Today 11 million people, basically one in four homeowners with a mortgage owe more than their home is worth. These "underwater" borrowers have virtually no shot at refinancing.
The Obama administration is hoping at least 1 million of these borrowers will take advantage of its refinancing program under more lenient rules unveiled Monday. Homeowners who are current on their payments will be eligible to refinance no matter how much their home's value has dropped.
Still, it's unclear how many borrowers will benefit. Lenders will remain under no obligation to refinance a mortgage they hold.
The Federal Housing Finance Agency announced that it is making a series of changes to the Home Affordable Refinance Program (HARP). The changes are intended to allow even more underwater homeowners refinance under HARP. The biggest change is the elimination of the 125% Loan To Value ceiling on HARP loans. This means that theoretically, a borrower can refinance no matter how far they are underwater.
Some of the proposed changes include:
• Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers;
• Removing the current 125 percent LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac;
• Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie Mae and Freddie Mac;
• Eliminating the need for a new property appraisal where there is a reliable AVM
• (automated valuation model) estimate provided by the Enterprises; and
• Extending the end date for HARP until Dec. 31, 2013 for loans originally sold to the Enterprises on or before May 31, 2009.
Only those who have a job and are current on their Freddie Mac- or Fannie Mae-owned mortgages are eligible for the new program. Those who have already refinanced with HARP are not eligible.
Edward Demarco, the Acting Director of the FHFA commented:
"We know that there are many homeowners who are eligible to refinance under HARP and those are the borrowers we want to reach. Building on the industry's experience with HARP over the last two years, we have identified several changes that will make the program accessible to more borrowers with mortgages owned or guaranteed by the Enterprises. Our goal in pursuing these changes is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets".
Fannie Mae and Freddie Mac will issue guidance on the HARP updates to lenders and servicers by November 15, 2011. At that time we should have additional clarity on the eligibility requirements for the new version of HARP. It is possible that these changes could take effect as soon as December 2011.
_______________________
Mortgage Loan Compliance® The Forensic Loan Audit Company
Get The Facts, Audit Your Loan, Sue Your Lender and Protect Your Rights!
Call Today 1-866-966-6615 or Visit www.ml-compliance.com
Tuesday, October 25, 2011
Sunday, October 23, 2011
Mortgage Loan Compliance | The Failure of Private Mortgage Insurance
Insurance regulators in Arizona have seized the main subsidiary of private mortgage insurer PMI Group Inc., which will begin paying claims at just 50 percent.
A statement on PMI's website says a court order, signed by an Arizona Superior Court judge on Thursday, gives Arizona's Department of Insurance full possession and control of the subsidiary. Beginning Monday, PMI says claims will be paid at just 50 percent, in lieu of a moratorium on claim payments. Meanwhile, PMI said it will "continue to support our customers' ongoing policy servicing needs, and loss mitigation programs."
The seizure follows heavy losses at PMI since the housing market bubble burst. Two months ago, state regulators ordered the Arizona-based subsidiary, PMI Mortgage Insurance Co., to stop selling new policies after it came under scrutiny because it didn't have enough money on hand to meet the requirements of regulations in that state.
Private mortgage insurance protects lenders from losses if a homeowner defaults and the lender doesn't recoup costs through foreclosure. The insurance costs the borrower a monthly fee, typically a set percentage of the total mortgage loan. Like other mortgage insurers, PMI has been able to sell profitable policies in recent years, but the gains from those sales hasn't outpaced losses from policies sold before the housing market collapsed. As flagging home prices have strapped borrowers, the company has had to pay more claims.
PMI's CEO, L. Stephen Smith, told analysts in early August that that company has seen a sharp rise in the number of previously denied claims that banks appealed and were able to get reinstated by producing better documents to back up them up.
_______________________
Mortgage Loan Compliance® The Forensic Loan Audit Company
Get The Facts, Audit Your Loan, Sue Your Lender and Protect Your Rights!
Call Today 1-866-966-6615 or Visit www.ml-compliance.com
A statement on PMI's website says a court order, signed by an Arizona Superior Court judge on Thursday, gives Arizona's Department of Insurance full possession and control of the subsidiary. Beginning Monday, PMI says claims will be paid at just 50 percent, in lieu of a moratorium on claim payments. Meanwhile, PMI said it will "continue to support our customers' ongoing policy servicing needs, and loss mitigation programs."
The seizure follows heavy losses at PMI since the housing market bubble burst. Two months ago, state regulators ordered the Arizona-based subsidiary, PMI Mortgage Insurance Co., to stop selling new policies after it came under scrutiny because it didn't have enough money on hand to meet the requirements of regulations in that state.
Private mortgage insurance protects lenders from losses if a homeowner defaults and the lender doesn't recoup costs through foreclosure. The insurance costs the borrower a monthly fee, typically a set percentage of the total mortgage loan. Like other mortgage insurers, PMI has been able to sell profitable policies in recent years, but the gains from those sales hasn't outpaced losses from policies sold before the housing market collapsed. As flagging home prices have strapped borrowers, the company has had to pay more claims.
