(Read More: Rising Rates Scare Borrowers Into Action)

In addition to the 29 servicer test results, Smith also reported receiving 59,586 consumer complaints as well as 797 from mortgage professionals between October and the end of March 2013.

The top consumer complaint was that a single point of contact was not provided or that contact was either difficult to deal with or to reach. The lack of a single servicing agent to work with each customer has led to dual-tracking; that is when one side of the bank is unaware that the other side is working on a loan modification and a foreclosure is completed while the borrower is still working through a mortgage modification.

Dual tracking violations of single point of contact and of timeline standards for loan modifications are also the crux of a lawsuit announced in early May by New York State Attorney General Eric T. Schneiderman against Bank of America and Wells Fargo. Schneiderman jumped the gun on Smith’s report, citing 339 violations of the National Mortgage Settlement in New York.

“Wells Fargo and Bank of America have flagrantly violated those obligations, putting hundreds of homeowners across New York at greater risk of foreclosure,” Schneiderman said in a statement released May 6.

(Read More: More Evidence Banks Violated Mortgage Pact: NY AG)

Former Bank of America employees, in affidavits filed in a Massachusetts lawsuit last week, claimed the lender paid them bonuses to deny loan modifications, lie to customers and initiate new foreclosures. Bank of America denied the allegations.

Smith had no comment on either lawsuit, saying only, “The single biggest deficit we have in the mortgage business is a deficit of trust.”

Article source: http://www.cnbc.com/id/100825528

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Ricardo Rodriguez, a San Francisco resident who has been fighting to save his home from foreclosure, has received some good news from Bank of America. After unsuccessfully applying for at least 10 loan modifications since 2009, Rodriguez was accepted by Bank of America last week for a trial loan modification.

He has made his first payment and will get to stay in his home. If he makes his payments on time during the three-month trial period, he may qualify for permanent loan restructuring.

“We’re just happy we get to keep our house after more than three years of this stuff,” Rodriguez said Monday. He said he is optimistic that he can meet the requirements to make the trial loan permanent.

NBC Bay Area and the Center for Investigative Reporting highlighted Rodriguez’s case in a joint report in April on questionable foreclosure practices in the Bay Area. The investigation found that thousands of homeowners were fighting in court to save their homes from a foreclosure system filled with mistakes, mismanagement and, on occasion, fraud. The report also found that in some cases, Bank of America was skirting proper foreclosure procedures, leaving Rodriguez and other borrowers unsure of the status of their loan modifications or who owned the rights to their home.

When Rodriguez lost his job delivering newspapers in 2011, he had trouble making the payments on his mortgage. He repeatedly applied for loan modifications but said Bank of America lost his paperwork and shuffled him among account managers, despite a state law requiring banks to provide homeowners with a single contact. Rodriguez became fed up and joined a local advocacy group to fight foreclosures in his neighborhood.

Bank of America spokeswoman Jumana Bauwens said in April that the bank previously had worked with Rodriguez and reduced his interest rate to 2 percent, but he was unable to pay the lower amount.

“If even the lowest possible payment is not affordable for a borrower, homeownership may not be the best or most responsible option for them,” the bank said at the time.

Bank of America plays the largest role of any bank in Bay Area foreclosures. From July 2008 through October, Bank of America’s foreclosure trustee, ReconTrust, handled 1 in 5 defaulted properties in the Bay Area, roughly 70 percent more than the next biggest trustee, according to RealtyTrac Inc., a real estate information company.

Article source: http://www.nbcbayarea.com/news/local/Homeowner-Fighting-Foreclosure-Wins-Trial-Loan-Modification-210295101.html

(Read More: Map: Tracking the US Real Estate Recovery)

The settlement’s monitor, former North Carolina Banking Commissioner Joseph A. Smith noted, “a significant increase,” in consumer complaints in the second half of 2012.

In a February 2013 report he reported 5,700 consumer complaints submitted to his office, about half of which related to problems with loan modifications or customer service.

The banks have extended close to $46 billion in gross relief to more than 550,000 borrowers under the settlement so far, according to the Office of Mortgage Settlement Oversight. Thousands of borrowers have had their mortgage principal slashed under the settlement, which should reduce future delinquencies. Negative equity is a primary driver of new delinquencies, a fact all too clear in a new report Monday from Lender Processing Services.

“Looking at the March data, we see that borrowers with equity are actually outperforming the national average—at 0.6 percent, this group is quite close to pre-crisis norms,” said Herb Blecher of LPS Applied Analytics, which released the delinquency report Monday.

(Read More: Housing Recovery Shows Up In Job Gains)

“The further underwater a borrower gets, the higher those problem rates rise. Borrowers with loan-to-value (LTV) ratios of just 100-110 percent are actually defaulting at more than twice the national average. For those 50 percent or more underwater, we see new problem rates of 4 percent.”

Article source: http://www.cnbc.com/id/100710946

“We outgrew the last space as soon as we had moved in,” said Edelheit as he weaves through a maze of desks, followed by his panting dog Frankie, to get to his office. There he shows off his stand-up computer work station that he fabricated out of a small shelf from Ikea. Many of his mostly-young employees stand as well, as they search for homes to buy, rent, market, and manage. The energy is palpable.

“In terms of risk and reward, I feel that this is a generational opportunity,” Edelheit noted.

Two similar REITs, Silver Bay Realty Trust and Altisource Residential just went public in December 2012.

