Federal Housing Finance Agency Defends ?Dual Track' Practice in Mortgage Industry

The Federal Housing Finance Agency is set to defend the infamous ‘dual track' practice within the mortgage servicing sector. Acting director Edward DeMarco was quoted as saying that such "simultaneous actions are necessary."

DeMarco added that the dual track practice is a logical move taken by home loan lenders because of the usually long timeframe involved in any typical foreclosure process. He also emphasized that most borrowers do not show responsiveness when dealing with foreclosure alternatives offered by mortgage providers.

DeMarco's prepared testimony for the scheduled Senate Banking Committee hearing on December 1 was leaked to the press. Observers note that the statement would raise more issues and irk the ire not just of legislators, but also of the public.

Government-sponsored Fannie Mae and Freddie Mac are set to back DeMarco's stand on the issue.

Officials from the two secondary mortgage financers were also summoned in the Senate hearing to testify on the need to immediately resume foreclosures after numerous complainants filed charges against mortgage lenders like JP Morgan, Bank of America, and others. The Federal Housing Finance Agency regulates both Fannie Mae and Freddie Mac.

The so-called ‘dual track' move is a practice that enables mortgage servicers to proceed to foreclosure even during the negotiation process between the lenders and borrowers. Through the practice, banks do not wait for the outcome of negotiations for possible loan modification schemes offered to help the struggling borrowers repay their debt so that they could keep their homes.

Mortgage banks unanimously deride the negotiation process as more confusing to buyers. Some of them assert that many borrowers do not pay attention and are not responsive enough whenever there are options provided so that foreclosures could be avoided.

Thousands of consumers who suffered foreclosures filed charges against the mortgage lenders. They accuse the banks of mishandling the foreclosure proceedings that resulted to the homeowners' untimely eviction from their own homes. As a result, most home loans banks decided to temporarily stop their foreclosure processes in September to give way for review and re-assessment of their foreclosure documents and practices.

There are now proposals to establish a new Consumer Financial Protection Bureau to put up more oversight on general consumer protection across several industries. The foreclosure anomaly is expected to ignite more interest in the proposal.

For additional and other related news and information, check out ForeclosureConnections.com.



Find More House Industries Articles

Industry Groups Get a Little Optimistic on Housing Market and Economy

The National Association of Business Economics (NABE) keeps its economic outlook ‘sub-par', but it still holds optimism. The group expects consumer spending in the US to remain modest in the coming months due to sluggish gains in employment rate and the almost negligible household net worth growth.

NABE is positive that the economy would not slip back into a possible recession. That counters the dismal figures and the bearish outlook of the panel not just to the economy, but more to the property market in the country.

According to analysis released by the group, the housing market continues its struggle. NABE backs the recent report of the National Association of Realtors or NAR that sales of existing homes dropped in October after gains in the preceding two months.

NAR analysts said the sales pattern in October could continue, but may show improvements when spring comes.

They pointed out that the current housing market is into an uneven recovery. They added that the recent temporary halt of foreclosure activities in many states is expected to continue affecting the overall volume of completed sales.

In addition, the number of foreclosure liquidations increased again last third quarter. In the three months ending September, about 1.5 out of 1,000 properties were liquidated. It was considered another quarterly peak.

Meanwhile, the Mortgage Bankers Association (MBA) has recently reported that the rate of mortgage delinquency across the US has dropped in the third quarter. This came as clues to improvements in the national job market came. The group's analysts note that despite the positive report for the month of October, overall job market in the US improved only marginally in the period. Thus, the delinquency rate remains high despite its decline.

It could be recalled that NAR released a statement during the first week of October that the recovery of the housing market depends on jobs. The association added that it could also be helped by consumers' possible access to credit.

At another upside, interest rates have started dropping. This development may encourage more consumers to take advantage of lower borrowing rates to buy new or existing homes and even to refinance their current mortgages. Interest rates have recently declined to one of its lowest levels in the past two decades.

For more information about the housing market and the overall economy, visit foreclosureconnections.com. The Website is regularly updated to provide readers with more news and information about the industry.



Find More House Industries Articles