Key Events This Week:

Monday:

No significant data.

1:30 ― Narayana Kocherlakota, president of the Minnesota Fed, delivers a luncheon speech to business leaders in Sioux Falls, South Dakota.

Treasury Auctions:

• 11:30 ― 3-Month Bills
• 11:30 ― 6-Month Bills
• 1:00 ― 2-Year Notes

Tuesday:

8:30 ― Revisions to third-quarter GDP are expected to boost the measure to an annualized rate of 2.4%, up from the original projection of 2%. Estimates from the 64 economists polled by Thomson Reuters range from 2% to 2.8%.

“Recent economic indicators such as business and wholesale inventories, new residential construction and net external demand point to a stronger economic activity in 3Q10 than previously estimated,” said economists at BBVA.

Forecasters at IHS Global Insight say inventory accumulation should provide a bigger boost than original estimates, while foreign trade should be less of a drag. However, private nonresidential construction should see large downward revision.

Projecting into the current quarter, IHS says to expect 2.5% growth.

10:00 ― Existing Home Sales are expected to take a slight hit in October. Forecasters expect to see an annualized pace of 4.50 million sales, down from 4.53 million in September. Estimates from 60 economists range from 4.20 to 4.80 million. The pessimism largely stems from the 1.8% drop in September’s pending home sales index, versus the consensus call for a 3% gain. The PHSI tracks contract signings, thereby anticipating secondary market sales by a month or two.

Against the consensus, economists at Nomura Global Economics look for a 1.5% increase to 4.60 million sales.

“Despite rapid growth over the past two months, the level of existing home sales remains a bit low compared to pre-federal tax credit levels,” they wrote. “We therefore think sales could rise further this month, despite the weakness in the pending home sales index (a leading indicator of existing home sales).”

On the lower end of the spectrum, economists at IHS Global Insight expect a 6% tumble.

“The Pending Home Sales Index slipped 1.8% in September, and mortgage applications to buy homes fell during October, according to the Mortgage Bankers Association,” they wrote. “The foreclosures mess which led to halts in foreclosures from some mortgage lenders contributed to the expected decline in sales.

2:00 ― Given the unprecedented attacks on the Federal Reserve in recent weeks, there should be lost of appetite to read the FOMC Minutes of the Nov. 2-3 policy meeting. The resulting communique detailed the central bank’s plan to renew quantitative easing efforts with $600 billion of new asset purchases. The minutes should detail how much support chairman Ben Bernanke had in launching the program.

“The QE2 decision is under attack from many quarters ― including from some members of the committee ― and markets have reacted violently since the meeting,” said economists at Nomura. “There is a clear need for formal communication on the latest policy action from the Fed. Indeed, the minutes of the last FOMC meeting specifically noted that the committee itself regards this document as ‘an important channel for communicating participants' views about monetary policy.’”

The minutes will also provide the Fed’s first updates on GDP, unemployment and inflation since the late June meeting.

“We expect major downward revisions to the Fed's forecasts for growth and core inflation, and an upward revision to forecasts for unemployment,” said Nomura.

Treasury Auctions:

• 11:30 ― 4-Week Bills
• 1:00 ― 5-Year Notes

Wednesday:

7:00 ― In the latest MBA Mortgage Applications survey for the week ending Nov. 12, mortgage loan application volume fell a precipitous 14.4%. Refinancings declined 16.5% to their lowest level since July; purchases fell 5%, ending a three week uptrend.

One reason for the sharp drop was a rise in interest rates. The average contract for a 30-year fixed-rate mortgage moved up to 4.46% from 4.28%.

“Rates increased sharply last week due to stronger economic data and lingering uncertainty regarding the structure and impact of the Fed’s QE2 program,” said the MBA. “Mortgage applications, particularly for refinances, dropped in response.”

Economists at Nomura note that purchase applications, despite three weeks of gain before last week’s fall, continue to languish at low levels. “This may indicate downside risks to our home sales forecasts for the next few months,” they added.

8:30 ― Durable Goods are expected to be flat in October following a 3.5% advance one month before. Forecasts are all over the place however, ranging from -2.7% to +4.5%. Not all news is bad though; the core index, defined as non-defense spending excluding aircraft, is anticipated to rise 1% after falling 0.2% in September. The discrepancy arises from September’s 105% monthly climb in non-defense aircraft parts.

