Loss Mitigation

Bank of America says Old Republic International is wrongfully withholding payment on hundreds of millions of dollars in mortgage insurance claims on loans that have defaulted. BofA has filed a lawsuit against the mortgage insurer seeking to recover more than $160 million in damages. Bank of America says between 2009 and 2010, claims paid by Old Republic under its policy fell by 75 percent and denials persist, although the mortgage insurer markets its services as protecting lenders ""against default loss for virtually any reason.""

Fannie Mae announced the opening of a new mortgage help center in Culver City, California, this week to provide counseling and other services for struggling homeowners in the greater metro area with loans owned by the GSE. The fourth facility in a series of nationwide mortgage help centers, the Greater Los Angeles Mortgage Help Center is a joint partnership between Fannie Mae and West Angeles Community Development Corporation, major mortgage servicers, and civic and community leaders.

The nation's largest mortgage financier reported a smaller loss during the third quarter than it did in the second, with the latest figures representing a $17 billion improvement over financial results from a year earlier. Fannie Mae says, though, that it needs another $2.5 billion from taxpayers to cover its net worth deficit. The GSE also reported that home retention actions were down 14 percent in Q3, while home repossessions rose by nearly 24 percent. As of September 30, Fannie Mae's inventory of single-family REO properties stood at 166,787.

Advantage Title Company recently announced the release of its proprietary REO monitoring system, TitleFlow, which addresses the requirements of foreclosed transactions. The system enables Advantage Title to monitor client-specific requirements and production workflow. Turn times of multiple tasks can be closely tracked, with time-sensitive color coding that enables Advantage Title's team to determine at a glance the status of various jobs for each property in the client's pipeline.

The Federal Housing Administration (FHA) insured 1.74 million single-family mortgages during fiscal year 2010, which for the agency ended in September. The collective value of the loans endorsed was $318.8 billion. FHA's loan volume for the year was down 10.3 percent from 2009, and came in below the 1.87 million mortgages it had previously projected would be endorsed in the 2010 fiscal year. The agency's serious delinquency rate stood at 8.4 percent at year-end. At the same time in 2009, the rate was 8.3 percent.

JPMorgan Chase says it will re-file affidavits for some 127,000 foreclosures that have been on hold because of ""robo-signing"" issues. According to a company official, the resubmission of corrected documentation should begin by mid-November and will take at least three to four months to complete. The bank says it risks losing a couple million dollars each month the foreclosure proceedings are delayed. Reviews have confirmed that all foreclosure decisions have been based on materially accurate information, according to JPMorgan.

IndiSoft now supports electronic signatures with its RxOffice Document Management platform. The company says RxOffice increases the speed of default management processes by allowing users to execute documents without printing, signing, and scanning. The technology is compliant with federal and state handwritten digital signature regulations. The eSignature is bound as part of the document itself.

Oxygen Funding, Inc., a factoring company based in California, recently launched a new service program focusing on the financing needs of real property appraisers. The company says appraisers have been experiencing problems in collecting money owed to them and maintaining a healthy balance of cash flow because banks are holding on to money longer. Oxygen Funding purchases appraisers' outstanding invoices to give them the capital they need immediately to continue operating, less a service fee.

Ally Financial's GMAC Mortgage subsidiary was the first major servicer to announce a foreclosure freeze after finding problems in its procedures that led to errors in legal affidavits. In the words of Ally's own CEO, ""We had a robo-signer affidavit problem. We're embarrassed about it and we fixed it. We'll be the first to say we screwed up."" The company reported a $269 million profit for the third quarter on Wednesday, and said it's decided not to sell its ResCap mortgage unit.

Insufficient automation could cause non-compliance issues for mortgage lenders, credit unions, and banks when it comes to the extensive regulatory changes emerging as a result of the Dodd-Frank Reform Act, according to Bruce Backer, president of LoanSifter. Mortgage lenders are most affected by title XIV of the act, which sets national underwriting standards for residential loans, and Backer says even more reforms are headed our way when the Consumer Financial Protection Bureau begins establishing additional regulations for the industry.