Servicing

Despite their vocal opposition to principal reductions, major banks are actually reducing principal on loans they hold in portfolio and the redefault rate on these modifications is much lower than standard rate and term restructurings, according to a new report from Amherst Securities Group.

Four states are considering legislation that would prohibit or restrict appraisers from using distressed sales, such as those of foreclosed properties, as comparable sales when assessing the value of a home.

Not only are state attorneys general pushing the nation's megabanks to sign a servicing settlement tied to faulty foreclosure practices, but they want these institutions to sign a regulatory consent order, holding their boards' responsible for correcting deficiencies.

Although bankers are likely to have significant concerns about the risk retention proposal due next week, they appear to have won at least one victory already: a choice over how to structure risk that must be retained.

Although bidders on residential nonperforming loans are griping about a lack of available product, that's not the case over in the commercial space, according to Donald Cogsville of The Cogsville Group LLC, New York.

Mortgage bankers likely won't see any official proposals to revamp servicing compensation until late summer, Government National Mortgage Association president Ted Tozer said Friday morning.

Freddie Mac purchased $38.9 billion of home mortgages from its seller/servicers in February, a slight gain from January, according to figures released Friday morning.

A class-action lawsuit filed against CitiMortgage Inc. in New Jersey indicates a legal glitch may be enough to prolong for many years to come foreclosure suspensions on loans that are or may become part of a class lawsuit elsewhere in the country.

A private securities market set up exclusively for prime mortgages can be developed and attract investors as Fannie Mae and Freddie Mac are phased out, according to three American Enterprise Institute fellows.

Kondaur Capital Corp., Orange, Calif., is the winning bidder on a 1,000 unit nonperforming mortgage portfolio auctioned off by the Department of Housing and Urban Development.