Analysts at KBW estimate cash returns on investments in REOs are in the 5-7 percent range, while total returns could reach 15-20 percent. (Read More: Bank of America in $10 Billion Foreclosure Settlement With Fannie Mae)

Article source: http://www.cnbc.com/id/100366417

“When we began the Independent Foreclosure Review, the OCC pledged to fix what was broken, identify who was harmed, and compensate them for that injury,” said Comptroller of the Currency Thomas Curry in a written statement. “While today’s announcement represents a significant change in direction, it meets those original objectives by ensuring that consumers are the ones who will benefit, and that they will benefit more quickly and in a more direct manner.”

The banks, including Bank of America, Citibank, JPMorgan Chase and Wells Fargo, will make $3.5 billion in direct payments to borrowers and $5.2 billion in other assistance, such as loan modifications and forgiveness of deficiency judgments. Four other banks, EverBank, Ally, HSBC and One West, were involved in the talks but did not sign the deal. Together they service close to half a million loans. The OCC says conversations with them continue.

All 3.8 million borrowers, designated as those who were in any stage of foreclosure in 2009 or 2010, will receive something, regardless if they were wronged in any way, according to federal regulators. The loan servicers will divide borrowers into eleven different categories, and the regulators will designate a standard payment for each category.

Bank of America’s share will be the largest at just under $3 billion in direct payments and borrower assistance. Bank of America took on the ills of Countrywide Financial.

“We support the new approach because it expands the number of borrowers who will receive payment, speeds the delivery of those payments, and will provide support for homeowners still struggling to make payments and encourages continued community stabilization efforts and recovery of the housing market,” said Bank of America spokesman Dan Frahm.

This settlement follows a $25 billion deal last year with many of the same mortgage servicers and state attorneys general. So far that has resulted in nearly $22 billion in consumer relief and $4.2 billion pending to 300,000 borrowers through the end of September, roughly $84,385 per homeowner. (Read More: Forty States Sign On to Foreclosure ‘Robo’ Settlement.)

Article source: http://www.cnbc.com/id/100359672

“The programs then going forward will provide for similar relief, but I think we have offered principal reduction to all our borrowers — all the people we own, the asset that we can actually offer to that’s been done,” said Bank of America CEO Brian Moynihan in an interview last week.

Another report Friday from Lender Processing Services showed a monthly increase in the U.S. loan delinquency rate in November. As it stands now, 7.12 percent of loans are 30-plus days past due, but not yet in foreclosure, and 3.51 percent are in the foreclosure process. Add it up and 5.35 million loans are still in some kind of trouble, according to LPS, as big banks finish their obligations under the settlement.

—By CNBC’s Diana Olick; Follow her on Twitter @Diana_Olick or on Facebook at facebook.com/DianaOlickCNBC

Questions? Comments? RealtyCheck@cnbc.com

Article source: http://www.cnbc.com/id/100335126

“The prospect of being taxed on potentially tens or hundreds of thousands of dollars in additional income may motivate more distressed homeowners to forgo a short sale and allow the home to be foreclosed,” said RealtyTrac’s Daren Blomquist in a release. “Additionally, if the mortgage interest deduction is eliminated due to the fiscal cliff quagmire, it would give many underwater and otherwise distressed homeowners one less reason to hang on to their homes.”

Banks completed 13,351 principal reduction loan modifications in November alone, according to a monthly report from Amherst Securities Group. That’s a 62 percent jump from September. Much of it is thanks to the $25 billion mortgage servicing settlement signed by the nation’s five largest banks early this year over so-called “robo-signing” foreclosure practices.

Banks have already given borrowers $6.3 billion in mortgage principal relief under the settlement, according to a report from its monitor, Joseph A. Smith, released last month. Bank of America recently ramped-up its relief, reporting 30,000 customers were approved or had completed first-lien modifications through September 30 providing $4.75 billion in principal reduction. Borrowers received an average $150,000 slash in loan balances.

(Read More: How ‘Fiscal Cliff’ Could Affect Mortgage Interest Deduction)

Article source: http://www.cnbc.com/id/100285754

As part of the sweeping national mortgage servicing settlement that went into effect in March, officials at Bank of America said they are halfway to fulfilling their mandate of providing $7.6 billion worth of consumer relief. 

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The settlement, which was supposed to right the wrongs of so-called “robo-signing” and other fraudulent mortgage servicing activities, credits banks for principal reduction, short sales, and other consumer relief, but the credits are not dollar for dollar. That’s why Bank of America’s $15.8 billion in relief so far is only half-way to its required $7.6 billion under the settlement.

According to officials on a conference call with reporters, Bank of America has approved or completed first-lien modifications for 30,000 customers, providing $4.75 billion in principal reduction.

In addition, 45,000 customers got home equity loan relief, totaling $2.5 billion. Finally, more than 62,000 customers completed qualifying short sales or deeds-in-lieu of foreclosure, which adds up to $7.4 billion in relief from unpaid principal balances on the loans. (Read More: Foreclosure Discounts Drying Up.)

Borrowers received an average $150,000 reduction in their first lien loan balances, resulting in a 35 percent reduction in monthly mortgage payments, according to bank officials. On second liens, the average relief through loan extinguishment to about 43,000 customers is more than $56,000 per borrower.

While officials would not give an exact amount, they estimated that 60 percent of the loans that received principal reduction were owned by investors and serviced by Bank of America, while 40 percent were held on the banks own books. (Read More: Bank of America Posts Profit.)

As for other aspects of the settlement, like providing customers with a single point of contact for mortgage assistance, officials said each bank representative is primary contact for between 70 and 75 customers.

All of the five banks that signed the National Mortgage Settlement are required to submit quarterly progress reports to the participating state attorneys general and the federal program monitor.

—By CNBC’s Diana Olick

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