Tag Archives: Foreclosure Prevention

The analysts at Fitch Ratings warn that before the housing market pulls out of this downturn, half of prime borrowers could wind up underwater on their mortgage. Data released last month by CoreLogic shows that one in five of all residential mortgages in the U.S. is in a negative equity position. But segment out just those homeowners with prime mortgages, and Fitch says one in three currently owe more on their mortgage than the home is worth.

Federal housing programs came under attack during a congressional hearing Thursday titled ""The Obama Administration's Response to the Housing Crisis."" Members of the Senate challenged witnesses with questions about the effectiveness of several programs, including the Neighborhood Stabilization Program and the Home Affordable Modification Program. Industry experts also discussed the potential of new initiatives, such as the REO rental proposal.

Treasury released a new progress report on its Home Affordable Modification Program (HAMP) Wednesday. The number of modifications granted continues to slip - fewer than 26,000 in August - but each month's results are chipping away at the pool of eligible borrowers who fit the HAMP criteria. Treasury's report comes just one day before a House subcommittee is scheduled to hold a hearing on the administration's response to the housing crisis, and one of HAMP's most outspoken critics is heading to Capitol Hill to testify.

With little faith that ongoing negotiations between state officials and major mortgage servicers will result in a fair and just settlement, Massachusetts Attorney General Martha Coakley signaled Wednesday that she will be taking her case to the courts. Coakley did not disclose which companies would be targeted, but cited servicers' failure to establish their right to initiate foreclosure and filings of false or misleading documents as the basis for the impending legal actions.

Fannie Mae has opened up a new Mortgage Help Center in St. Louis, Missouri, to provide free education and counseling services to struggling homeowners. The St. Louis facility is the GSE's 11th Mortgage Help Center to open across the country. It was developed in partnership with the Urban League of Metropolitan St. Louis, local community and elected officials, and area mortgage servicers.

The Federal Housing Finance Agency (FHFA) had knowledge of such foreclosure procedural abuses as robo-signing and falsified documentation years before these infractions made front-page headlines and triggered industry-wide investigations, according to the agency's own inspector general. Beyond a number of very specific red flags - including consumer complaints, media reports of foreclosure mills, and even public court filings - the inspector general says the sheer nature of market conditions should have been enough to lead FHFA to take action.

The National Federation of Community Development Credit Unions has completed a new Credit Union Foreclosure Intervention Toolkit to help credit unions combat the foreclosure crisis in their communities. The toolkit was developed with the support of a financial education grant from the National Credit Union Foundation (NCUF). The federation says it has seen the national foreclosure crisis reflected in a dramatic shift in demand between different types of counseling services, from pre-purchase to foreclosure intervention counseling.

California has withdrawn from settlement negotiations between the 50 state attorneys general and the nation's top servicers regarding robo-signing and other foreclosure-related violations. California's Attorney General Kamala Harris says progress has been made in identifying common-sense reforms to mortgage servicing, but she believes the current settlement proposal is ""inadequate"" for California homeowners. As the state with the highest incidence of defaults, California has been a significant participant in the negotiations.

If all of Fannie Mae's and Freddie Mac's borrowers paying interest rates that are higher than the median rate were to refinance at 4 percent, the savings would total $63 billion. While such an option would not bring the total $63 billion in savings to fruition, Moody's chief economist, Mark Zandi, says ""even a fraction would be a big plus."" According to Zandi, the single most effective policy move for the housing market would be to facilitate more mortgage refinancing.

Mortgage servicer Residential Credit Solutions (RCS) stands out from the crowd in today's world of almost commonplace ratings downgrades and default servicing challenges. RCS has been awarded two upgrades from Fitch of its primary servicer rating for subprime products and its special servicing rating. Fitch said the rating actions reflect the company's 'high touch' servicing approach, competitive performance metrics, and effective default and foreclosure practices.