Economists at Nomura, looking for a 0.5% increase overall, said October’s industrial production report signaled “very strong growth in business equipment output” and suggests a healthy underlying trend in capital expenditure ― “and therefore core durable goods orders.”

8:30 ― The October Personal Income & Outlays report is anticipated to show wages and consumption rising amid flat inflation. Economists predict income will rise 0.4%, following a 0.1% cut one month before, while consumption will pick up 0.5% after rising 0.2%. Core inflation, which excludes volatile energy and food prices, is set to be unchanged for the second month, providing the Federal Reserve with a defense of its reflationary QE2 measures.

Economists at BMTU note that year-to-year personal income began expanding in December 2009 following eleven months of decline. The growth rate was 3.1% in September.

“While that’s the best growth rate in income since late 2008, it is still about half of the historical average,” BTMU says. “Wages were up +1.7% year-over-year in September, which is the third consecutive month they’ve outpaced inflation since the recession began in December 2007.”

Forecasters at IHS Global Insight look for wages and salaries – which they call “the best guide to underlying trends” – to rise 0.5% in October.

“Higher employment, a longer working week, and increased hourly earnings all drove wages and salaries higher in October,” they said.

8:30 ― Many will be watching the Initial Jobless Claims report to see if the trend in claimants continues to fall. There were 439k and 437k new claims in the weeks ending Nov. 13 and Nov. 6, respectively, which drove the 4-week average to the lowest level since September 2008. A sustained number below 450k is generally indicative of private job growth in the US economy.

“Recent claims reports have increased our optimism about the state of the US labor market,” said economists at Nomura. “If we see another good report this week we will likely push up our forecasts for nonfarm payroll employment growth.”

10:00 ― The Reuters / U of Michigan Consumer Sentiment report bumped up 1.6 points in mid-November to 69.3. The current economic conditions index climbed 3.1 points to 79.7 and the expectations component moved up less than one point to 62.7. Revisions are expected to be minor, with analysts forecasting a 0.2 point gain to 69.5.

“The index of consumer sentiment remains quite low despite higher stock prices and improving economic conditions,” said economists at Nomura. “Given that the index was as high as 76.0 in June, we think further increases from 69.3 are quite plausible. The inflation expectation components of this report signal little risk of deflation.”

10:00 ― New Home Sales, the final bit of new data for the holiday-shortened week, is expected to show the annual pace of sales rise to 310,000 in October, from 307,000 one month before. Last month’s positive employment report provides the hope for more sales in the final quarter of 2010. Extremely low mortgage rates are also a nice incentive.

Analysts at Nomura look for the index to jump 4.2% to 320,000.

“The post-tax credit bust in new home sales looks to have ended, and building sentiment has started to pick up (albeit slowly and from a very low level),” they noted. “Given that new home sales remain quite low, we see room for further increases.”

Treasury Auctions:

• 1:00 ― 7-Year Notes

Thursday:

Happy Thanksgiving! Markets closed.

Friday:

No significant data. Markets are closing early.

Question of the Day:

Realtors Ask Mortgage Industry to Ease Underwriting Policies

The National Association of Realtors® (NAR) used the forum of its 2010 Conference in New Orleans to urge the lending industry to make things easier to qualified buyers to become homeowners. NAR appealed primarily to the public sector, i.e. FHA, Fannie Mae, and Freddie Mac, which it said account for more than 90 percent of the mortgage market, saying that lenders refuse to make loans without assurance that FHA will insure them or the GSEs will buy them.

Vicki Cox Golder, NAR President, said that the government agencies are impairing their own mission to provide mortgage liquidity to home buyers with unnecessarily restrictive limits on the availability of credit. "These policies are delaying recovery both of the housing market and the larger economy."

"Under current practices, many would-be home buyers who could responsibly, affordably become home owners are unable to do so," said Golder. "NAR wants to ensure that anyone who is able and willing to assume the responsibilities of owning a home should have the opportunity to pursue that dream."

