Government

Three former executives of the Bank of the Commonwealth and a borrower were convicted by a federal jury in Norfolk, Virginia for their roles in a fraud scheme that eventually led to the bank's failure in 2011, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) said last week in a release.

Among the available foreclosure prevention tools, short sales are becoming the weapon of choice for servicers while the use of loan modifications has slowed, data from Fitch Ratings revealed. For example, among bank servicers, the percentage of resolutions in the loan modification category decreased to 26 percent in the last half of 2012 from 57 percent in the first half of 2010, according to Fitch's latest quarterly index. Meanwhile, short sales showed significant increases over the last couple of years. In 2012, short sales represented 51 percent of resolutions for bank servicers, up from a low of 20 percent in 2010.

Freddie Mac's total mortgage portfolio expanded in April, but growth slowed as purchase and issuance activity declined from March, the GSE reported. According to Freddie Mac's monthly volume summary, its total portfolio grew at an annualized rate of 0.6 percent last month, a setback compared to March's 4.0 percent growth rate but still above January and February's contracting figures. As of the end of the month, the portfolio's ending balance was about $1.95 trillion.

Freddie Mac is in the process of securitizing over $1 billion in performing loans that were modified. The modified loans have been performing for at least six consecutive months and were held in the company's mortgage portfolio. ""Securitizing loans that have been modified and are now performing will allow Freddie Mac to better manage its mortgage-related investments portfolio,"" said Adama Kah, Freddie Mac VP of distressed assets management.

Fixed mortgage rates trended higher for the third consecutive week, according to reports from Freddie Mac and Bankrate.com. According to Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 3.59 percent (0.7 point) for the week ending May 23, up from 3.51 percent the previous week. The 15-year FRM was also up, averaging 2.77 percent (0.7 point) from 2.69 percent previously.

The price of a new single-family home soared to a record high in April as sales jumped 2.3 percent to a seasonally adjusted annual rate of 454,000, the Census Bureau and HUD reported Thursday. The median price of a new home, according to the Census/HUD report, soared $20,900 (8.3 percent) in April to $271,600, the highest price on record. The inventory of homes available for sale rose to 155,000--the highest level since November 2011--translating to a 3.5 month supply, matching March for a record low.

First-time claims for unemployment insurance for the week ended May 18 dropped 23,000 to, 340,000 from the highest level since the end of March, the Labor Department reported Thursday. Economists expected initial claims to drop to 345,000. First-time jobless claims for the week ended May were revised up to 363,000 from the originally reported 360,000.

Barclays forecast new non-agency RMBS issuance at $12 to $15 billion at the start of the year, and its latest research shows the market is on track to hit that mark. Contributing to that forecast are a few factors: First, Barclays notes, the capital costs of holding loans in portfolio will increase for many banks under Basel III, making securitization a more attractive proposition. Second, further hikes in guarantee fees (g-fees)--such as those mandated by the Federal Housing Finance Agency (FHFA)--could make for a more competitive private-label market.

A federal judge of the U.S. District Court for the Eastern District of Washington ruled in favor of Mortgage Electronic Registration Systems, Inc. (MERS) and other defendants, MERSCORP Holdings, Inc. announced.

The Office of the Comptroller of the Currency (OCC) issued a statement Wednesday to encourage banks and federal savings associations to work with customers affected by the destructive tornadoes that tore through Oklahoma.