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Loss Mitigation

NY AG Alleges Servicing Violations, Threatens to Sue BofA, Wells Fargo

New York Attorney General Eric T. Schneiderman revealed plans Monday to take legal action against Bank of America and Wells Fargo for allegedly violating terms under the national mortgage settlement reached in February 2012. Schneiderman's office is accusing the banks of 339 servicing violations related to the timeline for processing mortgage modifications. ""Attorney General Schneiderman has referenced 129 customer servicing problems which we take seriously and will work quickly to address,"" a BofA spokesperson stated in an email.

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LPS: Rate of New Problem Loans Approaching Pre-Crisis Levels

The rate of new loans that rolled into serious delinquency fell below 1 percent for the first time since 2007, Lender Processing Services (LPS) reported Monday. The new problem loan rate--defined as seriously delinquent mortgages that were current six months ago--inched down toward pre-crisis levels to 0.84 percent in March. The new problem loan rate averaged 0.55 percent from 2000 to 2004. As expected, when categorizing borrowers by equity position, LPS found borrowers with higher levels of negative equity tended to have higher new problem loan rates.

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Cuomo Announces Special Program for Sandy Victims

Fannie Mae and Freddie Mac are offering a relief program to victims of Superstorm Sandy who were current on their mortgage before the storm, Governor Andrew M. Cuomo of New York announced in a release Thursday. According to the release, the program is in response to letters the New York State Department of Financial Services (DFS) sent in April, which urged for a change in what Cuomo's administration called ""restrictive"" guidelines that could lead to a spike in mortgage payments for Sandy victims.

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Institutional Investor Trends in Atlanta and Their Impact on Housing

In a recent report, Radar Logic closely examined purchase trends and patterns from institutional investors in the Atlanta area. Among its findings, the research firm found investors have been targeting a different cross-section of homes compared to traditional buyers. According to the report, institutional investors are more likely to purchase homes that are cheaper, smaller, and located in lower-income areas compared to homes bought by non-investor buyers.

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Tight Lending, Foreclosures to Prompt Homeownership Declines

With the homeownership rate already at its lowest point since 1995, Capital Economics predicts further decline before a rebound occurs. The analytics firm predicted last July that the homeownership rate would fall to a low of 64 percent, and the firm is sticking to that forecast. The firm suggests the 64 percent low will come sometime ""within a year or so,"" and when it does, the market will have about 9 million more renters when the homeownership rate peaked. One of the major contributors to the ongoing decline in homeownership is the high level of foreclosures that continues to challenge the market.

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GSE Reminds Servicers of Default-Related Legal Services Requirements

In a notice Thursday, Freddie Mac encouraged servicers to prepare for new requirements for default-related legal services that will take effect in less than a month. Under the new requirement, Fannie Mae and Freddie Mac servicers must select qualified law firms by June 1 to handle all new referrals of default-related legal services, such as foreclosures, loss mitigation, bankruptcy, and related litigation.

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Ocwen Reports Surge in Profit, Record Revenue in Q1

Ocwen Financial Corporation experienced a surge in net income for the first quarter, which more than doubled over a year, and reported record revenue. In Q1 2013, Ocwen's net income jumped to $45.1 million, or $0.31 per share, up from 19.3 million, or $0.14 per share, a year ago. Revenue for the Atlanta-based company also surged 147 percent year-over-year to $406.7 million in Q1 2013, while income from operations increased 108 percent to $163.1 million during the same time period. ""Ocwen's core earnings and cash-flow were strong in the first quarter, and we should see these trend higher as a percentage of revenue as we drive down costs and delinquencies on newly acquired business,"" said Bill Erbey, Ocwen's chairman.

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Private Mortgage Insurers Report Improvements in March

Mortgage Insurance Companies of America (MICA) reported a lift in business in March, with dollar volume rising both month-over-month and year-over-year. At the same time, the number of private mortgage insurance applications received by MICA members totaled 43,278 in March, up from 36,793 in February and 32,540 in March 2012. March's application volume was the highest since last October, when MICA members reported receiving 46,045 applications.

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Obama Nominates New FHFA Leader

President Obama announced Wednesday his nomination of Rep. Mel Watt (D-North Carolina) to serve as FHFA's director, a role played by Edward DeMarco since he was appointed acting director in August 2009. Watt has represented his district for more than 20 years. In his time as a congressman, Watt has made it part of his mission to put a spotlight on predatory lending practices and to ensure access to mortgages for low-income borrowers. ""He's helped protect consumers from the kind of reckless risk-taking that led to the financial crisis in the first place,"" Obama said in his personnel announcement.

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