News

Ally Financial Inc. reported a profit for the second quarter of 2011, but its results were down from previous earnings. Net income for Q2 was $113 million, a decline from $146 million in the previous quarter and from $565 million one year ago. The company says reducing risk in its legacy mortgage portfolio has been among the top priorities. Ally's GMAC Mortgage has completed more than 700,000 loan workouts for defaulted homeowners since 2008. The mortgage unit says it modifies two loans for every one foreclosure.

On a national level, mortgage fraud risk has declined 2.3 percent over the year but has remained relatively steady for the last five quarters, according to Interthinx's second-quarter risk report. Three states where the risk of mortgage fraud remains highest are Nevada, Arizona, and California. Separately, the FBI released its own report, citing short sale fraud as a growing problem. The FBI says industry insiders and organized crime groups from overseas are the most common perpetrators of mortgage fraud.

Sales of foreclosed REO homes and short sales continue to dominate the Las Vegas market. These distressed sales made up nearly 70 percent of the region's home resales in June, according to the research firm DataQuick. REOs accounted for 58 percent of existing-home sales during the month, while short sales comprised 11 percent. With such a heavy presence of distress, the median home price in the Las Vegas metro area dropped to $115,000 in June - the lowest it's been since October 1995.

Williston Financial Group, LLC (WFG) has named title industry veteran Lynn Riedel president and manager of its Puget Sound division. Riedel will oversee the former Northpoint Escrow & Title operation, acquired by WFG in July 2011. She has over 33 years' experience in the title and escrow industry, most recently having served as a VP with Northpoint.

Third-party investors are much faster at reselling foreclosures than banks, according to the tracking firm ForeclosureRadar. It keeps close tabs on foreclosure activity in states along the country's western seaboard, and the company says one market dynamic that's consistent throughout the area is that investors are moving foreclosed homes at a more rapid pace than lenders who take possession of REOs. For example, California banks on average take 104 days longer to dispose of REOs than third-party investors do to resell their distressed assets.

Claims Recovery Financial Services, LLC (CRFS), a nationwide provider of post-foreclosure claim processing management solutions, announced this week that it has begun offering a host of consulting and training services to educate, inform, and assist lenders, mortgage service companies, and financial institutions. The company says the inclusion of consulting services is a direct response to the significant turmoil within the mortgage industry that has forced lenders to bring on new personnel and provide additional training to existing staff.

Fannie Mae and Freddie Mac have suspended Republic Mortgage Insurance Company (RMIC) and Republic Mortgage Insurance Company of North Carolina as approved mortgage insurers. According to North Carolina law, mortgage insurers must maintain at least one twenty-fifth of their aggregate insured risk outstanding. RMIC fell below this amount in September 2010 but was granted waivers from the North Carolina Department of Insurance. A recent extension of the waiver is set to expire August 31.

American Home Mortgage Servicing Inc. (AHMSI) signed a settlement with Massachusetts Attorney General Martha Coakley agreeing to implement a consent judgment between the Commonwealth of Massachusetts and Option One Mortgage Corporation, which AHMSI acquired in April 2008. In conjunction with the settlement, Coakley also dismissed claims against Coppell, Texas-based AHMSI. The servicer did not incur civil penalties or any other costs.

Bank of America has sold the servicing rights of 400,000 home loans to Fannie Mae, according to media reports. The unpaid principal balance on the loans is said to be $73 billion. The loans were sold at a price of $500 million. BofA's CEO Brian Moynihan referenced a sale of mortgage servicing rights in a CNBC interview this week, but did not name the purchaser. A BofA spokesperson told DS News the sale is consistent with steps the company is taking to address legacy mortgage issues and position for growth.

Turbulent financial markets served to push mortgage interest rates to new lows this week. Despite the much-ballyhooed downgrade by S&P, investors made a run on Treasuries to send yields plummeting, and the Federal Reserve pledged to keep a key interest rate near zero for two years. Both had a profound effect on mortgage rate trajectories. Freddie Mac puts the 30-year fixed rate at 4.32 percent, a new low for 2011, with the 15-year fixed and adjustable-rate mortgages setting all-time record lows.