PMI's CEO, L. Stephen Smith, told analysts in early August that that company has seen a sharp rise in the number of previously denied claims that banks appealed and were able to get reinstated by producing better documents to back up them up.
_______________________
Mortgage Loan Compliance® The Forensic Loan Audit Company
Get The Facts, Audit Your Loan, Sue Your Lender and Protect Your Rights!
Call Today 1-866-966-6615 or Visit www.ml-compliance.com
Tuesday, October 18, 2011
Mortgage Loan Compliance | OCC Requires Review of 4.5M Foreclosures
The Office of the Comptroller of the Currency (OCC) is calling for independent reviews of almost 4.5 million loans.
According to the OCC, Bank Foreclosure Examiners will review the self-assessments, corrective actions, and any determinations of financial harm and related remediation in the next quarterly review or examination of the bank.
This applies to such major banks as Bank of America, JPMorgan Chase, Citigroup, Ally Financial, among others, and could affect as many as 4.5 million loans that faced foreclosure action.
As the leading provider of Residential Audits, Mortgage Loan Compliance delivers a solid foundation of information that discovers the errors and legal violations in your loan.
Many Homeowners, Housing Counseling Agency, Mediators, Bankruptcy and Litigation Attorneys have used our audits as defenses to foreclosure and statutory damages that can greatly exceed the value of the loan. At Mortgage Loan Compliance we specialize and strictly focus on loan and title compliance.
Get The Facts, Audit Your Loan, Sue Your Lender and Protect Your Rights!
_______________________
Mortgage Loan Compliance®
The Forensic Loan Audit Company
Get The Facts, Audit Your Loan, Sue Your Lender and Protect Your Rights!
Call Today 1-866-966-6615 or Visit www.ml-compliance.com
According to the OCC, Bank Foreclosure Examiners will review the self-assessments, corrective actions, and any determinations of financial harm and related remediation in the next quarterly review or examination of the bank.
This applies to such major banks as Bank of America, JPMorgan Chase, Citigroup, Ally Financial, among others, and could affect as many as 4.5 million loans that faced foreclosure action.
As the leading provider of Residential Audits, Mortgage Loan Compliance delivers a solid foundation of information that discovers the errors and legal violations in your loan.
Many Homeowners, Housing Counseling Agency, Mediators, Bankruptcy and Litigation Attorneys have used our audits as defenses to foreclosure and statutory damages that can greatly exceed the value of the loan. At Mortgage Loan Compliance we specialize and strictly focus on loan and title compliance.
Get The Facts, Audit Your Loan, Sue Your Lender and Protect Your Rights!
_______________________
Mortgage Loan Compliance®
The Forensic Loan Audit Company
Get The Facts, Audit Your Loan, Sue Your Lender and Protect Your Rights!
Call Today 1-866-966-6615 or Visit www.ml-compliance.com
Tuesday, October 11, 2011
Mortgage Loan Compliance | New Rule – Banks Benefit To Client
The Federal Deposit Insurance Corp. backed a draft rule barring banks from trading for their own profit instead of their clients on a 3-0 vote. The ban on so-called proprietary trading was required under the financial overhaul law.
For years, banks had bet on risky investments with their own money. But when those bets go bad and banks fail, taxpayers could be forced to bail them out. That's what happened during the 2008 financial crisis.
The Federal Reserve has also approved a draft of the so-called Volcker Rule, named after former Fed Chairman Paul Volcker. The Securities and Exchange Commission must still vote on it, and then the public has until January 13 to comment. The rule is expected to take effect next year after a final vote by all three regulators.
Under the draft, banks must hold investments for more than 60 days. Regulators determined that was enough time to limit speculative trading.
The banking industry said Tuesday the rule is too complex to work and will put U.S. financial firms at a competitive disadvantage to those in other countries.
"How can banks comply with a rule that complicated, and how can regulators effectively administer it in a way that doesn't make it harder for banks to serve their customers and further weaken the broader economy?" Frank Keating, head of the American Bankers Association, said in a statement.
The rule also would limit banks' investments in hedge funds and private equity funds, which are lightly regulated investment pools. Banks wouldn't be allowed to own more than 3 percent of such a fund. In addition, a bank's investments in such a fund couldn't exceed 3 percent of its capital.
_______________________
Mortgage Loan Compliance®
The Forensic Loan Audit Company
Get The Facts, Audit Your Loan, Sue Your Lender and Protect Your Rights!
Call Today 1-866-966-6615 or Visit www.ml-compliance.com
For years, banks had bet on risky investments with their own money. But when those bets go bad and banks fail, taxpayers could be forced to bail them out. That's what happened during the 2008 financial crisis.
The Federal Reserve has also approved a draft of the so-called Volcker Rule, named after former Fed Chairman Paul Volcker. The Securities and Exchange Commission must still vote on it, and then the public has until January 13 to comment. The rule is expected to take effect next year after a final vote by all three regulators.
