Loss Mitigation

Many have argued that Countrywide Financial and its top executives carry a large portion of the blame for the current state of the housing market and the vast amounts of bad loans that have now infiltrated the nation’s financial system.

The U.S. House of Representatives approved legislation on Thursday that will allow bankruptcy judges to reduce the principal amount of mortgage loans. The proposed law has received stiff opposition from the banking and mortgage industries, but the Obama administration and Democratic lawmakers have been unrelenting in pushing the so-called cramdown legislation through Congress.

The national unemployment rate rose to 8.1 percent in February, the highest the stat has reached in a quarter century. The Bureau of Labor Statistics reported on Friday that 651,000 workers lost their jobs last month.

The Mortgage Bankers Association (MBA) released its Mortgage Delinquency Survey for 2008 on Thursday, which showed that Americans fell behind on their mortgages and banks seized homes at a record pace in the fourth quarter of last year.

Amidst the announcement of President Barack Obama’s housing plan, and with mortgage rates reaching historic lows, Seattle-based real estate web site Zillow.com reports record-breaking traffic and loan request activity within its free marketplace for custom mortgage quotes.

The Treasury Department released guidelines on Wednesday that will enable servicers to begin modifications of eligible mortgages under the administration’s Homeowner Affordability and Stability Plan – announced by President Barack Obama just two weeks ago.

HOPE NOW, a foreclosure prevention alliance of mortgage servicers, non-profit counselors, and investors, today announced that its members and the larger mortgage lending industry modified 123,000 mortgages in January 2009.

Citigroup announced on Tuesday that it is initiating a new mortgage program to help the rising numbers of unemployed Americans hold onto their homes. The initiative is aimed at those homeowners whose economic conditions have changed because of the deteriorating national economy, leaving them unable to meet their mortgage obligations.

With President Obama’s recent proposal to provide $75 billion to help modify home loans, millions of Americans on the brink of foreclosure now have hope in sight. But what’s uncertain, particularly for those who are facing imminent foreclosure, is how quickly the assistance will funnel down the pipeline to homeowners.

Washington, D.C.-based Fannie Mae reported a loss of $58.7 billion, or ($24.04) per diluted share for fiscal year 2008. The GSE’s annual deficit is a significant increase from 2007, when the company reported a loss of $2.