Loss Mitigation

9.1 million U.S. residential properties were seriously underwater in the first quarter of 2014, according to RealtyTrac's U.S. Home Equity & Underwater Report. Seriously underwater properties, which are homes where the combined loan amount secured by the property is at least 25 percent higher than the property's estimated market value, represented 17 percent of all properties with a mortgage.

Bank of America’s first-quarter earnings were hit hard by legal expenses, resulting in a net loss of $276 million to start the year. The loss follows a profitable fourth quarter of 2013, which saw the bank taking in $3.4 billion. For the first quarter of 2013, BofA reported net income of $1.5 billion. The results for the first quarter include $6 billion in litigation expenses related to a major settlement the Federal Housing Finance Agency (FHFA) over legacy securities claims.

According to the Mortgage Graveyard report by Mortgage Daily, the number of mortgage-related failures has significantly declined this past year, and wholesale lenders are disappearing equally as quickly. However, mortgage mergers are on the rise.

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) announced that four men—Sean Cutting, Brian Melland, Bijan Madjlessi, David Lonich—have been indicted on federal charges of conspiracy, bank fraud, wire fraud, money laundering, false statements to a bank, false bank entries, and obstruction of justice.

The Special Inspector General for the Troubled Asset Relief Program (SIGTARP) announced that James Crews and Michael Hilbert pleaded guilty to defrauding Excel Bank. According to plea agreements, Crews and Hilbert admitted to making false statements to Excel Bank with respect to escrow funds or “fix funds” set aside to repair rental homes financed through the bank.

Freddie Mac commented Wednesday that its' full menu of mortgage relief policies are available for borrowers who are affected by disasters in the state of Washington from recent flooding and landslides. The company said, "Freddie Mac's disaster relief policies enable servicers to help borrowers with homes in presidentially declared Major Disaster Areas where federal Individual Assistance programs are being made available."

In a long line of lawsuits and complaints against corporations alleging discrimination, the National Fair Housing Alliance (NFHA) announced a complaint against Safeguard Properties, the largest mortgage field services company in the country. The organization alleges REO properties were not as well maintained and marketed in African-American, Latino, and other non-white communities compared to properties in white neighborhoods.

Through a partnership between the Texas State Affordable Housing Corporation (TSAHC) and the Texas Association of Realtors (TAR), the joint campaign "Get Ready: Making Texans Homeowners for Life" will work to increase awareness of educational programs among potential home buyers.

For the second straight year, Washington, D.C., is the place lenders are most likely to encounter mortgage fraud, according to the annual Mortgage Fraud Risk Report released by Interthinx. This continues the rising trend in fraud risk observed over the past three years as inventories shrink, prices rise, and markets stabilize.

Poppi Metaxas, former president and CEO of Gateway Bank of Oakland, California, was charged with bank fraud, bank fraud conspiracy, and perjury in relation to a sham "round trip" transaction. The scheme, initiated by Metaxas, caused Gateway to execute a false transaction in which the bank self-funded a down payment to make it appear that Gateway had sold toxic, non-performing mortgage loans.