Government

The Consumer Financial Protection Bureau released updated procedures for examinations of financial institutions and mortgage lenders, which will begin taking place in January of next year. The new procedures, which will be published in the manuals for the Truth in Lending Act and the Equal Credit Opportunity Act, cover a range of topics, including compensation for loan originators, qualification standards for mortgage professionals, consumer rights, arbitration, and appraisals.

A House panel is investigating what it believes is an attempt by Federal Housing Administration (FHA) officials to cover up the full details of the agency's financial troubles regarding its Mutual Mortgage Insurance (MMI) Fund. The House Oversight and Government Reform Committee reviewed emails between FHA and IFE Inc., the firm that conducted the agency's actuarial report last year.

The nation's economy grew at a ""modest to moderate pace"" from early April through the end of May, the Federal Reserve said Wednesday in its periodic Beige Book. From late February through early April, the last Beige Book released described economic growth simply as ""moderate."" The sole bright spot in Wednesday's report was in the Dallas Federal Reserve District, which had ""strong economic growth."" The Beige Book reported slowdowns as a result of federal budget sequestration, which forced a mandatory cutback in spending.

In an effort to speed up the short sale process, Fannie Mae is increasing early communication with real estate agents by asking listing agents to register accepted short sale offers with the GSE. By registering offers, Fannie Mae says there will be greater transparency in the process and it will also allow the GSE to be more proactive when working with servicers to complete short sales. Through Fannie Mae's site Homepathforshortsales.com agents can register their short sale offers.

The Mortgage Bankers Association (MBA) released the third paper in its series on secondary market reform, this one focusing on how the Federal Housing Finance Agency (FHFA) can accommodate small lenders. According to 2011 data released under the Home Mortgage Disclosure Act (HMDA), more than 7,500 lenders issued mortgages that year. At the same time, Fannie Mae and Freddie Mac report that roughly 1,000 lenders sell to them. The majority of those lenders are small independent mortgage bankers and community banks.

HSBC faces a lawsuit from New York Attorney General Eric T. Schneiderman, who accused the bank of failing to follow a state foreclosure law that mandates a settlement conference for past due borrowers. In a statement, Schneiderman announced he filed a lawsuit against HSBC, alleging the bank repeatedly failed to file a Request for Judicial Intervention (RJI) in a timely manner. According to Schneiderman, delays in filing the RJI increase the risk that homeowners will lose their home and leads to a backlog of foreclosure cases.

The Wisconsin Department of Financial Institutions closed Banks of Wisconsin (Kenosha), FDIC announced Friday. As receiver, the agency entered into a purchase and assumption agreement with North Shore Bank, FSB (Brookfield, Wisconsin) to assume all of Banks of Wisconsin's $127.6 million in deposits and $97.4 million in assets. The remaining assets (approximately $36.6 million) will be retained by FDIC for later disposition.

Shadow inventory held by the GSEs and HUD "vastly" outnumbers REO properties the groups maintain, according to a joint report from the Office of Inspector General for the Federal Housing Finance Agency and HUD. The report further warned HUD and the GSEs must pay close attention to shadow inventory, which threatens to increase their supply of REOs. For the GSEs, the ratio of shadow inventory to REO inventory was about 6-to-1, while shadow inventory for HUD was 19.9 times greater than REO inventory.

According to BEA, profits fell for both financial and non-financial corporations in the first quarter. For financial corporations, it was the fourth quarterly decline in profits in the last five quarters. The slip in financial corporation profits comes at a particularly critical time for the financial sector, as housing-so heavily dependent on lending institutions--is in the midst of a nascent recovery, and that recovery is causing concerns that we may be on the cusp of yet a new housing bubble. Recent data shows home prices rising at the fastest pace since the housing bubble burst.

As of the end of May, borrowers have cashed or deposited 2.6 million foreclosure review checks, according to the latest update from the Office of the Comptroller of the Currency (OCC). The checks are valued at $2.3 billion and are part of a foreclosure settlement reached in January between the OCC, the Federal Reserve Board, and 13 servicers.