Government

In a slow recovery, Freddie Mac expects to see further growth in the multifamily sector, while the homeownership rate is projected to tick down from its already historically low rate. According to the GSE's multifamily demand forecast, the homeownership rate will descend by one or two percentage points to around the 65 percent level, which implies more than half of total new households will transition into rental units. On the other hand, the multifamily market is expected to reap somewhere around 1.7 million new renter households from 2011 to 2015. The projection is based on the assumption that the recovery is continuing at a slow pace.

Fannie Mae and Freddie Mac were shy of meeting their low-income and very low-income home purchase goals, according to the Federal Housing Finance Agency's (FHFA) annual housing report. Currently, the GSEs, the Federal Housing Administration and the Department of Veterans Affairs – all government agencies – serve as the principal sources of liquidity in the mortgage market.

A turnaround in housing helped drive Freddie Mac to a $2.9 billion profit in the third quarter, the GSE reported. Freddie Mac's net earnings dipped slightly under the $3.0 billion reported for Q2, but it helped keep the company from making any additional Treasury draws. In addition, Freddie's comprehensive income of $5.6 billion in Q3 allowed it to pay a $1.8 billion dividend on senior preferred stock.

In the third quarter of this year, servicers increased the pace at which they completed proprietary modifications and short sales, HOPE NOW data revealed Monday. In Q3 2012, proprietary modifications, or non-government mods, stood at 186,057 compared to 161,764 in Q3 2011, representing a 15 percent annual gain, according to the alliance. Quarter-over-quarter, proprietary mods were up 41 percent compared to Q2 2012, when there were 131,556 completed mods.

The FDIC added two more banks to this year's failed bank list Friday, bringing the total year-to-date to 49. The two shuttered banks were located in Illinois and Florida, each marking the eighth bank in their state to close this year.

Goldman Sachs is asking the U.S. Supreme Court to dismiss a mortgage securities class action lawsuit that the company says could cost Wall Street tens of billions of dollars, according to a report from Reuters. The bank is facing a suit from the NECA-IBEW Health & Welfare Fund, which owned mortgage-backed certificates underwritten by Goldman. The fund is suing on behalf of investors who say they were misled about the securities' risk, Reuters reports. The 2nd U.S. Circuit Court of Appeals in New York decided in September to allow the lawsuit to go ahead on the basis that the NECA-IBEW is acting for investors whose claims ""implicate the same set of concerns"" as its own.

The Federal Housing Finance Agency (FHFA) announced a third bidder scooped up properties in three states for the agency's REO-to-rental initiative, leaving Atlanta as the sole metro in the program with no winning bidder. Colony Capital, LLC purchased 970 properties in Los Angeles and Riverside, California; Phoenix, Arizona; and Las Vegas, Nevada, the agency revealed Thursday. In a statement Monday, C.A.R. said, ""Fannie Mae and FHFA’s decision to move forward with the REO bulk sale in California amounts to another gift to Wall Street at the expense of taxpayers.""

Rent prices are climbing faster than asking prices and are rising in metros where asking prices are falling, according to a report from Trulia. Year-over-year, nationwide rent prices were up 5.1 percent in October, while asking prices were up 2.9 percent during the same period when including foreclosures. Chicago, which saw a 5.3 percent yearly dip in asking prices in October, still experienced a 7.7 percent gain in rent prices during the same one-year period.

The U.S. government is violating the terms of the national mortgage settlement with its recently filed lawsuit against Wells Fargo, attorneys for the bank argue. The U.S. Attorney's Office for the Southern District of New York filed suit against Wells Fargo in early October ""more than 10 years of misconduct"" in connection with the bank's participation in the Federal Housing Administration (FHA) Direct Endorsement Lender Program.

The Real Estate Roundtable's survey of 110 industry leaders on commercial real estate changed little quarter-over-quarter, possibly due to uncertainty over how the next administration will impact economic policies. On a scale of 1-100, the sentiment index overall inched up to 65 in Q4, a 2 point increase from Q3. One survey participant said, ""Everyone is deferring business and investment decisions until after the election because they don't know what's going to happen.""