Mortgage Performance Improvement Continues

On September 25, the OCC reported that the performance of first-lien mortgages serviced by large national and federal savings banksimproved from a year earlier.  The OCC Mortgage Metrics Report, Second Quarter 2014, showed 92.9% of mortgages were current and performing at the end of the quarter, compared with 90.6% a year earlier.  The percentage of mortgages that were 30 to 59 days past due decreased 17.3% from a year earlier to 2.4% of the portfolio.  Seriously delinquent mortgages—60 or more days past due or held by bankrupt borrowers whose payments are 30 days or more past due—decreased 17.0% from a year earlier.  Report.

Freddie Mac and Fifth Third Bancorp Reach Settlement Agreement

On November 25, Fifth Third Bancorp announced a $25 million settlement agreement with Freddie Mac related to mortgages sold by the bank prior to January 1, 2009.  Per the agreement, Fifth Third Bancorp agreed to repurchase all nonconforming loans it sold to Freddie Mac, including those not identified in repurchase demands.  Press Release.

Ambac Expands Its Review of Mortgages Underlying Insured RMBS

In an 8-K filed with the SEC on November 18, 2010, Ambac Assurance Corporation announced that it is conducting a review of the mortgage loans underlying a dozen Ambac-insured RMBS, in addition to 17 RMBS as to which it already has initiated litigation.  Ambac stated that it intends to perform what it describes as forensic analysis of the loan origination files and processes and a “re-underwriting” of the loans to determine whether there were breaches of the representations and warranties made at the time the securities were issued.  Ambac also stated that it has either sought or intends to seek the repurchase of certain loans underlying the RMBS due to claimed breaches of representations and warranties.  Form 8-K.

Congressional Request for Mortgage and Foreclosure Investigation

On October 4, representatives of the California Democratic Congressional Delegation (including Rep. Pelosi) sent a letter to U.S. Attorney General Holder, Fed Chairman Bernanke, and Acting Comptroller of the Currency Walsh urging an investigation into possible violations of law or regulations by financial institutions in their handling of delinquent mortgages, mortgage modifications, and foreclosure. Congressional Letter. Case Examples.