Loss Mitigation

New York attorney general and co-chair of RMBS Working Group Eric T. Schneiderman announced a lawsuit against JPMorgan Chase Bank, JPMorgan Securities, LLC (formerly known as Bear Stearns & Co.), and EMC Mortgage LLC (formerly EMC Mortgage Corporation). Schneiderman's complaint alleges that Bear Stearns led investors to believe that the quality of loans in its mortgage-backed securities had been carefully evaluated and would be monitored. The complaint further alleges that as a result of Bear Stearns' and the other defendants' negligence, investors suffered cumulative losses of approximately $22.5 billion.

Home prices continued to trend upwards in August, posting both yearly and monthly gains for the sixth consecutive month, CoreLogic reported Tuesday. When including distressed sales, home prices in August rose 4.6 percent from a year ago, marking the biggest yearly gain since July 2006. Month-over-month, prices were up 0.3 percent from July to August. CoreLogic's Pending HPI points to further increases into September. Prices including distressed sales are expected to rise by 5 percent yearly and 0.3 percent monthly.

A California man was placed under arrest Friday on a complaint charging him with mail fraud for running a multistate scam that bilked homeowners out of more than $3.1 million. Alan David Tikal of Brentwood, California, was arrested at his home for a complaint that he scammed more than 1,000 homeowners out of millions of dollars in a fraudulent foreclosure rescue scheme.

Sometimes, to bring attention to what one considers to be an unjust law or policy, an act of rebellion occurs. In Ohio, three current but underwater borrowers have decided to go on a mortgage strike as an act of civil disobedience against FHFA's stance on principal reduction and the lack of help to address underwater mortgages. Rather than paying their mortgage servicer, the three Ohio homeowners will pay their principal and interest to an attorney who will hold their payments in an escrow account.

The population of CMBS loans handled by special servicers is declining, which could signal a turning point for the commercial real estate sector, Fitch Ratings said in a report Friday. As of June 30 of this year, the balance for CMBS loans shrunk to $80.5 billion, down from $85.5 billion in June 2011 and a significant drop from $92 billion in June 2010.

Consumer spending rose $57.2 billion, 0.1 percent, in August but personal income improved just $15 billion, 0.5 percent, the Bureau of Economic Analysis reported Friday. While the increase in spending matched economist expectations, the increase in incomes was half of what had been forecast.

Mortgage performance for loans serviced by large national and federal savings banks weakened in the second quarter of 2012, the Office of the Comptroller of the Currency (OCC) reported Thursday. The percentage of current and performing mortgages stood at 88.7 percent at the end of Q2, a slight drop from Q1, when 88.9 percent of loans were current and performing. However, the share of seriously delinquent mortgages fell 0.8 percent from Q1 to 4.4 percent, the lowest level in three years.

In the second quarter of 2012, Fannie Mae and Freddie Mac completed more than 129,007 foreclosure prevention actions, raising the year-to-date total to 275,106, the Federal Housing Finance Agency, which is the GSEs conservator and regulator, reported Wednesday. The second quarter total is a decrease from the first quarter of 2012, when the GSEs completed 146,099 foreclosure prevention actions. Since 2008, the start of the conservatorship, the GSEs have completed nearly 2.4 million foreclosure prevention actions, 1.2 million of which included permanent loan mods.

A lack of properties, mainly REOs, is crimping home sales in California, according to a release from the California Association of Realtors (C.A.R.). Although pending home sales in the state rose in August from July, sales were down from a year earlier, putting a halt to a 15-month trend of yearly increases.

As more and more baby boomers approach their golden years, many are finding themselves having to make a choice they never imagined: Whether or not to walk away from their mortgages. YouWalkAway.com released the results of a client survey, revealing that the looming prospect of a fixed income is driving many older struggling homeowners to strategically default while they still have something left.