Tag Archives: Principal Writedown

In January, servicers completed about 78,400 modifications, bringing the total since 2007 to 6.15 million, according to data from HOPE NOW. The number of completed short sales in January slowed to 29,244, down from 34,909 in December 2012. As of December 2009, the industry has completed 1.18 million short sales. When combining foreclosure prevention solutions through loan modifications and short sales, the cumulative total is about 7.33 million.

Bank of America announced it has completed or approved nearly $30 billion in relief to more than 330,000 homeowners as of the end of 2012.

A year after the nation's largest mortgage servicers reached a monumental settlement with 49 state’s attorneys general and several federal agencies, the five servicers have reportedly provided assistance in the amount of $45.83 billion to 550,000 homeowners, according to the Office of Mortgage Settlement Oversight reported. The greatest portion of the total $45.83 billion distributed since the settlement went to ""relief to support home ownership."" About $24.7 billion went to these efforts. Short sales made up another significant portion of servicers' efforts, totaling $19.5 billion.

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.

The principal reduction debate resurfaced after 45 members of the House of Representatives sent a letter to President Obama, urging him to replace Federal Housing Finance Agency (FHFA) Acting Director Edward DeMarco with a permanent director. DeMarco was mainly criticized for his resistance to a loan modification pilot program that would ""examine whether a principal reduction program could reduce costs to taxpayers while helping borrowers stay in their homes.""

In a report released Monday, ForeclosureRadar boldly asserts that foreclosures are helping mend the market in California, and the government--backed by the banking industry--has created foreclosure delays to help bank balance sheets. ForeclosureRadar argues ""the real problem continues to be the negative equity created during a massive and unsustainable credit bubble,"" not foreclosures, which are helping homeowners ""escape a prison of debt.""

Edward DeMarco's days directing the Federal Housing Finance Agency (FHFA) may be numbered, according to a report from The Wall Street Journal. ""People familiar with the discussions"" told The Wall Street Journal the White House is preparing to nominate a new director. According to those sources, administration officials are still in the process of gathering names for potential nominees.

The Center for Responsible Lending, a nonprofit group dedicated to protecting consumers from predatory lending practices, and the Financial Services Roundtable, a group of representatives from the nation's largest financial institutions, have come together to ask Congress to extend the Mortgage Forgiveness Debt Relief Act, which will otherwise expire at the end of this year. The two groups argue that if lawmakers fail to act, it will make it difficult for struggling homeowners to accept short sale, and even loan modification, offers.

Five mortgage servicers--Bank of America, Chase, Citi, Wells Fargo, and Ally--have provided over 300,000 borrowers with some form of mortgage relief as part of a settlement agreement, according to a report from settlement monitor Joseph A. Smith, Jr. As of September 30, 2012, the banks reported they have provided $26.1 billion in actual consumer relief. Short sales accounted for $13.13 billion of that amount. Part of the settlement agreement requires the banks to provide $20 billion in relief, but the servicers are not always credited on a dollar-for-dollar basis.

Bank of America announced it's on track to fulfill consumer relief requirements as part of the national mortgage settlement within the first year of the three-year agreement. So far, the bank has completed or approved $15.8 billion in consumer relief for about 164,000 homeowners as of September 30. One form of consumer relief offered through the settlement is first-lien principal forgiveness, which BofA has offered to 30,000 customers, leading to $4.75 billion in principal reductions.