Loss Mitigation

Atlanta-based Chrisley Asset Managent, a full-service REO management company, announced Wednesday the integration of short sales and loan modification services to its clients, streamlining the process for lenders and borrowers while increasing overall efficiency with a low-cost and reliable solution.

Marking a major milestone in its effort to provide more clarity and transparency in the mortgage process, Bank of America, N.A., (BofA) provided more than 1 million potential homebuyers with the lender's first mortgage Clarity Commitment. ""Customers told us they wanted transparency and 'no surprises' in the lending process, and the Clarity Commitment answers that need-helping potential homeowners clearly understand the key terms and conditions of their mortgage agreement prior to closing a loan,"" said Barbara Desoer, president of BofA Home Loans.

Freddie Mac said Wednesday that it will purchase ""substantially all"" mortgages that are 120 days or more delinquent from the company's fixed-rate and adjustable-rate mortgage Participation Certificate (PC) securities. With new accounting rules that took effect January 1, the company said it is cheaper to buy and hold these nonperforming loans on its books than to pay guarantee fees to security investors. As of December 31, 2009, the aggregate balance of such loans was just over $71 billion.

Payment Gone, LLC, creators of Khafre Back Office, announced Wednesday the launch of its commercial loan modification software module. The company says this marks the introduction of the first commercial mortgage mod software on the market. The new module is designed to enable servicers to accurately capture and manage their clients' portfolio of commercial properties and to quickly analyze clients' complete financial picture.

Delinquencies on prime jumbo loans continue to climb, and Fitch Ratings says they could reach 10 percent as early as next month. Loan performance among high-end mortgages within private residential mortgage-backed securities (RMBS) showed further weakness in January, as serious delinquencies rose for the 32nd consecutive month. Meanwhile, sales of seven-figure homes last year in California hit their lowest count since 2002.

Low interest rates have pushed more Americans to refinance their mortgages, and the Federal Housing Administration has announced enhanced refinance guidelines to assist homeowners facing foreclosure. As a result, banks and lenders are faced with an increasing volume of loan modification and refinancing requests.

Mortgage principal - to cut or not to cut - has grabbed a fair share of the media spotlight in recent weeks, with a number of experts plugging principal reduction as a practicable means of ensuring homeowners don't redefault on their modified loan. While lenders are often prohibited from trimming the principal by agreements with investors, one such group, representing holders of some $100 billion in mortgage securities, is lobbying Congress to enact legislation that addresses the problem of underwater mortgages by reducing the debt.

Lowers & Associates (L&A), an independent provider of risk management and loss prevention services to the financial services sector, recently announced its new commercial mortgage asset management (CMAM), workout, and loan restructuring services.

Even with improvements beginning to peek through the debris of the housing crisis, mortgage defaults continue to rise at an incredible rate, and the story is no different for the federal government's mortgage insurance agency. The latest numbers from the Federal Housing Administration (FHA) show that loans at least 90 days past due hit 9.12 percent at the end of 2009. That figure is up from 6.82 percent one year earlier. Foreclosures also soared 41 percent, but short sales as a means of avoiding foreclosures outpaced even that figure, increasing 140 percent.

Lender Processing Services (LPS) turned a $74.9 million profit in the fourth quarter, or 77 cents per share. The Florida-based company attributed its success to record improvements in its loan facilitation business, as well as solid demand for its default services as lenders continue to seek out efficiencies to handle a still-growing number of defaults and foreclosures.