government affairs blog

More mortgage servicers signed up to use Lender Processing Services (LPS: 18.78 -0.37%) technology to comply with new requirements from the recent regulatory consent orders.

Last year, foreclosure problems surfaced in courts across the country, leading to moratoriums, federal and state investigations. In April, the Federal Reserve, the Office of the Comptroller and the Currency and the Office of Thrift Supervision settled their investigations with 14 mortgage servicers.

LPS also was required to sign a consent order with the Fed for executing and recording "numerous affidavits, assignments of mortgages, and other mortgage-related documents that contained inaccurate information." LPS was forced to implement new oversight plans to manage its processes.

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Freddie Mac completed 10,809 loan modifications in June and slightly more than 66,000 during the first half of the year, according to the company's latest monthly volume summary.

The monthly average is up from 8,891 loan modifications in May.

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Following a series of cases splitting on the question of whether MERS is a proper party to foreclose.   Mortgage Electronic Registration Systems, Inc. (MERS) is withdrawing from the foreclosure business. 

The organization has issued a policy update to its members stating that no foreclosure proceeding may be initiated in the name of MERS and no legal proceedings in a bankruptcy may be filed in the name of MERS.

Before a lender or investor starts a foreclosure or files a bankruptcy motion, they must execute an assignment of the security instrument from MERS to themselves as the mortgagee and record the transfer with the applicable county clerk or public land records office, MERS said.

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Here is the ABA Journal analysis

Senators Carl Levin (D-MI) and Mark Begich (D-AK) have introduced legislation (S. 1390) that would require the IRS to file tax liens in a centralized electronic database instead of in the local property records office.  As the Senators envision it, the electronic registry would be accessible by the public and free to search and would index liens by "at a minimum, taxpayer name, the State of the taxpayer's address as shown on the notice of lien, the type of tax, and the tax period." The Senators argue that this bill would save $150 Million a year and help reduce the amount of time necessary to release a tax lien down from 30 days to 20 days.   More information about the bill can be found here.

Many think this would be a disaster for traditional search and examination procedures.   We have enough problems dealing with “common names” in large counties.   It would be all but impossible to sort out all of the “John Smith” entries in a national registry to focus only on those tax liens which might affect a given property. 

The practical reality is that such a law will likely lead to a further erosion of search standards to essentially ignore (and insure over) tax liens against certain common names, simply because there is no practical way to sort them out.  Ironically, this could actually reduce IRS tax collections, because the title industry would no longer have any practical ability to assist in their collection.

ALTA is already working on this issue.   If you have any thoughts on how this proposal would reduce efficiency for title processes please forward them to Kelley Williams ALTA Manager of Government Affairs at kwilliams@alta.org.

Critics of last year’s $8,000 tax credits for home purchases routinely argued that the credits were unlikely to do more than offer sellers the chance to boost their sale price by the amount of the tax credit.

Those critics won’t be surprised, then, by a new paper that findsundefinedyou guessed itundefinedthat average listing prices rose by around $8,000 in the month after the signing of the first major tax credit, and that they fell by slightly less than $9,000 two months after the tax credits expired.

More from the Wall St. Journal

President Barack Obama said Sunday he would nominate former Ohio Attorney General Richard Cordray to head the consumer finance watchdog agency created in the wake of the 2008 financial crisis.

During two years as Ohio's attorney general, Mr. Cordray was a leader among state regulators who challenged banks over their mortgage foreclosure practices.  Among other things, the CFPB will be responsible for enforcing RESPA and providing a consolidated GFE and TILA disclosure.

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In an AP exclusive, it was reported that mortgage industry employees are still signing documents they haven't read and using fake signatures more than eight months after big banks and mortgage companies promised to stop the illegal practices that led to a nationwide halt of home foreclosures.

County officials in at least three states say they have received thousands of mortgage documents with questionable signatures since last fall, suggesting that the practices, known collectively as "robo-signing," remain widespread in the industry.

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