MORTGAGE LOAN COMPLIANCE®

New-home sales jumped 11% in June from the previous month and homebuilders expect to see a slow improvement in sales during the rest of this year. "Significant evidence has accumulated that we have hit the bottom," said Bernard Markstein, senior economist at the National Association of Home Builders. But NAHB has not called a bottom yet, because of concerns sales may drop off toward yearend with the expiration of the first-time homebuyer tax credit.

The U.S. Census Bureau saw sales of new single-family homes rise to a 384,000 seasonally adjusted annual rate in June, up from a 346,000 rate in May. NAHB economists expect sales will run at a 390,000 rate during the second half of this year, up from a 347,000 rate in the first half.

Meanwhile Senate Banking Committee chairman Christopher Dodd, D-Conn., wants HUD and the Treasury Department to investigate allegations by a consumer attorney that servicers are demanding upfront payments for loan modifications and violating other provisions of the Obama administration's Home Affordable Modification Program.

In a letter to Treasury secretary Timothy Geithner and HUD secretary Shaun Donovan, Sen. Dodd highlighted allegations made by National Consumer Law Center attorney Diane Thompson in testimony before the banking committee. Ms. Thompson testified that some servicers are requiring homeowners to waive all claims and defenses in order to apply for a modification review. Servicers also are denying reviews to borrowers who are not yet in default, she said.

"If true and widespread, abuses of this kind threaten to undermine the effectiveness of the HAMP program and deny the relief on which so many Americans are depending for their financial stability," Sen. Dodd says in a July 23 letter.