Government

The economy continued to expand at a modest to moderate pace from mid-February through late March, the Federal Reserve said Wednesday in its periodic Beige Book, reporting faster and solid growth in Kansas City and Minneapolis but moderate or modest growth in Boston, Atlanta, Chicago, Dallas, San Francisco Cleveland and St. Louis. New York reported economic growth picked up somewhat while Philadelphia and Richmond cited improving business conditions.

Nineteen members of California's congressional delegation want to keep Fannie Mae's and Freddie Mac's ""for rent"" signs outside their state's borders. Led by Congressman Gary Miller, the group sent a letter to Edward DeMarco, acting director of the Federal Housing Finance Agency, petitioning him to exclude the 600 homes in California slated for the pilot program of the REO Initiative, which aims to sell off homes repossessed by the GSEs and FHA to institutional investors who will turn the properties into rental homes.

While arguments continue to be made that Fannie Mae and Freddie Mac should apply principal reductions to keep underwater borrowers from going into foreclosure, Edward DeMarco, FHFA acting director, still has plenty of ammo to defend his highly criticized stance. During a speech at the Brookings Institution Tuesday, DeMarco, despite revealing figures that showed the GSEs could potentially save $1.7 billion through the application of principal reduction, still cited reasons to be wary of the proposed foreclosure prevention solution.

The Consumer Financial Protection Bureau (CFPB) is looking to propose mortgage servicing rules to keep borrowers from costly surprises and prevent servicers from giving customers the runaround. Lack of transparency and lack of accountability are the two issues motivating the new rules, and to create more transparency, the CFPB is proposing clear monthly mortgage statements, a warning before interest rates adjust, options to avoid force-placed insurance, and early information to keep customers out of foreclosure.

Christy L. Romero was sworn in as Special Inspector General of SIGTARP Monday. Romero was nominated by President Barack Obama on February 1, 2012 and confirmed by the U.S. Senate on March 29.

The Federal Housing Administration (FHA) rule that would delay potential borrowers with outstanding collections debt of $1,000 or more from getting an FHA-insured loan is on hold until July 1. The rule proposes that if a borrower has collections debt of $1,000 or more, a he or she must go on a repayment plan for the debt for a minimum of 3 months to be eligible. This would cause a delay from receiving approval for a loan for 90 days or more.

Mortgages are becoming more and more of a litigious matter, with the number of mortgage-related cases reaching an all-time high since being tracked in 2007, according to Mortgage Daily's 2011 fourth quarter Mortgage Litigation Index. At 244, the number of cases rose from 218 in the 2011 third quarter and from 151 over the same period a year earlier. Foreclosure-related litigation cases reached 99 and accounted for 40 percent of all cases. One attorney attributes the increase to a high level of awareness among borrowers that foreclosure-related issues can be litigated, sometimes successfully.

The Obama Administration released its March Housing Scorecard Friday, which showed delinquencies on a downward decline, while modifications continue to help struggling homeowners through reduced monthly payments. Foreclosure completions were down though, but delays are expected to pick up due to the mortgage settlement, which just received approval from a federal judge Friday.

The Securities and Exchange Commission (SEC) filed a complaint against the former CEO and CFO of Franklin Bank for using loan modification programs to cover its non-performing loans. Franklin CEO Anthony J. Nocella and CFO J. Russell McCann applied loan modification programs during the third and fourth quarters of 2007, masking how many of Franklin's loans were actually non-performing and artificially boosting its net income and earnings, the SEC stated Friday in a release. By the end of September 2007, the two hid more than $11 million in non-performing single family residential loans and $13.5 million in non-performing residential construction loans.

The $25 billion settlement received approval from a federal judge Wednesday, but the announcement was not made public until Thursday, according to a Reuters’ article published Thursday evening. U.S. District Judge Rosemary Collyer approved the national, historical settlement, which was brought on by federal officials and 49 state attorneys general against the top five largest servicers – Bank of America; Citigroup, JPMorgan Chase; Wells Fargo and Ally Financial. Oklahoma was the only state to opt out of the agreement. In a statement Friday, HUD Secretary Shaun Donovan called the the approval ""a victory for American homeowners.""