Government

FDIC Chairman Sheila Bair - a recognized champion of homeownership preservation whose loan modification model has set the standard for the industry - is throwing her support behind the administration's Home Affordable Modification Program (HAMP). She also points out that the nation's mortgage problem has evolved, and it's underwater mortgages that are now the biggest threat. Bair says the FDIC is actively looking at principal write-downs as one way to encourage borrowers to stick with their mortgages and help mortgage owners avoid costly foreclosures.

Thousands of homeowners across the nation are facing foreclosure, but nearly 2,100 of these troubled borrowers received help through HOPE NOW's homeownership preservation events in Februaary in Sacramento, California and Houston. The workshop in Sacramento, California had 1,200 attendees, and almost 900 families attended the Houston workshop.

The online listing service Homes & Land recently asked thousands of real estate agents for their opinions about their local real estate markets. The company found that only 10 percent believe the government's Home Affordable Modification Program (HAMP) has actually reduced foreclosures. Despite the low enthusiasm about HAMP, overall optimism seems to be improving, with most agents reporting an increase in homebuyer interest, and nearly half of the respondents saying home prices in their markets have bottomed out.

Two subsidiaries of American International Group Inc. have agreed to pay a minimum of $6.1 million to resolve allegations that they engaged in a pattern of discrimination against African American homebuyers. The Justice Department claims that the two companies ""looked the other way"" when mortgage brokers they contracted with charged higher fees to blacks. Federal officials say this marks the first time a lender has been held responsible for failing to monitor its brokers to ensure equal treatment.

Lender Processing Services (LPS) is putting down stakes in the nation's Capitol. The mortgage technology and services company said Thursday that it has just opened a new Washington, D.C. office to better serve the contractual relationships it already has with a number of federal agencies and pursue opportunities with new government partners.

The Federal Reserve Board's No. 2 has submitted his resignation. Donald L. Kohn said Monday that he will step down from his post as vice chairman when his current term expires on June 23. Kohn, 67, has been a member of the Fed board since August 2002 and served as its second-in-command since June 2006.

In response to the new regulations under the Real Estate Settlement Procedures Act (RESPA), Accurate Title Group, LLC (ATG), a full-service appraisal, title insurance, closing, and settlement provider based in Huntersville, North Carolina, recently announced the release of its TAG Good Faith Estimate Calculator (TAG GFE).

Ocwen Financial has one of the industry's most impressive track records when it comes to restructuring loans under the Home Affordable Modification Program (HAMP). The company is converting trials to permanent mods at a rate that is 10 to 20 times higher than some of the biggest banks, and its re-default rate is under 5 percent. Based on his company's success, Ocwen's president has proposed several changes to improve HAMP, including principal writedowns and requiring underperforming servicers to outsource their HAMP processes.

The FDIC has built up a stockpile of some $40 billion in underperforming real estate loans and other assets seized from failed banks over the past couple of years. The federal agency is a regulator and deposit insurer, not an asset manager, and it doesn't like to hold on to these loan leftovers for very long. But the agency's asset portfolio is growing faster than it can conduct auctions and offload these loans. That's led the FDIC to try a new tactic - package the loans and sell them to investors as securities on the secondary market.

The nation's largest mortgage financier says it will purchase up to 200,000 seriously delinquent loans from mortgage-backed securities (MBS) holders this month. As of the end of last year, Fannie's single-family MBS loans that were considered seriously delinquent totaled $127 billion. The GSE says after its March buybacks, it will continue purchasing loans in each of the subsequent few months until the company has ""substantially reduced"" the population of loans that are four or more months delinquent.