Tag Archives: Foreclosure Prevention

Fannie Mae announced the opening of a new mortgage help center in Culver City, California, this week to provide counseling and other services for struggling homeowners in the greater metro area with loans owned by the GSE. The fourth facility in a series of nationwide mortgage help centers, the Greater Los Angeles Mortgage Help Center is a joint partnership between Fannie Mae and West Angeles Community Development Corporation, major mortgage servicers, and civic and community leaders.

The nation's largest mortgage financier reported a smaller loss during the third quarter than it did in the second, with the latest figures representing a $17 billion improvement over financial results from a year earlier. Fannie Mae says, though, that it needs another $2.5 billion from taxpayers to cover its net worth deficit. The GSE also reported that home retention actions were down 14 percent in Q3, while home repossessions rose by nearly 24 percent. As of September 30, Fannie Mae's inventory of single-family REO properties stood at 166,787.

Freddie Mac said Wednesday that it lost $2.5 billion during the third quarter of this year. Add to that the $1.6 billion dividend payment the GSE had to make to Treasury on stock the company relinquished in exchange for bailout money, and Freddie Mac reported a net loss attributable to common shareholders of $4.1 billion. The company is asking Treasury for a draw of $100 million in taxpayer dollars. Since Freddie Mac was placed under government control, it has needed $64.2 billion to stay afloat.

Mortgage servicers have completed 1.4 million permanent loan modifications so far this year, according to the latest estimates from HOPE NOW. Servicers have been granting permanent loan modifications through proprietary and HAMP programs at a steady pace of about 150,000 per month. But consumer advocates and federal watchdogs say their efforts are unfortunately overshadowed by the sheer volume of delinquencies. HOPE NOW says there are still over three million homeowners at least two months behind on their mortgage payments.

Fannie Mae and Freddie Mac have both issued notices to servicers that they must work closely with state housing finance agencies to provide mortgage assistance to homeowners who've lost their jobs. Treasury awarded $7.6 billion for housing agencies in certain states to develop programs that provide temporary relief to unemployed homeowners. Effective immediately, GSE servicers are instructed to accept all monthly mortgage payments from housing finance agencies on behalf of borrowers enrolled in state-specific programs.

Fannie Mae's Payment Reduction Plan (PRP) program will sunset on December 31, 2010. The GSE's PRP program was introduced in 2009 to provide a borrower with temporary payment relief while the servicer and borrower worked together to find a permanent foreclosure prevention solution. According to a notice issued by Fannie on Friday, all PRPs must be initiated by December 31st and must end within six months of commencement, or no later than July 1, 2011.

According to the Center for Responsible Lending, since the housing crisis took hold, 2.5 million homeowners have already lost their homes and another 5.7 million are at risk of foreclosure. It's projected that between 10 and 13 million foreclosures will have occurred by the time this crisis abates. The Center argues that the power to stop unnecessary foreclosures and stabilize local housing markets lies with state legislatures. The group says lawmakers should impose mandatory loss mitigation standards for all servicers prior to foreclosure.

Perhaps it was eager anticipation of the World Series kickoff, but Sen. Ted Kaufman's baseball analogy at a Capitol Hill hearing Wednesday clearly put into perspective a key defect of the Home Affordable Modification Program (HAMP) - a defect that watchdog groups and market observers have been lamenting for months now. And that is, Treasury's back-peddling of how many homeowners the program will actually help. ""What matters is not how often you swing the bat, but how often you reach the bases,"" Kaufman said.

Treasury's latest report on the administration's Home Affordable Modification Program (HAMP) shows that over half of the trial plans started have been canceled and 11 percent of borrowers have re-defaulted on their new loan. The TARP special inspector general told Congress that HAMP is ""failing to meet its goal of preserving homeownership"" and risks igniting public anger and mistrust. A Fed economist says HAMP is a reflection of the Obama administration's ""failed policies,"" and the government must be prepared to ""pay lenders a lot of money"" to modify loans.

The Homeownership Preservation Foundation says calls coming into its hotline from distressed homeowners hoping to stave off foreclosure increased 7.4 percent in the third quarter of this year compared to the previous quarter. HPF administers the Homeowner's HOPE Hotline to provide consumers with foreclosure prevention counseling. The nonprofit received 412,353 calls during the third quarter. The largest call volumes came from the states of California and Florida.