A look at stories across HousingWire’s weekend desk, with more coverage to come on bigger issues:
Countrywide is transferring mortgages to special servicers on certain deals in line with the servicing part of a proposed $8.5 billion residential mortgage-backed securities settlement proposed by The Bank of New York Mellon (BNY) and Bank of America (BAC) last year.
As of June 26, Countrywide transferred 38,000 loans to Specialized Loan Servicing, Select Portfolio Servicing and Green Tree, according to Barclays. Of these, 73% were transferred to SLS, 21% to SPS and 6% to Green Tree.
The loans transferred so far span 91 different deals in the proposed settlement. Bank of America will pay servicers incentive fees for loss-mitigation activities such as short sales and modifications. High-risk loans from a single deal will be transferred to one servicer, while loans that make payments for 12 consecutive months can be transferred back to Countrywide. As a result, Barclays expects more aggressive servicer loss-mitigation behavior on these deals.
The proposed settlement agreement sets the criteria to determine which loans are high risk and eligible for transfer: those that are at least 45 days delinquency with no response from borrower; at least 60 days delinquency with at least one missed payment in the past 12 months; at least 90 days delinquency but less than 90 days in foreclosure; foreclosed but no sale date; and any bankruptcy regardless of delinquency status
Look for HousingWire’s coverage this week of Consumer Financial Protection Bureau Director Richard Cordray’s testimony before the Senate Banking Committee. He and the Committee will meet at 10 a.m. (Eastern) Tuesday to review the CFPB’s semi-annual report to Congress.
Then, at 10 a.m. (Eastern) on Wednesday, officials from groups such as the Manhattan Institute, the Center on Budget and Policy Priorities and the National Low Income Housing Coalition will meet with the Subcommittee on Housing, Transportation and Community Development for a hearing on the Housing and Urban Development Department‘s rental assistance programs.
Homebuilder sentiment continues to improve despite the weakening economic backdrop, but at least one homebuilding analyst is asking why, according to a new research note.
“How do we reconcile this divergence?” Michelle Meyer, analyst at Bank of America Merrill Lynch, asks. She says her bank falls somewhere between those who argue homebuilders sense a turn in the market and will be supported with a gain in new home sales over the coming months and those who argue that homebuilders have gotten ahead of themselves.
Builders have good reason to feel more optimistic as inventory of new homes for sale is extraordinarily low and the inventory of existing properties is shrinking as well, reducing some competition for builders.
“That said, the coast is not clear for builders,” Meyer notes. “The pipeline of foreclosures remains very full and there will be a steady flow of distressed properties into the market over the coming years. This will continue to restrain housing demand.”
BofA expects the S&P/Case-Shiller home price report, which will be released Tuesday, to show that home prices have increased since a year ago, consistent with CoreLogic (CLGX), Federal Housing Finance Administration and other price measures.
The Justice Department settled a housing discrimination lawsuit with a California municipality and a homeowners’ association to resolve allegations of discrimination on the basis of familial status in violation of the Fair Housing Act. The U.S. District Court for the Northern District of California must approve the settlement.
The DOJ’s lawsuit, filed in November 2011, alleged that the city of Santa Rosa, Calif., and La Esplanada Unit 1 Owners’ Association, a homeowners’ association, unlawfully sought to restrict residency at a housing development to seniors aged 55 and older. While the law allows an exemption for senior housing, the suit alleged that neither the city nor the homeowners’ association took the steps, such as routine age-verification, necessary to qualify for an exemption to the Fair Housing Act.
Under the terms of the consent order, when the city permits or requires a developer or property owner to operate senior housing, it will, among other things, designate the age restriction of the zoned property in its ordinances and zoning maps. It also requires that property owners for these developments submit biennial age verifications for the city’s review and certification.
Regulators shut down one bank over the weekend, raising the 2012 total to 39. This time last year, 58 had failed.
Jasper, Ga.-based Jasper Banking Company was shut down. The Federal Deposit Insurance Corp. entered into a purchase and assumption agreement with St. Cloud, Minn.-based Stearns Bank to assume all of Jasper’s $216.7 million of assets and $213.1 million of deposits.
The FDIC and Stearns Bank entered into a loss-share transaction on $106 million of Jasper’s assets. The FDIC estimates the cost to the deposit insurance fund will be $58.1 million. Compared to other alternatives, Stearns Bank’s acquisition was the least costly resolution for the FDIC’s DIF.