Housing Market, Mortgage | featured news

A bellwether index of subprime mortgage bonds rallied, a day after the New York Fed suspended further auctions of so-called Maiden Lane II securities acquired in the AIG bailout.

JPMorgan Chase & Co has pushed out its head of home lending, David Lowman, who was sidelined in February after the bank racked up billions of dollars in losses on soured mortgages and became mired in litigation over a wave of foreclosures.

Proposed rules sparked by the financial industry meltdown could have the effect of shutting many lower-income buyers out of the mortgage market, critics say.

The nation's largest mortgage companies are operating on the assumption that they will have to pay as much as $20 billion to resolve claims of widespread foreclosure abuse, an amount four times what they had originally proposed, the top federal official overseeing the discussions told state officials Monday, according to people who participated in the conversation.

The attorneys general in California and Illinois have subpoenaed Lender Processing Services Inc, and Nationwide Title Clearing Inc as part of their probes into alleged "robosigning" practices in the mortgage servicing industry.

The nation’s biggest banks and mortgage lenders have amassed a glut of foreclosed homes that threatens to deepen the housing slump.

The number of American households behind on mortgage payments posted a substantial decline from year-earlier levels, but foreclosures remained near record highs in the first quarter.

Two lawmakers are set to unveil legislation to replace Fannie Mae and Freddie Mac with at least five private companies that would issue mortgage-backed securities with explicit federal guarantees.

Bank of America Corp is working to improve profits by reducing its number of problem mortgages and cutting other costs, Chief Executive Brian Moynihan told shareholders on Wednesday. Moynihan, speaking at the company's annual meeting in downtown Charlotte, said the mortgage business of the largest U.S. bank by assets is "still struggling mightily" as it slowly crawls out from under the billions in soured home loans.

Moody's downgraded Bank of America's underlying mortgage-servicing ratings to reflect the challenges the bank continues to face with the integration of Countrywide.