Loss Mitigation

JPMorgan Chase, which surpassed Bank of America as the largest bank in terms of assets in October 2011, reported a net income $5.4 billion, with earnings per share at $1.31. The reported net income and earnings per share for the 2011 first quarter was $5.6 billion and $1.28, respectively. The bank saw a significant boost with mortgage production-related revenue, which was reported at $1.6 billion, an increase of $722 million, or 80 percent, from the year before. At $59.9 billion, mortgage loan application volumes increased 33 percent compared to the prior year, and 14 percent from the previous quarter, mostly due to heavy refinancing activity.

With reports that around 20 percent of mortgages are underwater, about 46 percent of bank risk professionals surveyed by FICO expect to see the volume of strategic defaults in 2012 exceed 2011 levels. Combined with concerns over strategic default are disconcerting results about consumer priorities. Combined with concerns over strategic default are disconcerting results about consumer priorities. Only 29 percent of bankers said the current generation of homeowners considers their mortgage to be their most important credit obligation, while 49 percent said its not a priority.

First time claims for unemployment insurance jumped 13,000 to 380,000 for the week ended April 7, the Labor Department reported Thursday, the highest level since the end of January. At the same time the previous week’s report were adjusted upward by 10,000, wiping out what had been a four year low and showing an increase of 4,000 initial claims instead of an originally reported drop of 6,000 for the week ended March 31.

Foreclosure filings - default notices, scheduled auctions, and bank repossessions - were reported on 572,928 properties during the 2012 first quarter, down 2 percent from the previous quarter and down 16 percent from the first quarter of 2011, according to RealtyTrac's U.S. Foreclosure Market report. Also, the number of days it took to foreclose on properties in the first quarter took longer, averaging 370 days, up from 348 days in the previous quarter and the highest average number of days going back to the first quarter of 2007.

The economy continued to expand at a modest to moderate pace from mid-February through late March, the Federal Reserve said Wednesday in its periodic Beige Book, reporting faster and solid growth in Kansas City and Minneapolis but moderate or modest growth in Boston, Atlanta, Chicago, Dallas, San Francisco Cleveland and St. Louis. New York reported economic growth picked up somewhat while Philadelphia and Richmond cited improving business conditions.

MortgageKeeper Referral Services released its Homeowner Needs Status Report for the 2012 first quarter ending March 31. The report revealed that homeowners received 217,000 referrals, or requests for local assistance, from MortgageKeeper – more than twice the level of referrals for the same period last year.

While arguments continue to be made that Fannie Mae and Freddie Mac should apply principal reductions to keep underwater borrowers from going into foreclosure, Edward DeMarco, FHFA acting director, still has plenty of ammo to defend his highly criticized stance. During a speech at the Brookings Institution Tuesday, DeMarco, despite revealing figures that showed the GSEs could potentially save $1.7 billion through the application of principal reduction, still cited reasons to be wary of the proposed foreclosure prevention solution.

The Consumer Financial Protection Bureau (CFPB) is looking to propose mortgage servicing rules to keep borrowers from costly surprises and prevent servicers from giving customers the runaround. Lack of transparency and lack of accountability are the two issues motivating the new rules, and to create more transparency, the CFPB is proposing clear monthly mortgage statements, a warning before interest rates adjust, options to avoid force-placed insurance, and early information to keep customers out of foreclosure.

Bank of America is making changes to its short sale procedures and introducing an improved task flow within the short sale technology module from Equator, BofA's short sale management platform of choice. The goal: to reduce the timeframe for a short sale decision to less than three weeks. Starting Saturday, April 14, real estate professionals working with BofA will be required to submit five documents for short sales initiated with an offer, and they will be able to complete tasks such as document collection, valuations, and underwriting at the same time.

The Federal Housing Administration (FHA) rule that would delay potential borrowers with outstanding collections debt of $1,000 or more from getting an FHA-insured loan is on hold until July 1. The rule proposes that if a borrower has collections debt of $1,000 or more, a he or she must go on a repayment plan for the debt for a minimum of 3 months to be eligible. This would cause a delay from receiving approval for a loan for 90 days or more.