Government

With the help of record-low mortgage rates, HARP refinances surged in May, accounting for 20 percent of all loans refinanced by the GSEs, FHFA announced Monday. The one in five ratio of loans refinanced through HARP is the largest increase since the program's 2009 inception. The number of underwater borrowers who found relief through HARP also saw a significant increase. Year-to-date through May, 78,273 refinances were completed for underwater borrowers compared to 59,991 refinances for the entire year of 2011.

Fannie Mae is now offering a program to help prevent foreclosures by enabling better relationships between servicers and homeowners, the GSE announced Monday. The program, dubbed Know Your Options Customer Care, is a customer engagement strategy and training program for servicers. Fannie Mae will conduct training sessions for servicer call center employees, provide scripting for homeowner interaction, and help implement ongoing quality control measures.

Missouri saw its first bank casualty of 2012 Friday as FDIC announced that Glasgow Savings Bank of Glasgow, Missouri, was closed down by the state's finance division.

Delaware attorney general Beau Biden announced Friday that the state has reached an agreement with Mortgage Electronic Registration Systems, Inc., (MERS) about implementing reforms. Biden filed suit against MERS last year after hearing from homeowners in the state who were ""unable to have meaningful conversations about saving their home"" and who could not find out who owned their mortgage.

In a commentary, Fitch stated the proposed uses of eminent domain in California could negatively affect private label RMBS performance. Recently, the board of supervisors of San Bernardino County voted to form a joint powers authority with California cities Fontana and Ontario to look into the option of using eminent domain to seize underwater mortgages. Fitch said one proposal, which is of particular concern, indicates that only current and delinquent mortgages, not those in foreclosure, would be eligible. Thus, borrowers who would have stayed current on their payments could have their mortgage seized by the local, state, or county government. If eminent domain was to be used in such a way, then holders of the seized homes could experience losses, Fitch said.

In Philadelphia, about 1030 African-American homebuyers may be eligible to receive funds from the $175 million discrimination settlement with Wells Fargo, the Pennsylvania Human Relations Commission announced Thursday.

Top executives and favored borrowers faced indictment by a federal grand jury on Wednesday for their role in a massive fraud that led to the biggest Virginia bank collapse since 2008. According to a release on Thursday from SIGTARP, the accused are charged with masking non-performing assets at the Bank of the Commonwealth in Norfolk, Virginia.

While negative equity still continues to hinder the housing market's recovery, CoreLogic reported Thursday that the share of underwater mortgages declined. In the first quarter of 2012, the total number of underwater homes was 11.4 million, accounting for 23.7 percent of all residential properties with a mortgage. In the fourth quarter of 2011, 12.1 million properties, or 25.2 percent, were underwater. In addition, more than 700,000 households saw their equity move into the positive territory in the first quarter of this year.

U.S. District Judge Ann D. Montgomery ordered a Minnesota-based attorney to pay $75,000 for continuing to file and litigate show-me-the-note lawsuits designed to thwart foreclosure proceedings, MERSCORP Holdings announced Thursday.

Wells Fargo wrote a check for $175 million on Thursday to settle claims that independent brokers drove a disproportionate number of otherwise creditworthy minority borrowers to higher-priced variable mortgages in the lead-up to the financial crisis. The payout will tie off a suit filed by federal authorities earlier Thursday that claimed discriminatory practices from 2004 to 2009 had negatively impacted more than 34,000 black and Hispanic borrowers. Wells Fargo denied any of the claims and took action Thursday to stop originating loans with independent mortgage brokers by Friday.