Wednesday, December 23, 2009

Third Quarter 2009 "Mortgage Metrics"

The Office of the Comptroller of the Currency and Office of Thrift Supervision just released its "Mortgage Metrics Report for Third Quarter 2009" which provides "performance data on first-lien residential mortgages serviced by national banks and federally regulated thrifts." It reports that

  • the percentage of current and performing mortgages dropped for the sixth consecutive quarter to 87% of the servicing portfolio
  • only 67.7% of "option ARM" mortgages were current and performing
  • serious delinquencies (more than 60 days past due) rose to 6.2%
  • 3.2% of the servicing portfolios were in the process of foreclosure
  • deterioration among prime mortgages of which 3.6% were in serious delinquency
  • only 781 or less than 1% of HAMP trial period plans have been converted to permanent HAMP modifications

Monday, December 14, 2009

Mortgage Bankruptcy Amendment Defeated

On Friday, the House of Representatives rejected an amendment to the "Wall Street Reform and Consumer Protection Act of 2009" that would have added provisions to allow bankruptcy judges to modify home mortgages in chapter 13. The amendment was similar to that previously passed by the House on March 5, 2009 in H.R. 1106, the "Helping Families Save Their Homes Act of 2009" but was rejected by the Senate.

Under present law, mortgages that are secured only by a principal residence may not be modified, but mortgages on investment property may be modified.

It should be noted that some homeowners may be able to obtain a mortgage modification under present chapter 13 or chapter 11 bankruptcy law by changing the use of their home from being their principal residence to investment property. A modification in chapter 13 or chapter 11 bankruptcy may involve a reduction in principal balance and changes in interest rate, monthly payment and term.

Tuesday, December 8, 2009

Proposed Bankruptcy Reform and Mortgage Modification

It was reported yesterday that Congressman John Conyers (D-Mich.) has submitted Amendment 201 to the Wall Street Reform and Consumer Protection Act of 2009 (H.R. 1473) that would allow the modification of home mortgages in bankruptcy. This modification would include a principal reduction and interest rate changes.

The House Rules Committee was to meet today regarding this measure and debate on the legislation may start this week. The House passed similar bankruptcy measures earlier this year but they were defeated in the Senate.

House Hearings on Mortgage Crisis

Today the House Financial Services Committee held a hearing on "The Private Sector and Government Response to the Mortgage Foreclosure Crisis".