Attorney General
By Carrie Bay | 05/08/2012
Bank of America began mailing out more than 200,000 letters this week targeting borrowers thought to be eligible for principal-reducing modifications under terms of the settlement reached with the federal government and 49 state attorneys general. To be eligible, a homeowner must owe more on the mortgage than the property is worth today and must have been at least 60 days behind on payments on January 31, 2012. BofA estimates average monthly savings of 30 percent for qualifying customers.
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By Ryan Schuette | 04/24/2012
Parties to the landmark mortgage servicing settlement appointed one man to oversee $25 billion in compliance. In an interview with DS News, Joseph A. Smith, onetime banking commissioner for North Carolina and ex-nominee to head the Federal Housing Finance Agency, lays out the role he envisions playing as he monitors funds for homeowners, states, and the federal government. The settlement monitor speaks with an understated tone about his stewardship of the historic settlement, which 49 state attorneys general and federal officials completed in February.
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By Krista Franks Brock | 03/16/2012
HUD Secretary Shaun Donovan announced Friday the distribution of $42 million in grants to 468 housing counseling agencies nationwide. In his announcement Friday, Donovan called housing counseling programs nothing less than indispensable. After national funding for housing counseling was cut last year, Donovan said, "We fought hard to persuade Congress to restore funding for housing counseling in HUD's budget and now we're working to make these important resources available as quickly as possible."
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By Carrie Bay | 03/14/2012
Oklahoma residents seeking restitution under the state's mortgage settlement with the nation's largest mortgage servicers must apply for benefits by September 13, 2012. The agreement between Attorney General Scott Pruitt and Bank of America, Citigroup, Ally's GMAC, JPMorgan Chase, and Wells Fargo gives the state $18.6 million, all of which will be used to compensate residents wronged in the foreclosure process. Under the nationwide settlement, Oklahoma would have received an estimated $10.2 million, and most of it would have been "paid" in the form of credits for loss mitigation activities fulfilled by the servicers.
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By Krista Franks Brock | 03/14/2012
New York Attorney General Eric Schneiderman secured $25 million from three of the nation's top servicing shops after filing a lawsuit early last month regarding foreclosures he says were improperly processed through Mortgage Electronic Registration System (MERS). Bank of America, JPMorgan Chase, and Wells Fargo will each pay the state of New York $5.9 million, according to settlement documents obtained by Reuters. MERS itself has faced a number of lawsuits regarding its participation in the foreclosure process, and results have been mixed from state to state.
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By Krista Franks Brock | 03/13/2012
According to documents filed in federal court Monday, Ally Financial formerly GMAC will offer principal reductions beyond what is required of the majority of the five banks in $25 billion the national mortgage settlement. While the general rule for principal reductions required through the settlement is to lower principal to no more than 120 percent of a home's value, Ally will offer reductions of as low as 85 percent in some cases where borrowers are considered likely to default. Other homeowners with high-risk loans may receive reductions bringing their loan to 105 percent or 100 percent of their homes' current values.
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By Krista Franks Brock | 03/12/2012
Some Bank of America borrowers may be in for principal reductions in amounts exceeding $100,000, according to the latest developments in the settlement the bank and four other large servicers made with state and federal regulators. While the other four servicers in the national settlement are being required to diminish principal so underwater borrowers have loan-to-value ratios of 120 percent or less, BofA will be reducing principal for about 200,000 homeowners to fall in line with current market values.
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By Carrie Bay | 03/01/2012
The first details on how mortgage servicers must fulfill their end of the $25 billion federal-state settlement can be found within the 233 pages of Wells Fargo's annual filing with the Securities and Exchange Commission. As expected, first-lien principal reductions carry the most weight in terms of credit towards each servicer's financial obligation. Forgiveness of past due payments for unemployed homeowners garner dollar-for-dollar credit, as do costs associated with demolishing vacant, foreclosed properties.
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By Krista Franks Brock | 03/01/2012
Principal reductions have been approached with some reluctance and much debate throughout the industry, but as part of the recent $25 billion settlement with the state attorneys general, the nation's largest servicers have agreed to administer the loss mitigation tactic. Fitch maintains the issue of principal reductions is not a simple "yes" or "no" question, and "if not implemented carefully, a wide-ranging principal reduction program could potentially increase defaults among borrowers who would otherwise remain current."
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By Krista Franks Brock | 02/28/2012
Insistent that principal reductions are the best line of defense in loss mitigation, California Attorney General Kamala Harris is calling on Fannie Mae and Freddie Mac to halt foreclosures in her state while the Federal Housing Finance Agency (FHFA) considers whether principal reductions are an appropriate strategy for the GSEs. In a recent letter to FHFA Acting Director Edward DeMarco, Harris requested a "good-faith pause on foreclosure sales in California" while the FHFA continues to investigate the pros and cons of principal reductions.
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