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THE APP SPECTRUM TECHNOLOGY ON-THE-GO SHOULD SERVICERS REPORT PRINCIPAL FORBEARANCE LOSSES NOW OR LATER? Timios Closing Costs Available for: Wonder what your closing cost will look like in a real estate transaction? Timios National Corporation has made available a free app that grants users an instant, guaranteed Good Faith Estimate (GFE). The estimate covers non-lender closing costs, title insurance, escrow fees, and any applicable government fees. The Timios Closing Costs app is available for free at the Apple Store and Google Play. CamCard Available for: Stop saving all those business cards from networking events, and let CamCard do the organizing for you. CamCard is a virtual Rolodex, allowing users to scan, sort, and digitally save cards. Contact information can be shared via email and SMS, and the new AR Card feature can be used to create interactive cards. Free for Apple and Android users; those with Windows and Blackberry devices are charged a download fee. Lovely Available for: The free Lovely iPhone app from a San Francisco startup puts search tools for finding homes and apartments for rent at your fingertips. Search based on location, price, or residence features; receive alerts as soon as new listings hit the market; and include important information, such as income and credit score, with submissions to landlords. Lovely Pro for property owners and managers offers a complete set of tenant search tools. 12 Principal forbearance, a loan modification practice in which a loan servicer allows a borrower to delay payment on his or her loan for a specified period of time, apparently poses an accounting conundrum. Both Fitch Ratings and Moody's Analytics reported last month that they have observed inconsistencies in the way servicers report losses in cases of principal forbearance. According to Fitch, before 2010, pooling and servicing agreements did not require servicers to report forborne principal as losses. With the Home Affordable Modification Program (HAMP), Treasury began requiring servicers to do so in June 2010. When forborne principal is repaid, servicers are to report the amount as a recovery. However, HAMP modifications completed before 2010 are not reported in a consistent manner, and non-HAMP loans are still open to the discretion of each individual servicer. Nationstar Mortgage announced it is revising losses on loans with principal forbearances acquired in 2012 from Aurora Bank FSB and Aurora Loan Services. The revision adds about $1 billion in losses to residential mortgage-backed securities (RMBS) serviced by Nationstar. The loss amount is about 1.5 percent of the total balance of the Aurora pools of loans, according to Fitch. As a result, Fitch will dole out some downgrades. However, Fitch "does not anticipate significant rating changes as a result of the revision." Fitch said it would review Nationstar's revisions at the end of July to make a final assessment. Additionally, Nationstar clarified in its announcement that it does not expect similar revisions to loans acquired from Bank of America or any other loans it services. "Other than Nationstar, no servicer reported a significant amount of HAMP principal forbearance yet to be realized as a loss," Fitch stated. Some servicers have reported non-HAMP forbearance losses that are not yet realized, but Fitch does not anticipate these servicers will need to revise losses on the affected loans. "Consequently, Fitch does not expect any additional large revisions for realized losses tied to principal forbearance," the agency said. Ocwen Financial Corp. reported $1.4 billion in losses it discovered in May on loans acquired from Homeward Residential, which did not account for principal forbearance losses on 177 non-HAMP modifications that took place before July 2012. Moody's also took note of the discrepancy in a recent ResiLandscape report. While some servicers report forborne principal as a loss at the time of the loan modification, others wait until the time of liquidation, the agency explained—a inconsistency amplified by the fact that HAMP and non-HAMP modifications are not subject to the same accounting provisions. According to Moody's, Ocwen, Bank of America, Wells Fargo, and OneWest all report forbearance amounts as losses at the time of the loan modification. However, Green Tree and the former Aurora Commercial Corporation—which passed its portfolios on to Nationstar and Selene Finance—postpone the reporting of losses on loans with principal forbearances. Delayed reporting of these losses often negatively impacts RMBS, Moody's says. "However, [a] limited number of bonds have benefitted from the late realization of forbearance losses, such as senior bonds whose payment priority shifts following a depletion of credit support," according to Moody's. Like Nationstar and Ocwen, Wells Fargo is set to report newly discovered losses due to unreported principal forbearance losses, Moody's says.