Tag Archives: Foreclosure Prevention

Fannie Mae has issued a notice to servicers detailing changes to how they should evaluate ""imminent default"" and how they determine the market value of properties for pre-foreclosure sales. The GSE is requiring servicers to apply the imminent default test now used only for HAMP modifications to all non-HAMP mods secured by owner-occupied properties. In addition, Fannie Mae is requiring servicers to use only approved providers for broker price opinions or appraisals on short sales and deeds-in-lieu.

The attorneys general for the states of Illinois and California are casting a wider net in their investigations of faulty foreclosure paperwork, issuing subpoenas against two Florida-based firms that provide mortgage servicing support to lenders and servicers across the country. The state counsels say they have received reports of robo-signing practices on the part of the two firms - LPS and Nationwide Title. Statements from the AGs indicate that the reach of both companies and their extensive client bases have put them on the radar.

Bank of America will leverage the federal government's Hardest Hit Fund (HHF) through participation in unemployment assistance programs in all 18 eligible states and the District of Columbia. The HHF targets states with sustained unemployment rates at or above the national average and falling property values. Collectively, state housing finance agencies have about 2,700 applications for unemployment assistance in process for BofA customers and have provided $2.8 million toward mortgage payments for the benefit of more than 700 customers.

The Ohio Attorney General's office and Ohio Department of Commerce have announced an assurance of voluntary compliance (AVC) with Carrington Mortgage Services, LLC to resolve a 2009 lawsuit. The AVC will also provide relief to Ohio homeowners facing foreclosure. The three parties agreed to several mortgage servicing standards that will apply to all Ohio loans serviced by Carrington Mortgage Services, including providing borrowers who complete a modification application with a single point of contact.

GMAC Mortgage said Tuesday that the company has signed contracts with all states participating in the Treasury Department's Hardest Hit Fund (HHF). The HHF program was established to provide targeted aid to homeowners in states hit hard by the economic and housing market downturn, specifically, states where unemployment rates are above 12 percent and home prices have experienced the steepest drops.

Negotiation talks continued this week between state attorneys general and the nation's largest mortgage servicers to settle robo-signing allegations, and those on the states' side of the table began throwing out big numbers to convince servicers they should ante up. Attorneys general advised representatives from the five largest servicing shops that they would be on the hook for at least $17 billion from civil lawsuits alone if the two parties don't reach a settlement agreement.

With millions falling behind on their mortgage payments and declining property values eating away at home equity, short sales are increasingly being looked to as an alternative to foreclosure. CoreLogic says the number of short sales has tripled in the last two years, and they're expected to increase another 25 percent in 2011. Such growth, though, can open the gate for fraudulent activity. CoreLogic estimates lenders, servicers, and investors may incur potential losses in excess of $375 million this year from ""suspicious"" short sales.

Quandis, Inc., a provider of default management technology solutions, recently launched a service that runs searches on active military personnel. The technology was developed to allow mortgage servicers to comply with the Servicemembers Civil Relief Act (SCRA), which dictates that servicers and foreclosure attorneys must follow certain processes before foreclosing on an active person in the U.S. military.

California Attorney General Kamala Harris announced the creation of a 25-person task force on Monday charged with protecting homeowners from mortgage fraud. Within the last year, the California Department of Justice says it has received thousands of complaints related to foreclosure scams and mortgage servicing practices. In addition to fraud on the default side of the business, the task force will be on the lookout for misconduct and false claims involving investments and securities tied to subprime mortgages.

Treasury has launched a Web-based tool that allows homeowners themselves to conduct a net present value (NPV) assessment of their mortgage. Under the Home Affordable Modification Program (HAMP), servicers perform an NPV test to determine if modification is a more financially sound route to take than allowing the loan to proceed to foreclosure. Treasury is encouraging both homeowners who have been denied a HAMP mod and those considering applying for the program to use the new online calculator and share the results with their servicer.