Government

Ally has satisfied its consumer relief obligations required under last year's National Mortgage Settlement (NMS), according to a report filed by settlement monitor Joseph Smith Jr. Smith filed his report with the Federal District Court for the District of Columbia, certifying that ""Residential Capital, LLC, Ally Financial, Inc. and GMAC Mortgage, LLC (collectively, Ally) have satisfied their consumer relief obligations."" According to the settlement terms, Ally was required to provide $200 million in relief to customers in the form of loan modifications, short sales, principal forgiveness, and other forms of relief.

President Obama faces a budget obstacle in his plans to rebuild crumbling bridges and address other pressing infrastructure needs. Unlike many governments, the United States does not have a separate budget for capital spending, which means each tax dollar is as likely to go to the construction of, say, a courthouse, as it is to paying the salary of a judge or court clerk who works there. What would having a separate capital budget do for the country? For starters, it would rationalize our spending and make it more difficult for lawmakers to lard up spending bills with long-term projects.

In his written testimony before the Senate Committee on Appropriations, HUD Secretary Shaun Donovan spoke on the potential impact to households across the nation if across-the-board automatic spending cuts were to take effect. The cuts are scheduled for March 1. Speaking from HUD's perspective, Donovan says the cuts, also referred to as the sequester, would be especially damaging on middle class families, communities, and the economy across the nation. More specifically, he warned the cuts would keep 75,000 households from receiving foreclosure prevention, pre-purchase, rental, or other counseling though HUD housing counseling grants.

Fixed mortgage rates continued to hold steady this week, according to data from Freddie Mac and Bankrate.com. Freddie Mac's Primary Mortgage Market Survey for the week ending February 14 showed no weekly changes in fixed rates: The 30-year fixed averaged 3.53 percent (0.8 point), while the 15-year average held at 2.77 percent (0.8 point). Meanwhile, Bankrate reported slight increases in fixed rates, though any movement was minor. According to Bankrate's survey, the average 30-year fixed-rate mortgage had a rate of 3.79 percent.

Housing may not be where it used to be, but on the upside, Freddie Mac suggested this indicates there's still plenty of room for the industry to grow. ""[T]he level of housing activity is still near historic lows. This means that there is still room for substantial growth in housing and housing-related industries before we return to a more normal environment,"" Freddie Mac stated in its latest economic and housing outlook. This optimistic viewpoint was reflected in the GSE's forecast for housing in 2013, especially for housing starts.

In a recent blog post from the Federal Reserve Bank of New York, three Fed researchers shared their findings on mortgages that would have been targeted by a controversial use of eminent domain proposed in San Bernardino County. Although the researchers found only 11 percent of the open loans in the county were not underwater, they also reported a dramatic decrease in payments and an increase in home values.

Foreclosure activity slowed in January with an especially notable drop in foreclosure starts, which hit a 79-month low, according to a recent foreclosure report from RealtyTrac. Foreclosure filings--default notices, scheduled auctions, and bank repossessions--were down monthly and yearly by 7 percent and 28 percent, respectively. Data from RealtyTrac also revealed a steep drop in foreclosure starts as starts fell 11 percent from the December and 28 percent from January 2012. Foreclosure starts are now at the lowest level since June 2006.

Bolstered by favorable seasonal adjustment factors, first-time claims for unemployment insurance dropped 27,000 to 341,000 for the week ending February 9, the Labor Department reported Thursday. Economists expected a much smaller decline to 360,000. Initial claims were under 350,000--a dividing line between a strong and weak labor market--for the third time in the last five weeks, hinting layoff activity has returned to normal.

The federal judge who approved last year's National Mortgage Settlement between the government and the five largest servicers turned down Wells Fargo's claim that a federal lawsuit against the bank violates settlement terms. District Judge Rosemary Collyer wrote in her opinion that Wells Fargo took ""a leap of logic"" in its interpretation of several settlement provisions that would bar the government from bringing certain claims against the bank.

The Consumer Financial Protection Bureau recently finalized several rules for the mortgage industry, including the ability-to-repay rule and new mortgage servicing guidelines. As the Bureau prepares for the rules to take effect in January 2014, it aims to take several actions to educate and prepare both the industry and consumers on the new regulations.