High-End Foreclosures Are Next
CNBC

I heard a startling statistic from the National Association of Realtors this morning…no not that home sales are actually increasing, but something about the high end of the market.

Chief economist Lawrence Yun said that the supply of existing homes for sale over $750,000 has reached a forty-month supply. Yep, that means it would take well over three years at the current place to sell off all of those homes.

Single-Regulator Plan for Banks Now Close
The Wall Street Journal

WASHINGTON -- Top Obama administration officials are close to recommending that Congress create a single regulator to oversee the entire banking sector, people familiar with the matter said, a departure from the hodgepodge of federal agencies that failed to contain the financial crisis as it ballooned out of control last year.

The new agency is expected to be a major plank in a proposal that Treasury Secretary Timothy Geithner and White House officials send Capitol Hill in a few weeks with the goal of overhauling supervision of financial markets.

Number of Home Sales Rises, but Prices Keep Plummeting
The Washington Post

Bargain hunters drove home sales up slightly in April, but prices plunged and do not appear close to stabilizing, according to industry data released yesterday.

Existing-home sales rose 2.9 percent from March, to a seasonally adjusted annual rate of 4.68 million units, according to the National Association of Realtors. That was slightly better than analysts expected. The April numbers represented a 3.5 percent drop in sales compared with April 2008.

$1M Mortgage Buybacks Seen
The New York Post

Smart-money investors are betting that the Obama administration will start leaning more on Fannie Mae and Freddie Mac to kick-start the housing market by giving them the OK to buy mortgages worth up to $1 million.

Current law prohibits the two government-run mortgage giants from buying home loans valued at more than $417,000 nationally, or up to $729,000 in areas where home prices are high. But some mortgage traders and analysts think that could soon change.

More Small Banks Ailing as Recession Toll Mounts
The New York Times

Despite signs that the nation’s biggest banks are stabilizing, more small and midsize institutions are coming under stress as the recession continues.

The Federal Deposit Insurance Corporation said Wednesday that the number of banks on its list of “problem” institutions had grown to 305 in the first quarter, the most since 1994, and up from 252 at the end of 2008. From January through March, 21 small or medium-sized banks failed, and 15 more have gone in the second quarter.

The Housing Hurricane Will Howl Again
Barrons

WE'RE OUT OF THE EYE OF THE HURRICANE, but here comes the back half of the storm. A lot of people think that we've seen the worst of the housing crisis. They're talking about green shoots and glimmers of hope, when they should be back in the storm shelter, preparing for a flood of inventory that will overwhelm the markets and produce another round of falling prices

For the past few months there has been a semi-moratorium on foreclosures. Most institutions with delinquent mortgages didn't foreclose. The signs that blanket many neighborhoods have been posted by a fraction of the lenders. Now the rest of the banks are rushing to get their properties on the market.

Plan to Buy Banks' Bad Loans Founders
The Wall Street Journal

WASHINGTON -- A government program designed to rid banks of bad loans, part of a broader effort once viewed as central to tackling the financial crisis, is stalling and may soon be put on hold, according to people familiar with the matter.

The Legacy Loans Program, being crafted by the Federal Deposit Insurance Corp., is part of the $1 trillion Public Private Investment Program the Obama administration announced in March as a way to encourage banks to sell securities and loans weighing on their balance sheets to willing investors.

Home Prices Continue Downward March
The Wall Street Journal

U.S. home prices continued their multiyear tumble in March, according to the S&P Case-Shiller home-price indexes, as the downdraft shows no near-term signs of abating.

Meanwhile, U.S. consumer confidence improved sharply in May, especially in expectations for the economy six months from now, a report released Tuesday said.

Job Losses Push Safer Mortgages to Foreclosure
The New York Times

As job losses rise, growing numbers of American homeowners with once solid credit are falling behind on their mortgages, amplifying a wave of foreclosures.

In the latest phase of the nation’s real estate disaster, the locus of trouble has shifted from subprime loans — those extended to home buyers with troubled credit — to the far more numerous prime loans issued to those with decent financial histories.

Face-Lift for Foreclosure Prevention
The Washington Post

The Obama administration is attempting to revive a stalled government foreclosure prevention program that could restore equity to hundreds of thousands of borrowers whose home values have plummeted.

After eight months, the program, known as Hope for Homeowners, has helped just one borrower secure a more affordable loan. President Obama signed legislation last week simplifying and lowering the cost of the program for lenders and borrowers. Lenders that participate also are eligible for incentive payments from government bailout funds.

Mortgage Modifying Fails to Halt Defaults
The Wall Street Journal

Mortgage-servicing companies are struggling to find the best way to modify mortgages so that borrowers can stay in their homes, according to a Fitch Ratings report expected to be released this week.

The Fitch report analyzed mortgages bundled into securities between 2005 and 2007, a peak time when the U.S. housing industry benefited from investors' demand for mortgages. The Fitch report studied pools of mortgages that are managed by more than 30 servicing firms charged with collecting and modifying loans on behalf of investors in so-called residential mortgage-backed securities.

MBS, Foreclosure Lawsuits Jump
MortgageBank Mag

Mortgage-backed securities investors led an increase in mortgage-related lawsuits, according to the First Quarter Mortgage Litigation Report from MortgageDaily.com. A rise in foreclosure lawsuits also contributed to the increase.