NAR also called on FICO Corp. and private lenders to amend certain rules on the utilization of credit, how negative credit scores will affect future home purchases, and to change how they report and treat loan modification and payment plans. The Association also expressed its intentions to work with all public and private parties to encourage them to assess their credit policies on an ongoing basis.

NAR said it will also develop educational materials for its members and consumers about credit issues, including the importance of good credit, lender credit policies, and how to find a fair and affordable mortgage.

By: Jann Swanson

Largest Lenders Control Mortgage Industry. Time to Engage Community Bankers

I've been very busy over the past few weeks answering questions regarding the foreclosure mess and the accompanying “robo-signing” dilemma.
What surprises me are not the concerns over systematic risks surrounding the issue or whether or not fraud has occurred, but the fact that everyone I’ve spoken to is shocked that something like this could have happened.

To this I say, have you not been paying attention?

The government initiated HAMP program has failed to address loan modifications effectively and short-sales have failed to efficiently mitigate housing's losses.

These two outcomes have played out for the same reason: Four major banks control over 75% of the nations mortgage servicing. The GSE’s failure too can be linked to Fannie and Freddie controlling over 70% of the nations mortgage-backed securities market during their hay day. Too much control in the hands of the few has ultimately ended in chaos.

The same four major banks have controlled the majority of the mortgage servicing for the past two decades. During that time their primary responsibilities have been the collection of monthly remittances, payments to bond-holders and submission of the accompanying reports. This responsibility was relatively straight-forward and with the ability, in the past decade, to send processes off-shore the profitability grew at an enormous rate.

As annual mortgage volume grew from $500 billion in 1990 to an excess of $3 trillion in 2006 so too did the number of outstanding mortgage accounts that were being serviced by the large financial institutions. As these numbers continued to grow, so too did the number of delinquent files. Unfortunately loan servicers are not properly set up with the experienced personnel or the technology required to effectively managing these delinquent assets. As a result, too many delinquent accounts are being managed by institutions that have not adequately prepared for such an anomaly and we've experienced a massive back-up in the modification/loss mitigation process.

The solution is not simple but it’s doable...

First congress MUST redesign the nation’s Housing finance System to adequately supply the necessary liquidity to meet its future housing needs. This can only be accomplished if congress is willing to address an entire system overhaul and not just Fannie and Freddie.

Congress should also provide the Federal Home Loan Banks the authority to securitize mortgages. This would serve two purposes. It would first help to deleverage the percentage of the mortgage-backed securities market that the GSEs currently enjoy. After all that is what got them into the situation they find themselves today. Owning 70% of the MBS market was doomed to failure. Allowing the FHLB to securitize would also allow the industry to begin to shift some of the servicing responsibilities from the few to the many. Engaging the community banking system to assist in the de-leveraging of the big players should be a goal of the administration. More importantly, however, moving the servicing back down to these local bankers in local markets makes much more sense and improves the odds of future catastrophic failure of our mortgage system.

If the market ever expects housing to contribute 25% to 30% of GDP again, it will require congress to completely overhaul the housing finance system, de-leverage those institutions that have enjoyed the “too big to fail” status and let the private markets control housing rather than the socialized housing system currently in place.

by Joe Murin

FHFA Releases Framework for Dealing with Foreclosures. Borrowers Must Play Ball

Statement By FHFA Acting Director Edward J. DeMarco On Servicer Financial Affidavit Issues

“On October 1, FHFA announced that Fannie Mae and Freddie Mac are working with their respective servicers to identify foreclosure process deficiencies and that where deficiencies are identified, will work together with FHFA to develop a consistent approach to address the problems. Since then, additional mortgage servicers have disclosed shortcomings in their processes and public concern has increased.

Today, I am directing the Enterprises to implement a four-point policy framework detailing FHFA’s plan, including guidance for consistent remediation of identified foreclosure process deficiencies. This framework envisions an orderly and expeditious resolution of foreclosure process issues that will provide greater certainty to homeowners, lenders, investors, and communities alike.

In developing this framework, FHFA has benefited from close consultation with the Administration and other federal financial regulators.

