Government

Institutions insured by the Federal Deposit Insurance Corporation recorded their second-highest annual earnings ever in 2012, according to the FDIC's Quarterly Banking Profile for the fourth quarter of 2012. High noninterest income and declining loan loss provisions contributed to the increase, according to the FDIC. Delinquencies at FDIC-insured institutions are also declining. The number of loans 90 or more days past due fell 5.5 percent in the fourth quarter. At the end of the year, 3.6 percent of loans held by the institutions were noncurrent, down from 2.86 percent a year earlier.

Following a recent report from the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), which charged that Treasury has not appropriately limited compensation for executives at companies bailed out by TARP, a House subcommittee held a hearing on the matter. House Representatives heard from Special Inspector General Christy Romero and Acting Special Master for TARP Executive Compensation at the Treasury, Patricia Geoghegan.

Home prices rose 5.5 percent year-over-year in 2012's final quarter, the Federal Housing Finance Agency (FHFA) reported Tuesday. FHFA's seasonally adjusted purchase-only Home Price Index (HPI) increased 1.4 percent on a quarter-to-quarter basis in Q4. Month-over-month, December's index was 0.6 percent up from November, marking the 11th straight month of increases. While the national purchase-only HPI rose 5.5 percent from Q4 2011 to Q4 2012, FHFA notes prices of other goods and services rose 1.7 percent over the same period.

In the fourth quarter of last year, the risk of mortgage fraud elevated to the highest level since 2009, Interthinx reported Tuesday. According to the company's Mortgage Fraud Risk Report, the mortgage fraud risk index climbed to 159, representing a 16 percent increase from Q3 2012 and 9 percent increase from Q4 2011. Interthinx pinpointed the source of the increase to a surge in property valuation fraud risk, which rose 25 percent from Q3.

Federal Reserve Chairman Ben Bernanke underscored benefits of the Fed's quantitative easing policy while also pointing to associated costs and risks in his written testimony to Senators Tuesday. According to Bernanke, the benefits of the purchase and policy accommodation are clear. ""Monetary policy is providing important support to the recovery while keeping inflation close to the FOMC's 2 percent objective. Notably, keeping longer-term interest rates low has helped spark recovery in the housing market and led to increased sales and production of automobiles and other durable goods,"" he said.

New home sales jumped 15.6 percent in January--the strongest gain in 20 years--to a seasonally adjusted annual rate of 437,000, the highest since July 2008, the Census Bureau and HUD reported Tuesday. Economists surveyed by Bloomberg expected the report to show a much smaller sales pace: 381,000. January's rate of sales was the highest since July 2008. At the same time, the months' supply of new homes for sale dropped to its lowest level since March 2005.

Although some argue the push for homeownership was the root cause leading to the housing downturn, a report from the Bipartisan Policy Center's (BPC) Housing Commission argued it was actually a wide range of factors that converged to create the crisis and offered its own formula for encouraging sustainable homeownership for those with modest incomes. With past mistakes in mind, the commission argued sustainable homeownership should be encouraged among lower-income borrowers and can be achieved through broad availability of prime, fixed-rate mortgage financing and adjustable-rate mortgages with clear terms and limits on adjustments and maximum payments.

DS News took some time to chat with Daren Blomquist, VP of RealtyTrac, to get a reading on the current state of the foreclosure market and what is expected to come. Although foreclosures served to strip homes of their value during the housing crisis, Blomquist says foreclosures will be seen as a welcome sign this year and act as a stimulus. While this may seem counterintuitive, Blomquist said, ""because of the severe lack of inventory available for sale, foreclosures could actually fill that inventory and provide more fuel to the fire that's been slowly building over the past year as more sales occur.""

A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit has affirmed, without hearing, an order dismissing claims against Mortgage Electronic Registration Systems, Inc. (MERS), according to a release from MERSCORP Holdings. [IMAGE] The appellate ruling affirmed a decision issued by District Judge David Alan Ezra of the District Court for Hawaii.

The Office of the Inspector General for the Federal Housing Finance Agency (FHFA-OIG) says in a new report that the agency needs to provide better guidance for investigators examining the GSEs' multifamily loan portfolios. Given the size of their investment and their dominant role in the secondary market, OIG says it is ""imperative"" for FHFA--as conservator of the GSEs--to supervise Fannie Mae and Freddie Mac's multifamily businesses and ensure underwriting standards are being upheld.