The Office of Thrift Supervision is refining a policy position on loan modifications that would compensate servicers and allow adjustable-rate subprime borrowers to stay at the initial interest rate for 36 months if they can't afford their payments once the mortgage resets.OTS director John Reich has discussed the proposal with Treasury Department officials and he believes a three-year modification period is consistent with current servicing contracts and could be used by all servicers - not just thrift institutions. Mr. Reich told reporters he is "not comfortable" with proposals that call for converting 2/28 ARMs to 30-year fixed rate mortgages. Under his proposal, borrowers that are current and borrowers that became delinquent because of a reset could be eligible for a loan modification. However, each eligible borrower would have to make their monthly payment for six months before the modification becomes permanent. Servicers would be paid $500 for each loan modification Mr. Reich plans to discuss the loan modification proposal at OTS' housing conference on Dec. 3 at the National Press Club in Washington.
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The massive mortgage business saw a first quarter profit mitigated by nearly $300 million in hedging losses.
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The Consumer Financial Protection Bureau has seen excessive property-inspection charges, fees that loan mods should eliminate and improper line-item labels.
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Michael Tannenbaum, whose experience in the financial services industry spans over 15 years, has a track record of helping companies scale and grow.
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A majority of consumers earning more than $100,000 annually said they were concerned about their own ability to purchase a home, demonstrating how affordability issues are impacting those at many socioeconomic levels, the University of Michigan study found.
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The nonbank's results add to other indications that the first quarter's "higher for longer" rate scenario had an upside for efficient servicing operations.
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The latest rate increases contributed to a 1% drop in purchases from the previous week and 15% annually, according to the Mortgage Bankers Association.
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