Loss Mitigation
By Esther Cho | 06/19/2013
After testing compliance among the five servicers part of the $25 billion national mortgage settlement, monitor Joseph A. Smith concluded more work needs to be done since issues with the loan modification process, providing a single point of contact, and customer records still persist. Under the settlement, Bank of America, JPMorgan Chase, Wells Fargo, Citi, and Ally Financial agreed to adopt some 300 servicing standards. To verify compliance with the servicing standards, the monitor retained outside firms to test the servicers in 29 metrics.
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By Krista Franks Brock | 06/18/2013
Home Equity Conversion Mortgages (HECMs) and reverse mortgages, tools to which many seniors turn to help manage expenses in their later years, can be challenging products to navigate, according to testimonies delivered during a Senate committee hearing Tuesday morning. While the Department of Housing and Urban Development (HUD) considers changes to the HECM program, the Senate Committee on Banking, Housing, and Urban Affairs held a hearing to determine the best path forward for the program.
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By Esther Cho | 06/18/2013
From new regulations to increasing fines, financial institutions--both large and small--reported feeling more squeezed by compliance and risk management pressures since the start of the year, according to survey results from Wolters Kluwer Financial Services. In January, the Indicator began with a baseline score of 100 after the company surveyed 400 banks and credit unions. After surveying 430 similar institutions in April, Wolters Kluwer Financial Services reported a score of 136.
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By Esther Cho | 06/17/2013
For homeowners facing a financial hardship, sometimes it can be difficult to know exactly what options might be available. To help homeowners get a better idea of what is out there, Freddie Mac released the Mortgage Help Navigator, a new online tool that assists homeowners with finding out what relief options might be applicable for them in their specific situation.
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By Esther Cho | 06/17/2013
The risk of default for more recently originated mortgages is close to levels seen 10 years ago, according to the findings from the University Financial Associates (UFA) of Ann Arbor, Michigan. In the second quarter of this year, the UFA Default Risk Index stood at 106, up from 97 in the previous quarter. Between 2006 and 2008, the index peaked well above 200. "These readings on the Index are the lowest in almost 10 years, but we may not be able to declare the mortgage crisis over yet," said Dennis Capozza, business professor at the University of Michigan and a founding principal of UFA.
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By Mark Lieberman, Five Star Institute Economist | 06/14/2013
In a newly published paper posted on the New York Federal Reserve website, Robert Hockett, a Cornell University professor of financial and monetary law, proposes using government's eminent domain authority as a solution to underwater mortgage debt. In reviewing Hockett's suggestion, the Wall Street Journal concentrated not on the idea itself, but on the fact that Hockett "turns out to have been on the payroll of none other than Mortgage Resolution Partners." There may be a lot of good reasons to discard Hockett's suggestion, but his past relationships are not among them. His idea deserves a fair hearing, not a digression.
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By Esther Cho | 06/14/2013
The recent rise in mortgage rates is not enough to pose any real threat to the housing recovery, but that's not to say the increase doesn't come with any risk, according to a recent analysis from Capital Economics. To put things into perspective, Ed Stansfield, chief property economist at Capital Economics, noted that on a long-term view, rates are still "exceptionally low" as they return to levels seen in late 2011 and early 2012. However, 18 months ago, when mortgage rates hovered around the levels seen today, "house prices were at best flat, if not still edging lower, while the recovery in housing sales was very much in its infancy," Capital Economics stated.
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By Esther Cho | 06/13/2013
As long as short sales remain a common strategy to handle distressed properties, related fraudulent activity should also be expected. To help lenders, servicers, and investors develop tactics to combat the more common occurrence of short sale fraud, DataQuick outlined five solutions as starting points. The first is to understand activity levels to pinpoint markets with the greatest potential for fraud. Over the past two years, DataQuick identified 205,177 short sales in 14 of the largest counties.
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By Mark Lieberman, Five Star Institute Economist | 06/13/2013
Driven by stronger auto sales but held back by falling gasoline sales, total retail sales increased 0.6 percent in May, the Census Bureau reported Thursday. Economists had expected sales to increase 0.5 percent. In April, retail sales rose 0.1 percent.
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By Mark Lieberman, Five Star Institute Economist | 06/13/2013
First time claims for unemployment insurance fell to 334,000, for week ended June 8, the lowest level in a month dropping 12,000 after increasing 13,000 one week earlier the Labor Department reported Thursday. Economists expected initial claims to increase to 350,000 from the prior week.
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