News

After some consideration, the board of American International Group (AIG) announced Wednesday the company will not be joining in a lawsuit brought by one of its former executives against the U.S. government. The New York Times first reported Monday that AIG's board was mulling over its options regarding a $25 billion lawsuit filed by Starr International Company on behalf of AIG shareholders and spearheaded by former AIG CEO Maurice ""Hank"" Greenberg.

It's been months since New York Attorney General Eric Schneiderman filed suit against JPMorgan Chase over faulty mortgage-backed securities (MBS), but the bank is now coming out of its own corner swinging. Attorneys for the bank filed a motion to dismiss in early January, arguing that because Schneiderman brought his claims under the Martin Act (an article granting New York's attorney general increased power to combat financial fraud), they are subject to a three-year statute of limitations that has already elapsed.

The year 2012 is on its way to becoming the most affordable year housing has seen since recordkeeping began in 1970, according to data from the National Association of Realtors (NAR). In November, the NAR's Housing Affordability Index reached 198.2, down 2.5 index points from October, but up 1.5 points from a year ago. Based on data up to November, NAR also projects the index will set a record high of 194 in 2012, beating the high of 186 in 2011.

While the mortgage market continues its slow trod toward recovery--with distressed liquidations and delinquencies on the decline--industry participants await the final word from lawmakers on one key issue affecting the future of their businesses. The Consumer Financial Protection Bureau has expressed its intent to announce its final decision on what constitutes a qualified mortgage this year. This, in turn, will give the industry some insight into what can be expected to define a qualified residential mortgage (QRM), according to Fitch Ratings.

Fewer businesses in the mortgage industry went under in Q4 2012, according to data from Mortgage Daily. The number of mortgage businesses--banks, credit unions, and non-bank mortgage firms--that fell dark in Q4 of this year stood at 13, down from 17 in Q3 and halved from 26 during the same quarter in 2011, Mortgage Daily reported. In 2012 alone, 82 mortgage businesses had to shut their doors, a steep decrease from 137 in 2011 and the lowest number since 2006, when 31 businesses failed.

The National Association of Home Builders reported the First American Improving Markets Index rose for the fifth consecutive month in January. The index reached 242 and once again, achieved a record high. The index measured 201 in December. According to the NAHB, the list of improving markets now includes entrants from 48 states and the District of Columbia. The only states not represented are Kansas and New Mexico.

YouWalkAway.com, a foreclosure agency, conducted a survey of its clients and revealed 78 percent of those who responded said they were walking away from their primary residence. In addition, at least 74 percent of all respondents would be eligible for tax relief through the Mortgage Debt Relief Act of 2007. The Mortgage Debt Relief Act allows forgiven debt through a short sale, loan modification, or foreclosure to be excluded as taxable income. ""Had this law not been extended, it could have brought a drastic halt to short sales and had a devastating effect on underwater homeowners,"" said Chad Ruyle, YouWalkAway.com co-founder.

National home prices finished 2012 with a strong yearly gain, but prices fell flat quarter-over-quarter in December, according to a report from Clear Capital. Prices in December saw a 0.9 percent quarterly increase, remaining mostly unchanged from the 1 percent quarterly improvement in November, Clear Capital reported. Year-over-year, national home prices grew by 4.9 percent. The data provider expects to see continued growth into 2013, but estimates the increase will be slower at 2.1 percent.

The National Credit Union Administration (NCUA) filed its 10th action against a major Wall Street investment firm--this time, the defendant is JPMorgan Securities. NCUA's suit, which was filed in Federal District Court in Kansas, revolves around mortgage-backed securities (MBS) underwritten and sold by Washington Mutual Bank (WaMu), which was acquired by JPMorgan in 2008 following its collapse.

Nationstar Mortgage LLC, based in Lewisville, Texas, has agreed to purchase residential mortgage servicing rights (MSRs) in the amount of $215 billion in unpaid principal balance from Bank of America, the company announced Monday. Nationstar entered the agreement with backing from Newcastle Investment Corp., based in New York, and Fortress Fund, based in Barbados. Each company will retain one-third interest in the MSRs, and Nationstar will service all the loans. The purchase price for the portfolio is $1.3 billion.