News

Freddie Mac plans to re-securitize certain mortgage loans that were previously delinquent but have been reinstated to current, performing status. The new-issue bonds will not, however, include loans that have been modified. The GSE says this new avenue for securitization will provide more flexibility for the company to manage its mortgage-related investment portfolio and its distressed assets. Freddie Mac expects to make its first offering of reinstated loans later this month.

California Attorney General Kamala Harris reportedly sent subpoenas to Fannie Mae and Freddie Mac, requesting information about their servicing, foreclosure, and property leasing actions in the state. The attorney general's office also intends to investigate the GSEs' actions regarding purchases of ""toxic mortgages."" With one of the highest default rates in the nation, Harris has been actively seeking aid for California homeowners and has recently lobbied for increased principal reductions from Fannie and Freddie.

Clayton Holdings announced Friday that it has agreed to buy Green River Capital. The transaction is expected to close within 60 days. No financial details were announced. Green River will become a wholly owned subsidiary of Clayton Holdings. The company will continue to operate as a standalone business, under its current brand, in its current location, and will be led by its current management team.

There were 6,298,000 mortgages going unpaid in the United States as of the end of October, according to Lender Processing Services (LPS). It's a daunting number, but the data show that it's actually been on a fairly steady decline for nearly two years now. At the start of 2011, the total number of non-current mortgages in the U.S. stood at 6,870,000. In January 2010, it was 8,118,000. LPS' report indicates mortgage delinquencies are declining while the nation's foreclosure inventory is growing.

Fannie Mae and Freddie Mac have notified servicers that they can no longer refer foreclosure or bankruptcy cases to the law firm of Steven J. Baum, P.C. in upstate New York. The Baum law firm has found itself at the center of controversy. In early October, the firm agreed to pay $2 million to end an investigation by the U.S. Department of Justice into its foreclosure practices. Two weeks after the DOJ settlement was announced, the New York Times ran photos of the firm's 2010 Halloween party, which depicted a mockery of homeowners who had been foreclosed on.

Members of a House subcommittee voted Thursday not to pass a bill which would have allowed banks to classify modified loans as accruing rather than non-accruing. While most members of the subcommittee agreed that, in many instances, examiners and regulators are posing undue hardship on community banks, the bill was shot down with 8 ayes and 10 nays. Those who opposed said it would allow lenders to manipulate their accounting so that they don't have to hold additional capital against a potentially problematic loan.

A deteriorating housing picture, coupled with an increase in expenses and a drop in consumer confidence, led to a sharp decline in consumers' financial health during the third quarter. The nonprofit credit counseling agency CredAbility puts out a regular quarterly index measuring consumer distress. Between July and September, the gauge recorded its largest drop since the third quarter of 2008. CredAbility's data show the average consumer has been in distress for 12 straight quarters now.

Data released by Freddie Mac shows the average rate for a fixed-rate mortgage with a 30-year term has hovered at or below the 4.00 percent threshold for three consecutive weeks. The GSE's latest study, averaging rate data from 125 lenders for the week ending November 17, puts the 30-year fixed-rate mortgage at exactly 4.00 percent. The 15-year fixed-rate mortgage, a popular refinancing choice, averaged 3.31 percent.

Mortgage industry veteran Miriam Mendieta, Esq. has joined forces with entrepreneur Jonathan Broder to launch ForeclosureReviewServices.com. The company is based in Miami, Florida and offers assistance to servicers by providing legal professionals who review foreclosure cases to determine if the borrower may have suffered financial injury. Mendieta previously served as an attorney for a large national creditor's rights firm in Florida. Broder, also an attorney, has specialized in securities litigation.

Nevada Attorney General Catherine Cortez Masto has filed criminal charges against two title officers for alleged robo-signing. The defendants are employed by Lender Processing Services (LPS) and are allegedly responsible for tens of thousands of fraudulent documents that made their way through the Clark County Recorder's Office from 2005 to 2008. LPS says it cooperated with Masto's investigation and was assured earlier in the month that the company was not a target of the attorney general's inquiry.