News

In just the first three months of operation, Fannie Mae's mortgage help center in South Florida has been able to provide assistance to more than 700 Miami-Dade metro area mortgage borrowers seeking to avoid foreclosure. The center, which offers free mortgage and financial counseling to homeowners at risk of foreclosure, was opened in late February through a partnership between Fannie Mae and Neighborhood Services of South Florida.

A new initiative announced Monday by HUD will give state and local governments and nonprofit groups participating in the department's Neighborhood Stabilization Program (NSP) preference to acquire homes from its inventory of foreclosed properties at discounted rates. This temporary program will provide NSP grantees an exclusive option to purchase HUD's REO properties before they are marketed to other purchasers. Furthermore, NSP purchasers will receive a 10 percent discount off the appraised value of the home.

Two banks in Maryland and one each in New York and Oklahoma were shut down over the weekend by their respective regulators, bringing the total number of failed FDIC-insured institutions to 90 so far this year. The FDIC says it expects bank closings to peak in the latter half of 2010, but already the industry is well on pace to far exceed the 140 bank failures that characterized 2009.

The Federal Housing Finance Agency (FHFA) is putting a host of private-label mortgage-backed securities (MBS) under the microscope in an effort to examine their role in losses suffered by Fannie Mae and Freddie Mac. As conservator of the nation's two largest mortgage investors, FHFA has issued 64 subpoenas seeking documents related to the GSEs' investments in private mortgage bonds. The agency is looking into whether the MBS issuers should be held liable and forced to buy back bad mortgages.

According to a recent report by DebtX, the aggregate value of DebtX-priced commercial real estate (CRE) loans that collateralize commercial mortgage-backed securities inched up to 76.6 percent as of May 28, 2010, rising slightly from 76.4 percent in April. Despite the month-to-month increase, loan prices were still down on a year-over-year basis, as CRE loan values were 77.6 percent in May of last year.

According to an article recently released by the Federal Reserve Bank of Cleveland, much can be gleamed by studying the historic link between foreclosure and unemployment rates--including the fact that according to past patterns, we can expect the current high foreclosure rate to persist for some time. This finding was based on the observation that states that experienced boom-bust housing cycles in the past (such as Texas, Oklahoma, Massachusetts, and California) had elevated foreclosure starts for years after the peak in foreclosure starts and inventory, and these previous boom-bust cycles were small in comparison to the current cycle.

Housing-related loan delinquencies improved across the board in the first quarter of 2010, the American Bankers Association (ABA) recently reported. According to ABA's quarterly consumer delinquency report, home equity delinquencies fell for the first time in two years to 4.12 percent of all accounts, down from 4.32 percent the previous quarter. Home equity lines of credit delinquencies and property improvement loan delinquencies also fell during the same period.

The average guarantee fee charged by Fannie Mae and Freddie Mac on single-family mortgages fell to 22 basis points in 2009, a dip from 25 basis points in 2008, according to a report released by the Federal Housing Finance Agency (FHFA). FHFA said this decline resulted from a significant improvement in the credit profile of the single-family mortgages the government-sponsored enterprises acquired relative to 2008. On a year-over-year basis, there were improvements across the product, credit score, and loan-to-value ratio spectrums.

Households across the nation have been negatively impacted by the foreclosure crisis, but African-American and Latino families have been hit the hardest, according to a report recently released by the Center for Responsible Lending (CRL). The report found that while the majority of families who have lost their homes are non-Hispanic and white, African-American and Latino families have been disproportionately affected relative to their share of mortgage originations. Among recent borrowers, CRL estimates that nearly 8 percent of both African-American and Latinos have lost their homes to foreclosure, compared to 4.5 percent of whites.

Wells Fargo is restructuring its financial division--a move which outlines for the closure of 638 Wells Fargo Financial stores, as well as for the company to stop originating nonprime portfolio mortgage loans. The bank said this move is the result of its 2008 acquisition of Wachovia Corp, which makes these units no longer necessary. Of the 14,000 employees at Wells Fargo Financial, approximately 2,800 positions will be eliminated within the next 60 days, with an additional 1,000 positions to be eliminated over the next 12 months.