Tag Archives: Loan Modification

The Office of the Comptroller of the Currency has laid out its expectations for national banks' handling of mortgage foreclosures. The federal agency says all servicers under OCC supervision must observe the same stipulations handed down to a handful of servicers in April as part of the regulatory settlement for robo-signing infractions. National banks are directed to conduct a self-assessment of their foreclosure management practices by September 30, and take immediate action to correct any deficiencies.

The performance of first-lien mortgages serviced by large national banks and thrifts improved in the first quarter as troubled loans worked through the system, according to a report released Wednesday by federal regulators. Their analysis of servicing portfolios as a whole found that loans serviced for government agencies and the GSEs are outperforming those held by banks and thrifts on their own books. Nevertheless, delinquencies improved across all risk categories and for all asset owners, while newly started foreclosures declined sharply.

A total of 25,485 suspicious activity reports (SARs) involving mortgage fraud were submitted to the Financial Crimes Enforcement Network in the first quarter, up 31 percent from a year earlier. The agency attributes the increase to more demands from investors for lenders to repurchase poorly performing mortgages, which have prompted additional loan reviews. Officials also found a number of incidents involving foreclosure rescue scams, false claims of identity theft, and property flopping.

Housing counseling increases the likelihood that a homeowner will be granted a loan modification by 200 percent, according to a research study from the Federal Reserve. The central bank also found that counseled borrowers received more favorable terms on their loan modifications compared to borrowers who go it alone. The Homeownership Preservation Foundation says these, among other findings, show that mortgage counseling works, but the availability of these services are in jeopardy due to federal budget cuts.

The nation's second largest mortgage company has again reported a decline in the percentage of loans it holds that are 90 or more days past due and in foreclosure. Freddie Mac says its serious delinquency rate for single-family mortgages dropped to 3.53 percent in May. That's down four basis points from 3.57 percent the month before and down 53 basis points from 4.06 percent in May 2010. May's rate was the lowest it's been since September of 2009.

Federal Reserve Chairman Ben Bernanke says its all the distress in the housing sector that's pulling home prices and consumer confidence down and keeping buyers away from the market, despite the fact that the Fed's bond-buying program has succeeded in keeping interest rates low and housing affordable. Bernanke says he'd like to see more efforts to modify loans, but when that's not appropriate, the industry needs to speed up the process of foreclosure and disposition to clear the market.

The delinquency rate on loans included in commercial mortgage-backed securities (CMBS) fell four basis points in May to 9.18 percent, according to Moody's. The dollar balance of past due loans was approximately $56 billion. While loans totaling $3.4 billion became newly delinquent, previously delinquent loans totaling $4.1 billion became current, worked out, or were disposed. The top 25 metros continue to outperform the broader market with a delinquency rate of 8.48 percent, 70 basis points below the national average.

Wells Fargo will host a home preservation workshop in Irvine, California, this week to assist Wells Fargo and Wachovia customers in Southern California who are facing financial hardships. The two-day event begins Wednesday. Borrowers attending the event will meet with home retention team members to obtain loan modifications or pursue other foreclosure prevention options. Bilingual representatives are also available to assist borrowers.

Litigation related to mortgage servicing surged during the first quarter, after last fall's robo-signing issues raised questions about servicers' procedures and garnered widespread attention from mainstream media. Mortgage servicing litigation increased 88 percent over the first three months of this year, according to industry data released Monday. Investor-related litigation, however, eased, as did actions related to loan modification disputes.

Mortgage insurer PMI has announced the launch of a new program to identify mortgage servicers who score high marks for keeping borrowers in their homes. These companies will benefit from certain advantages when doing business with PMI. The company has identified certain servicing best practices that play a central role in maximizing home retention and achieving positive results for borrowers, communities, and mortgage investors, alike, and PMI says servicers who follow these practices should be recognized.