Loss Mitigation

Homebuilder Lennar Corporation has acquired around $740 million in loans and distressed real estate from three large financial institutions. The combined portfolio includes both residential and commercial properties and consists of approximately 397 loans and 306 properties.

Questions about the legality of foreclosure proceedings have prompted Old Republic National Title Insurance to decide it will no longer insure titles to homes foreclosed by JPMorgan Chase and GMAC Mortgage. Chase and GMAC both halted foreclosure sales in 23 states and are reviewing legal filings that they say may have been signed without a notary's presence or without verifying the supporting documents.

Wolters Kluwer Financial Services will begin providing customizable mortgage application and processing kits to lenders. The two kits, which are available in English and Spanish, are designed to educate borrowers on the mortgage process, helping them improve their financial literacy. The company says the kits can also assist lenders in expediting the application process to close more loans, ensuring disclosures are compliant and provided to borrowers as required, and making sure marketing activities are consistent across branches.

Wells Fargo, one of the nation's largest mortgage servicers, has agreed to use HOPE LoanPort's proprietary technology to partner with nonprofit housing counselors to assist homeowners with loan modifications. Wells is the 13th major servicer to sign onto the Web-based tool, which allows borrowers and counselors to streamline their submission of loan mod applications. HOPE LoanPort also has commitments from more than 1,600 housing counselors from almost 300 organizations across the country.

Three major mortgage lenders have halted foreclosures in states where the process is handled through the court system after suspicions surfaced that employees did not follow legal procedures in preparing the required documentation. These paperwork problems are widely expected to draw out the already devastating foreclosure crisis in the affected areas. We've dug a little deeper to provide a list of the states where judicial foreclosures are the standard and that are most likely impacted by the foreclosure suspensions announced.

The latest in a string of government extensions is an extension to Fannie Mae's Alternative Modification (Alt Mod) to the Home Affordable Modification Program (HAMP). The extension is being provided so servicers will have enough time to complete the processing of modifications for borrowers who meet the eligibility requirements for the Alt Mod program, which remain the same.

If governmental policy on foreclosure prevention does not change, 11.5 million borrowers are in danger of losing their homes, according to the analysts at Amherst Securities. That staggering figure equates to one out of every five borrowers - an astronomical 20 percent default rate. So how can the administration fix deficiencies in its loan modification program? Amherst analysts say the answer lies in cutting borrowers' principal balances and boosting housing demand, including opening up financing channels for investors.

Marshall & Ilsley Corporation (M&I), a financial services institution based in Milwaukee, Wisconsin, has extended its foreclosure moratorium through December 31, 2010. The initial moratorium, which applies to owner-occupied residential loans in all M&I markets for customers who agree to reach a successful repayment agreement, was announced December 18, 2008, as part of the company's Homeowner Assistance Program.

The Wayne County Treasurer in Michigan concluded its September online auction of tax-foreclosed properties by generating more than $4.1 million in tax revenue for the county, an increase of more than 600 percent from last year's live, on site auction. The treasurer tapped Bid4Assets.com to conduct its first online auction due to the record number of tax foreclosed properties available.

Wells Fargo will no longer delay foreclosure proceedings in hopes that a short sale deal will come through. At the requests of its mortgage investors, including Fannie Mae and Freddie Mac, the bank has stopped granting extensions for distressed homeowners to complete short sales. Going forward, borrowers must close on short sales by the date quoted in their approval letter. The policy change will allow the bank's foreclosure proceedings to advance, even if a short sale is already in negotiation.