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54 MORTGAGE PERFORMANCE CONTINUES UPWARD TREND e Office of the Comptroller of the Currency released its first quarterly Mortgage Metric Report for 2017, a disclosure of first-lien and closed-end mortgage data supplied by seven national banks, including Bank of America, Citibank, HSBC, JPMorgan Chase, PNC, U.S. Bank, and Wells Fargo. rough the end of March, the seven banks serviced around 19.5 million mortgage loans with a cumulative total unpaid principal balance of $3.42 trillion, representing 35 percent of all residential mortgage debt in the country. Mortgage performance improved over the year, with performing loans up to 95.6 percent from 94.9 percent. In the realm of foreclosure actions, reporting banks started 47,546 new foreclosures, a month-over-month increase of 4.5 percent and a year-over-year decrease of 19.3 percent. Completed foreclosure sales, short sales, and deeds-in-lieu-of- foreclosure—home forfeiture actions—were also on the decline over the year, coming in at 28,696. e number of modifications rose to 35,137 (a jump of 8.7 percent) compared to Q 4 of 2016's total of 32,312, and 94.5 percent of those modifications were "combination modifications"—loans that had multiple actions on them such as an extension or change to the loan's interest rate. Loans with only one action present numbered 1,823, and the remaining 120 loans did not have a designated modification type. In breaking down combination modifications, the majority of the 33,194 loans included capitalization of delinquent interest/fees and an interest rate reduction or freeze—at 92.0 percent and 82.1 percent, respectively. Term extensions were included in 90.5 percent of the reported loans, but only 4.9 percent included a principal reduction, the smallest segment of the group. Of all the modifications, 88.3 percent reduced the loan's monthly payment after said modification was applied. According to the report, 12.3 percent of loans reported modified in the first quarter of 2017 were 60 or more days past due or in the process of foreclosure. JUDGE ALLOWS FDIC TO REOPEN MBS CASES A handful of banks may be in court again, as a federal judge has given the Federal Deposit Insurance Corporation (FDIC) the go-ahead to reopen a case previously dismissed at the end of September if it can prove it still has legal standing to sue. U.S. District Judge Andrew Carter issued a statement on in July informing the FDIC that it could petition the court to reopen cases against Citigroup Inc., Bank of New York Mellon Corp., and U.S. Bancorp as an attempt to recoup losses on mortgage debt amounting to more than $695 million. e FDIC, in the past lawsuit, accused the banks of not monitoring the underwriting and servicing of mortgage-backed securities owned by Austin-based Guaranty Bank, which closed its doors in 2009. e securities in question were issued between 2005 and 2007 and added up to $2.7 billion. e FDIC claims the bank's failure will cost the deposit insurance fund $3 billion. Judge Carter gave the FDIC 90 days to file its petition. Last September, Judge Carter dismissed the case on the grounds that legal claims were transferred with the bonds when they were purchased in March 2010 via a resecuritization transaction, even though the FDIC argued the claim for was a personal matter. Judge Carter has since amended his ruling. Neither the FDIC or any of the banks in question have commented on the judge's ruling. For more information, the cases in the U.S. District Court, Southern District of New York are listed as the following: FDIC v. e Bank of New York Mellon, No. 15-06560; FDIC v. U.S. Bank NA, No. 15-06570; and FDIC v. Citibank NA, No. 15-06574. In terms of return on investment, real estate historically doesn't have the highest yield, despite it being America's favorite long-term investment, according to Bankrate's Financial Security Index. Professors at the London School of Business showed average returns on housing was only 1.3 percent annually, and notoriously difficult to sell even in a strong market. In comparison, stocks usually returned four times that amount. KNOW THIS

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