The U.S. Department of Housing & Urban Development (HUD) has released two reports on the impact of HUD-approved housing counseling has for those families who purchase their first homes and those struggling to prevent foreclosure. In both studies, HUD found housing counseling significantly improved the likelihood homeowners remained in their homes. Both the pre-purchase counseling and foreclosure counseling studies enrolled clients in the fall of 2009 and early 2010. HUD found that 35 percent of participants became homeowners within 18 months of pre-purchase counseling and only one of those buyers subsequently fell behind in their mortgage payments. The foreclosure counseling study reveals that with a counselor’s help, nearly 70 percent of those counseled obtained a mortgage remedy to retain their home, and 56 percent cured their defaults and became current on their mortgages. “These two studies underscore the need to continue supporting housing counseling programs across this country, especially during this period when families need these services the most,” said Raphael Bostic, HUD’s Assistant Secretary for Policy Development and Research. “The evidence is clear, with a little investment on the front end, we can go a long way toward improving the chances families will buy a home they can afford and sustain their homes in the long run.” The “Pre-Purchase Counseling Outcome Study” enrolled 573 individuals seeking pre-purchase counseling continued on page 46
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JUNE 2012
MGIC Investment Corporation has announced that its Mortgage Guaranty Insurance Corporation
New HUD Studies Find the Benefits of Housing Counseling
SOUTH CAROLINA MORTGAGE PROFESSIONAL MAGAZINE
Mortgage Insurer MGIC Files Suit Against Freddie Mac and FHFA
(MGIC) subsidiary has filed a lawsuit in Federal District Court in Milwaukee, Wis. against Freddie Mac and the Federal Housing Finance Administration (FHFA) regarding the pool insurance dispute between MGIC and Freddie Mac. The dispute has been described for some time in MGIC Investment’s public disclosures. MGIC said it would not comment on the suit beyond a communication it has sent to Freddie Mac, which said in part: That we took the initiative in seeking to resolve our dispute through the judicial system does not mean we cannot seek to resolve it “out of court.” Indeed, we welcome the opportunity to continue such discussions, but could not accept the terms on which Freddie Mac was willing to do so. MGIC intends to conduct “business as usual” on the various matters between themselves and the FHFA, and the company hopes that after due reflection, Freddie Mac will concur their approach makes sense.
NationalMortgageProfessional.com
Assistant Attorney General for the Civil Division Stuart Delery, U.S. Attorney for the District of Colorado John Walsh, Director of Enforcement for the U.S. Securities & Exchange Commission (SEC) Robert Khuzami, and New York State Attorney General Eric Schneiderman. The Working Group and its members are focused on investigating potential false or misleading statements, deception or other misconduct by market participants in the creation, packaging and sale of MBS. While the working group and its members’ specific efforts are law enforcement sensitive and, therefore, must remain confidential, generally the working group continues to: Identify specific RMBS offerings for priority investigation through the use of various forensic tools including riskbased analytics; analyze pending private RMBS litigation throughout the country for important evidentiary connections to existing law enforcement investigations; and convene operational meetings among investigators, attorneys, analysts and RMBS market experts and insiders. “The RMBS Web site is a new call to those insiders who know about fraud that occurred in the RMBS market, who know it’s time to expose that fraud, and who want to help us hold accountable those individuals and institutions who broke the law in pursuit of even bigger paydays,” said Acting Associate Attorney General Tony West. “Although the Working Group and its members have done a tremendous amount of investigative work already—including having issued more than 25 civil subpoenas—we know that hearing from insiders is particularly valuable. There are scores of people who worked in the RMBS market who acted responsibly, but who also may have witnessed greed and misconduct that crossed the legal line and created havoc for investors, homeowners and our economy. We want to hear from them.” Each co-chair agency brings investigative resources and existing RMBS investigations to the Working Group. To facilitate communication and coordination among the various agencies conducting RMBS investigations nationwide, the five co-chairs and the Task Force’s Executive Director have appointed a coordinating team. Matthew Stegman, a career white-collar prosecutor, is the RMBS Working Group’s Coordinator. In addition to the selection of Stegman, the coordinating team in Washington, D.C. includes criminal prosecutors and civil attorneys, analysts and FBI investigators who are coordinating federal and state fraud investigations nationwide.