Five California men were charged for allegedly operating a mortgage modification scheme and defrauding hundreds of victims under the business as CSFA Home Solutions, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and Orange County, California, District Attorney Tony Rackauckas announced Friday in a statement. Between January 2009 and March 2012, the defendants are accused of creating numerous fraudulent loan modification businesses through which they purported to offer loan modification assistance.

Former CEO of Brookstreet Securities Corp. was ordered by a federal judge to pay a maximum $10 million for securities fraud, the Securities and Exchange Commission (SEC) announced Friday in a statement. The SEC charged Stanley C. Brooks and Brookstreet in December 2009 with fraud due to the sale of risky mortgage-backed securities to customers who were not looking to purchase risky investments. The more than thousand customers who bought the risky Collateralized Mortgage Obligations (CMOs) through Brookstreet included seniors and retirees.

Treasury says servicers participating in the Home Affordable Modification Program (HAMP) are getting better at evaluating homeowners for eligibility. Its latest performance assessment found no company in need of ""substantial improvement."" OneWest Bank and Select Portfolio Servicing performed at the highest level, needing only minor improvement. As part of the $25 billion settlement announced last month, Treasury has agreed to release incentives previously withheld from Bank of America and JPMorgan Chase.

The principal reduction debate wages on with the Federal Housing Finance Agency (FHFA) standing firm in its resolve that the strategy is not the best option for the GSEs. ""Both companies have been reviewing principal forgiveness alternatives. Both advised me they do not believe that it is in the best interest of the companies to do so,"" FHFA Acting Director Edward DeMarco told the Senate Banking Committee. One senator asked why banks then are turning to principal forgiveness for 20 percent of modifications on their own loans.

Katherine Quinby joined Keystone in 2007 and will hold a new role as Closing Manager this year. Quinby's responsibilities will include ensuring proper file management and compliance throughout her team, as well as holding regular client management conference meetings to review and implement new initiatives.

Lender Processing Services announced that its LSI Title division is extending its Streamlined Settlement solution to help lenders meet the HARP 2.0 guidelines.

While mortgage originations are at their lowest level since 2001, investigations for mortgage fraud have shot up in recent years. As of December 31, 2011, the FBI reported 2,590 pending mortgage fraud investigations with 71 percent involving losses of more than $1 million. With increased levels of foreclosures and delinquencies over the past few years, schemes targeting distressed homeowners as victims have surged. Through FY 2011, FBI investigations resulted in 1,082 convictions of mortgage fraud criminals.

Despite recent reports of modest improvement in the health of the housing economy, Fitch expects the real estate sector to continue to depress the performance of banks, according to Fitch Ratings. Residential real estate is the largest exposure for banks since they make up $2.5 trillion, or roughly one-third of total loans, according to the agency. Home equity represents about 30 percent of this amount, with 1-4 family first lien mortgages making up the balance.

The Department of Justice reached a settlement today with Empirian Property Management Inc. regarding allegations that the management company refused to terminate leases for military members after the members received permanent change of station orders, the Justice Department announced today. The military members involved were on active duty in the Air Force and were assigned to Offutt Air Force Base in Sarpy County, Nebraska.

The first details on how mortgage servicers must fulfill their end of the $25 billion federal-state settlement can be found within the 233 pages of Wells Fargo's annual filing with the Securities and Exchange Commission. As expected, first-lien principal reductions carry the most weight in terms of credit towards each servicer's financial obligation. Forgiveness of past due payments for unemployed homeowners garner dollar-for-dollar credit, as do costs associated with demolishing vacant, foreclosed properties.