Tag Archives: Loan Modification

The regulatory tidal wave has come upon the industry, declared David Stevens, president of the Mortgage Bankers Association (MBA), in a written speech Wednesday. ""Over 3500 pages of regulations have been released in just the first few weeks of 2013 and many more will be released by mid-year,"" said Stevens in his remarks for the MBA's National Mortgage Servicing Conference & Expo. In light of the rules, Stevens advised ""listening to the CFPB staff explain the rules,"" while also ""letting them know, respectfully, what works, what doesn't and what we need to work on together.""

Foreclosure activity was somewhat mixed in the five Western states--Arizona, California, Nevada, Oregon, and Washington--observed by ForeclosureRadar over the month of January. Notably, California foreclosure sales were down in January, despite a past trend of an uptick in the month following a decline in December. However, this January, both notices of default and notices of foreclosure sale declined in January--down 60.5 percent and 34.83 percent, respectively, over the month. Adequate inventory is necessary for a recovery to take place, but is lacking in much of the state, according to the analytics firm.

The pace of modifications is slowing compared to the 2010 peak, but repeat modifications are on the rise, according to a recent research report from Barclays. Not only are mods returning for seconds, but researchers from Barclays also found remodifications perform more poorly than first-time mods. Barclays gave three reasons for the rise in repeat mods: first-time mods did not reduce payments enough, leading to higher re-defaults; servicers are taking advantage of HAMP principal reduction alternatives; and servicing transfers are leading to an increase in remodifications.

Ally has satisfied its consumer relief obligations required under last year's National Mortgage Settlement (NMS), according to a report filed by settlement monitor Joseph Smith Jr. Smith filed his report with the Federal District Court for the District of Columbia, certifying that ""Residential Capital, LLC, Ally Financial, Inc. and GMAC Mortgage, LLC (collectively, Ally) have satisfied their consumer relief obligations."" According to the settlement terms, Ally was required to provide $200 million in relief to customers in the form of loan modifications, short sales, principal forgiveness, and other forms of relief.

In a recent blog post from the Federal Reserve Bank of New York, three Fed researchers shared their findings on mortgages that would have been targeted by a controversial use of eminent domain proposed in San Bernardino County. Although the researchers found only 11 percent of the open loans in the county were not underwater, they also reported a dramatic decrease in payments and an increase in home values.

In light of the heightened number of mortgage servicing transfers, the Consumer Financial Protection Bureau (CFPB) issued a bulletin to servicers and subservicers to remind them of protections for consumers when loan transfers occur. ""If the transfer process is not handled properly, consumers may find that their servicer lost important loss mitigation documents or that the servicer did not credit their payments on time,"" the CFPB explained. The CFPB also announced it is making servicing transfer-related problems a focus and will be scrutinizing servicers in a few specific areas.

For all of 2012, servicers completed more than 850,000 loan modifications, while the industry also continued to push for another foreclosure alternative--short sales, according to recent data from HOPE NOW. As of 2007, the number of completed mods now stands at 6.06 million. Since 2009, the industry has seen 1.15 million short sales, with 422,605 of the short sales occurring in 2012 alone. In 2011, completed short sales reached 372,168. ""In the past year, there has been unprecedented work from the industry with respect to short sales as a viable mortgage solution,"" said Eric Selk, executive director of HOPE NOW.

During the month of January, 14,500 homeowners received permanent mortgage modifications through the Home Affordable Modification Program (HAMP), while 53,100 homeowners lost their homes to foreclosure, according to the latest Housing Scorecard from the Obama administration. At the same time, 14,500 homeowners entered into trial modifications through HAMP, and 72,500 homes entered the foreclosure process. Proprietary modifications continue to outpace HAMP. HOPE Now reported 62,200 mortgage modifications completed in January.

Freddie Mac partnered with nonprofits to open up three walk-in centers for borrowers who are facing mortgage troubles. The centers were opened Atlanta, Las Vegas, and Los Angeles.

Serious delinquencies for U.S. RMBS improved across all sectors in the fourth quarter of 2012, according to a new mortgage market index from Fitch Ratings. Furthermore, the agency expects RMBS delinquencies to continue declining this year. According to Fitch, the improvement ""reflects positive selection in the remaining pools, loan modification efforts by servicers, and positive home price trends.""