The country’s housing finance system remains fragile and I intend to maintain our focus on addressing this issue in a manner that is fair to delinquent households, but also fair to servicers, mortgage investors, neighborhoods and most of all, is in the best interest of taxpayers

Four-Point Policy Framework For Dealing with Possible Foreclosure Process Deficiencies

1. Verify Process -- Mortgage servicers must review their processes and procedures and verify that all documents, including affidavits and verifications, are completed in compliance with legal requirements. Requests for such reviews have already been made by FHFA, the Enterprises, the Federal Housing Administration, and the Office of the Comptroller of the Currency, among others. In the event a servicer’s review reveals deficiencies, the servicer must take immediate corrective action as described below.

2. Remediate Actual Problems -- When a servicer identifies a foreclosure process deficiency, it must be remediated in an appropriate and timely way and be sustainable. In particular, when a servicer identifies shortcomings with foreclosure affidavits, whether due to affidavits signed without appropriate knowledge and review of the documents, or improperly notarized, the following steps should be taken, as appropriate to the particular mortgage:

a. Pre-judgment foreclosure actions: Servicers must review any filed affidavits to ensure that the information contained in the affidavits was correct and that the affidavits were completed in compliance with applicable law. If the servicer’s review indicates either (a) that the information in a previously filed affidavit was not correct or (b) that the affidavit was not completed in compliance with applicable law, the servicer must work with foreclosure counsel to take appropriate remedial actions, which may include preparing and filing a properly prepared and executed replacement affidavit before proceeding to judgment.

b. Post-judgment foreclosure actions (prior to foreclosure sale): Before a foreclosure sale can proceed, servicers must review any affidavits relied upon in the proceedings to ensure that the information contained in the affidavits was correct and that the affidavits were completed in compliance with applicable law. If the servicer’s review indicates either (a) that the information in a previously filed affidavit was not correct or (b) that the affidavit was not completed in compliance with applicable law, the servicer must work with foreclosure counsel to address the issue consistent with local procedures. Potential remedial measures could include filing an appropriate motion to substitute a properly completed replacement affidavit with the court and to ratify or amend the foreclosure judgment.

ci. Post-foreclosure sale (Enterprise owns the property): Eviction actions: Before an eviction can proceed, servicers with deficiencies must confirm that the information contained in any affidavits relied upon in the foreclosure proceeding was correct and that the affidavits were completed in compliance with applicable law. If the servicer’s review indicates either (a) that the information in a previously filed affidavit was not correct or (b) that the affidavit was not completed in compliance with applicable law, the servicer must work with foreclosure counsel to address the issue consistent with local procedures before the eviction proceeds. Potential remedial measures could include seeking an order to substitute a properly prepared affidavit and to ratify the foreclosure judgment and/or confirm the foreclosure sale.

cii, Real Estate Owned (REO): With respect to the clearing of title for REO properties, servicers must confirm that the information contained in any affidavits relied upon in the foreclosure proceeding was correct and that the affidavits were completed in compliance with applicable law. If the servicer’s review indicates either (a) that the information in a previously filed affidavit was not correct or (b) that the affidavit was not completed in compliance with applicable law, the servicer must work with foreclosure counsel to address the issue consistent with local procedures and take actions as may be required to ensure that title insurance is available to the purchaser for the subject property in light of the facts surrounding the foreclosure actions.

d. Bankruptcy Cases: Servicers must review any filed affidavits in pending cases to ensure that the information contained in the affidavits was correct and that the affidavits were completed in compliance with applicable law. If the servicer’s review indicates either (a) that the information in a previously filed affidavit was not correct or (b) that the affidavit was not completed in compliance with applicable law, the servicer must work with bankruptcy counsel to take appropriate remedial actions.

3. Refer Suspicion of Fraudulent Activity -- Servicers are reminded that in any foreclosure processing situation involving possible fraudulent activity, they should meet applicable legal reporting obligations.

4. Avoid Delay -- In the absence of identified process problems, foreclosures on mortgages for which the borrower has stopped payment, and for which foreclosure alternatives have been unsuccessful, should proceed without delay. Delays in foreclosures add cost and other burdens for communities, investors, and taxpayers. For Enterprise loans, delay means that taxpayers must continue to support the Enterprises’ financing of mortgages without the benefit of payment and neighborhoods are left with more vacant properties. Therefore, a servicer that has identified no deficiencies in its foreclosure processes should not postpone its foreclosure activities.

