Financial Crisis News Center

Administration Urges Congress to Approve Housing Measures

This story appeared in Bank Digest.

Treasury Secretary Tim Geithner and Housing and Urban Development Secretary Shaun Donovan have called on Congress to approve three measures to improve housing and the housing market for Americans: extension of the First Time Homebuyers Tax Credit for a limited period; extension of higher loan limits for home mortgages; and secure funding for the Housing Trust Fund. The administration supports a limited extension of the First Time Homebuyers Tax Credit, which currently is set to expire on Dec. 1, 2009; a one-year extension of the current loan limits for the Federal Housing Administration, Fannie Mae, and Freddie Mac; and $1 billion in funding for the Housing Trust Fund. House Financial Services Committee Chairman Barney Frank, D-Mass., has supported the White House call to action, calling the Trust Fund socially and economically necessary and saying that higher GSE loan limits are needed to address market differences.

GSE Loan Modifications Increase More Than 40 Percent

This story appeared in Bank Digest.

According the Federal Housing Finance Agency’s latest Foreclosure Prevention Report, Fannie Mae and Freddie Mac's trial mortgage loan modifications under the Administration's Home Affordable Modification Program (HAMP) were up more than 40 percent in September 2009 from the previous month. Completed loan modifications are also expected to increase when borrowers successfully complete the three-month trial period and provide required documentation.

Housing Finance Agencies Gain Help under Administration Initiative

This story appeared in Bank Digest.

As part of its plan to stabilize the U.S. housing market, the Obama Administration announced a new initiative for state and local housing finance agencies (HFAs) intended to help support low mortgage rates and expand resources for low and middle income borrowers to purchase or rent homes that are affordable over the long term. “This initiative is critical to helping working families maintain access to affordable rental housing and homeownership in tough economic times,” said Treasury Secretary Tim Geithner.

The initiative has two parts—a new bond purchase program to support new lending by HFAs and a temporary credit and liquidity program to improve the access of HFAs to liquidity for outstanding HFA bonds. The initiative is expected to provide hundreds of thousands of affordable mortgages for working families and enable the development and rehabilitation of tens of thousands of affordable rental properties.

Monthly Servicer Performance Report Issued

This story appeared in Bank Digest.

The Treasury Department has released the latest Making Home Affordable Program Servicer Performance Report, which provides a transparent and public accounting of individual servicer performance. The report provides: the number of trial modification offers extended; the number of trial modifications underway; the number of official modifications offered; and the long-term success of modifications. The agency noted that the program had reached a milestone of 500,000 modifications nearly one month ahead of schedule.

TG-315 at http://www.ustreas.gov/press/releases/tg315.htm

Making Home Affordable Program Report http://www.treas.gov/press/releases/docs/MHA%20Public%20100809%20Final.pdf

GSEs Implement HAMP During Second Quarter

This story appeared in Bank Digest.

The Federal Housing Finance Agency has released its second quarter “Foreclosure Prevention Report,” which shows that trial loan modifications under the Obama Administration's Home Affordable Modification Program (HAMP) announced in March 2009 are rising steadily. The FHFA report details the actions Fannie Mae and Freddie Mac have taken to prevent foreclosures and keep people in their homes. For the first time the report includes trial modification volumes from the HAMP. The data were released by FHFA Acting Director Edward DeMarco as part of the report for the second quarter of 2009, which now includes cumulative data from HAMP.

FDIC Alerts Banks to Tenant Protection Act

This story appeared in Bank Digest.

The FDIC has published highlights of the “Protecting Tenants at Foreclosure Act of 2009,” which became effective on May 20, 2009. The law is intended to protect tenants from immediate eviction by persons or entities that become owners of residential property through foreclosure and extends additional protections for tenants with U.S. Department of Housing and Urban Development Section 8 vouchers. It establishes a minimum time period that a tenant can remain in a foreclosed property before being evicted. Tenants must be given at least 90 days notice; tenants with leases must be permitted to remain until the end of the lease, except that a lease can be terminated with 90 days notice by a purchaser who intends to occupy the property.

OCC Identifies “Worst Mortgage Lenders”

This story appeared in Bank Digest.

The OCC has issued a list of the 10 metropolitan areas with the highest foreclosure rates in the first half of 2008 and another list of the 10 mortgage originators in each area with the highest foreclosure rates. Comparing the two lists, the agency noted that 21 originators occupied the top 10 places on both lists, only three of which were subject to OCC supervision during the times the loans generally were made.

HAMP Servicer Agreement Released

This story appeared in Bank Digest.

The Treasury Department has posted the following servicer participation agreement for the Home Affordable Modification Program (HAMP). This agreement is the first step servicers need to take to participate in HAMP for loans that are not owned, securitized or guaranteed by Fannie Mae or Freddie Mac.

Bay Federal Credit Union at http://www.financialstability.gov/docs/HAMP/Bay%20Federal%20Credit%20Union.pdf

FTC Sues Organizations for Alleged Foreclosure Rescue Fraud

This story appeared in Bank Digest.

The FTC has announced the filing of lawsuits against two different groups of companies and individuals that allegedly engaged in fraud while offering assistance to consumers who were seeking mortgage loan modifications. According to the agency, Nations Housing Modification Center and its principals violated the Federal Trade Commission Act and the Telemarketing Sales Rule by misrepresenting themselves as a federal government agency or affiliate and falsely claiming that they would obtain mortgage modifications that would make consumers' loan payments substantially more affordable in virtually every instance. The FTC charged that Infinity Group Services and its president violated the FTC Act by falsely representing that they would: obtain a loan modification in all, or virtually all, instances; give full refunds if they failed to do so; and obtain loan refinancing for an up-front fee of $995. The agency also described preliminary injunctions or amended charges in four earlier cases.

Federal, State Officials Discuss Housing Anti-Fraud Efforts

This story appeared in Bank Digest.

Treasury Secretary Timothy Geithner, Attorney General Eric Holder, Housing and Urban Development Secretary Shaun Donovan, Federal Trade Commission Chairman Jon Leibowitz, Financial Crimes Enforcement Network Director Jim Freis and attorneys general from 12 states met on Sept. 17, 2009, to discuss emerging trends and proactive strategies to combat fraud against consumers in the housing markets as well as best practices to bolster coordination across state and federal agencies. The federal agencies have committed to coordinating information and resources across agencies to maximize targeting and efficiency in fraud investigations. This includes alerting financial institutions to emerging schemes, stepping up enforcement actions and educating consumers to help those in financial trouble avoid becoming the victims of a loan modification or foreclosure rescue scam.