Loss Mitigation

The Corvus Group, a Washington, D.C.-area firm with nearly $10 billion of real estate assets under management from failed banks, has formed a Troubled Asset Advisory Group (Corvus TAAG). The group, based in Chicago, says it provides specialized staffing and advisory services to companies involved with troubled and distressed commercial real estate and homebuilder/residential development debt.

In an effort to bring Web-based tools to homeowners in need of foreclosure prevention assistance, Columbia, Maryland-based IndiSoft and Financial Literacy Solutions (FLS), headquartered in Coral Springs, Florida, have entered into a strategic partnership.

The Federal Housing Finance Agency (FHFA) recently released its monthly Foreclosure Prevention Report, which summarizes loss mitigation activity for Fannie Mae and Freddie Mac. Under the administration's Home Affordable Modification Program (HAMP), the GSEs have initiated 43,000 permanent modifications and 442,500 active trials. FHFA also reported that in 2009, the two companies refinanced more than 4 million loans for struggling homeowners.

Defaults on home loans held by Fannie Mae and Freddie Mac continue to climb, but the two aren't taking the losses lying down. The GSEs' forced banks to buy back $7 billion in soured loans during the first nine months of 2009, and it's the largest lenders that are taking the biggest hit. A growing number of community banks, on the other hand, are seeing interest from discerning buyers for assets already identified as ""bad loans,"" and they're shrinking their nonperforming portfolios by as much as 80 percent with one sale.

The congressionally appointed committee charged with overseeing the government's $700 billion Troubled Asset Relief Program (TARP) headed to Atlanta to hold a hearing on problems in the commercial real estate (CRE) sector. Specifically panel members are hoping to get a better grasp on how CRE woes will affect the banking system and the role of TARP in addressing that impact, hoping to stave off another real estate-induced financial meltdown.

Loan Resolution Corporation (LRC), a pre-foreclosure asset manager based in Scottsdale, Arizona, recently announced that it has successfully completed its Statement on Auditing Standards No. 70 (SAS 70) Type II certification, the widely recognized auditing standard developed by the American Institute of Certified Public Accountants.

Freddie Mac and 13 national and local nonprofit organizations have launched a pilot effort aimed at convincing discouraged delinquent borrowers to pursue mortgage workouts to save their homes from foreclosure. Freddie Mac has set up new Borrower Help Centers in Chicago, Phoenix, San Bernardino, and Washington, D.C. to provide mortgage counseling to delinquent Freddie Mac borrowers. The company is also launching a separate national phone campaign to reach distressed borrowers across the nation.

Raymond A. Redlingshafer was recently named senior managing director of Clayton Holdings, LLC, a provider of customized risk analysis, loss mitigation, operational solutions, and staffing services to the mortgage industry, according to an announcement Thursday by the Shelton, Connecticut-based company.

Treasury said Thursday that it will begin requiring servicers to obtain all required documentation upfront, prior to evaluating a borrower for a trial plan under the Home Affordable Modification Program (HAMP) - an about-face from the current process where trial mods can be initiated based on stated, not verified, income. Treasury officials also fielded speculation that they might make principal reduction a more central component of the program. They currently have no plans to address negative equity under HAMP, but called it a ""serious policy concern.""

Technology provider Equator has announced the launch of its new agent-initiated short sale feature, which gives agents the ability to request a short sale on behalf of their homeowner clients, initially bypassing the lender to open up the process on their own. The company says agent initiation makes the progression easier for both the borrower and the lender, and brings short sales to fruition in dramatically less time.