The details of the recent Servicer settlement will have a noticeable impact on the values and prices of non-agency loans (i.e., loans not sold to either Fannie Mae or Freddie Mac, or insured by FHA).
Last Monday, the US Department of Justice, HUD, and 49 state attorneys general filed the $25 billion servicer settlement with Bank of America, JPMorgan, Wells Fargo, Citibank, and Ally for approval in the US District Court of DC.
Servicers will receive credits for every completed modification as well for other activities such as facilitating short sales. This means that these companies will receive "bonus points" for helping borrowers.
The banks are required to meet 75% of their prescribed modification targets within two years and 100% of their targets within three years or face monetary penalties.
Three banks -- Wells Fargo, Citigroup, and Ally -- have indicated that, at least for now, they will not be applying servicer settlement modifications to non-agency loans. Non-agency loans are often jumbo loans, or loans that fit into a particular portfolio. If that is the case, the effect of this headline-grabbing servicer settlement news on private-label securitizations serviced by these three banks will be limited.
Read the rest of the article at The Mortgage Reports
No comments:
Post a Comment