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Starts Plunge in January; Permits at 4 1/2-Year High

Housing starts plunged 8.5 percent in January--the steepest drop in two years--to a seasonally adjusted annual rate of 890,000, the Census Bureau and HUD reported jointly Wednesday. Applications for residential permits rose 1.8 percent to a rate of 925,000, the highest level since June 2008. Economists had expected start activity to drop to 914,000 in January from the initial report for December of 954,000 starts. Permits, according to the consensus forecast, were expected to increase to 920,000 from the original report of 903,000 in December.

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Freddie Mac: Rental Sector Shows Growth, but Lacks Affordability

In a blog post, a Freddie Mac executive revealed more than one-third of U.S. households are renters, the largest share since 1997, yet adequate, affordable rental housing is still out of reach for many. According to David Brickman, SVP of multifamily at Freddie Mac, the nation has seen 5.4 million new renter households between 2004 and 2011, and growth is expected to continue. At the same time, Brickman noted more than half of all renters in the country exhaust more than 30 percent of their income on housing.

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GSEs Refinance More than 2M Loans Through HARP

As of November 2012, Fannie Mae and Freddie Mac have refinanced more than 2 million loans through the Home Affordable Refinance Program (HARP), the Federal Housing Finance Agency (FHFA) reported Tuesday. According to FHFA, nearly 130,000 homeowners refinanced their mortgages through HARP in November alone, making it the second biggest month for HARP activity in 2012 (behind June's 137,000 HARP refinances). In addition, HARP volume represented 23 percent of total refinance volume in November.

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Report: Obstacles to Policies that Encourage Low-Priced Housing

Inclusionary housing policies--those which either require or encourage developers to provide low-priced housing within market-rate developments--have largely survived the recent housing downturn. However, several obstacles now stand in their way, preventing them from reaching their full effectiveness, according to a recent report from the Center for Housing Policy. Major hindrances to these policies include shifts in development pattern, new restrictions regarding rental housing, and rising homeowner association fees, among others.

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California Inventory Continues to Diminish as Foreclosure Activity Falls

Foreclosure activity was somewhat mixed in the five Western states--Arizona, California, Nevada, Oregon, and Washington--observed by ForeclosureRadar over the month of January. Notably, California foreclosure sales were down in January, despite a past trend of an uptick in the month following a decline in December. However, this January, both notices of default and notices of foreclosure sale declined in January--down 60.5 percent and 34.83 percent, respectively, over the month. Adequate inventory is necessary for a recovery to take place, but is lacking in much of the state, according to the analytics firm.

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Two Minnesota Counties File Suit Against MERS

Ramsey and Hennepin counties filed suit against Mortgage Electronic Registration Service, Inc. (MERS), alleging the company violated Minnesota law by not recording mortgage assignments at county recorders' offices and by not paying attendant recording fees, Ramsey County Attorney John Choi announced Friday. In a statement, MERS said it will defend against the complaint, announcing it has ""prevailed in similar recording fee cases in Kentucky, Florida, Iowa, Missouri, Hot Springs, Arkansas, and Union County, Illinois.""

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Chicago Bank Falls, Raising 2013 Tally to Three

Chicago's Covenant Bank is the third FDIC-insured institution to close this year, the agency announced. The Illinois Department of Financial and Professional Regulation--Division of Banking closed the bank Friday, appointing FDIC as receiver. As of the end of last year, Covenant Bank had approximately $58.4 million in total assets and $54.2 million in total deposits.

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Fifty-Four Senators Pledge Support for Cordray’s Re-appointment

Fifty-four Senate Democrats and Independents issued a letter to the president last week defending the Consumer Financial Protection Bureau (CFPB) and pledging to support the re-appointment of current director Richard Cordray. Obama announced last month his intent to renominate Cordray for the position, reigniting criticism and the threat of another filibuster. Adding to the controversy is a recent appeals court ruling invalidating the appointments of several National Labor Relations Board members who were appointed at the same time as the CFPB leader.

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LPS Settles Federal Mortgage Fraud Inquiry for $35M

Lender Processing Services Inc. (LPS) agreed to pay $35 million to resolve criminal fraud violations involving fraudulently signed and notarized mortgage documents, the Justice Department announced Friday. LPS entered into a non-prosecution agreement with the department and the U.S. Attorney's Office for the Middle District of Florida. Through the settlement, LPS announced it will pay $20 million to the United States Marshals Service and $15 million to the United States Treasury. In a statement, Hugh Harris, LPS president and CEO, said, ""[t]he conclusion of the Justice Department's inquiry is another positive step for LPS.""

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Edward Jones Mortgage to Close; Cites Regulatory Reform as Reason

Citing changes in regulatory reform due to Dodd-Frank as the driving factor, Edward Jones Mortgage, based in St. Louis Park, Minnesota, will close its doors permanently in April. Edward Jones Mortgage, which reportedly employs 214 people, is a joint venture between San Francisco-based Wells Fargo and Des Peres, Missouri-based Edward Jones. ""Regulatory reform stemming from the 2010 Dodd-Frank Act changed the rules for joint ventures of this type,"" said a spokesperson for Edward Jones.

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