Loss mitigation

The payment supplement partial claim the Federal Housing Administration proposed could be effective but not as is, according to the Mortgage Bankers Association and two other groups.

The agency developed measures taking effect Aug. 31 that, among other things, will allow lenders to prioritize foreclosures of the most impaired loans and then focus on modifying salvageable ones.

The Consumer Financial Protection Bureau issued a temporary final rule that allows mortgage servicers to initiate foreclosures on abandoned properties and certain delinquent borrowers, but it also outlined additional measures that shield distressed homeowners.

The FHFA’s forbearance extension to September is forcing nonbank servicers to buy out more delinquent loans. It's also upended loss estimates for investors and made racial and income disparities in the mortgage market worse.

The agency will allow an additional three months of forbearance for loans backed by Fannie Mae and Freddie Mac, giving homeowners up to 18 months to suspend payments due to the pandemic.

The decision provides more clarity to noteholders in the state about when the six-year statute of limitations to bring a foreclosure action begins.

While the annual total marks a 16-year low, the numbers are likely to change dramatically once government moratoria expire, according to Attom Data Solutions.

The company was accused of sending borrowers erroneous loan modification information between 2014 and 2018.

The November foreclosure rate represented an 80% decline from the year before, according to Attom Data Solutions.

While moratoria keep foreclosures low compared to last year's rates, October activity jumped 20% from September, according to Attom Data Solutions.