News

Amidst the housing crises came new challenges for more than just politicians, homeowners and those in the industry, but also for people with a penchant for art and design. Foreclosed: Rehousing the America Dream, is an exhibition that will be showcased at the Museum of Modern Art (MOMA) in New York. The exhibit will explore architectural possibilities against the backdrop of the depressed housing market.

To alleviate issues of foreclosure in one of the hardest hit areas, Illinois Governor Pat Quinn launched two initiatives. One effort will connect homeowners to resources to keep them in their homes, and another will help revitalize areas affected by foreclosed and vacant properties. Illinois is consistently ranked among the top 10 states with the highest number of foreclosures.

While the $25 billion settlement between five of the nation's largest servicers and 49 of the state attorneys general awaits approval from a judge, there is some relief in the industry that the 16 months of investigation and negotiation has come to a close. Mike Heid, president of Wells Fargo Home Mortgage, says the agreement represents ""a very important step toward restoring confidence in mortgage servicing and stability in the housing market.""

Zillow forecasts home values will be on the decline through December 2012, but the decrease will be smaller than in 2011. Home values in the U.S. fell in the fourth quarter, with the Zillow Home Value Index sinking 1.1 percent after a less significant decline for the two previous quarters. Zillow's report also shows that the rate of homes foreclosed on increased slightly to 8.2 out of every 10,000 in December, compared to 8 out of every 10,000 homes in November.

Bank of America will pay $1 billion to the U.S. to settle on the largest False Claims Act relating to mortgage fraud. Since 2009, the U.S. attorney's office has been investigating lending practices from Countrywide, which BofA acquired in 2008. The results of the investigation led to allegations that the bank created loans insured by the Federal Housing Authority (FHA) to unqualified home buyers. BofA was also accused of originating loans based on inflated appraisals and failing to identify homeowners who could participate in the government's Home Affordable Modification Program.

Bank of America is experiencing a deluge of phone calls from homeowners wanting to refinance. Consumer demand is so high, in fact, that without some internal adjustment, it threatens to compromise the level of customer service delivered by the bank's fulfillment personnel and interfere with closing timelines. The company says it's not willing to sacrifice long-term customer satisfaction for short-term volume, and it has instituted a temporary stopgap measure that alerts customers when it is experiencing processing delays due to high volume.

The Office of the Comptroller of the Currency (OCC) and the Federal Reserve issued statements Thursday detailing monetary penalties they have levied against the nation's largest servicers for ""unsafe and unsound mortgage servicing and foreclosure practices."" The OCC is assessing a total of $394 million in penalties against Bank of America, Citi, JPMorgan Chase, and Wells Fargo. The Federal Reserve's monetary sanctions total $766.5 million and target the same four institutions as well as Ally Financial.

Property code violations come in all shapes and prices, but Field Asset Services (FAS) narrowed the list down to the top 10. The list is based on FAS's 30 mortgage and asset management clients; the company services more than 130,000 active properties on an ongoing basis. ""Cities and local municipalities across the nation are becoming more vigilant towards issuing code violations to reduce blight and improve neighborhood conditions,"" said Dale McPherson, CFO of Field Asset Services.

Thursday's unprecedented $25 billion settlement between federal and state officials and the nation's top mortgage servicers was especially favorable to California. After leaving settlement negotiations in September, claiming the proposal at the time was inadequate for California homeowners, Attorney General Kamala Harris opted to sign on to the final settlement, which was revised to secure $18 billion for the state of California. At the time Harris left the settlement, California was expected to receive about $4 billion from the banks.

While the $25 billion robo-signing settlement concludes 16 months of intense negotiations, questions still remain on how this will impact borrowers and the larger economy. Capital Economics stated that while it is good that the settlement has been finalized and will offer principal reductions and refinancing schemes to borrowers, the bigger picture is that the settlement is not large enough to dramatically alter the outlook for the housing market or the wider economy.