversely impact real estate professionals and consumers alike.""

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Investors Back Frank’s Push for Second Lien Write-Downs

Last week, Rep. Barney Frank called for the nation's four largest banks to take a loss on secondary mortgage debt, such as home equity loans, which he says have no real economic value considering the state of the housing market. An influential group of investors, representing holders of some $100 billion in mortgage securities, is throwing its full support behind Frank's proposal, but the coalition is concerned that unless Treasury provides further guidance, the banks will shun the idea because it could result in ""catastrophic"" losses.

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Lend America and Its VP Barred from Federal Mortgage Market

New York-based Lend America and its senior-level strategist and VP, Michael Ashley, have been permanently banned from doing business for the Federal Housing Administration, according to recently released court documents. Ashley helped build Lend America into one of the most lucrative FHA loan producers, but federal attorneys say all the while he's been in violation of an earlier industry ban, when he plead guilty to wire fraud conspiracy in 1993.

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GSEs in the Hot Seat over Political Campaign Contributions

An activist group who says its purpose is to investigate and prosecute government corruption is in a federal court battle to get its hands on documents detailing the political contributions made by Fannie Mae and Freddie Mac. The organization says its been trying to get access to the GSEs' records since May of last year but has been denied by the companies' regulator, who is shielding the documents under claims that the government-controlled firms are private corporations. No. 2 on the GSEs' list of campaign contribution recipients is President Obama.

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Nevada Foreclosure Mediation Program to Undergo Rule Changes

At a public hearing scheduled for Tuesday, March 16, 2010, the Nevada Supreme Court will consider amendments to the rules governing the state's Foreclosure Mediation Program (FMP). If the amendments are approved, this will be the third set of rule changes since the FMP was enacted on July 1, 2009.

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Advantage Title Introduces GFE Rate Calculator

In response to the new regulations under the Real Estate Settlement Procedures Act (RESPA), Advantage Title, Inc. has launched GFEz--a RESPA-compliant Good Faith Estimate (GFE) rate calculator that delivers easy online calculation of title- and escrow-related fees.

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Legislated Risk Retention Is No Substitute for Good Underwriting: Report

Both the House bill for financial regulatory reform and the draft Senate bill currently being debated include across-the-board risk retention provisions for home mortgages. The idea is to ensure lenders have more ""skin in the game,"" to prevent the risky practices that ignited the housing crisis. But according to a new study by the Community Mortgage Banking Project, such mandated risk retention is ""no substitute"" for good underwriting and could significantly raise the cost of home mortgages.

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