Government

Mortgage rates finally broke their holding pattern this week, pulling back as reports demonstrated the housing market's ongoing strength and the global economy's precariousness. According to Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 3.51 percent (0.8 point) for the week ending February 28, dropping from 3.56 percent previously. Last year at this time, the 30-year FRM averaged 3.90 percent. Bankrate.com's weekly national survey showed rates falling to five-week lows.

Personal income dropped $505.5 billion, or 3.6 percent, and disposable personal income (DPI) fell $491.4 billion, or 4.0 percent, in January, the Bureau of Economic Analysis, reported Friday. Personal consumption expenditures (PCE) increased $18.2 billion, or 0.2 percent in January. In December, personal income increased $353.4 billion, or 2.6 percent, DPI increased $325.7 billion, or 2.7 percent, and PCE increased $14.8 billion, or 0.1 percent, based on revised estimates.

Freddie Mac pulled in a net profit of $11 billion for 2012, significant increase from the annual net loss of $5.3 billion in 2011. In addition, Freddie Mac's fourth quarter net income climbed to $4.5 billion, up from $2.9 billion in the third quarter of last year. According to the company's earnings release, the increase reflects a decrease in delinquent single-family loans, improved national home prices, and a higher income tax benefit. ""It's clear from our earnings that the housing market has turned a corner and that our work to minimize legacy losses and build a strong new book of business is paying off,"" said Freddie Mac CEO Donald H. Layton in a release.

The Senate Committee on Banking, Housing and Urban Affairs continued a series of hearings on the Federal Housing Administration (FHA) Thursday morning. Representatives heard from various members of the housing industry, who expressed their opinions of FHA's recent performance and ongoing role in the market. The six panelists discussed the appropriateness of FHA's countercyclical role in the housing market in recent years, with special attention to loan limits and FHA's market share.

Following a vote in the Senate, Jack Lew is officially the Secretary of the Treasury. The Senate voted Wednesday 71-26 to confirm Lew, who was previously President Obama's chief of staff. Lew replaces Tim Geithner, who stepped down at the end of January; deputy secretary Neal Wolin had been filling in in the meantime.

The Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board announced the release of amendments to their enforcement actions against 13 mortgage servicers over mortgage servicing and foreclosure practices. The amendments memorialize foreclosure agreements made between the regulators and 13 servicers. According to the release, 4.2 million borrowers are covered by the amendment and should expect to receive compensation ranging from hundreds of dollars up to $125,000. Rust Consulting, Inc., the paying agent, will contact borrowers by the end of March of this year with payment details.

Real gross domestic product (GDP) grew 0.1 percent in the fourth quarter, the Bureau of Economic Analysis reported Thursday. The nation's economy increased at a 0.1 percent seasonally adjusted annualized rate. Last month, in the advance GDP release, BEA had reported the nation's economy contracted by 0.1 percent, the first ""negative growth"" since the end of the Great Recession in mid-2009. Economists had expected the turnaround, but to a stronger 0.5 percent growth rate.

First-time claims for unemployment insurance fell 22,000 to 344,000 for the week ended February 23, the Labor Department reported Thursday. Economists expected 360,000 initial unemployment claims. The drop in filings--the third in the last four weeks--resumed a downward trend in layoffs.

The U.S. District Court for the Western District of Washington dismissed a three-count complaint against MERSCORP Holdings, Inc. (MERS) that alleged wrongful foreclosure and violations of the state's Deed of Trust Act (DTA) and Consumer Protection Act (CPA). In the case Zalac v. CTX Mortgage Corp., the plaintiff was never foreclosed on, and so the wrongful foreclosure claim was dismissed since an element of the claim was missing: a foreclosure sale.

A three-judge panel of the U.S. Court of Appeals for the Sixth Circuit affirmed a U.S. District Court dismissal of a case against MERSCORP Holdings, Inc. (MERS) and 15 of its members. County clerks representing Christian and Washington County in Kentucky filed suit against MERS, alleging the defendants established MERS to allow members to avoid recording mortgage assignments and to evade paying recording fees to county clerks.