Investors suing Freddie Mac for fraud for not properly disclosing the risk of mortgage-backed securities (MBS) have been stymied in their efforts to gather evidence by a secrecy pledge binding former employees who accepted severance packages, the New York Times reported.

Contrary to popular opinion, home prices have not yet bottomed out, according to the financial information and analysis firm Fiserv.

Commercial real estate is now the weakest economic sector in the country, as residential real estate is showing some positive aspects and other sectors are mixed, the Federal Reserve said in its Beige Book.

While most U.S. banks are seeing higher write-offs for real estate loans, Minneapolis-based U.S. Bancorp reported higher earnings as mortgage banking revenue surged.

The government is mobilizing all its resources to aid homeowners in modifying mortgages and now the Internal Revenue Service (IRS) is getting into the act.

Fitch Ratings cited declining fundamentals on collateral as it put a further $6.1 billion in commercial real estate loan collateralized debt obligations (CREL CDOs) on Rating Watch Negative, bringing its entire rated universe in this type of security onto the negative watch.

""This is just a test"", was the message from the Federal Reserve as it tried to reassure markets that it was not ready yet to drain liquidity from the financial system.

Morgan Stanley moved into the black in the third quarter, though profit was down sharply from the year-ago period.

While the market for distressed assets from the financial crisis may be the biggest since the savings & loan disaster of the 1990s, it is taking longer to develop and it may be next year before asset sales begin in earnest.

A Virginia congressman is asking banks and mortgage servicers to help homeowners struggling with toxic drywall by allowing them to apply for a temporary forbearance on their mortgage payments.