News

As state attorneys general and major U.S. banks continue to work toward a settlement, questions abound regarding the amount of legal liability the mortgage servicers should and will maintain after an agreement is signed. Media reports have surfaced claiming a draft proposal put forth by the attorneys general includes language that could prevent officials from bringing securitization claims in the future, but the negotiating committee for the states is adamant that servicers will not be released from all civil liability or any criminal liability.

The Federal Housing Finance Agency's decision to pursue legal action against firms that sold residential mortgage-backed securities to Fannie Mae and Freddie Mac could potentially strain relationships between the GSEs and the companies named as defendants, many of whom still sell mortgages to Fannie and Freddie and service home loans held by the two mortgage financiers. Some of the financial firms have been forthcoming with pledges to aggressively defend themselves against the allegations and are disappointed by the fact that FHFA has taken to the courts.

After the mortgage industry lost more than 2,000 jobs in the first half of 2011, things may pick up later in the year, according to a newly released analysis of mortgage sector employment. During the second quarter of this year, the mortgage industry recorded a net loss of about 500 positions. The loss for the three-month period is less than the previous quarter's net job loss of 1,804. Looking forward, the report predicts a possible increase in hiring as mortgage rates remain at record lows and poor loan performance necessitates more manpower.

Spectrum Field Services Inc. provides financial institutions across the country with specialized REO preservation and specialty inspection services. Spectrum has been using the third-party certification technology from Pruvan to offer select clients proof-of-performance reporting on inspections since early 2011. Based on the results it's seen so far, Spectrum has decided to extend the service to all of its customers.

State and federal regulators on Friday closed the doors on two Georgia lenders, bringing the number of names on the FDIC's failed-bank list to 70 for the 2011 calendar year. The state of Georgia's banking industry has been especially hard-hit by the real estate and economic downturns. It's been home to the most bank failures since the crisis set in, with 19 institutional closings over the last eight-and-a-half months. Patriot Bank of Georgia in Cumming and CreekSide Bank in Woodstock are the latest casualties.

Fannie Mae is bolstering the incentive fees paid to servicers modifying the GSE's loans through the Home Affordable Modification Program (HAMP). The new incentives apply to all HAMP mods with a trial period effective date of October 1, 2011 or later. In a servicing policy update, Fannie Mae explained that it will begin paying servicers based on a tiered incentive structure that coincides with the number of days the mortgage loan has been delinquent when the trial plan starts.

The Federal Housing Finance Agency (FHFA) is suing 17 financial institutions in an attempt to recover losses incurred by Fannie Mae and Freddie Mac from mortgage bonds purchased between 2005 and 2007. Based on initial reports, FHFA is looking to recoup as much as $45 billion. At least one financial analyst believes the matter will end in a settlement significantly south of that amount. Others say a more long-lasting impact may come in the form of higher mortgage costs for consumers.

HUD has announced that it will distribute more than $10 million to housing counselors throughout the country. Grants have been awarded to 139 local counseling agencies and 23 housing counseling intermediaries. The funding is specifically earmarked to help distressed homeowners with mortgage modifications and other loss mitigation options, and to combat scams perpetrated by fraudulent foreclosure rescue companies. HUD says the grant money is unspent funding from its 2010 appropriation.

After rising in July, CMBS delinquencies picked up their downward trend again in August, decreasing 36 basis points to 9.52 percent. This drop is the third in the past four months, according to analysis released by Trepp LLC, a provider of commercial real estate data. Serious delinquencies also declined for the month and now make up 8.79 percent of commercial mortgage loans. According to Trepp, August's decline was the largest recorded since 2008 when the credit crisis began.

StreetLinks Lender Solutions says the company can ensure compliance with phase one of the Uniform Mortgage Data Program (UMDP) for appraisals ordered through both its full-service AMC solution, LenderPlus, and self-managed appraisal software platform, LenderX. All appraisals on loans destined for Fannie Mae or Freddie Mac are now required to comply with new Uniform Appraisal Dataset (UAD) requirements. StreetLinks requires that appraisers provide their assessments in the UAD-compliant format.