Pipeline

Industry at Work

If mortgage bankers had a theme song right now, it might be "Ain't Nothing Gonna Hold Me Down."

Despite overwhelming challenges, the overall mind-set of attendees at the industry's annual convention in Atlanta this week was resilient; mortgage bankers are determined to fight back against recent bad press and are taking new rules and the weak economic outlook, in stride.

Conference participants agreed that the industry has a much more upbeat attitude than in recent years, refusing to buckle under the uncertainty from the Dodd-Frank Act, and the frenzy over defects in the filing of foreclosure documents that have come to light in the past month.

And there are things to be positive about, too, namely record-low interest rates that have driven refinancings.

"I think with these interest rates you cannot be having a bad year in 2010, that's for sure," said Daniel Arrigoni, the president and chief executive of U.S. Bancorp's mortgage unit. "From a production perspective, I truthfully believe it's been a tremendous year."

E. Todd Chamberlain, managing executive of Regions Financial Corp.'s residential mortgage division, may have summed it up best: "The pace of change has been as brisk as ever."

States vs. Servicers

States could dramatically cut foreclosures and the steep losses incurred from reduced property taxes by inserting a mandatory loss mitigation standard into state foreclosure laws, according to a lawyer at the Center for Responsible Lending.

"This is a low-cost, high-impact strategy," Sara Weed, a policy attorney at the nonprofit advocacy group, said Wednesday. Her 16-page report last week, "Foreclosure as a Last Resort," written with Sonia Garrison, a senior researcher, urges states to require that servicers perform mandatory loss mitigation before filing for foreclosure.

Servicers would have to weigh the investor's cost of foreclosure against the anticipated cash flow from a future modified mortgage.

Maryland represents the gold standard, Weed said, because its laws require that a lender complete a loss mitigation analysis no later than 30 days before a foreclosure sale. The lender also must provide an explanation if a loan modification is denied.

Lawyers on Alert

The Florida Bar Association is investigating about two dozen attorneys for potential misconduct in foreclosure cases and is asking judges to report attorneys who may have violated the group's rules, The Palm Beach Post reported Wednesday.

Mayanne Downs, the bar's president, sent a letter last week to Florida's chief judges asking for feedback on misconduct related to foreclosures.

Judges have cited incidents in which foreclosure attorneys submitted forged signatures on affidavits, fraudulent notarizations and false mortgage assignments, the paper reported.

Florida Attorney General Bill McCollum is investigating four firms: the Law Offices of Marshall C. Watson; Shapiro & Fishman LLP; the Law Offices of David J. Stern; and Florida Default Law Group.