Loss Mitigation

In an effort to help every qualified Mississippian own a home, the Mississippi Development Authority is overseeing a limited-time grant program. Authorized through HUD, the ""Home Buyer Advantage"" program provides one-time downpayment assistance grants ranging from $14,999 to $39,999 to individuals buying foreclosed property as a primary residence in Mississippi.

Bank of America has become the largest mortgage servicer to join HOPE LoanPort, the new Web-based housing counselor tool that streamlines submission of completed loan modification applications. As part of its participation agreement, the bank has committed to use HOPE LoanPort's proprietary technology to partner with nonprofit housing counselors to assist homeowners with loan modifications. Larry Gilmore, CEO of HOPE LoanPort, said this is a significant development in the evolution of HOPE LoanPort, with far reaching implications.

Charge-offs and non-performers continue to eat away at profitability and the sheer fundamentals of the U.S. banking system, according to Moody's Investors Service. The firm says 5 percent of banks' loans are currently non-performing assets. Moody's has estimated total loan charge-offs of $744 billion from 2008 through 2011. So far, the banks have recognized 60 percent of Moody's estimated total charge-offs and 65 percent of estimated residential mortgage losses, but only 45 percent of projected commercial real estate losses.

Oregon Housing and Community Services, one of five state housing finance agencies selected to receive foreclosure assistance funds through the second round of the administration's Hardest Hit Fund, has submitted a proposal to the Treasury Department detailing how it plans to use its $88 million allocation. The department said its proposal, which comprises five separate programs, will serve a minimum of 6,300 struggling homeowners.

Home loan servicers are continuing to step up efforts to put distressed homeowners into more sustainable mortgages, according to data released this week by HOPE NOW. The number of loan modifications offered to homeowners during the month of April - more than 172,000 - represents a 46 percent increase compared to a year earlier, when the industry completed nearly 118,000 loan mods. Nearly two-thirds of the April 2010 number were through servicers' own proprietary, non-government mod programs.

Bank of America said Wednesday that its new mortgage program for certain underwater borrowers, which incorporates an earned principal forgiveness approach into the loan modification equation, has been implemented on schedule. The bank has already mailed out an initial round of letters notifying customers who may qualify. Upon review of these applications, the first trial offers for BofA's principal forgiveness program could find their way to distressed borrowers as early as the second half of June.

The economic downturn has choked off demand for commercial space, with vacancy rates rising and new occupancy limited by the duress in today's job market. At the same time, commercial real estate (CRE) values have dropped more than 40 percent in some markets. Plagued with the same trip wires that have set off a barrage of residential mortgage delinquencies - unemployment and negative equity - the CRE market, too, is seeing default volumes soar to new heights, both on loans held by banks and those owned by securities investors.

In an effort to support mortgage servicers' need for a strategic, comprehensive short sale offering, LenderLive Network Inc., a Denver-based provider of business process outsourcing and technology to the financial industry, has expanded its loss mitigation initiative to include the launch of LenderLive Default Solutions. This new short sale offering is powered through two strategic partnerships: One with the technology-based real estate and loan disposition company ClearMarkets LLC, and another with Keller Williams Global Property Solutions LLC through its KW Commercial Division.

Bank of America has opened the first of three outreach centers to serve Nevada mortgage customers who are seeking loan modifications or other foreclosure prevention assistance. The first outreach center is in Henderson. Openings of additional centers in Las Vegas and Reno are expected by the end of June. With the acquisition of Countrywide in 2008, Bank of America services about one in three mortgage loans in Nevada.

Allonhill, an independent third-party review firm specializing in mortgage due diligence and credit risk management, has announced the hiring of former Fidelity executive Kathy Ireland as director of securitizations. Ireland, a 30-year veteran in banking and financial services, will manage Allonhill's core securitization solutions.