Under the draft, banks must hold investments for more than 60 days. Regulators determined that was enough time to limit speculative trading.
The banking industry said Tuesday the rule is too complex to work and will put U.S. financial firms at a competitive disadvantage to those in other countries.
"How can banks comply with a rule that complicated, and how can regulators effectively administer it in a way that doesn't make it harder for banks to serve their customers and further weaken the broader economy?" Frank Keating, head of the American Bankers Association, said in a statement.
The rule also would limit banks' investments in hedge funds and private equity funds, which are lightly regulated investment pools. Banks wouldn't be allowed to own more than 3 percent of such a fund. In addition, a bank's investments in such a fund couldn't exceed 3 percent of its capital.
_______________________
Mortgage Loan Compliance®
The Forensic Loan Audit Company
Get The Facts, Audit Your Loan, Sue Your Lender and Protect Your Rights!
Call Today 1-866-966-6615 or Visit www.ml-compliance.com
Tuesday, October 4, 2011
Mortgage Loan Compliance | “Robo-Signing” Since 2003 or Sooner
Fannie and its sister company, Freddie Mac, own or guarantee about half of U.S. mortgages. That equals nearly 31 million loans worth more than $5 trillion. And they account for nearly all new mortgages. According to a new government watchdog report Fannie Mae knew about allegations of improper foreclosure practices by law firms in 2003 but did not act to stop them.
Similar allegations are now the subject of a probe by state attorneys general into how lenders and law firms ignored proper procedures to handle a crush of foreclosure paperwork.
An unnamed shareholder warned Fannie Mae of alleged foreclosure abuses in 2003, the inspector general for the agency that regulates Fannie says in a report being released Tuesday.
Fannie Mae responded by hiring a law firm to investigate the claims in 2005. The law firm reported in 2006 that it had found foreclosure attorneys in Florida "routinely filing false pleadings and affidavits."
Fannie officials said they told a government official about the law firm's findings in 2006. That unnamed official, who now works for Fannie's regulator, the Federal Housing Finance Agency, said he couldn't recall the conversation, the report says.
Fannie began using a network of attorneys in 1997 to help handle foreclosures, evictions and bankruptcies. In 2008, the network grew to 140 law firms. And the number of foreclosures in Fannie's portfolio reached historic highs. Foreclosures more than doubled from 2007 to 2008. They grew 50 percent in 2009.
In June 2010, FHFA officials went to Florida to study the foreclosure crisis. They found that the mortgage industry was overwhelmed by foreclosures; that the average foreclosure processing time had grown from 150 days to more than 400 days; that lenders were beset by flawed documentation; and that law firms weren't devoting enough time to cases.
The worst practices, known collectively as "robo-signing," led some lenders to suspend foreclosures last fall. And it led to an ongoing investigation by all 50 state attorneys general.
Several states, including California, Delaware and New York, oppose a proposed settlement with the lenders. They complain that the lenders would receive unfair immunity from civil litigation under the deal.
_______________________
Mortgage Loan Compliance® The Forensic Loan Audit Company
Get The Facts, Audit Your Loan, Sue Your Lender and Protect Your Rights!
Call Today 1-866-966-6615 or Visit www.ml-compliance.com
Similar allegations are now the subject of a probe by state attorneys general into how lenders and law firms ignored proper procedures to handle a crush of foreclosure paperwork.
An unnamed shareholder warned Fannie Mae of alleged foreclosure abuses in 2003, the inspector general for the agency that regulates Fannie says in a report being released Tuesday.
Fannie Mae responded by hiring a law firm to investigate the claims in 2005. The law firm reported in 2006 that it had found foreclosure attorneys in Florida "routinely filing false pleadings and affidavits."
Fannie officials said they told a government official about the law firm's findings in 2006. That unnamed official, who now works for Fannie's regulator, the Federal Housing Finance Agency, said he couldn't recall the conversation, the report says.
Fannie began using a network of attorneys in 1997 to help handle foreclosures, evictions and bankruptcies. In 2008, the network grew to 140 law firms. And the number of foreclosures in Fannie's portfolio reached historic highs. Foreclosures more than doubled from 2007 to 2008. They grew 50 percent in 2009.
In June 2010, FHFA officials went to Florida to study the foreclosure crisis. They found that the mortgage industry was overwhelmed by foreclosures; that the average foreclosure processing time had grown from 150 days to more than 400 days; that lenders were beset by flawed documentation; and that law firms weren't devoting enough time to cases.
The worst practices, known collectively as "robo-signing," led some lenders to suspend foreclosures last fall. And it led to an ongoing investigation by all 50 state attorneys general.
Several states, including California, Delaware and New York, oppose a proposed settlement with the lenders. They complain that the lenders would receive unfair immunity from civil litigation under the deal.
_______________________
Mortgage Loan Compliance® The Forensic Loan Audit Company
Get The Facts, Audit Your Loan, Sue Your Lender and Protect Your Rights!
Call Today 1-866-966-6615 or Visit www.ml-compliance.com
Subscribe to:
Posts (Atom)