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Tag Archives: Principal Writedown

Loan Mods and Delinquencies Rise in November: HOPE NOW

The number of mortgage modifications completed during the month of November rose 5 percent from October, bringing the year-to-date total to about 969,000, according to data released Tuesday by HOPE NOW, a voluntary private sector alliance of mortgage industry participants. While completed modifications rose over the month, 60-plus day delinquencies also increased. After reporting 2.65 million 60-plus day delinquencies in October, HOPE NOW reported 2.77 million in November.

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HAMP Mods Pass 900,000 as Servicers Tackle Seconds, Negative Equity

Treasury released a new report Monday highlighting results from the Home Affordable Modification Program (HAMP). Nearly 910,000 homeowners have received a permanent HAMP modification, saving $9.9 billion in monthly mortgage payments. Officials say they will continue to press servicers to assist underwater borrowers and address second-lien issues. A total of 38,243 principal-reducing permanent HAMP mods have been granted, and 54,828 second-lien mods have been started under the federal program.

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OCC: 88% of First-lien Mortgages at Large Banks Are Performing

First-lien mortgage performance among large national banks' servicing portfolios is stabilizing, with 88 percent current over the third quarter of this year, according to the Office of the Comptroller of the Currency (OCC). Delinquencies - both early stage and serious delinquencies - remained unchanged, with 3 percent of loans 30 days to 59 days delinquent and 4.9 percent 60 or more days delinquent. However, new foreclosures rose 21.1 percent. The OCC says nearly half of the loans modified since 2008 have since redefaulted.

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Attorneys General Expect to Reach Settlement Before Christmas

State attorneys general and the nation's five largest mortgage servicers have been supposedly close to a settlement for quite some time. The latest estimate is that they are likely to reach an agreement before Christmas. A local Iowa media outlet attributes this information to Iowa Attorney General Tom Miller, head of the states' negotiating committee. Miller says the settlement would release the banks from legal claims on past servicing and foreclosure practices but would not provide any release on securitizations.

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Congress Calls for Principal Reductions from GSEs

Twenty-one members of Congress sent a letter to Federal Housing Finance Agency (FHFA) Acting Director Edward DeMarco calling on him to allow - even encourage - Fannie Mae and Freddie Mac to start reducing principal balances for distressed homeowners. The lawmakers say underwater borrowers pose a greater risk of eventual default. They're advocating for principal writedowns, not ""as a kindness to homeowners,"" but to save taxpayers from future losses.

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Without California, AG Settlement May Be Reduced

While the attorneys general working toward a settlement with the nation's largest servicers may be able to strike a settlement without California, it may cost them. A deal that seemed likely imminent as of the end of October would have required $25 billion from the banks - $5 billion in cash penalties and $20 billion in refinancings and modifications. That $25 billion could be reduced to $18.5 billion if California refuses to take part in the settlement, and it could limit the amount of assistance provided to California homeowners.

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California AG Subpoenas Fannie and Freddie

California Attorney General Kamala Harris reportedly sent subpoenas to Fannie Mae and Freddie Mac, requesting information about their servicing, foreclosure, and property leasing actions in the state. The attorney general's office also intends to investigate the GSEs' actions regarding purchases of ""toxic mortgages."" With one of the highest default rates in the nation, Harris has been actively seeking aid for California homeowners and has recently lobbied for increased principal reductions from Fannie and Freddie.

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California Expands Its Homeowner Relief Program

California is relaxing some of its eligibility restrictions and increasing the amount of assistance it provides struggling homeowners through its mortgage assistance program. Keep Your Home California is a $2 billion initiative funded by the federal government through the California Housing Finance Agency. Changes to the various sub-programs include an extension of the time period during which unemployed homeowners receive assistance and expanding eligibility to those who own more than one property.

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State Attorneys General and Servicers Set to Strike $25B Settlement

State attorneys general and the nation's five largest mortgage servicers could be within weeks of reaching a $25 billion agreement to settle allegations that foreclosures were improperly processed. Details of the settlement terms obtained by DSNews.com indicate that individual servicer penalties will be based on the number of foreclosures they've completed. Collectively, $5 billion would come in the form of cash fines and $20 billion would be satisfied with principal-reducing modifications and refinancing for underwater borrowers.

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States and Servicers Consider New Proposal for Aiding Those Underwater

Help for underwater homeowners has moved from principal writedowns to refinancing in the settlement negotiations between state attorneys general and the nation's five largest mortgage servicers. According to a widely circulated report, the proposal made its way into the talks last week. Borrowers who are current on their mortgage payments but owe more than their home is worth would be able to refinance at today's lower rates. The main caveat is that the loan must be owned, not just serviced, by one of the five banks.

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