News

The Federal Housing Administration's (FHA) reserves have fallen below legal limits, and the agency now holds $4.7 billion against a $1 trillion portfolio. According to reports recently released by FBR Capital Markets & Co. and HUD's Office of Inspector General (OIG), FHA may crack down on lenders and servicers and may not be paying out default claims quite as generously as in the past. FBR says FHA claim denials could cost the industry as much as $13.5 billion.

The National Federation of Community Development Credit Unions has completed a new Credit Union Foreclosure Intervention Toolkit to help credit unions combat the foreclosure crisis in their communities. The toolkit was developed with the support of a financial education grant from the National Credit Union Foundation (NCUF). The federation says it has seen the national foreclosure crisis reflected in a dramatic shift in demand between different types of counseling services, from pre-purchase to foreclosure intervention counseling.

Bank of the Cascades has agreed to sell off a chunk of nonperforming, substandard, and related performing loans with a book carrying value of approximately $108 million. Included in the sale is an additional $2 million of the bank's other real estate owned (OREO) assets. Bank of the Cascades says the transaction will result in a reduction of nonperforming assets by approximately 38 percent.

Real estate auctioneer and loan sales advisor Auction.com announced Monday that the company has named Elizabeth O'Brien managing director and SVP. O'Brien was hand-picked by CEO Jeff Frieden to expand Auction.com's residential mortgage notes platform and lead the firm's residential capital markets business. She previously served as a director in mortgage finance within Citi's fixed income division.

Data released by Lender Processing Services (LPS) Monday shows that foreclosure starts were up in August by 19.7 percent when compared to the previous month. However, overall foreclosure starts were down more than 12 percent from August of last year. At the same time, LPS says the number of loans in the 90-plus day delinquency bucket on which foreclosure has not been initiated has contracted to levels not seen since 2008, and the loan deterioration rate is less than half that seen in 2009.

California has withdrawn from settlement negotiations between the 50 state attorneys general and the nation's top servicers regarding robo-signing and other foreclosure-related violations. California's Attorney General Kamala Harris says progress has been made in identifying common-sense reforms to mortgage servicing, but she believes the current settlement proposal is ""inadequate"" for California homeowners. As the state with the highest incidence of defaults, California has been a significant participant in the negotiations.

CoreLogic has launched a supplemental consumer credit report to help lenders mitigate risk by uncovering additional debt obligations, as well as increase new lending opportunities by identifying previously hidden credit behavior that could improve a consumer's credit profile. CoreScore consumer information is merged with traditional credit data into a single, integrated report. The supplemental data is sourced from CoreLogic's proprietary databases, which include nearly 1 billion consumer transaction records.

A new quarterly survey of bank risk professionals from FICO paints a decidedly pessimistic picture of housing's future. The company describes its latest results as a reversal of the growing optimism seen in late 2010 and early 2011. The survey shows that bankers expect mortgage defaults and foreclosures to remain elevated for at least five more years, and housing prices nationally to hold below the pre-crisis levels of 2007 until the year 2020.

If all of Fannie Mae's and Freddie Mac's borrowers paying interest rates that are higher than the median rate were to refinance at 4 percent, the savings would total $63 billion. While such an option would not bring the total $63 billion in savings to fruition, Moody's chief economist, Mark Zandi, says ""even a fraction would be a big plus."" According to Zandi, the single most effective policy move for the housing market would be to facilitate more mortgage refinancing.

MISMO, the not-for-profit data standards subsidiary of the Mortgage Bankers Association (MBA), presented its Staff Appreciation Award to Leendert Bijnagte, business systems consultant at Wells Fargo Home Mortgage. The award was presented to Bijnagte at the MISMO September Trimester Meeting in Broomfield, Colorado, for his outstanding commitment and service to MISMO.