Government

Homeowners who are denied a modification under the Home Affordable Modification Program (HAMP) even after completing a trial period plan (TPP) have legal standing to sue their lender, the 9th U.S. Circuit Court of Appeals in San Francisco ruled Thursday. Reversing a lower court dismissal, the ""panel held that the district court should not have dismissed the plaintiffs' complaints when the record before it showed that the bank had accepted and retained the payments demanded by the TPP,"" the court opinion stated.

The number of markets listed on the National Association of Home Builders' (NAHB) Improving Markets Index (IMI) continued to decline in August, though the index still sits well ahead of where it was last year, the association reported. ""While the number of improving housing markets this August remains well ahead of the same month last year, the index is affected by seasonal softening in home prices just as we saw happen in 2012,"" explained NAHB chief economist David Crowe.

Fannie Mae&'s second-quarter profits nearly doubled year-over-year, the GSE reported. The company reported Thursday net income of $10.1 billion in Q2 2013 compared to $5.1 billion for Q2 2012. It was the sixth consecutive quarter of profit for Fannie Mae. Comprehensive income totaled $10.3 billion, again nearly double that of the same quarter last year ($5.4 billion).

As local governments consider the use of eminent domain to seize underwater mortgages, they may have to deal with the Federal Housing Finance Agency (FHFA) before moving forward with the plan. In a statement Thursday, FHFA stated it may ""initiate legal challenges"" to local or state actions that authorize the use of eminent domain to restructure mortgage contracts impacting Fannie Mae and Freddie Mac. Another action the GSEs' regulator might take is limit or stop business activity in jurisdictions that authorize the use of eminent domain to restructure mortgages.

It was a mixed week for mortgage rate reports following the release of July's employment numbers, which showed job growth coming in below the market consensus forecast. According to Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 4.40 percent (0.7 point) for the week ending August 8, up from 4.39 percent last week. The 15-year FRM averaged 3.43 percent (0.7 point), unchanged from the previous survey.

First-time claims for unemployment insurance increased 5,000 to 333,000 for the week ending August 3, the Labor Department reported Thursday. Economists expected the number of claims to drop to climb to 336,000 from the 326,000 originally reported for the week ending July 27. The number of filings for that week was revised to 328,000, the lowest level since early May.

The Securities and Exchange Commission (SEC) and Justice Department filed separate complaints against Bank of America and certain subsidiaries for allegedly misrepresenting an $855 million offering of residential mortgage-backed securities (RMBS), according to statements Tuesday.

Freddie Mac had a banner second quarter, pulling in its second-largest profit in company history, the enterprise reported Wednesday. According to Freddie Mac's quarterly earnings report, Q2 2013 net income totaled $5.0 billion, up about $407 million over the first quarter. Comprehensive income was $4.4 billion compared to Q1's $7.0 billion.

During the question and answer session hosted by Zillow, President Obama reiterated his stated goals to bring a gradual end to Fannie Mae and Freddie Mac, to bring private capital into the housing market, and to offer affordable housing options--both rental options and 30-year mortgages. ""We're actually confident that the private market can step in, do a good job, and the government can be a backstop,"" Obama said, adding, ""In some ways it's a return to earlier models.""

Undeterred by rising mortgage rates, the majority of consumers polled in a Fannie Mae survey expressed belief that the market will continue to improve, with 53 percent saying they expect home prices will go up in the next year--though that figure does represent a decline of 4 percentage points from June's high. The share of respondents who believe interest rates will continue to rise over the next year increased another 5 percentage points over June to a new survey high of 62 percent.