News

The Federal Reserve published its latest edition of the popular Beige Book Wednesday. Based on information received from contacts in the field, the central bank says economic activity across the country ""continued to expand moderately"" during the last part of 2010 with steady improvements seen in labor markets. However, the real estate sector, and residential housing in particular, continues to be a significant hurdle for the economic recovery, with local housing markets characterized as ""sluggish.""

The Mortgage Bankers Association (MBA) on Wednesday filed a lawsuit against the U.S. Department of Labor (DOL) in an attempt to set aside a March ruling by the department that declared loan officers are entitled to overtime pay. In 2006 DOL issued an interpretation to MBA stating that typical loan officers were exempt from overtime pay. But in March of 2010, DOL released an administrative interpretation that rescinded the previous opinion, now mandating that loan officers are entitled to overtime pay.

According to RealEstate Business Intelligence (RBI), a source of real estate data, analytics, and business intelligence for real estate professionals in the Mid-Atlantic, the Baltimore housing market continued to look bleak in December. Based on figures from RBI's newly launched pending home sales index, the average price of homes sold in the Baltimore area dropped 6.6 percent, from $283,269 at the end of 2009 to $264,500 by the end of 2010. At the same time, active listing inventory grew by 10 percent.

A recent report examining the role of private mortgage insurance reveals the instrument serves a vital role in helping to establish stability within the housing market. The study, conducted by Promontory Financial Group, provides a review of how private mortgage insurance policies protect mortgage lenders and investors against the risk of defaulted mortgages by taking on a part of that risk, and how they make private capital more readily available to a broader range of potential borrowers.

The number of mortgage applications filed by consumers rose last week as interest rates eased and more homeowners moved to refinance their home loans. According to data released by the Mortgage Bankers Association (MBA) Wednesday, total mortgage loan application volume increased 2.2 percent for the week ending January 7, 2011, when compared to the previous week. It marked the second week in a row that application volume has climbed as MBA's index hit its highest level in nearly a month.

LRES Corporation, a provider of valuations and asset management for the mortgage, banking, and real estate industries, now uses TrackPoint REO technology to facilitate real estate-owned transactions on behalf of its clients. Created by DepotPoint, Inc., TrackPoint is a workflow and tracking system and the foundation of DepotPoint's default servicing applications, including TrackPoint Loss Mitigation and TrackPoint REO.

As the backlog of foreclosures continues to drive down housing prices, losses on private-label residential mortgage backed securities (RMBS) will increase in 2011, according to Moody's. The forecast for more red ink seeping from home loans sold to investors comes despite the fact that the agency believes the rate at which loans become delinquent will decline during the year. Moody's expects flaws in foreclosure practices that have recently come to light to delay foreclosures by three to six months, further extending the window of losses for investors.

Reports have surfaced that the FDIC is contemplating stricter requirements that would force banks to disclose what potential ramifications a loan modification on a first lien they service would have on an underlying lien. Industry analysts have speculated that servicers may be reluctant to modify a primary loan because the bank that services the loan also holds the second lien. Such an arrangement could be considered a conflict of interest and prompts some to wonder if investors would be swayed if they knew of the arrangement beforehand.

Lenders across the country are facing demands from mortgage investors to buy back faulty loans. Analysts praised Bank of America's settlement with the GSEs earlier the month for setting a precedent that other banks could follow to reconcile with investors, but some community lenders are already ahead of the game. StellarOne Corporation in Virginia says it has reached an agreement with one of its primary mortgage investors to resolve repurchase and indemnification claims to the tune of $1.45 million.

In November after the robo-signing scandal broke, New York City Comptroller John C. Liu, on behalf of the New York City Pension Funds, called on the directors at Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo - which together service more than half of the nation's mortgages - to conduct an independent audit of their foreclosure practices. This week, Liu issued a demand for the banks to immediately follow through on that request, this time backed by 11 major public pension funds from several states.