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Tag Archives: Loan Modification

Top Lenders’ Early Earnings Point to Continuing Mortgage Losses

JPMorgan Chase kicked off the banking sector's second-quarter earnings season with a $5.4 billion profit. It was followed by Citigroup's announcement that it pulled in net income of $3.3 billion. Both beat market expectations, however, neither lender escaped mortgage-related losses - a trait that is likely to show up on balance sheets throughout the industry as banks continue to grapple with delinquencies and additional costs tied to foreclosure reviews and litigation.

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Modifications and Strategic Behavior: A Countrywide Case Study

The promise of a loan modification based on delinquency status induces some financially proficient borrowers to intentionally fall behind on their mortgage payments, according to a study commissioned by the National Bureau of Economic Research in Massachusetts and conducted by researchers at Columbia University. Led by Christopher Mayer, senior vice dean and professor of real estate at Columbia Business School, the research team examined the modification policies of Countrywide Financial.

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Study Points to Improvement in Post-Modification Default Trends

Putting struggling borrowers into mortgages with more manageable monthly payments via a loan modification is a key element of the industry's effort to cut the nation's foreclosure crisis short. A recent study by the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS) took a look at loan performance post-modification. The regulators found that more recent modifications have performed better than earlier modifications, reflecting an increasing emphasis on lower monthly payments and sustainability.

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Proposed Bill Would Allow Banks to Classify Modified Loans as Accruing

Congressman Bill Posey of Florida has introduced a bill which would allow lenders to classify modified mortgages as accruing rather than non-accruing. Posey claims federal bank regulators are hindering the ability of community banks to modify home loans and keep homeowners out of foreclosure. A subcommittee of the House Financial Services Committee held a hearing Friday to review Rep. Posey's Common Sense Economic Recovery Act.

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HOPE LoanPort Now Live in All 50 States, D.C. and Puerto Rico

HOPE LoanPort, a proprietary, Web-based tool used by non-profit housing counselors, housing finance agencies, investors, and major mortgage servicers, recently added North Dakota to its roster, making it live in all 50 states, the District of Columbia, and Puerto Rico. The nonprofit organization, which recently completed its first full year of operation, allows housing counselors to submit an application, including the upload of homeowner documents, for home retention in a secure environment.

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Wells Fargo to Host Free Workshop for Washington Customers

More than 5,000 Washington state homeowners have been invited by Wells Fargo to participate in a free workshop this Thursday and Friday in Bellevue. Designed for borrowers facing financial hardships, the two-day workshop targets Wells Fargo Home Mortgage, Wells Fargo Financial, Wachovia Mortgage, and Wells Fargo Home Equity customers. The Washington event is Wells Fargo's 16th home preservation workshop in 2011.

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Fannie Mae’s Serious Delinquencies Decline for 15th Straight Month

Seriously past-due home mortgages continue to decline for the nation's largest mortgage company, continuing a 15-month path of descent. Fannie Mae says the share of single-family loans it holds that are 90 or more days past due or in foreclosure fell 8 basis points to 4.19 percent in April, and then dropped another 5 basis points to 4.14 percent in May. Fannie Mae says servicers completed modifications on 16,419 of its loans in May. For the first five months of the year, loan modifications total 84,133.

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Treasury: Nearly 5,000 HAMP Mods Carry Principal Reductions

Treasury has released new numbers for the Home Affordable Modification Program (HAMP). New this month is data on the program's Principal Reduction Alternative (PRA). Servicers have cut principal balances on 4,938 permanent HAMP modifications under the PRA initiative. In addition, there are currently 16,017 HAMP trials in force that have also received principal write-downs. The median amount of principal reduced for active permanent modifications exceeds $69,000.

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Freddie Mac Details New Default Servicing Requirements

Freddie Mac has issued a bulletin to servicers announcing changes to the company's default management requirements. The move is part of the Servicing Alignment Initiative announced by the Federal Housing Finance Agency in late April to bring both Fannie Mae's and Freddie Mac's procedures for handling past-due mortgages in line with one another. Freddie also alerted servicers that it plans to roll out a new modification solution for borrowers who defaulted on previous modifications and who are ineligible for HAMP.

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