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55 » VISIT US ONLINE @ DSNEWS.COM FIRST MORTGAGE DEFAULT RATES FALL FOR 9TH STRAIGHT MONTH While overall national consumer credit default has hit its lowest levels in 10 years, the first mortgage default rate continues to decline, according to the July S&P/Experian Consumer Credit Default Indices. e first mortgage default rate slipped to 0.88 percent in July, down from 0.09 percent the previous month. It was the ninth straight month in which the first mortgage default rate experienced a drop, the report says. at rate has not experienced a month-over-month increase since October to November in 2013, when it crept up from 1.28 to 1.3 percent. e percentage of first-rate mortgage defaults experienced a year-over-year decrease from 1.25 to 0.88 in July, a change of 0.37 percent. "Mortgage default rates have been trending down, while auto and bank card are a bit higher than their historical lows set in April and March," said David M. Blitzer, managing director and chairman of the index committee for S&P Dow Jones Indices. "Driven by mortgages, household debt decreased in the second quarter of 2014. Non-housing debt rose slightly in the second quarter. In the latest Federal Reserve survey of lending standards, a small portion of banks reported some easing of standards, while most banks reported no change." Second mortgage defaults also declined month-over-month and year-over-year, according to the index. July's second mortgage default rate of 0.52 percent represents a drop from 0.57 percent in June and 0.54 percent from July 2013. In November 2013, the percentage of second mortgage defaults reached 0.78 percent, its highest rate in the last 12 months. e July rate for first and second mortgage defaults were both lower than the composite consumer credit default rate for July of 1.01 percent. e composite default rate inched downward from 1.02 percent in June and is down from 1.34 a year ago, according to the index. "Los Angeles dropped to its lowest default rate of 0.66 percent. Dallas saw its default rate decline by seven basis points and is only a few basis points away from its historical low set in May 2014," Blitzer said. "Chicago and Miami are at their lowest default rates since 2006. Miami continues to maintain the highest default rate of 1.51 percent, while Los Angeles posted the lowest default rate of 0.66 percent. All five cities—Chicago, Dallas, Los Angeles, Miami, and New York—remain below default rates seen a year ago." TARP TAKES ANOTHER STEP TOWARD WINDING DOWN e U.S. Department of the Treasury announced plans to continue selling its shares of common stock in Ally Financial, which will further reduce the government's stake in the Detroit-based lender and recover more TARP investment funds for taxpayers. Treasury now holds 75,065,340 shares of Ally common stock, which computes to about 16 percent. e announcement of Treasury's sale of additional Ally common stock is "another step toward ultimately exiting the Troubled Asset Relief Program (TARP) and delivering additional value to shareholders, including the U.S. taxpayer," Ally spokeswoman Gina Proia said in a statement. Treasury began selling off its common stock in Ally back in April, when Ally's initial public offering (IPO) price of $25 per share resulted in $2.375 billion in proceeds for taxpayers. "Treasury's sale of additional Ally common stock is part of our continuing effort to wind down the Troubled Asset Relief Program," Chief Investment Officer Chairman Uy said. "We will prudently exit the remaining Ally investment, balancing speed with maximizing returns for taxpayers." Following the sale of those 95 million shares in April, IPO underwriters later elected to buy an additional 7,245,670 shares of Ally common stock at the IPO price of $25 per share, which recovered taxpayers another $181 million. To date, about $17.8 billion of the government's original investment through TARP to assist Ally has been recovered for taxpayers—which is approximately $650 million more than the original $17.2 billion investment. Taxpayers have recovered a total of $439.8 billion from TARP investments to date, a number that includes the sale of Treasury's American International Group (AIG) shares completed in December 2012. By comparison, $424.8 billion has been disbursed for TARP. default servicing in print and online @ dsnews.com 08.2014 default servicing in print and online default servicing in print and online default servicing in print and online default servicing in print and online .201 .201 .201 .201 .201 .201 .201 .201 .201 .2014 default servicing in print and online default servicing in print and online default servicing in print and online default servicing in print and online default servicing in print and online default servicing in print and online default servicing in print and online default servicing in print and online @ dsnews.com dsnews.com dsnews.com dsnews.com dsnews.com dsnews.com dsnews.com 08 08 08 08 08 08.201 .201 Housing's Golden Investment or Fairy Tale? While data shows that the housing industry is making a signifi cant rebound, some housing market investors are fi nding that in the realm of purchasing of non-performing notes is a mere fantasy. 68 Q&A SESSIONS GOOD FOR BUSINESS Knowing which questions to ask is a critical piece to investor success in the changing marketplace. 72 PREYING FOR PAYOFF Troubled homeowners are easy prey for scammers, but steps can be taken by homeowners and servicers to make sure their investments are protected. 64 APPLES, ORANGES, AND LEMONS: EFFECTIVELY MEASURING HAZARD- CLAIMS MANAGEMENT If the devil is truly in the details, one of those details for mortgage servicers is managing the mortgagee-fi led hazard insurance claims process. THE LEADER IN DEFAULT SERVICING NEWS Help shape the next issue of DS News. Drop us a line at Editor@DSNews.com.

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