3.5% Closing Cost Assistance on REO’s Available
Fannie Mae announced Monday that borrowers purchasing a Fannie Mae-owned property through HomePath, the GSE’s REO disposition operation, will receive up to 3.5 percent in closing cost assistance. The company has implemented this temporary buyer assistance program fairly regularly since the beginning of last year — a strategy aimed at helping the GSE unload a bloated supply of repossessed homes. Fannie Mae acquired 262,078 single-family REO properties through foreclosure in 2010, compared with 145,617 in 2009.
Fair Housing Uncovers Corrupt Modification Practices
Four fair housing organizations have released their findings of a year-long undercover investigation of 80 loan modification companies, which reveal a host of corrupt practices scammers employ to target homeowners in distress. According to the report, 55 percent of loan modification companies required an upfront fee to start work or a low initial fee to conduct minimal work, such as reviewing loan documents. Twenty-four percent advised or encouraged homeowners to stop making mortgage payments or stop contacting their lenders.
Completed Modifications Slip Again
Mortgage servicers had been completing over 100,000 loan modifications per month since late 2009, but that streak came to an end in February. HOPE NOW reports that 87,083 homeowners received permanent loan modifications – through both proprietary and government programs – during the month of February. That’s about 14 percent fewer than the previous month and the first time the organization’s modification tally has fallen below the 100K mark in nearly a year and a half. Leaving borrowers with the question, “Now what?”
Foreclosures Are A “Stately” Issue
Standard & Poor’s (S&P) has released a study that delves deep into the nuances of foreclosure at the state level, namely how timelines and loan losses vary between judicial and non-judicial systems. Among the conclusions, S&P found that foreclosure timelines are approximately twice as long in judicial states versus non-judicial states. In addition, asset pools with a higher concentration of loans in judicial states pose more of a risk for mortgage investors in terms of loan loss severities.
…And Longer Foreclosure Timelines
With foreclosure activity somewhat erratic in recent months along the country’s West Coast, time-to-foreclose remains the one true constant in that it continues to increase across the board. ForeclosureRadar has released its monthly report on March foreclosure activity for its coverage area of the five West Coast states. The foreclosure timeline in Nevada extended by more than 16 percent in one month’s time to 322 days. In California, the increase was smaller at 4 percent, bumping the state’s timeline up to 302 days.
GSE Wants Fee Structure Revamp by Summer
Fannie Mae, Freddie Mac, and their regulator anticipate a decision on revamping mortgage servicers’ payment structure by mid-summer, according to the Mortgage Bankers Association (MBA). The trade group, however, is urging the GSEs and federal agency to tread carefully and slowly in undertaking such an endeavor. MBA says the options put forth raise more questions than answers, particularly related to the “default servicing fee.”
Private Mortgage Cures Outpace New Defaults
A group of private mortgage insurers reported 48,086 defaults during the month of February, but 53,944 loan cures, according to data from the trade association Mortgage Insurance Companies of America (MICA). For February, the cure/default ratio for MICA members came in at 112.2 percent. It’s the first time since May 2010 that default cures have outnumbered new default notices among the group, and it’s a notable bounce-back from the previous month when the cure/default ratio was 78.6 percent.
Partial Robo-Signing Settlement
Federal regulators split from state attorneys general last week to cut their own deal with mortgage servicers as part of a settlement for the robo-signing mess that surfaced last fall. Critics of the side deal are calling for federal regulators to withdraw their agreements and work with the states to hold banks accountable. But even in the attorney general camp there has been dissension. A study released Tuesday by three economists says the original settlement proposal backed by state counsels could increase the foreclosure inventory by $297 billion.
The Bremner Group at Coldwell Banker
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