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Tag Archives: Loan Modification

Study Finds Counseling Increases Chances for Loan Modification

Homeowners who participate in default counseling are more likely to have their loans modified, according to a study from the Mortgage Bankers Association (MBA). Policymakers have increasingly turned to education and counseling to remedy problems that impede borrowers' ability to make their mortgage payments, but the trade group's report comes on the heels of federal budget cuts that have eliminated $88 million to fund HUD's counseling program.

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Idaho Legislation Places New Requirements on Lenders

Under a new Idaho state law, lenders must respond to requests for loan modification within 45 days and cannot proceed to a foreclosure sale until after responding to the request. House Bill 331, which takes effect September 1, also stipulates that lenders must meet in person or over the phone with the borrower if the borrower requests it. In addition, new documentation requirements and borrower contact parameters have been put in place.

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Democratic Faction Unveils Plan to Retain 30-Year Mortgage Post-GSEs

The New Democratic Coalition has added the nation's housing finance system to its list of things to ""modernize."" They've outlined principles for following through with the wind-down of Fannie and Freddie while maintaining a limited government role to ensure access to the 30-year fixed-rate mortgage. But the debate is intense over whether the 30-year mortgage should stick around. With or without it, one research group says the numbers prove government guarantees aren't necessary to entice private investors.

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Mortgage Cadence Offers Technology to Tackle Servicing Reforms

Mortgage Cadence recently announced that its Mortgage Cadence Reprise system can assist servicers in meeting proposed requirements to mortgage servicing procedures. Mortgage Cadence Reprise is a Web-based solution that provides servicers with automation technology, and the company says it will allow servicers to effectively respond to mortgage reform in the servicing industry while providing the customer service expected by state attorneys general and federal regulators.

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Wells Fargo Posts $3.8B Profit for Q1 as Loan Quality Improves

Wells Fargo reported record earnings of $3.8 billion for the first quarter of 2010. That's up 48 percent from the same period last year, and up 10 percent from the fourth quarter of 2010. The lender's first-quarter profit beat analysts' estimates, but the market didn't look too kindly on the underlying numbers that showed revenue was down $1.2 billion from the previous quarter. That decline included a $741 million drop in mortgage banking fee income. While revenue slipped, Wells Fargo says its numbers were boosted by improving loan quality.

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Government Returns $2.3M to Victims of Foreclosure Rescue Scam

The Federal Trade Commission (FTC) has mailed 1,410 refund checks totaling $2.3 million to consumers allegedly defrauded by Home Assure LLC, a so-called mortgage foreclosure rescue service. The FTC alleged that the company charged consumers an up-front fee of $1,500 to $2,500, and falsely claimed its ""special"" relationships with lenders would enable the company to secure favorable loan modifications or stop foreclosure altogether - promises the federal agency says the company did not keep.

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Waters Introduces Bill Calling for Mandatory Loss Mitigation

Mortgage servicing practices have taken center stage on Capitol Hill, with a flurry of bills being penned to make servicing reforms the law of the land. Rep. Maxine Waters of California has revised a bill she's brought to the table several times before that would compel lenders to engage in what she says are ""reasonable loss mitigation activities"" for all delinquent homeowners. The legislation would place responsibility for modifying first and second liens with the servicer of the primary mortgage and would institute several reforms outlined in recent settlements with regulators.

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Ginnie Mae Announces New Policy for Pooling Delinquent Loans

Ginnie Mae, which provides a guaranty on mortgage securities backed by Federal Housing Administration loans, has announced a new policy regarding the pooling of past-due loans. For single-family securities with an issue date of June 1, 2011, and after, servicers can no longer package loans that are delinquent by more than the monthly installment of principal and interest that is due on the issue date. This fall, the federal agency will also begin requiring issuers to supply new data elements, such as loan-to-value ratios and pre-modification qualities.

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Lawmakers Move to Make Servicing Reforms Law

Lawmakers in both the House and Senate are seeking to legislate changes to servicing practices. On the heels of the cease and desist orders issued by federal regulators to a handful of mortgage servicers to address process deficiencies uncovered by robo-signing investigations, four bills have been introduced aimed at reforming the way delinquent borrowers are handled industry-wide and aligning servicer incentives with those of investors and homeowners.

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Mortgage Issues Lead to 39% Drop in Income for Bank of America

Bank of America said Friday that it turned a profit of $2.0 billion for the first quarter of 2011. That's down 39 percent from the lender's earnings a year earlier, largely due to continuing losses tied to its legacy mortgage business. Bank of America took a $4.9 billion hit related to foreclosure delays and other out-of-pocket expenses that the company does not expect to recover, as well as higher litigation costs and loss mitigation expenses. The bank has also confirmed plans to lay off 1,500 mortgage employees.

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