Housing Wire reports in its “Morning Cup of Coffee” Post:
Countrywide is transferring mortgages to special servicers on certain deals in line with the servicing part of a proposed $8.5 billion residential mortgage-backed securities settlement proposed by The Bank of New York Mellon ($16.80 0.07%) and Bank of America($7.28 -0.03%) last year.
As of June 26, Countrywide transferred 38,000 loans to Specialized Loan Servicing, Select Portfolio Servicing and Green Tree, according to Barclays. Of these, 73% were transferred to SLS, 21% to SPS and 6% to Green Tree.
The loans transferred so far span 91 different deals in the proposed settlement. Bank of America will pay servicers incentive fees for loss-mitigation activities such as short sales and modifications. High-risk loans from a single deal will be transferred to one servicer, while loans that make payments for 12 consecutive months can be transferred back to Countrywide. As a result, Barclays expects more aggressive servicer loss-mitigation behavior on these deals.
The proposed settlement agreement sets the criteria to determine which loans are high risk and eligible for transfer: those that are at least 45 days delinquency with no response from borrower; at least 60 days delinquency with at least one missed payment in the past 12 months; at least 90 days delinquency but less than 90 days in foreclosure; foreclosed but no sale date; and any bankruptcy regardless of delinquency status