Loss Mitigation

Sparking indignation in the mortgage broker community, Raj Date, deputy director of the Consumer Financial Protection Bureau, laid the bulk of the blame for the housing crisis on brokers during a speaking engagement Monday. His statements have led at least one industry trade group to call for his resignation. Marc Savitt, president of the National Association of Independent Housing Professionals, called Date's comments ""outrageous."" He said the group will call for the official's resignation this week.

Investors and lenders should expect loans currently originated to have a 20 percent higher chance of default than those originated in the '90s due to current economic conditions, according to the University Financial Associates (UFA). The UFA Default Risk Index rose slightly to 120 in the second quarter of 2012 from 119 compared to the previous quarter. While loans currently originated are more likely to default than those from the '90s, loans originated today are still much less likely to default compared to vintages from 2006 to 2008.

Through National Foreclosure Mitigation Counseling (NFMC), more than 1.3 million homeowners have received foreclosure prevention counseling by local nonprofits and state housing finance agencies since March 2008, NeighborWorks America announced Monday. So far, the NFMC has also received six appropriations from Congress totaling $619.87 million. According to a report, NFMC clients who had their payments modified saved an average of $176 more per month, and those who received help were nearly twice as likely to obtain a modification.

Secretary of Housing and Urban Development (HUD) Shaun Donovan and Federal Housing Administration (FHA) Commissioner Carol Galante announced in a press conference Friday FHA's program to sell mortgage loan pools to investors. The Distressed Asset Stabilization Program, designed to give homeowners with seriously delinquent loans a chance to avoid foreclosure, is an expansion of an earlier FHA pilot program that allows investors to purchase loan pools headed for foreclosure. Investors are then charged with the task of working to bring the loan out of default. The program starts in September 2012 with a sale of the loan pools.

Reperforming and nonperforming loans decreased $6.1 billion to $528.6 billion in May compared to the previous month of April for private label mortgage backed securities (MBS), according to a report from Amherst Securities Group. The decrease came after a reduction of $6.4 billion in the non-performing bucket and a $0.3 billion growth in the re-performing bucket, reflecting elevated liquidations and a slowdown of new defaults, Amherst stated in the report.

First time claims for unemployment insurance fell to 377,000 for the week ended June 2, from the prior week's upwardly revised 389,000, the Labor Department reported Thursday. Economists had expected the report would be show 379,000 initial claims. The drop in claims was the first in five weeks.

As recent data provide reasons to be both positive and worried about the economy, restrained optimism seems to be the phrase to describe how the public should respond to current economic indicators. Wednesday's release of the Beige Book revealed economic outlooks remain positive, but contacts were slightly more guarded in their optimism, while the Obama administration's Housing Scorecard relayed a similar sentiment. The scorecard provides an overview of the state of the market based on reports published within the public and private sectors.

The economy expanded at a modest to moderate pace from early April to the end of May, the Federal Reserve reported Wednesday in its periodic Beige Book. The assessment reflected a weakening from the report in April when the expansion was characterized as moderate. Economic outlooks, according to the report, ""remain positive, but contacts were slightly more guarded in their optimism."" Activity in the New York, Cleveland, Atlanta, Chicago, Kansas City, Dallas, and San Francisco districts was described as moderate, while the Richmond, St. Louis, and Minneapolis districts noted modest growth.

eMason, Inc., announced Saturday that its Clarifire Community app was approved by Apple and is now available for download.

Settlement monitor Joseph Smith announced a partnership Monday to work with BDO Consulting as the primary professional firm. BDO, a division of BDO USA, LLP, will join Smith and his team for three and a half years to oversee the implementation of the settlement involving 49 states, state and federal officials, and the five largest banks - Bank of America, JPMorgan Chase, Wells Fargo, Citi, and Ally.