Loss Mitigation

In an effort to rebuild communities devastated by the foreclosure crisis, the National Association of Realtors (NAR) has partnered with the National Community Stabilization Trust (NCST), a nonprofit organization that facilitates the transfer of foreclosed and abandoned properties from financial intuitions to local housing organizations. The collaboration will bring more than 1,400 state and local Realtor associations into a side-by-side relationship with nonprofits and state and local leaders to develop targeted plans to bring stabilization to struggling neighborhoods.

Specialty servicer Statebridge Company has partnered with the American Legal & Financial Network (AFN) to establish a 50-state network of mortgage banking attorneys to assist Statebridge with its loan servicing efforts.

Bank of America announced Tuesday that it is the first mortgage servicer to sign an agreement formally committing to participate in the second-lien component of the Home Affordable Modification Program (HAMP). Bank of America, which services 3 million second liens, says it will modify eligible home equity loans and lines of credit regardless of whether the first lien is serviced by Bank of America or another participating servicer.

Despite the income verifications and trial modification periods being carried out by mortgage servicers, modified loans continue to redefault at extremely high rates. The debt ratings agency DBRS estimates that more than half of all restructured mortgages become delinquent or fall into foreclosure again within six months. As a result, DBRS expects modifications that forgive mortgage debt to become the preferred loss mitigation strategy for many servicers during 2010.

As DSNews.com recently reported, the Title/Appraisal Vendor Management Association (TAVMA) recently developed the Standards of Good Practice in Appraisal Management, and on Monday, Clear Capital, a provider of data and solutions for real estate asset valuation, announced its endorsement of these new guidelines.

After six straight years of double-digit growth, lenders' reports of suspected mortgage fraud remained relatively flat during the first half of 2009, according to a new government report. The Treasury's Financial Crimes Enforcement Network (FinCEN) said depository institutions reported 32,926 cases of possible mortgage fraud in the first six months of last year - just a 1 percent increase over filings during the same period in 2008.

In an announcement Friday, HUD said homeowners with mortgages insured by the Federal Housing Administration (FHA) who are experiencing financial hardship are now eligible for loss mitigation assistance before they fall behind on their mortgage payments. Previously, these homeowners were not eligible for such assistance until after they had missed payments.

Hotel asset managers are emerging as the new breed of experienced hotel receivers, according to Capital Hotel Management (CHM), a hotel asset management and investment advisory firm based in Beverly, Massachusetts. As the lending community looks for qualified receivers, the company said it expects to see an exponential leap in demand for hotel asset management services.

A team of mortgage finance and investment management veterans have announced the official launch of a new company, BlackBox Logic LLC. BlackBoxprovides investors, broker/dealers, and researchers with a database of loan-level collateral underlying non-agency residential mortgage-backed securities (RMBS).

Top officials from across the country warned policymakers in Washington this week that efforts to stem the housing crisis are falling short. According to a group of state banking regulators and attorneys general, six out of 10 seriously delinquent borrowers are not involved in loss mitigation efforts. Perhaps the most divisive proposal put forth by the group is that government programs should make principal reductions a priority in areas where home prices have plummeted.