Servicing

The Treasury Department singled out the three largest banks — Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. — for failing to properly solicit and consider homeowners for the government's loan modification program.

In its “Shadow Inventory Update” report, Standard & Poor’s estimates that the principal balance of distressed homes amounts to about $460 billion, representing nearly one-third of the nonagency residential mortgage-backed securities market currently outstanding.

While Fed officials are not ruling out future mortgage-backed securities purchases, there are some good reasons why they decided in August to reinvest principal payments into Treasuries instead, and that may play into any quantitative easing plans going forward.

Besides imposing a 5% risk retention requirement on securitizations by banks, the FDIC also spelled out new standards that are particularly tough and aimed solely at issuers of residential mortgage-backed securities.

Home prices have risen for four straight months, but the rate of growth has slowed, according to new figures tracked through the Standard & Poor's/Case-Shiller house price index.

Connecticut Attorney General Richard Blumenthal has asked Ally Financial to freeze all home foreclosures within its borders, saying his office is investigating "defective" documents filed by the company and its mortgage division, GMAC.

Another top official has left the warehouse lending department of Southwest Securities FSB, leaving the Dallas-based bank with just two sales associates, and a declining book of business.

he Federal Housing Administration said it was responding to market demand when it started modifying its Home Equity Conversion Mortgage products. The result consists of several changes to the standard program; HECM Saver, a new option that requires lower upfront premiums; and new opportunity to use this affordable option as an REO disposition tool.

Federal regulators implicitly rebutted the view that banks are refusing to take losses on second mortgages that are current but at risk of default.

Starting January 1, FDIC-insured institutions will have to retain 5% of the credit risk on newly issued securitizations until the federal banking agencies approve new risk retention standards next year as mandated by the Dodd-Frank Act.