Loss Mitigation

The FDIC has released a special report highlighting what it describes as ""lessons learned"" from the interagency review of foreclosure processes and procedures at the nation's largest mortgage servicers. The FDIC says most institutions that own or service residential real estate loans have been affected by the dramatic increase in foreclosures, but the delinquency rates on loans originated by community banks have been far lower and as a result, ""robo-signing"" practices and process deficiencies are principally isolated to the largest servicers.

The nation's second largest mortgage company reported Wednesday that it pulled in net income of $676 million during the first three months of this year. Freddie Mac closed the quarter with positive net worth of $1.2 billion. As a result, no additional funding from Treasury was required for the first quarter of 2011. It's the first time since the fourth quarter of 2009 that the company has not needed to draw on taxpayer support. REO dispositions reached record levels in the first quarter with approximately 30,000 homes sold.

Default management and residential valuation provider Integrated Asset Services, LLC (IAS) has named former Lehman Brothers executive Paul E. Sveen as its new CEO. A 25-year veteran of the industry, Sveen spent 19 years with Lehman, where he held executive leadership roles in the firm's structured finance and securitization businesses, and at Aurora Loan Services, Lehman's largest residential mortgage company.

Fannie Mae sponsored a special open house event Wednesday in Philadelphia to mark the opening of its latest Mortgage Help Center. The Philly location is the ninth in a series of planned nationwide centers to provide assistance to homeowners in default or at risk of foreclosure. Fannie Mae president and CEO, Mike Williams, joined representatives from the Philadelphia area public and private sectors to mark the occasion.

The Supreme Court of South Carolina issued an administrative order on Tuesday halting all pending foreclosure actions and foreclosure sales on May 9th, until the lender can demonstrate they have worked with the borrower to pursue a loan modification or other loss mitigation option. Chief Justice Jean Toal says the purpose of the statewide order is to ensure mortgage foreclosures are not inappropriately concluded while an alternative resolution is being negotiated - the practice commonly referred to as dual-tracking.

A new report released by Lender Processing Services this week (LPS) indicates foreclosure activity picked up significantly during the month of March. LPS says the foreclosure inventory stood at 2.2 million loans as of the end of March - a new all-time high. The number of new foreclosure actions increased 33 percent from the previous month. At the same time, though, delinquencies dropped to their lowest level since 2008. LPS says new problem loans are now less than half 2009's peak levels.

Clayton Holdings has partnered with MBSData to provide loan-level data risk identification analytics and reporting solutions to fixed-income-mortgage investors. According to a statement from the two companies, their combined technology platform is designed to help investors manage residential mortgage-backed securities (RMBS) risk more effectively. The new offering will cover 98 percent of the active deal universe of private-label RMBS.

The U.S. government has filed a lawsuit against Deutsche Bank and its mortgage unit, claiming that Germany's largest bank ""repeatedly lied"" to get into a program to select mortgages to be insured by FHA against default. Once part of the program, U.S. authorities say Deutsche Bank ""recklessly"" selected mortgages that violated the program rules ""in blatant disregard"" of whether borrowers could make their mortgage payments. The U.S. government is seeking $1 billion in damages and penalties.

PMI Mortgage Insurance Co. is seeing signs of strengthening in markets the firm classifies as ""distressed,"" enough so that the private mortgage insurer is relaxing its requirements for loan-to-value (LTV) ratios and minimum credit scores. PMI also announced that it has removed four markets from its ""Distressed Markets List,"" however the mortgage insurer plans to add the entire states of Arizona and Florida to the list in July. The company's analysts have also updated their forecast for sales of existing homes and price projections.

A new homeowner outreach program launched by Default Resource aims to enhance the interaction between servicers and struggling homeowners. The company said it created the program to help troubled borrowers stay in their homes while assisting servicers in loss mitigation efforts. The program includes borrower outreach, door-knocking, and in-person initiation of the loan resolution or short sale process.