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» VISIT US ONLINE @ DSNEWS.COM 7 A look at facts you didn't know you couldn't live without Compiled by the DS News Staff TAKE A LOOK INSIDE THE NUMBERS D ATA B I T S PRESIDENT AND CEO OF THE HOMEOWNERSHIP PRESERVATION FOUNDATION (HPF) The National Gross Domestic Product decreased 2.9 percent in Q1 2014, according to the Bureau of Economic Analysis. More than 35 percent of Americans spend over 30 percent of their income for housing, according to Joint Center for Housing Studies at Harvard University. LEGAL ACTION POSSIBLE FOR EXCESSIVE LENDER-PLACED INSURANCE RATES PAGE 31 INSIDE THE JOURNAL // MOVERS & SHAKERS // ON THE WEB // THE APP SPECTRUM Source: Bureau of Labor Statistics FIVE MINUTES WITH Colleen Hernandez TOP LARGE CITIES FOR JOB GROWTH 1 Orlando, FL 4% 2 Dallas/Fort Worth, TX 3.78% 3 Miami, FL 3.18% 4 Houston, TX 3.09% 5 Denver, CO 2.83% 6 Portland, OR 2.78% 7 Tampa, FL 2.62% 8 Seattle, WA 2.53% 9 Riverside, CA 2.42% 10 San Diego, CA 2.22% Urban Areas Percentage Growth Ranking STATES WITH HIGHEST UNEMPLOYMENT RATE 1 Rhode Island 8.3 2 Nevada 8 3 Illinois 7.9 4 California 7.8 5 Kentucky 7.7 6 Mississippi 7.5 6 District of Columbia 7.5 8 Michigan 7.4 9 Georgia 7 10 Oregon 6.9 Ranking State Unemployment Rate In 2012, lender-placed insurance (LPI) issues cost Fannie Mae and Freddie Mac a combined $360 million, and now the federal government may take legal action against servicers for charging excessive LPI rates, according to a report released this month by the Federal Housing Finance Agency's Office of the Inspector General. e report comes on the heels of several lawsuits—most of which have been settled out of court and for substantial amounts of money—that borrowers have filed against the nation's top lenders in the past few years. Wells Fargo and QBE, for example, settled a class-action suit in Florida last spring for $19 million and agreed to reimburse or credit affected borrowers 25 percent of any LPI premiums they assessed. Last September, JPMorgan Chase and Assurant settled with a nationwide class of borrowers for $300 million and agreed to reimburse or credit affected borrowers 12.5 percent of any LPI premiums they assessed. And, in February, Citibank and a class of borrowers agreed to a $95 million settlement in which the lender also agreed to reimburse or credit affected borrowers 12.5 percent. e trouble itself stems from GSE- serviced mortgage holders defaulting on Fannie- and Freddie-required coverage. Fannie and Freddie's servicers are required to ensure that their client homeowners maintain hazard insurance for the life of the mortgage. ese servicers often outsource the tracking of this insurance, and the payments, to specialty insurers. When an insurer identifies a payment lapse, it initiates LPI coverage, which homeowners are expected to keep up with. However, not all do, and in the event of a foreclosure Fannie and Freddie get stuck with the bill. In 2012 and 2013, insurance regulators in several states determined that LPI rates in their respective states were excessive and may have been driven up by profit-sharing arrangements under which servicers were paid to steer business toward LPI providers in the form of commission structures and reinsurance deals. is, of course, led to the class- action suits that have so far amounted to $674 million in settlement payments. Last November, the Federal Housing Finance Agency (FHFA) sought to mitigate financial harm to Fannie and Freddie by directing them to prohibit their servicers from receiving LPI-related commissions and entering into reinsurance arrangements with LPI providers. But those new rules did not take effect until June 1, and the grand total for how much the GSE's are out due to LPI-related issues is not yet clear. e FHFA is still considering whether Fannie and Freddie should pursue litigation against servicers and LPI providers to recover potential damages that the enterprises have lost cleaning up LPI- related messes.

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