Loss Mitigation

One of the nation's foremost banking regulators has issued a directive to large mortgage servicers, ordering them to reassess their procedures for foreclosing on defaulted borrowers. John Walsh, head of the Office of the Comptroller of the Currency (OCC) told lawmakers that he contacted seven institutions his agency supervises, after several large lenders announced a halt on foreclosures in states where filings might contain erroneous paperwork and preparers may have broken the law in their haste to process large volumes of cases.

Mortgage insurer Radian Guaranty Inc. has made a $200,000 grant to HOPE LoanPort to be used by borrowers, non-profit counselors, servicers, and other organizations to improve the execution of loss mitigation activities, including those under the Home Affordable Modification Program (HAMP). Radian's contribution will be used to support HOPE LoanPort in its mission to address some of the hurdles borrowers face when seeking foreclosure alternatives.

Wipro Gallagher Solutions (WGS) has combined its managed origination system, NetOxygen Cirrus, with Wipro's loan processing services to create a new loan fulfillment and servicing platform. The new platform allows lenders to generate revenue while using WGS to perform loan fulfillment, loan sub-servicing, and vendor management tasks. The company cites a cost reduction of 30 percent or more over existing infrastructure.

National Creditors Connection, Inc. (NCCI), a provider of field contact, loss mitigation, and onsite inspection services to financial institutions nationwide, recently added Audra Agen to its team as a national account manager to service the Southwest United States. A 15-year mortgage industry veteran, Agen has experience in the lending, servicing, underwriting, and branch and account management sectors.

The nation's largest mortgage financier is shrinking its portfolio. Fannie Mae reported this week that its holdings declined at a compound annualized rate of 4.1 percent in August, while its total book of business fell by 1.3 percent. At the same time, delinquency levels fell across the board. Fannie Mae's single-family serious delinquency rate dropped 17 basis points in July to 4.82 percent. The multifamily serious delinquency rate declined 6 basis points to 0.74 percent.

Fannie Mae has enhanced its EarlyCheck technology service to help lenders identify eligibility or data issues with loans they plan on selling to the GSE in order to minimize the risk of repurchases. With EarlyCheck, lenders now have access to Fannie Mae delivery data checks at any point in the business process, allowing them to spot and correct potential underwriting errors earlier in the process - from prior to closing through to the pre-delivery stage.

The Treasury Department has instructed three of the nation's largest mortgage servicers to make changes to the way they solicit distressed borrowers for the government's loan modification program and evaluate applicants for eligibility. In Treasury's latest report card on the Home Affordable Modification Program (HAMP), JPMorgan Chase, Wells Fargo, and Bank of America were called out by name as receiving sub-par grades in complying with the program's guidelines.

UnitedTech Lender Services (UTLS) celebrated the opening of a new office located in Las Colinas, Texas with a ribbon cutting ceremony earlier this month. The company chose to expand to Dallas County for the city's proximity to some of their largest clients.

HUD has announced the availability of more than $5.1 million in grants for housing counseling training. HUD plans to fund eligible organizations to deliver full-spectrum training as part of the Obama administration's efforts to provide housing counseling to the nation's homeowners, buyers, and renters. The agency says right now, these counseling programs are critical to helping thousands of families avoid foreclosure, and it has increased the funding for such services by 36 percent in this year's HUD budget.

Legislation to stabilize the foreclosure crisis through the federal government's conservatorship of Fannie Mae and Freddie Mac was introduced in the U.S. House of Representatives Tuesday. The Housing Opportunity and Mortgage Equity (HOME) Act would require Fannie and Freddie to allow borrowers to refinance their mortgages by locking in today's record-low interest rates for longer fixed-term loans. The legislation would affect up to 30 million mortgages held or backed by the two GSEs.