Tag Archives: Foreclosure Prevention

Fitch Ratings has reviewed all U.S. subprime mortgage securitizations rated by the agency and found little change in expected losses for the bond investors as default risk improved slightly. However, the agency says loss severities have increased due to longer foreclosure timelines and still-declining home prices. Fitch says the average time to liquidate a distressed loan has increased by roughly six months from a year ago and now exceeds 20 months. Timelines are expected to increase further in 2011 as foreclosures continue to face procedural challenges.

Short Sale Association of America (SSAA) has officially launched its short sale platform to real estate agents and brokers. With over 12 million U.S. homeowners upside-down on their mortgage, Jonathan Bowman, founder of SSAA, notes that the industry certainly has its worked cut out, but he says the resources provided his organization will empower agents at all levels of expertise to reach and effectively assist as many distressed homeowners as possible.

The nation's second largest mortgage company says early workouts are central to its game plan for 2011. This ""nip it in the bud"" mindset can be key to getting in front of delinquencies before they turn into lost-cause foreclosures, and Freddie Mac says it's making changes to the way it evaluates the performance of mortgage servicers in order to ensure problem loans are tackled early on and increase the odds of getting borrowers back to performing status. Namely, the GSE is pushing servicers to make contact with homeowners by the third day of delinquency.

Word on the street is that Goldman Sachs is looking to sell off its mortgage servicing arm, Texas-headquartered Litton Loan Servicing. One publication's blog post says Litton never proved to be the distressed mortgage cash-cow that Goldman had hoped, while another financial news outlet reports that the servicing unit is indeed unprofitable at the moment. Industry data show that Litton's servicing portfolio has contracted by nearly 35 percent over the last two years.

House Republicans may have succeeded in passing legislation to end federal housing programs that are intended to provide assistance to unemployed homeowners and support efforts to clean up vacant foreclosed homes, but their Democratic counterparts aren't going to take it lying down. Rep. Barney Frank, the top-ranking Democrat of the House Financial Services Committee, has introduced legislation that would require the biggest banks and hedge funds to cough up $2.5 billion to keep those very same programs alive.

There were many who opposed the hefty bank bailouts after the financial crisis set in, and they still have their ethical argument against the government's decision, but the fiscal argument is growing faint. Treasury announced this week that over 99 percent of the funds disbursed to banks through the Troubled Asset Relief Program (TARP) have now been recovered. Even the largest bailout of all - that of Fannie and Freddie - is expected to shrink by nearly half over the next 10 years.

Midwest Real Estate Data (MRED) has teamed up with Fannie Mae to provide its brokers and agents with a service designed to shorten the time they have to wait for approval from the GSE on short sale transactions. MRED provides property listing services in northern Illinois, southern Wisconsin, and northwest Indiana. This week, the company announced the availability of the Fannie Mae Short Sale Assistance Desk for its coverage area. The tool has already been employed by MLSs in Florida and Nevada, and agents there are seeing the benefits.

As part of its crackdown on mortgage scams targeting homeowners facing foreclosure, the Federal Trade Commission (FTC) has charged a national operation with marketing bogus loan modification services. The complaint alleges that U.S. Mortgage Funding Inc., Debt Remedy Partners Inc., Lower My Debts.com LLC, and their principals mislead consumers to believe they are affiliated with or approved by consumers' lenders. They tell consumers not to contact their lenders and to stop making mortgage payments, claiming that falling behind on payments will demonstrate the consumers' hardship and need for a mortgage modification.

HomeFree-USA recently revealed its success in assisting struggling homeowners by using HOPE LoanPort, a Web-based system to submit home retention applications to mortgage servicers. HomeFree-USA, which oversees a network of 65 housing counseling agencies, endorses the HOPE LoanPort system for eliminating lost paperwork and reducing decision times on loan modification applications.

Following last week's statement by Bank of America CEO Brian Moynihan that principal reductions are unfair and not in everyone's best interest, more banks and even some attorneys general have spoken out against the controversial clause in the settlement proposal. Wells Fargo CEO John Stumpf voiced his disapproval of principal write-downs, saying such provisions would entice people to default on their loans. Some attorneys generals said they feel write-downs would force servicers to break their contracts with investors.