Mortgage, Foreclosure | featured news

Federal regulators and the top law enforcement officers in all fifty states are eyeing big changes to the dysfunctional home loan industry. If these officials have their way, borrowers who take out home loans and the investors who buy them will work closer together and find common ground to minimize foreclosures, while the middle men who are supposed to be performing that job will see their power diminished.

U.S. regulators' efforts to settle with banks over improper mortgage foreclosures are being hampered by infighting among the groups involved in the talks, and a settlement may take a while, according to sources familiar with the matter.

The average U.S. borrower in the throes of foreclosure hasn't made a mortgage payment in 17 months, up from nearly 11 months two years ago.

In a ruling that may affect foreclosures nationwide, the Massachusetts high court has voided the seizure of two homes by Wells Fargo & Company and US Bancorp after the banks failed to show that they held the mortgages at the time of the foreclosures.

Regulators have opened a new line of inquiry in their mortgage foreclosure probe and are asking big Wall Street banks about the beginning stages of mortgage securitization, two sources familiar with the probe said.

Grocery store owners William and Esperanza Casco were making enough money to stay current on their mortgage, but when JPMorgan Chase & Co. offered a plan that reduced their payments, they figured they could use the extra cash and signed up.

The mortgage-finance company warned that foreclosure delays could lead to higher costs, as it asked the Treasury to provide a $2.5 billion infusion.

Officials in 49 states have launched a joint investigation into allegations that mortgage companies mishandled documents and broke laws in foreclosing on hundreds of thousands of homeowners.

Bank of America, the country's largest mortgage lender by assets, said on Friday that it was reviewing documents in all of its pending foreclosure cases to evaluate if there were errors made.

Lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis.