Loss Mitigation

Two government programs that extend new options to homeowners who are unable to make their mortgage payments will lean even more heavily upon field service firms, according to National Creditors Connection Inc. (NCCI). The California-based company says the role of these field service providers will expand from basic borrower contact to a targeted evaluation of a borrower's financial condition.

The Home Affordable Modification Program (HAMP) has been the target of some heavy criticism, with naysayers taking aim at everything from the program's slow progress to servicers' lack of capacity to handle large-volume modification work. The latest numbers may be more fodder for the fire. Treasury's HAMP report card shows 230,801 homeowners have been granted permanent modifications under the program, and the number of permanently modified loans to re-default has nearly doubled in one month's time.

The Federal Housing Finance Agency (FHFA) recently released its Foreclosure Prevention and Refinance Report, detailing the actions the government-sponsored enterprises (GSEs) have taken to prevent foreclosures and keep people in their home. The findings were positive, showing notable improvements across the board.

Political pressure is growing for lenders to cut mortgage principal. Executives from the nation's four largest banks pushed back against that pressure Tuesday, arguing to lawmakers that a large-scale principal forgiveness program could have dire ramifications for the future of housing finance. It's estimated that some 11 million borrowers owe more on the mortgage than their home is worth. JPMorgan Chase projects it would cost $700 billion to $900 billion to bring these underwater borrowers ""even.""

A newly enacted California law provides a tax break to borrowers whose mortgage debt was forgiven through a foreclosure, short sale, or loan modification. The bill landed on Gov. Schwarzenegger's desk and he inked his approval just days before the April 15th tax deadline. The state's Franchise Tax Board says the new provision will cost California about $34 million in tax revenue, but will provide relief to approximately 100,000 borrowers in the hard-hit state.

Can appraisal management companies (AMCs) help appraisers? The Fort Worth, Texas-based property valuation management firm Axios Valuation Solutions says, ""The answer may surprise you, and it's a resounding yes."" The company says AMCs provide an invaluable service to America's mortgage lending industry as a buffer against lender pressure, a partner in the quality control process, and a work opportunity resource for appraisers.

In the latest of a string of homeownership preservation events offered by HOPE NOW, representatives from more than a dozen mortgage servicers and several local HUD-approved housing counselors were on hand last week in Nevada to assist more than 2,300 struggling homeowners who attended workshops offered in Reno and Las Vegas.

Halo Portfolio Advisors, LLC has contracted to provide home retention services to a hedge fund operating in the distressed mortgage arena. Halo says its services will improve the performance of the fund's portfolio by providing workouts for non-performing loans using loan modifications, short sales services, refinancing, credit repair, and unsecured debt settlement.

Florida's Ocwen Loan Servicing has acquired the residential mortgage servicing rights on 38,000 loans with an aggregate unpaid principal balance of $6.9 billion. Sources confirm Saxon Mortgage Services, the Texas-based subsidiary of Morgan Stanley, as the seller.

Following the severe flooding in Rhode Island, HUD recently instituted a 90-day moratorium on foreclosures of Federal Housing Administration (FHA)-insured mortgages in four counties across the state, including Kent, Newport, Providence, and Washington. While the foreclosure suspension is only mandated for FHA-insured mortgages in these counties, Rhode Island's Attorney General, Patrick Lynch, is asking all lenders to consider voluntary moratoria on non-FHA mortgages as well.