FHFA will provide additional guidance should it become necessary.

-------------------------------------

Notice I called attention to the phrase "the servicer must work with counsel". I am not sure if this guidance was intended to be a solution or not. If it was, it seems like the borrowers who have claimed to be victims of "robosigning" will still need to be dealt with individually, on a case by case basis, which tells me only time will heal this problem. It also means borrowers must be willing to work with servicers. This is a technicality that can be corrected if all parties involved are willing to play ball. Unfortunately common sense tells me that borrowers will not give in without a fight.

The FHFA made the consequences clear/guilt tripped all the robosigned folks...

"Delays in foreclosures add cost and other burdens for communities, investors, and taxpayers. For Enterprise loans, delay means that taxpayers must continue to support the Enterprises’ financing of mortgages without the benefit of payment and neighborhoods are left with more vacant properties. Therefore, a servicer that has identified no deficiencies in its foreclosure processes should not postpone its foreclosure activities."

Foreclosures should go as scheduled if the servicer has all their ducks in a row. Let’s get on with the correction process already....

by Adam Quinones
in an article from Mortgage News Daily

All States Join Nationwide Mortgage Licensing System. Verification Checkpoint Provided

The presser below was released this morning by the Conference of State Bank Supervisors
Washington, D.C.—Less than 34 months after its official launch, all 50 states have joined the Nationwide Mortgage Licensing System and Registry (NMLS, or the System). Hawaii became the last state to join NMLS on Monday, thereby ensuring improved supervision of non-depository mortgage lenders, brokers, and mortgage loan originators maintaining licensure through a single system shared by all state mortgage regulators.

“NMLS was built to be the foundation of a coordinated and transparent system of mortgage supervision implemented by state regulators,” said Neil Milner, CSBS President and CEO. “Having all 50 states on the System provides greater transparency within the mortgage industry and makes information available to consumers as they obtain mortgages from state-licensed entities.”

“This milestone is a testament to the hard work and commitment of state mortgage regulators,” said Gavin Gee, Director of the Idaho Department of Finance and Chairman of the State Regulatory Registry LLC (SRR). A limited liability company established by CSBS and the American Association of Residential Mortgage Regulators, SRR operates NMLS on behalf of state regulators. “State regulators have demonstrated their ability to coordinate on an unprecedented level to enhance supervision of the residential mortgage industry and protect consumers,” Gee continued.

Launched in January 2008 with seven states (ID, IA, KY, MA, NE, NY, RI), NMLS now includes 58 state agencies from all 50 states, the District of Columbia, and the territories of Puerto Rico and the U.S. Virgin Islands. NMLS currently tracks nearly 16,000 mortgage companies holding over 30,000 licenses and over 126,000 mortgage loan originators holding over 207,000 licenses.

MORE BACKGROUND INFO: The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the Farm Credit Administration, and the
National Credit Union Administration published in the Federal Register a joint final rule implementing the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) on July 28, 2010. The rule took effect on October 1, 2010, institutions were expected to implement appropriate policies, procedures and management systems to ensure compliance.

REMINDER: At this time there is no licensing action required in the Nationwide Mortgage Licensing System (NMLS) of any mortgage loan originator who is an employee of a federally insured depository institution or an owned and controlled subsidiary of such a depository institution that is federally regulated. HOWEVER these loan officers will soon be forced to comply with licensing laws....the final rule further provides that Agency-regulated institutions must: require their employees who act as residential mortgage loan originators to comply with the S.A.F.E. Act’s requirements to register and obtain a unique identifier, and adopt and follow written policies and procedures designed to assure compliance with these requirements. It is expected that these loan originators will have to obtain a unique identifier, and maintain this registration on the NMLS system sometime in early 2011.

While it might seem "sketchy" that some loan officers face tougher testing standards than others, this is not the case. Even before the SAFE Act, loan officers employed by banks, savings associations, credit unions or Farm Credit System (FCS) institutions and certain of their subsidiaries regulated by a Federal banking agency or the FCA, were already required by Federal regulations to pass a series of tests similar to those taken by independent mortgage originators who must already comply with NMLS today.

