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January Layoffs Drop to Record Low

The number of layoffs fell 4.0 percent to 1,507,000 in January, the Bureau of Labor Statistics (BLS) reported Tuesday in its monthly Job Openings and Labor Turnover Survey (JOLTS) release, which details the ins and out of the labor market. The layoff total was the smallest since the JOLTS reports began in December 2000. At the same time, BLS said, the number of job openings rose 2.2 percent in January to 3,693,000, which meant there were 3.34 unemployed people for every job opening--a slight improvement from 3.38 in December.

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Ally Bank Agrees to Sell MSRs to Ocwen for $585M

Ally Bank, a subsidiary of Ally Financial, announced an agreement to sell mortgage servicing rights (MSRs) to Ocwen Financial Corporation for $585 million. The transaction includes MSRs with an unpaid principal balance of $85 billion and another $5 billion in agency MSRs created based on commitments made through the end of February. ""Ally continues to make significant progress in exiting its non-strategic mortgage activities. Going forward, the Bank's full focus and resources will be centered on its leading direct banking franchise and advancing its customer-centric deposit activities, as well as continuing to grow its key role in Ally's auto finance operation,"" said Barbara Yastine, president and CEO of Ally Bank.

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FHFA OIG: GSEs Face Significant Loss from Interest Rate Risks

Fannie Mae and Freddie Mac are at risk of losing billions as a result of fluctuations in interest rates, according to a white paper from the Federal Housing Finance Agency (FHFA) Office of Inspector General (OIG). According to the OIG's paper, an increase of just 1 percentage point in interest rates could cause the GSEs to lose nearly $2 billion in the fair value of their assets. To protect against interest rate risks, the OIG outlined its own suggestions, one of which included the use of derivatives.

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Georgia Bank Collapses Over Weekend; 2013 Tally Now at 4

FDIC announced Friday the closure of Frontier Bank, based in LaGrange, Georgia. The Georgia Department of Banking and Finance shut down the bank, appointing FDIC as receiver. HeritageBank of the South (Albany, Georgia)has picked up all of Frontier Bank's $224.1 million in deposits and ""virtually all"" of the closed bank's $258.8 million in assets, FDIC said.

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Fed’s Duke Says Recovery Is Sustainable and Will Strengthen

The evidence is clear that the recovery in housing is finally under way, but the question that remains open is whether the positive trends in housing are sustainable, Federal Reserve Board Governor Elizabeth A. Duke said in a speech at the Mortgage Bankers Association's Mid-Winter Housing Finance Conference. In her view, the recovery does appear to be sustainable. ""I do not believe that a flood of houses on the market from households that are currently underwater or from bank REO is likely to materialize or to be sufficient to outpace growing demand,"" she said.

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Commentary: Go With The Flow

Perhaps the most important piece of economic news in the last few days was not the continued drop in the unemployment rate or the positive blurbs in the Beige Book or even the Dow reaching a new record high, but Thursday's quarterly Flow of Funds report. According to the report for Q4 2012, household assets grew to $79.5 trillion in the fourth quarter, an increase of $1.3 trillion--not too shabby. Household financial assets were up $784 billion to $54.4 billion but home equity (the value of household real estate less loans against that real estate) grew $452.8 billion, the result of two moving parts: real estate values (which increased) and household mortgage liabilities, which dropped.

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Fitch Sees Potential in FHFA’s Goals to Attract Private Capital

The goal of attracting private capital into the mortgage market is at the center of discussions throughout the industry and the government. Thus far, ""efforts by the Federal Housing Finance Administration and other federal agencies to provide incentives for the creation of a vibrant private mortgage securitization market have been largely unsuccessful,"" according to Fitch Ratings. However, the ratings agency does see some promise in a couple of FHFA's goals.

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Administration Reports Improvements from Housing Market, Servicers

The housing market showed signs of progress across the board, but the overall recovery is still fragile, hence the need for efforts to prevent avoidable foreclosures, according to the Obama Administration Housing Scorecard for February. ""House prices are steadily rising above the mid-crisis lows in markets throughout the country, while inventories of new and existing homes are further tightening, and even estimates of the 'shadow inventory' are down,"" said HUD deputy assistant secretary for economic affairs Kurt Usowski. ""That said, we still remain considerably below long-term normal levels of home sales and production.""

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Attorney General Criticized after ‘Too Big to Jail’ Suggestion

U.S. Attorney General Eric Holder caused a stir Wednesday by voicing the idea that certain financial institutions may be ""too big to jail."" In a testimony before the Senate Judiciary Committee on Justice Department (DoJ) oversight, Holder said he is ""concerned that the size of some of these institutions becomes so large that it does become difficult for us to to prosecute when we are hit with indications ... it will have a negative impact on the national economy.""

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