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Loans late by 90 days or more are increasingly concentrated in parts of Florida, Georgia and southeast Texas as fallout from the storms continues to weigh on the market, National Mortgage News reported. Florida displaced Mississippi as the state with the biggest percentage of severe delinquencies during the month as a result, according to Black Knight's "First Look" report for December 2017. A total of 726,000 properties were 90 or more days past due, but not yet in foreclosure, last month. Of those, 142,000 are attributed to damage from Hurricanes Harvey and Irma. That raises the percentage of severely delinquent loans attributed to the two storms to almost 20 percent from less than 13 percent the previous month. Overall, severe delinquencies were up by 60,000 from November 2017 and 44,000 from December 2016 due to a combination of hurricane-related fallout and seasonal factors.

A bankruptcy judge who slammed Bank of America Corp. for its treatment of a California couple over a foreclosure declined a request to tear up the scathing opinion, saying that it was important "to name and to shame" the company in order to shed light on practices that affect consumers, Bloomberg News reported. Bankruptcy Judge Christopher Klein blasted Bank of America in a ruling in March for its "heartless" conduct against the couple, Erik and Renee Sundquist, and awarded more than $45 million in damages. The bank agreed to pay the Sundquists several million dollars more than the $6 million they won at trial if Judge Klein’s opinion was expunged. “This was a naked effort to coerce this court to erase the record,” Klein wrote in a Thursday opinion. “No chance. No dice.” Although the judge agreed to vacate the damages, he said "trials have consequences" and the litigation is no longer a two-party dispute. Nonprofit consumer advocacy groups and law schools that had intervened in the case on behalf of the public had a "potent point" when they noted that the bank "has shown no remorse, made no apology and promised no reform of the corporate culture practices illustrated by this case," Judge Klein said. Read more. 

Read further analysis of Judge Klein’s ruling in today’s Rochelle’s Daily Wire. 

Walter Investment Management Corp. is preparing to leave bankruptcy protection by Jan. 31 with a plan that reduces its debt by about $800 million after a federal judge approved its chapter 11 plan, WSJ Pro Bankruptcy reported. The Fort Washington, Pa., company won court approval for a plan that will turn over most of its ownership to bondholders, according to a press release on Thursday. The company, which has more than 4,000 workers, processes payments for mortgages and reverse-mortgage loans. The approval helps bring the company’s chapter 11 case filed on Nov. 30 to a close. Under the plan, roughly $531 million of the company’s debt will be canceled and $275 million will be paid down. Lenders also agreed to extend the maturity date on their loans to June 2022 from December 2020.

A federal judge in Philadelphia yesterday rejected Wells Fargo & Co.’s bid to dismiss that city’s lawsuit accusing the largest U.S. mortgage lender of predatory lending targeting black and Hispanic borrowers, Reuters reported. U.S. District Judge Anita Brody said Philadelphia may pursue claims that the bank’s alleged “reverse redlining” violated the federal Fair Housing Act, though she had “serious concerns” about whether claims of economic harm could survive. The lawsuit is one of several against big lenders by major U.S. cities claiming that mortgage lending discrimination causes more defaults by minority borrowers, lower property tax revenue, and higher costs to combat crime and blight. Philadelphia accused Wells Fargo of having since 2004 steered minority borrowers into higher-cost, higher-risk loans than white borrowers, even if they qualified for safer loans.

The Federal Reserve fined five big banks a total of $35.1 million for issues related to financial-crisis-era mortgage servicing and foreclosures, while also moving them out of the penalty box for what it said was a “substantial improvement” in their practices, the Wall Street Journal reported. The fines relate to deficiencies that regulators saw in the wake of a meltdown in the U.S. housing market around the 2008-09 financial crisis. Goldman Sachs Group Inc. was fined $14 million; Morgan Stanley, $8 million; CIT Group Inc., $5.2 million; U.S. Bancorp, $4.4 million, and PNC Financial Services Group Inc., $3.5 million. The five firms had been slapped with enforcement actions in 2011 and 2012 for what the Fed said were “deficiencies in residential mortgage loan servicing and foreclosure processing.” The Fed said the firms have made “substantial improvement” in their practices.

The number of Puerto Ricans who fell behind on their home loans following the devastation of Hurricane Maria may be peaking while federal mortgage guarantors debate how long to protect property owners from foreclosure, WSJ Pro Bankruptcy reported. The rate of mortgage borrowers in Puerto Rico either delinquent on their loans or in foreclosure rose in November to 37.2 percent from 35.4 percent, according to mortgage data firm Black Knight Inc. That compares with 10.5 percent the month before Hurricane Maria slammed in Puerto Rico, devastating its power grid and slowing economic activity to a crawl. Some 95,000 mortgages, or roughly one in four on the island, are now past due because of recent weather events, Black Knight said.

Banks and rival lenders are butting heads over the credit scores used to decide millions of mortgage requests by U.S. home buyers, the Wall Street Journal reported. Now, a federal agency is weighing whether to step into the fight, which revolves around a longtime requirement for lenders who sell mortgages to Fannie Mae and Freddie Mac to gauge most borrowers using FICO scores. The Federal Housing Finance Agency’s ultimate decision could have wide-reaching ramifications for the mortgage market and home buyers across the U.S. Many nonbank lenders, which in some recent quarters have accounted for more than half of the mortgage dollars issued in the U.S., want the ability to use a credit score provided by a company owned by credit-reporting firms Equifax Inc., Experian PLC and TransUnion. These lenders argue that the alternative score would open the mortgage market to a greater number of people and lead to more mortgage approvals, helping to boost home sales and the economy.