The FDIC filed a petition with the courts late Monday contesting the $8.5 billion settlement proposal put forth by Bank of America in June, which is intended to cover claims from institutional investors related to mortgage bonds populated by Countrywide years before the subprime lender was acquired by BofA. The FDIC has been the receiver of several failed banks that held certificates issued by the affected trusts. The agency says it is objecting because it has not been provided enough information to evaluate the settlement.

The city of Chicago is set to launch a targeted new loan program to help alleviate the effects of the foreclosure crisis in local neighborhoods. Through the initiative dubbed the Micro-Market Recovery Program, the city will work to foster the reoccupation of foreclosed or vacant properties in key areas of Chicago by employing both nonprofit intermediaries and for-profit capital sources to provide special funding for homebuyers and approved developers.

The default risk associated with newly originated mortgages continues to improve, according to the analysts at University Financial Associates (UFA). The company's default risk index for the third quarter indicates that with today's economic conditions, lenders and investors should expect defaults on new loans to be 32 percent higher than loans from the 1990s. That's down from an elevated risk of 41 percent during the first part of this year. UFA says at this rate, ""normalcy may not be far away"" for default and prepayment indicators.

Sperlonga Data and Analytics, a subsidiary of national real estate asset management firm MMREM, has announced the hiring of Brent Stokes, a 26-year mortgage industry veteran, for the newly created position of SVP. Sperlonga Data and Analytics provides a centralized interface for servicers and homeowners associations (HOAs) to help stakeholders minimize losses associated with transaction delays and lost revenues caused by HOA claims.

The marketplace was zeroed in on Ben Bernanke and Jackson Hole, Wyoming, in hopes of a signal from the Federal Reserve's chief that new stimulus measures were in the works to rekindle the stalled economy. But there was no mention of new action. Housing was the black eye of the Fed chairman's speech. He said this recession was ""unusual"" because it was linked to a very deep slump in the housing market, and with an overhang of distressed properties and still-declining home prices, the housing sector is hindering economic growth.

California's pending home sales dipped in July, as did the share of distressed property sales. The California Association of Realtors says 44.5 percent of home sales contracts last month involved distressed properties. That's down from both the previous month and a year earlier. Short sales made up 17.5 percent of total sales. The state's Realtors have sent letters to the largest lenders with ideas on how the process can be improved and calling for their immediate attention.

Katie Van Hook has been promoted to business development manager for Continental REO Services, Inc. She has four years' experience working as a closing coordinator for the company. Prior to joining Continental REO, Van Hook worked in closing and escrow positions for JPMorgan Chase Bank, N.A. and Fidelity National Title Company. She also has experience in loan processing.

Short sales are being used more frequently by homeowners, lenders, and investors to avert a foreclosure, and industry data released this week shows that these pre-foreclosure transactions are being pushed through at a faster pace. Freddie Mac says its short sales have risen from about 4 percent of completed workouts in 2000 to nearly 14 percent in 2010. The GSE warns that with the increase in short sale transactions comes an increase in fraud. It's become the top priority for Freddie Mac's fraud investigation unit.

Word on the street is the administration is sizing up a new program that would provide millions of homeowners with new, lower interest, lower payment mortgages. The initiative would allow borrowers with loans backed by Fannie Mae and Freddie Mac to refinance at today's rates, even if they are in negative equity or have bad marks on their credit. Two Columbia business professors say such a move would save homeowners an average of $350 a month and pump an extra $118 billion into the economy.

Econohomes is an Austin, Texas-based company that buys distressed REO properties in bulk and operates an online marketplace to get these homes back into the hands of owner-occupants and investors. The company is looking to make it easier for Hispanic buyers to get into the game. Econohomes is now offering bilingual services and Spanish-language online information to assist the Hispanic community with real estate transactions, both first-time homebuyers and property investors.