Loss Mitigation

Fannie Mae is building the ""strongest book of business we've seen in the last decade,"" according to the GSE's president and CEO, Michael Williams. While tighter underwriting may mean fewer consumers are able to get loans and banks are holding credit close to their chests, Williams says the type of prudent lending that has taken hold in the aftermath of the housing bust is translating into higher quality loans for Fannie Mae - namely plain, old-school mortgages; credit scores of 760; and loan-to-value ratios of 70 percent.

The PMI Foundation, the philanthropic arm of the PMI Group, Inc., has awarded a $50,000 grant to the Consumer Credit Counseling Service (CCCS) of San Francisco. The grant will support continued funding for CCCS of San Francisco's nationwide mortgage default counseling program and homebuyer education initiatives.

U.S. Reps. John Lewis, David Scott, and Hank Johnson have joined forces with HUD, the U.S. Department of Treasury, the HOPE NOW Alliance, and NeighborWorks America for an upcoming event aimed at helping financially troubled homeowners in the Atlanta area. The event, dubbed the ""Help for Homeowners"" project, is scheduled for July 30 and July 31. Nearly 20 of the area's top lenders will be available at the event to meet one-on-one with area residents who are struggling to pay their mortgages. The event, dubbed the Help for Homeowners project, is scheduled for July 30 and July 31.

As part of an ongoing effort against scams that target financially distressed consumers, the Federal Trade Commission (FTC) has banned several marketers from selling mortgage modification or foreclosure relief services. According to the FTC, the marketers allegedly charged homeowners up-front fees and falsely claimed they could get their mortgage modified or prevent foreclosure on their homes. Settlements regarding these allegations have been met through three separate actions.

Faced with growing criticism of its Making Home Affordable foreclosure prevention program, the Obama administration is turning to the tried and true method of advertising to raise public awareness of the program and encourage homeowners who are struggling with their mortgage payments to seek assistance from the federal government. The Advertising Council, in partnership with the U.S. Treasury and HUD, announced plans Wednesday to launch a national public service announcement (PSA) campaign about the Making Home Affordable program.

Fannie Mae and Freddie Mac are beginning to initiate foreclosures at a faster pace. According to a new study from Lender Processing Services (LPS), GSE foreclosure starts have been accelerating and are currently at all-time highs. From May to June, foreclosures initiated by Fannie and Freddie jumped 21 percent. LPS says the recent momentum coincides with Home Affordable Modification Program (HAMP) cancellations, with most of the increase and volume concentrated in the very late stages of delinquency.

The National Association of Real Estate Brokers (NAREB), a Washington, D.C.-based trade association composed of minority professionals in the real estate industry, has formed strategic partnerships with PartnerFirst, LLC, and Integrated Mortgage Solutions (IMS). NAREB teamed up with PartnerFirst to create a certified, nationwide, and multicultural short sale agent network that it says will help minority communities across America avoid foreclosure. And the association joined forces with IMS to engage minority business as subcontractors.

Last month, Fannie Mae announced new policy changes intended to deter financially competent homeowners from walking away from their mortgage obligation by imposing stiffer penalties for strategic default - a phenomenon that has become increasingly more common as home prices have plummeted and more and more borrowers find that they owe more on their mortgage than the home is worth. But the analysts at Moody's Investors Service say the GSE may encounter snags ahead since figuring out who to penalize for strategically walking away will be a significant challenge and implementing the policy could be difficult.

The number of past due home loans guaranteed by Freddie Mac has fallen below the 4 percent threshold. The milestone is a sign that the performance of the GSEs' loan portfolio is improving and loss mitigation efforts are having an impact, considering Freddie endured three long years of delinquency increases until March of this year. The company's latest report shows that the number of single-family mortgages at least three months past due or in foreclosure stood at 3.96 percent at the end of June. That's down from a high of 4.20 percent as recently as February.

The strides made by the Federal Housing Administration in lowering delinquency numbers are turning into a long-distance marathon run. The federal mortgage insurer's delinquency rate dropped again in June, marking the fifth straight month of declines. According to FHA's latest operations report, as of June 30, 532,757 of the mortgages it guarantees had spent at least 90 days in a delinquent status, which equates to a seriously delinquent rate of 8.3 percent. That's down from 8.4 percent in May, and 9.4 percent during the first month of this year.