Consumers you can check the licensing status of your mortgage professional HERE.

READ MORE ABOUT NMLS REQUIREMENTS

by Adam Quinones - Map by Google Maps

FHFA Releases Framework for Dealing with Foreclosures. Borrowers Must Play Ball

“On October 1, FHFA announced that Fannie Mae and Freddie Mac are working with their respective servicers to identify foreclosure process deficiencies and that where deficiencies are identified, will work together with FHFA to develop a consistent approach to address the problems. Since then, additional mortgage servicers have disclosed shortcomings in their processes and public concern has increased.

Today, I am directing the Enterprises to implement a four-point policy framework detailing FHFA’s plan, including guidance for consistent remediation of identified foreclosure process deficiencies. This framework envisions an orderly and expeditious resolution of foreclosure process issues that will provide greater certainty to homeowners, lenders, investors, and communities alike.

In developing this framework, FHFA has benefitted from close consultation with the Administration and other federal financial regulators.

The country’s housing finance system remains fragile and I intend to maintain our focus on addressing this issue in a manner that is fair to delinquent households, but also fair to servicers, mortgage investors, neighborhoods and most of all, is in the best interest of taxpayers

Four-Point Policy Framework For Dealing with Possible Foreclosure Process Deficiencies

1. Verify Process -- Mortgage servicers must review their processes and procedures and verify that all documents, including affidavits and verifications, are completed in compliance with legal requirements. Requests for such reviews have already been made by FHFA, the Enterprises, the Federal Housing Administration, and the Office of the Comptroller of the Currency, among others. In the event a servicer’s review reveals deficiencies, the servicer must take immediate corrective action as described below.

2. Remediate Actual Problems -- When a servicer identifies a foreclosure process deficiency, it must be remediated in an appropriate and timely way and be sustainable. In particular, when a servicer identifies shortcomings with foreclosure affidavits, whether due to affidavits signed without appropriate knowledge and review of the documents, or improperly notarized, the following steps should be taken, as appropriate to the particular mortgage:

a. Pre-judgment foreclosure actions: Servicers must review any filed affidavits to ensure that the information contained in the affidavits was correct and that the affidavits were completed in compliance with applicable law. If the servicer’s review indicates either (a) that the information in a previously filed affidavit was not correct or (b) that the affidavit was not completed in compliance with applicable law, the servicer must work with foreclosure counsel to take appropriate remedial actions, which may include preparing and filing a properly prepared and executed replacement affidavit before proceeding to judgment.

b. Post-judgment foreclosure actions (prior to foreclosure sale): Before a foreclosure sale can proceed, servicers must review any affidavits relied upon in the proceedings to ensure that the information contained in the affidavits was correct and that the affidavits were completed in compliance with applicable law. If the servicer’s review indicates either (a) that the information in a previously filed affidavit was not correct or (b) that the affidavit was not completed in compliance with applicable law, the servicer must work with foreclosure counsel to address the issue consistent with local procedures. Potential remedial measures could include filing an appropriate motion to substitute a properly completed replacement affidavit with the court and to ratify or amend the foreclosure judgment.

ci. Post-foreclosure sale (Enterprise owns the property): Eviction actions: Before an eviction can proceed, servicers with deficiencies must confirm that the information contained in any affidavits relied upon in the foreclosure proceeding was correct and that the affidavits were completed in compliance with applicable law. If the servicer’s review indicates either (a) that the information in a previously filed affidavit was not correct or (b) that the affidavit was not completed in compliance with applicable law, the servicer must work with foreclosure counsel to address the issue consistent with local procedures before the eviction proceeds. Potential remedial measures could include seeking an order to substitute a properly prepared affidavit and to ratify the foreclosure judgment and/or confirm the foreclosure sale.

cii, Real Estate Owned (REO): With respect to the clearing of title for REO properties, servicers must confirm that the information contained in any affidavits relied upon in the foreclosure proceeding was correct and that the affidavits were completed in compliance with applicable law. If the servicer’s review indicates either (a) that the information in a previously filed affidavit was not correct or (b) that the affidavit was not completed in compliance with applicable law, the servicer must work with foreclosure counsel to address the issue consistent with local procedures and take actions as may be required to ensure that title insurance is available to the purchaser for the subject property in light of the facts surrounding the foreclosure actions.

d. Bankruptcy Cases: Servicers must review any filed affidavits in pending cases to ensure that the information contained in the affidavits was correct and that the affidavits were completed in compliance with applicable law. If the servicer’s review indicates either (a) that the information in a previously filed affidavit was not correct or (b) that the affidavit was not completed in compliance with applicable law, the servicer must work with bankruptcy counsel to take appropriate remedial actions.

