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Tag Archives: Loan Modification

Fitch Reports Recovery in Subprime Credit-Default Swap Prices

After losses last month, Fitch Solutions reports a recovery among subprime credit-default swaps (CDS) in July. Subprime CDS prices increased 1 percent overall for the month. The largest increases in prices were among 2006 and 2007 vintages, which rose 6.1 percent and 10 percent, respectively. The rate of 90-day plus delinquencies reached a new low for the year - declining 1.4 percent to 10.8 percent. The share of subprime loans with balance modifications has increased by 120 percent over the last year.

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Ally Financial Reports Profitable Second Quarter

Ally Financial Inc. reported a profit for the second quarter of 2011, but its results were down from previous earnings. Net income for Q2 was $113 million, a decline from $146 million in the previous quarter and from $565 million one year ago. The company says reducing risk in its legacy mortgage portfolio has been among the top priorities. Ally's GMAC Mortgage has completed more than 700,000 loan workouts for defaulted homeowners since 2008. The mortgage unit says it modifies two loans for every one foreclosure.

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American Home Mortgage Servicing Settles with Massachusetts AG

American Home Mortgage Servicing Inc. (AHMSI) signed a settlement with Massachusetts Attorney General Martha Coakley agreeing to implement a consent judgment between the Commonwealth of Massachusetts and Option One Mortgage Corporation, which AHMSI acquired in April 2008. In conjunction with the settlement, Coakley also dismissed claims against Coppell, Texas-based AHMSI. The servicer did not incur civil penalties or any other costs.

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Illinois Launches Modification Program with Federal and State Funds

Illinois Governor Pat Quinn recently announced the new Mortgage Resolution Fund (MRF) created to permanently modify loans to affordable amounts. The MRF is being funded with $100 million from the state of Illinois and $445.7 million from the Hardest Hit Fund a fund established by the Obama Administration in 2010 to help families in markets hardest hit by the housing and economic crisis. Under the MRF, delinquent loans will be purchased from lenders at present value and modified according to current home values.

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HOPE NOW: Delinquencies and Foreclosure Starts Decline

Mortgage delinquencies declined 27 percent in the first half of 2011 compared to the first half of 2010, according to data from HOPE NOW. For the first half of 2011, the number of 60-day plus delinquencies was 2.7 million, down 1 million from the first half of 2010. Foreclosure sales also declined year-over-year for the period - down 25 percent. At the same time, the total number of foreclosure starts during the first six months of 2011 was 1.13 million, a decrease of 9 percent from the first six months of 2010.

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Washington Attorney General Accuses ReconTrust of Illegal Foreclosures

Washington Attorney General Rob McKenna and Assistant Attorney General Jim Sugarman have filed suit against ReconTrust Company, a subsidiary of Bank of America, for illegally foreclosing thousands of Washington homes. McKenna and Sugarman are requesting the court require ReconTrust to abide by state laws in addition to inflicting civil penalties of up to $2,000 per violation and restitution for affected homeowners.

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Freddie Mac Shows Loss for Q2, Needs $1.5B from Treasury

Freddie Mac said Monday that it logged a $2.1 billion net loss for the second quarter. The company has requested $1.5 billion in taxpayer funding from Treasury, bringing the total amount of its capital draws while in conservatorship to $66.2 billion. Freddie's latest financials represent a slide from the previous quarter, when it posted a $676 million profit and needed no money from Treasury. The GSE acquired 24,799 REO properties through foreclosure in the second quarter but sold 29,355, shrinking its inventory of repossessed homes.

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Treasury Reports More Borrowers Qualifying for Permanent Mods

The administration has released a new report on its flagship Home Affordable Modification Program (HAMP). Officials say more borrowers are qualifying for permanent modifications, and in less time. The rate of modifications moving from trial to permanent status under the HAMP umbrella is up to 74 percent, according to Treasury. At the same time, conversions from a trial to permanent modification are down to 3.5 months on average, compared to an average of 5.2 months a year ago.

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Fannie Mae Requests $5B in Taxpayer Support After Q2 Loss

Fannie Mae's second-quarter loss narrowed from the previous quarter, but still in the red, the GSE says it needs to draw another $5 billion from Treasury, bringing its tally of taxpayer-funded support to $104.8 billion since the company was placed into conservatorship. The company reported a net loss of $2.9 billion for the April-to-June period, compared to a net loss of $6.5 billion in the first quarter of the year. Fannie Mae acquired 53,697 REO homes through foreclosure over the three months ending in June.

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BofA to Pursue Loss Mitigation Under HUD Settlement

Bank of America and the Department of Housing and Urban Development (HUD) have reached a settlement regarding 57,000 delinquent government-issued mortgages serviced by the bank. Under the agreement, BofA must pursue loan modifications with the 57,000 borrowers that it previously did not offer foreclosure alternatives. However, the servicer will not be held liable for foregoing such efforts in the past, though the actions are required by HUD.

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