Government

Following a sharp drop in first time claims for unemployment insurance a week earlier, initial filings rose 15,000 for the week ended September 14 to 309,000, the Labor Department reported Thursday. Economists had expected the number of claims to jump 49,000 to 341,000, from the 292,000 originally reported for the week ended September 7.

While noting improvement in economic activity and labor market conditions, the Federal Open Market Committee voted Wednesday to continue its policy of near-zero interest rates and its $85-billion-per-month bond-buying program. At the same time, the Fed’s own economic projections suggested the economy might not grow this year as fast as it expected just three months ago.

Led by the strongest gain for single-family construction this, year, the pace of housing starts edged up 0.9 percent in August, the Census Bureau and Department of Housing and Urban Development reported Wednesday. Total housing permits though declined 4.8 percent despite a surge in filings for single-family homes.

While Rep. Jeb Hensarling's (R-Texas) Protecting American Taxpayers and Homeowners (PATH) Act seems to be gathering little momentum, Rep. Maxine Waters (D-California) announced her intention to create an alternative bill regarding the future of the housing finance system and the government's role in it.

The Housing Market Index (HMI), a measure of builder confidence, stalled at 58 in September, unchanged from August’s downwardly revised reading, the National Association of Home Builders reported Tuesday. The August confidence reading had originally been 59. Economists surveyed by Bloomberg had expected the index to remain at that level. But a dip in one of the three index components--the outlook for new home sales six months out--pulled the reading down slightly.

Among all cases, those related to foreclosures were the most active, with 74 cases moving forward, according to first-quarter data from Mortgage Daily. However, that was still a drop from that category's peak. An accompanying white paper released by Ballard Spahr LLP suggests the decline in foreclosure-related cases has more to do with the drop in foreclosure filings during the period. Cases involving loan modifications also decreased as foreclosure filings normalized--though dissatisfaction still remains high.

More than 11,000 borrowers are currently in the midst of trial mortgage loan modifications through Fannie Mae's Streamlined Modification program, which officially rolled out at the start of July, and an additional 30,000 borrowers pre-qualified for the program, according to a blog post last week by Bill Cleary, VP of credit portfolio strategies. The new program allows any homeowner 90 or more days delinquent on their first-lien mortgage to receive a trial loan modification if the loan-to-value ratio is 80 percent or higher.

In a speech to the nation, the president described a spirit of cooperation between Democrats and Republicans and between Congress and his administration. He invited leaders of both parties to the White House to discuss an upcoming vote which he acknowledged would be a tough decision for many members of Congress. And he closed with: ""America is a nation that tackles problems head on, where leaders come together to meet great tests."" The words were not those of President Obama but of President Bush.

Americans spent more on cars, furniture, health and beauty aids and at restaurants but were otherwise frugal in August as retail sales went up a disappointing 0.2 percent from July, the Census Bureau reported Friday. Economists had expected sales to increase 0.5 percent.

As the calendar approaches September 15, marking the anniversary of the collapse of Lehman Brothers, the nation is reminded of that historical event which severed the very fabric of our financial system. It's been five years since that fateful day, and the Center for Responsible Lending (CRL) says Americans--regardless of political party, age, race, or locale--overwhelmingly support financial regulation, and in particular, increased consumer protections.