November 2012

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Page 55 of 79

LOCAL EDITION SERVICING Dual Tracking Complaints Increased After Settlement RELEASING THE STATE'S FIRST MONTHLY REPORT, CALIFORNIA'S SERVICING SETTLEMENT MONITOR SHED LIGHT ON THE "DUAL TRACKING" TREND. CALIFORNIA // As the country's major servicers work to adapt to 300 new servicing standards, California's state monitor reports that servicers in the state took their time on some issues. In her first monthly report as work with the monitor's office to ensure fair attention was given to loan modifications since the settlement, Porter said it may be a cold comfort to homeowners who faced dual tracking while waiting out the deadline. "While some changes, such as implementation of a single point CONTINUES NEGOTIATIONS WITH FREDDIE MAC. WISCONSIN // MGIC Investment Corporation is on its way to resolving stipulations set forth by Freddie Mac in order for the insurance company to continue issuing insurance. new business through the end of 2013 in areas where it does not meet the necessary capital reserve requirements. This is an extension of its previous approval through the end of this year. The revision of MGIC's ob- MGIC is approved to write ligations may be seen as a step toward reconciliation following a dispute in the summer over ag- gregate loss limits under certain policies. MGIC announced in May that it had filed a lawsuit over the issue. "I am pleased with the spirit of California monitor, Katherine Porter described the servicers' efforts to reform their practices before the October 2 deadline outlined in the national mortgage settlement. Porter's first evalu- ation examined the practice of dual tracking. Described by Porter as a "race between foreclosure and loan modification," dual tracking is a practice used by some mortgage companies to negotiate a loan modification for a distressed homeowner while initiating foreclosure sale proceedings at the same time. The national mortgage settle- cooperation all parties have sown in moving forward to reach this point," said Curt Culver, CEO of MGIC Investment and MGIC. Freddie Mac's approval of MIC may be revoked at any time and is contingent on Freddie Mac and MGIC reaching an agreement regarding their pool insurance dis- pute by the end of October and confirmation from the state of Wisconsin that MIC's capital will support MGIC policies "without segregation of those obligations." "While there can be no guarantee that the open matters that remain can be successfully resolved, I am hopeful we will continue to make progress," Culver stated. With $166.7 billion in insur- ment has provisions to restrict dual tracking, and a separate law in the recently passed California Homeowner Bill of Rights pro- vides protections for California mortgages serviced by the banks involved in the settlement. The companies in the settlement were given 180 days to reform their dual tracking procedures, a period during which complaints about dual tracking actually increased, Porter revealed. At their height in August, complaints about dual tracking made up 25 percent of the total complaints heard by Porter's office. Dual tracking complaints saw a sharp decline through September as the final deadline approached, a trend Porter sees as a sign of cooperation with the settlement's restrictions. While servicers did 54 | THE M REPORT of contact for borrower com- munication, occurred quickly, the banks have taken the full 180 days (six months) to stop dual track- ing, sible under the settlement. But this waiting has been painful for homeowners, whose fate is uncer- tain under the dual track regime." " Porter said. "This is permis- MGIC Works Out Business Obligations with GSE GAINING A LOWER THRESHOLD FOR SUBSIDIARY- RELATED PAYMENTS AND AN EXTENDED DEADLINE FOR CONTRIBUTION, MGIC Mac reduced the amount MGIC Investment Corporation must pay to its subsidiary, from $200 million to $100 million. The GSE also extended the deadline for this contribution to the end of December. Additionally, Freddie Mac MGIC announced that Freddie ance on 1 million mortgages as of the second quarter of this year, MGIC is the nation's largest private mortgage insurer. Private Insurance Continues to Post Gains approved MGIC Indemnity Corporation (MIC), a subsid- iary of MGIC, to write insur- ance in 16 jurisdictions besides Wisconsin "that have specific regulatory capital requirements when MGIC is not able to write new business in a jurisdiction because MGIC would not meet those requirements," according to MGIC's announcement. ACCORDING TO DATA FROM MICA, CONSUMERS ARE CHOOSING PRIVATE MORTGAGE INSURANCE IN INCREASING NUMBERS. DISTRICT OF COLUMBIA // The number of borrowers using private mortgage insurance (MI) keeps going up, according to the most recent monthly statistics release from Mortgage Insurance Companies of America (MICA). CONTINUED ON PAGE 56 SECONDARY MARKET ANALYTICS SERVICING ORIGINATION

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