The pilot program will be offered to roughly 500 distressed homeowners to keep them in their homes.

The changes considered tail risk and stressed the backend of structures, said S&P MD Vandana Sharma in a conference call today.

The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 7.58%.

Standard & Poor’s warned that the entrance of new and lesser known special servicing operations can overcrowd the market and complicate the servicing process.

BofA, as part of a continuing effort to reduce its residential exposure, is selling about $7 billion of MSRs through what’s being called a ‘Barbell’ auction.

The REIT wants to service the GSE products through a subservicing firm called Cenlar.

Servicers have become more comfortable with disposing nonperforming loans through either asset or note sales.

Fannie is pressing its seller/servicers to repurchase $14.5 billion of bad mortgages but only a small portion of those buyback requests involve loans originated after 2008.

Under pressure from industry groups, federal banking regulators have extended the comment period on Basel III risk-based capital proposals by six weeks to Oct. 22.

Lenders will be required to determine whether the net value in changing an existing loan is more than the anticipated recovery from foreclosure.

A copy of the memo, written by MBA president David Stevens, says the rules “will likely be proposed with some comment period.”

CMBS data provider Trepp said that only 26.3% of the loans that reached their balloon date paid off in July.