For some borrowers, negative equity can become their rationale to stop making mortgage payments. The risk of such strategic default is rising among loans that have ""always performed,"" according to the credit analysts at Moody's Analytics. The agency found that these always-performing loans tend to be concentrated in robust housing markets that have held home values above the national average, but it's these areas where we may soon see a renewed increase in strategic defaults.

State and federal regulators shut down four community-based financial institutions over the weekend two in Georgia and one each in Florida and Arizona. These latest closings bring the total number of names on the FDIC's failed bank list to 55 for the 2011 calendar year.

JPMorgan Chase kicked off the banking sector's second-quarter earnings season with a $5.4 billion profit. It was followed by Citigroup's announcement that it pulled in net income of $3.3 billion. Both beat market expectations, however, neither lender escaped mortgage-related losses - a trait that is likely to show up on balance sheets throughout the industry as banks continue to grapple with delinquencies and additional costs tied to foreclosure reviews and litigation.

President Obama on Sunday announced his pick to lead the new Consumer Financial Protection Bureau (CFPB) - Richard Cordray, former attorney general for the state of Ohio. Cordray was selected to build out the Bureau's enforcement team in December. The president plans to formally nominate Cordray for the top post at the CFPB on Monday. His appointment must still be approved by the Senate.

Five years into the housing slump, and home sales remain weak with prices falling again in many parts of the country as foreclosures and short sales are ramping up. Mark Zandi, chief economist for Moody's Analytics, says while it certainly won't be the popular move, it may be time for the government to step up temporary support for the housing market. Zandi underscores three policy recommendations that he believes could help ensure housing stays on course.

Last year, banks seized more than one million properties. Lax underwriting standards during the boom years served as the catalyst for a housing bust that upended not only the mortgage market but the entire U.S. financial system, and has left scores of foreclosures, delinquencies, and vacant homes in its wake. In order to see what changes the lending community has made, the ratings agency DBRS decided to do a side-by-side comparison of the criteria for obtaining a prime mortgage in 2007 versus today's requirements for prime qualification.

With a groundswell of unpaid mortgages and home seizures adding to inventories of bank-owned properties for years, REO sales have commanded a bigger share of the market, weighing down the entire housing market. Getting these foreclosed homes off banks' books and back into the hands of responsible homeowners is an essential part of the housing sector's recovery. RealtyTrac reports that REOs sold during the first quarter carried an average markdown of 35 percent compared to the price of homes not in foreclosure.

Distressed commercial real estate in the United States stood at $181.1 billion in June, according to the analysts at Delta Associates. That tally includes properties in default, in foreclosure, and lender REO. The firm says the amount of distress in the commercial real estate (CRE) sector has increased by $500 million since April but still remains on the low end of the plateau range. The level of distress began to plateau in spring 2010, according to Delta Associates, and has stayed between $175 billion and $190 billion since then.

Home prices have gotten a little bit of a boost in recent months thanks to a seasonal uptick in market activity. Most analysts, expect further declines to characterize the later part of the year and possibly extend into next year, largely because of the huge supply of foreclosures on the market. Mortgage insurer PMI says there's a 50 to 60 percent chance that home prices at the national level will be lower in March 2013 than they were in March 2011. PMI has put a figure on the likelihood that home prices will continue to depreciate over the next two years.

The promise of a loan modification based on delinquency status induces some financially proficient borrowers to intentionally fall behind on their mortgage payments, according to a study commissioned by the National Bureau of Economic Research in Massachusetts and conducted by researchers at Columbia University. Led by Christopher Mayer, senior vice dean and professor of real estate at Columbia Business School, the research team examined the modification policies of Countrywide Financial.