The analysis, based on active cases covered by MortgageDaily.com, was prepared in conjunction with the law firm of Weiner Brodsky Sidman Kider PC, which is known as a leader for its work in mortgage banking litigation.

Foreclosed Homes More Appealing to Young Buyers
Wall Street Journal

Younger Americans and renters are more likely to buy homes out of foreclosure than seniors or current homeowners, according to a new survey from Trulia.com and RealtyTrac. Foreclosures tend to offer the biggest discounts, and their increasingly affordability has made them particularly attractive and marketable to first-time buyers, typically younger consumers that come out of the rental pool. More than two-thirds of current renters would consider buying a home in foreclosure, compared to half of current homeowners, according to an online survey by Harris Interactive that interviewed 2,397 adults in early May.

Obama Signs Mortgage Bill into Law
Washington Post

President Barack Obama said homeowners facing foreclosure would have a second chance under a measure he signed into law on Wednesday, but he added consumers still must live within their means. The law — officially called the Helping Families Save Their Homes Act — expands an existing $300 billion program that encourages lenders to adjust a mortgage if the homeowner agrees to pay an insurance premium. The program, set to expire in 2011, would swap out a homeowner's high-interest rate for a 30-year fixed loan backed by the Federal Housing Administration.

Ohio House Votes to Halt Foreclosures
Cincinnati.com

Ohio moved one step closer Wednesday to a six-month moratorium on home foreclosures, which have risen by more than 50 percent statewide since 2004. The Democratic-led Ohio House approved the temporary ban on new filings, by a 54 to 43 vote along party lines. But state legislators, after more than two hours of debate, disagreed about the severity of the problem and whether a ban will stop banks from taking homes from Ohioans unable to make mortgage payments. No state legislature has passed a moratorium on foreclosures, and Ohio's still requires Senate approval, which is unlikely soon. Ohio's legislature approved a two-year ban on foreclosures during the 1930s.

GM Finance Arm to Get a Fresh Bailout
Wall Street Journal

The Treasury Department is poised to inject more than $7 billion into GMAC LLC, the first installment of a new government aid package that could reach $14 billion, according to people familiar with the matter. As a result of the move, the government within months could end up owning both GMAC and General Motors Corp. The GM plan being devised by President Barack Obama's auto task force calls for the government to emerge with a majority stake. And the increasing infusion of taxpayer money into GMAC could turn the U.S. government into a majority shareholder there.

Mich. Lawmakers Agree on 90-day Foreclosure Bill
The Associated Press

Michigan lawmakers struck a deal Wednesday to give homeowners facing foreclosure a 90-day window to stay in their house and potentially work out something with their lender. The legislation lets homeowners delay foreclosure proceedings for 90 days if, after getting a notice of foreclosure, they meet with a housing counselor and the bank.

Gov't losses big in home market
USA Today

WASHINGTON — The nation's teetering economy has Uncle Sam playing a growing role in neighborhoods across the country — as a homeowner.

The combination of a deep recession and a foundering housing market has left the government with more than 50,000 houses on its hands — enough homes to fill a city the size of Riverside, Calif., or Miami. Now federal records show it's struggling to unload the houses and facing billions of dollars in losses.

Amid Push To Save Giant Banks, Small Ones Fail At A Rising Clip
Investors Business Daily

The federal government has put hundreds of billions of dollars into financial giants such as Bank of America to keep them afloat, claiming they are too big too fail.

But what about the 8,300 other banks and thrifts that account for a third of the nation's deposits and at least that much of business loans?

Plan to Encourage Banks to Allow Short Sales
The Washington Post

Banks could get government incentive payments for allowing borrowers to sell their home at a loss rather than go through foreclosure, under new guidelines issued yesterday for the Obama administration's $75 billion housing plan.

The program, known as Making Home Affordable, focuses on paying lenders to modify distressed borrowers' loans to affordable levels. But under this expansion of the program, lenders can also receive incentive payments even if the homeowner's loan is not modified.

When default’s not your fault
Boston Herald

It’s every renter’s worst nightmare: You move into a home or condo, then find out the owner has lost the place to foreclosure.

Your rent money and security deposit are gone, and chances are the lender that foreclosed on the property intends to kick you out.

As Fed's Role Grows, Doubt Spurs Critics
American Banker

Nearly a century after its creation, the Federal Reserve System faces growing questions over whether its structure is outdated and needs reworking.

"If we were to start over again and make a blueprint for the central bank of the United States, would we do what we did at the beginning of the 20th century?" asked Ralph Bryant, the Fed's former director of international finance who is now a senior fellow at the Brookings Institution. "Almost surely we wouldn't."

Mortgages Stay Below 5%
The Wall Street Journal

WASHINGTON -- Home-mortgage rates were mixed this week, but the average rate on 30-year fixed-rate mortgages remained below 5%, according to Freddie Mac's weekly survey of mortgage rates.

Mortgage rates have fallen in recent months as providers try to entice buyers amid the housing market's downturn. Still, many consumers are wary of making the commitment to purchase a home, and many prospective buyers face challenges getting financing amid the tight credit market.

Fisher says U.S. 'coming back from the abyss,’ but warns of 'slow slog'
Houston Chronicle

A woman recently approached Richard Fisher in a Dallas Starbucks and thanked him.

She’d refinanced her mortgage at 4.3 percent, down from more than 6 percent, and she wanted him to know she appreciated what the Federal Reserve had done to lower rates.