Tag Archives: Foreclosure Prevention

One in three Americans would be unable to make their mortgage or rent payment beyond one month if they lost their job, according to the results of a national survey taken in mid-September. Job loss has become the primary driver of mortgage defaults. With the state of the labor market posing one of the biggest obstacles for struggling homeowners and their lenders, a number of programs at both the national and state level have been launched to assist unemployed homeowners, but so far the expected results haven't materialized.

As delinquencies and impending foreclosures rose, New England states responded with foreclosure prevention programs, generally falling into one of two categories: foreclosure mediation and financial assistance. The Federal Reserve Bank of Boston examined these efforts to determine ways other states can learn from them. Five of the six New England states have their own mediation programs, and Massachusetts created a program allowing negotiation without a mediator.

Data released Thursday by a federal banking regulator provides a snapshot of mortgage performance over the second quarter of this year. Both early stage and serious delinquencies increased slightly compared to the previous three-month period, as did completed foreclosures, while new modification actions fell nearly 20 percent. Perhaps the most troubling result in the report is post-modification performance. Of loans modified since the beginning of 2008, nearly half have since gone delinquent.

Wells Fargo says it will increase its commitment to credit counseling nonprofits by $5.4 million to a total of $12.4 million in 2011 - a 35 percent increase over the $9.2 million in 2010 - for national and local credit counseling agencies. The company notes that public funding for credit counseling is becoming more scarce, while demand for such services is growing. Wells Fargo's $5.4 million in new commitments this year will be provided in the form of grant money directly to nonprofit agencies and support foreclosure prevention counseling services and training.

Servicers completed about 56,000 proprietary permanent loan modifications in the month of August - similar to their July efforts. Most of these modifications included reduced principal and interest payments and fixed interest rates for five years or more, according to HOPE NOW data released Wednesday. While proprietary loan modifications remained level, foreclosure starts increased 18 percent, rising from 185,000 in July to 218,000 in August.

The Federal Housing Finance Agency (FHFA) is seeking public comment on two new compensation structures for mortgage servicing. The agency says the current model was not designed for today's market conditions. After meetings and discussions with various stakeholders, FHFA has put forth two alternatives. One proposal would establish a reserve account within the current servicing compensation structure. The other proposal would create a new ""Fee for Service"" model.

With the deadline for the Emergency Homeowners' Loan Program (EHLP) just a couple days away, HUD says it does not expect to meet the program's original goal of helping 30,000 homeowners, even after two deadline extensions. According to a HUD spokesperson, the main obstacle stems from the ""statutory requirements of the program and the statutory time limits."" The agency says approximately 75 percent of the applicants rejected did not meet the criteria of the program.

Processing delays have taken their toll on first-time homebuyer interest in short sales, according to the latest HousingPulse Tracking Survey released Monday. First-time homebuyers were a part of 39.7 percent of the short sale transactions completed in August. That's the lowest percentage for this buyer segment ever recorded by the survey. The study found that the average time-on-market for short sales is 16.6 weeks, with the majority of that time spent waiting for approval.

A year after evidence of robo-signing related to the processing of home foreclosures surfaced, state attorneys general don't seem to be any closer to a consensus on what should and shouldn't be included in the settlement. In fact, dissension among states' lead counsels is growing. Attorneys general from Kentucky and Minnesota have now joined the faction questioning the thoroughness of the investigation. Of particular concern is liability related to securitizations and the use of MERS.

Illinois Governor Pat Quinn announced a program last week that he says will help approximately 15,000 homeowners threatened by foreclosure. The Illinois Hardest Hit program utilizes $345 million in federal funds to support families who are having trouble making their mortgage payments due to unemployment or underemployment. Eligible participants will receive up to $25,000 over 18 months as a 10-year loan to keep their mortgages current. The loan is forgiven over the last five years of the 10-year term and carries zero interest.