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49 » VISIT US ONLINE @ DSNEWS.COM EIGHT FIRMS SETTLE RMBS FRAUD CLAIMS WITH FDIC Eight financial firms have settled for a combined total of $190 million with the Federal Deposit Insurance Corporation (FDIC) over claims of misrepresenting the quality of certain residential mortgage-backed securities to five failed FDIC-insured banks, according to anannouncement from the FDIC. e FDIC, as a receiver for the five failed banks, filed six lawsuits from November 2011 to August 2012 claiming that the eight firms were in violation of federal and state securities laws regarding the sales of 21 Countrywide RMBS purchased by the five failed banks. In the suits, the FDIC claims there were misrepresentations in the offering documents for the 21 securities. e eight firms involved in the settlement are, alphabetically: Barclays Capital Inc.; BNP Paribas Securities Corporation; Credit Suisse Securities (USA) LLC; Deutsche Bank Securities Inc.; Edward D. Jones & Co., L.P.; Goldman, Sachs & Co; Royal Bank of Scotland (RBS) Securities Inc.; and UBS Securities LLC. e five banks in receivership that will receive the settlement funds are: Colonial Bank of Montgomery, Alabama; Franklin Bank, S.S.B. of Houston, Texas; Guaranty Bank of Austin, Texas; Security Savings Bank of Henderson, Nevada; and Strategic Capital Bank of Champaign, Illinois. Four out of the five banks failed in 2009; the only one that did not was Franklin Bank, which failed in November 2008. With these six lawsuits, the FDIC has filed a total of 19 RMBS lawsuits on behalf of eight institutions, seeking damages for violations of federal and state securities laws, according to the FDIC. e last RMBS settlement for the FDIC prior to ursday occurred in February 2016, when Morgan Stanley agreed to pay $62.95 million to settle four lawsuits which alleged that the investment banking firm sold toxic RMBS to three FDIC-insured banks that later failed, including Colonial Bank of Montgomery, Alabama. In August 2015, the FDIC filed a lawsuit accusing Bank of New York Mellon of breaching its duties as bond trustee for $2.06 billion worth of RMBS purchased by Guaranty Bank of Austin, Texas. SERVICERS REMAIN AGGRESSIVE WITH OUTREACH EFFORTS Mortgage servicers have still been extremely active with efforts to contact borrowers regarding loss mitigation, despite a lengthy, sustained decline in the number of delinquencies and defaults, according to HOPE NOW, an industry-created alliance of mortgage servicers, investors, counselors, and other mortgage market participants. Approximately 319,000 homeowners received a non-foreclosure solution (permanent loan modification, short sale, deed-in-lieu of foreclosure, retention plan, or other liquidation plan) during the first quarter of 2016, according to HOPE NOW. e Q1 totals brought the number of non- foreclosure solutions completed by the industry since 2007, when HOPE NOW began tracking the data, up to about 24.9 million. Approximately one-third of those solutions have been permanent loan modifications. Servicers are doing even more outreach to delinquent borrowers in the areas most affected by the foreclosure crisis after Treasury recently announced the allocation of the final $2 billion in funding under the Hardest Hit Fund authorized by Congress. Also, Treasury's Home Affordable Modification Program (HAMP), which was created in response to the crisis to help delinquent borrowers remain in their homes, is set to expire at the end of this year. In March, Treasury reported that HAMP has helped 1.8 million families and completed 2.3 million homeowner assistance actions in the seven years of the program's existence. "Mortgage servicers have remained aggressive in its outreach to at-risk borrowers, via face to face events, call centers and improved online technology," said Eric Selk, executive director of HOPE NOW. "As HAMP sunsets at the end of the year, it is critical for all homeowners who are experiencing difficulty with their mortgage to reach out for assistance. We also applaud the Treasury for its announcement to extend the Hardest Hit Funds. ese programs provide an important tool when helping families in local markets." Of the 319,000 foreclosure prevention actions completed in Q1 by the industry, 86,000 of them were permanent loan modifications and 118,000 of them were formal repayment plans. Of the 86,000 permanent loan modifications, about 62,000 of them were completed through proprietary programs and about 24,00o of them were completed through HAMP, according to HOPE NOW. "Activities to help families avoid foreclosure has remained strong during the first quarter of 2016," Selk said. "As mentioned in the data above 3.5 solutions are offered for every foreclosure. is points to a strong set of tools to address and cure delinquency. Permanent modifications increased slightly from the previous quarter while short term solutions such as repayment plans and retention plans increased significantly. Early intervention and direct contact with the borrower has clearly made a huge impact in the overall delinquency numbers. Our data indicates that both permanent and short term solutions remain available to those who are struggling with their mortgage." rough the first three HOPE NOW borrower outreach events in 2016 (in Tampa, Jacksonville, and Camden, New Jersey, more than 500 homeowners have been seen, the majority of which were in some form of delinquency. HOPE NOW has more borrower outreach events planned later in the year starting with New York in the middle of July, followed by Atlanta, Miami, and Riverside. "With general market recovery and stability over the past year, HOPE NOW is concentrating efforts on streamlining the assistance process for homeowners," Selk said. "We have looked at communication between servicers and homeowners and provided suggestions on improving the customer process. HOPE NOW is also very active in conversations focusing on the loss mitigation world once HAMP expires." "Mortgage servicers have remained aggressive in its outreach to at-risk borrowers, via face to face events, call centers and improved online technology." —Eric Selk, Executive Director, HOPE NOW

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