Government

Speaking before the Joint Economic Committee, Federal Reserve Chairman Ben Bernanke offered three guidelines for fiscal policymakers Thursday. The federal budget must be put on a sustainable long-run path, he said, adding that significantly tightening fiscal policy could impede the economic recovery. Bernanke called on Congress to ""promote a stronger economy in the medium and long term through the careful design of tax policies and spending programs."" The economy, according to Bernanke, is seeing a meager recovery.

A New York judge granted Attorney General Eric T. Schneiderman the right to intervene in litigation over Bank of America's proposed $8.5 billion settlement with mortgage-bond investors, according to a Wednesday statement from the Office of the Attorney General.

As of Wednesday, Fannie Mae has blanket delegation of authority on behalf of all servicers from United Guaranty Corporation, the GSE announced. Servicers can now apply Fannie Mae's guidelines and process a pre-foreclosure sale or deed-in-lieu of foreclosure in connection with Fannie Mae-owned or guaranteed loans without obtaining approval from UGC.

First time claims for unemployment insurance fell to 377,000 for the week ended June 2, from the prior week's upwardly revised 389,000, the Labor Department reported Thursday. Economists had expected the report would be show 379,000 initial claims. The drop in claims was the first in five weeks.

As recent data provide reasons to be both positive and worried about the economy, restrained optimism seems to be the phrase to describe how the public should respond to current economic indicators. Wednesday's release of the Beige Book revealed economic outlooks remain positive, but contacts were slightly more guarded in their optimism, while the Obama administration's Housing Scorecard relayed a similar sentiment. The scorecard provides an overview of the state of the market based on reports published within the public and private sectors.

The Office of Mortgage Settlement Oversight continues to evolve as the monitor, a widely respected banking and housing finance chief, takes on new help from accounting and legal firms. Joseph A. Smith, Jr., onetime Federal Housing Finance Agency director-nominee, now responsible for overseeing servicer compliance under the $25 billion settlement, revealed Monday that BDO USA, LLP, would serve as the Raleigh, North Carolina-based office's eyes and ears. He spoke with MReport about the firm Wednesday.

The economy expanded at a modest to moderate pace from early April to the end of May, the Federal Reserve reported Wednesday in its periodic Beige Book. The assessment reflected a weakening from the report in April when the expansion was characterized as moderate. Economic outlooks, according to the report, ""remain positive, but contacts were slightly more guarded in their optimism."" Activity in the New York, Cleveland, Atlanta, Chicago, Kansas City, Dallas, and San Francisco districts was described as moderate, while the Richmond, St. Louis, and Minneapolis districts noted modest growth.

Purchasing foreclosures also means discounts, but with the markdown is the price of repairs. According to RealtyTrac, foreclosures or REOs sold at an average discount of 27 percent compared to non-distressed properties in the first quarter of 2012. Through an FHA 203(k) loan, potential buyers who want to purchase a discounted foreclosure but don't have cash for the repairs may find a way to receive financing.

The board of directors for Fannie Mae announced Tuesday the appointment of Timothy J. Mayopoulos, 53, as president and CEO beginning June 18. Mayopoulos will replace current chief executive Michael J. Williams, who announced his resignation in January. Currently, Mayopoulos serves as EVP, chief administrative officer, and general counsel for Fannie. He has spent more than 25 years in the financial services sector, holding senior-level posts with Bank of America, Deutsche Bank, and Credit Suisse First Boston.

Congress has already approved of raising Fannie Mae and Freddie Mac guarantee fees to support non-housing related initiatives once before. Now, lawmakers are contemplating the use of GSE guarantee fees to fund student loan relief. In response to this, officials from Nationwide Title Clearing sent a release asking Congress not to raid the real estate piggy bank, stating an increase will lead to higher interest rates.