3. Refer Suspicion of Fraudulent Activity -- Servicers are reminded that in any foreclosure processing situation involving possible fraudulent activity, they should meet applicable legal reporting obligations.

4. Avoid Delay -- In the absence of identified process problems, foreclosures on mortgages for which the borrower has stopped payment, and for which foreclosure alternatives have been unsuccessful, should proceed without delay. Delays in foreclosures add cost and other burdens for communities, investors, and taxpayers. For Enterprise loans, delay means that taxpayers must continue to support the Enterprises’ financing of mortgages without the benefit of payment and neighborhoods are left with more vacant properties. Therefore, a servicer that has identified no deficiencies in its foreclosure processes should not postpone its foreclosure activities.

FHFA will provide additional guidance should it become necessary.

-------------------------------------

Notice I called attention to the phrase "the servicer must work with counsel". I am not sure if this guidance was intended to be a solution or not. If it was, it seems like the borrowers who have claimed to be victims of "robosigning" will still need to be dealt with individually, on a case by case basis, which tells me only time will heal this problem. It also means borrowers must be willing to work with servicers. This is a technicality that can be corrected if all parties involved are willing to play ball. Unfortunately common sense tells me that borrowers will not give in without a fight.

The FHFA made the consequences clear/guilt tripped all the robosigned folks...

"Delays in foreclosures add cost and other burdens for communities, investors, and taxpayers. For Enterprise loans, delay means that taxpayers must continue to support the Enterprises’ financing of mortgages without the benefit of payment and neighborhoods are left with more vacant properties. Therefore, a servicer that has identified no deficiencies in its foreclosure processes should not postpone its foreclosure activities."

Foreclosures should go as scheduled if the servicer has all their ducks in a row. Let’s get on with the correction process already....

by Adam Quinones
in an article from Mortgage News Daily
Statement By FHFA Acting Director Edward J. DeMarco On Servicer Financial Affidavit Issues

What is loan to value ratio (LTV)?

A loan to value ratio (LTV) is a ratio used by mortgage lenders to figure out what amount of a mortgage they will loan you based on the appraised value of the property (or purchase price of the property, whichever of the two numbers is lower). Lenders consider the LTV ratio whether you are purchasing new property or refinancing property you currently own. The loan to value ratio may depend on the type of property - commercial or residential, or primary home, secondary home or investment property. The loan to value ratio may even vary depending on whether the property is a single family home or a condominium.

As an easy example, let's assume that a couple is purchasing a single family primary residence. The couple walks into the local bank to apply for a mortgage. The lender tells the couple that it can loan up to an 80% loan to value on the purchase price or the appraised value of the home the couple is looking to purchase. Let's say that the purchase price is $100,000. So, in this example, the loan to value ratio is 80:100 or 80%. Multiply the LTV ratio by the purchase to figure out the amount of money the bank will loan. Eighty percent of $100,000 is $80,000, which means that the couple will need to come up with a down payment for the difference of $20,000.

The lower the loan to ratio value for a property, the more risk that the lender associates with the property type or borrower. So if a borrower has a low credit score, a history of making late payments, or a high debt-to-income ratio, the borrower is likely to receive a lower loan to value ratio from lenders than those borrowers with higher credit scores, who pay their mortgage on time, and have a low debt-to-income ratio.

For properties that are located in the United States, the typical LTV ratio is 80%. This is because an 80% LTV ratio allows the lenders resell the mortgage to the federal government on the secondary market. Borrowers can obtain higher loan to value ratios, but they will usually have to pay private mortgage insurance on top of their regular mortgage payment. Private mortgage insurance protects the lender since they are exposing themselves to more risk by loaning a borrower a higher loan to value ratio than they normally would.