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TREASURY REPORT OUTLINES EVOLUTION OF SPOC The Treasury Department issued a directive to servicers participating in the Making Home Affordable program in 2011 requiring them to develop a single point of contact (SPOC) for all distressed homeowners working through their loss mitigation options. Since then, servicers have implemented the SPOC standard in various ways. Treasury noted in a recent report that the nine largest servicers participating in the government's mortgage relief program have implemented three different SPOC models: the SPOC direct model, the SPOC pod model, and the SPOC appointment-based model. The direct model is the most common of the three and has been adopted by seven of the nine servicers: Bank of America, CitiMortgage, GMAC Mortgage, Homeward Residential, JPMorgan Chase, Select Portfolio Servicing, and Wells Fargo. In the direct model, an individual SPOC is assigned to a specific homeowner and is responsible for conducting all outbound communication with the customer and receiving all inbound correspondence from the customer. The seven servicers utilizing this model have different approaches for when a particular SPOC is not available for inbound communications, however. Some redirect the homeowner's call to another available SPOC. Others allow homeowners to leave a voicemail for their designated SPOC contact. Those who are provided with the voicemail option may also request to speak to an alternate SPOC immediately. OneWest Bank offers homeowners a "pod" or team of SPOCs rather than one individual SPOC. The pod approach allows homeowners more immediate access to a bank representative who can answer their questions and address their needs. Each pod has a manager whom the homeowner may contact, but all team members have access to the homeowner's information. Additionally, each pod has assigned processors and underwriters who are available to assist the homeowner as needed. The last model, the SPOC appointmentbased model, is in place at Ocwen Loan Servicing. Customer service representatives at Ocwen serve as intermediaries between homeowners and their SPOCs. When a homeowner calls the bank, he or she first speaks to a customer service representative who can either answer basic process-based questions or can set up an appointment for the homeowner to speak with his or her SPOC. In total, the nine servicers Treasury observed have increased staffing and now have 12,000 SPOCs working to communicate with distressed homeowners and about 6,000 more individuals working to assist SPOCs by collecting and processing documents for loss mitigation actions. YOUWALKAWAY EXPLORES POLITICS OF STRATEGIC DEFAULT A foreclosure agency suggested borrowers may be more encouraged to strategically default due to the expectation that little will change over the next four years surrounding policies on housing and the economy. Strategic default occurs when a borrower stops making mortgage payments on a property he or she can afford. Typically, strategic defaulters are also underwater. In a recent survey of YouWalkAway.com customers, 47 percent said they believe the Obama administration had no effect on the foreclosure crisis. About 31 percent believe the administration had a negative effect, and 22 percent of respondents said they think the Obama administration had a positive effect on the foreclosure crisis, the agency reported. Due to the perception that housing issues are not a priority for the current administration, YouWalkAway said, "underwater homeowners who were previously undecided about whether or not they should strategically default are choosing to do so given the election results." 26 Of the YouWalkAway respondents questioned, 30.4 percent are registered Republicans and 39.7 percent are registered as Democrats, while 29.9 percent are independent. Most of the YouWalkAway customers, 89.6 percent, began their foreclosure proceedings during President Obama's first term. When asked about the administration's impact on the economy, 39 percent said they believe it had a positive effect, while 41 percent said it had a negative effect. Twenty percent cited no effect. However, YouWalkAway says the expiration of the Mortgage Debt Relief Act of 2007 has an even greater influence on borrowers to strategically default. The act allows borrowers to exclude forgiven debt from a foreclosure, short sale, or modification from taxable income. With the act set to expire at the end of this year, homeowners don't want to risk facing a tax burden if the act is not extended, according to the agency. CONFORMING LOAN LIMITS UNCHANGED The Federal Housing Finance Agency (FHFA) announced that the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2013 will remain at existing levels. In most of the country, the loan limit will be $417,000 for one-unit properties. The loan limits are established under the terms of the Housing and Economic Recovery Act of 2008 (HERA) and are calculated each year. The law sets loan limits as a function of median home values in local areas. While some counties saw increases in home prices in 2012, no loan limit increases were evident after other HERA terms such as the statutory ceiling and floor were taken into account, FHFA explained. The maximum conforming loan limit for one-unit properties—which has been in effect for new originations since October 1, 2011—is $417,000 in most locations but as high as $625,500 in certain high-cost markets. A list of the 2013 maximum conforming loan limits for all counties and county-equivalent areas is available on FHFA's website. For loans originated prior to October 2011, the maximum loan limit was raised to as much as $729,750 in high-cost areas—that's when FHFA and the administration opted to lift the ceiling for loans the GSEs were allowed to purchase to compensate for tight credit conditions and a virtually non-existent private capital market during the housing crisis. That higher limit was permitted under legislation no longer applicable. KNOW THIS National house prices were down 22.8% from the June 2006 peak as of the end of October 2012, according to Lender Processing Services.

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