Government

With a common goal of economic recovery, Congress and the Federal Reserve diverge on the best means to that end. Should the housing sector finance the government's economic policies, or should the government help boost the housing sector? Federal Reserve Chairman Ben Bernanke submitted a white paper to Congress last week as a framework for policymakers to help the housing market, but that move has drawn the ire of at least one senator.

The U.S. Department of Justice released a 69-page report Tuesday on a foreclosure intervention method that is becoming increasingly popular across the country - mediation. The paper draws from an earlier workshop which was attended by dozens of mediation program stakeholders and researchers. A key finding that emerged, according to DOJ officials, is that the federal government should take an active role, both in helping to develop program and evaluation guidelines and in providing resources for mediation programs and research.

Michael Williams has decided to step down from his position as CEO and president of Fannie Mae, the GSE announced today. Williams was appointed to the top post at Fannie Mae in 2009, after the company was placed in federal conservatorship. He will continue as CEO and as a director until Fannie Mae's board names a successor, the GSE said in a statement. Edward DeMarco, head of the Federal Housing Finance Agency, praised Williams for his leadership through a turbulent time for the market and said his agency will work closely with Fannie Mae in the search for a new CEO.

Treasury released a new report Monday highlighting results from the Home Affordable Modification Program (HAMP). Nearly 910,000 homeowners have received a permanent HAMP modification, saving $9.9 billion in monthly mortgage payments. Officials say they will continue to press servicers to assist underwater borrowers and address second-lien issues. A total of 38,243 principal-reducing permanent HAMP mods have been granted, and 54,828 second-lien mods have been started under the federal program.

In the third quarter of 2011, mortgage lawsuits reached their highest level since the Mortgage Litigation Index began tracking them in 2007; however, lawsuits involving servicers declined over the quarter. The index, tracked by MortgageDaily.com and prepared along with Patton Boggs LLP, observed 218 cases over the third quarter, up from 190 the previous quarter and 151 in the same quarter last year. Litigation against servicers dropped from 65 cases in the second quarter to 51 cases in the third.

Standing before the Association of American Law Schools in Washington D.C., Federal Reserve Governor Sarah Bloom Raskin discussed the importance of enforcement and monetary penalties in the mortgage servicing industry. Her message stated simply that ""laws and regulations must be enforced."" A lack of enforcement leads to the entrenchment of bad practices and an increase in the costs of correction, Raskin said, calling many of the mortgage servicing industry's practices ""shoddy.""

Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB) has named Raj Date the agency's first deputy director. Date has been leading the day-to-day operations of the bureau since it launched in July. Cordray also named Kent Markus to the position of assistant director of the Office of Enforcement to fill the position Cordray vacated upon his director appointment.

The Collingwood Group announced this week that it has acquired GWN Consulting, LLC, a firm specializing in Federal Housing Administration (FHA) and Ginnie Mae risk management and quality control. GWN's business will operate as part of Collingwood's risk management and compliance division, and will be managed by Brian Montgomery, chairman of Washington, D.C.-based Collingwood. GWN's team of professionals have more than two centuries of combined direct HUD experience.

Freddie Mac has announced an extension of forbearance for unemployed borrowers of up to 12 months. According to Freddie Mac, almost 10 percent of delinquencies in the GSE's portfolio are linked to unemployment. Under the new directive, servicers may offer up to six months of forbearance to unemployed homeowners without prior approval, and with prior approval they may offer up to six months more, totaling a possible one year in some cases.

The nation's unemployment rate continues to trend down. It slipped to 8.5 percent during the month of December as the economy added 200,000 new jobs, the U.S. Department of Labor said Friday morning. December marks the sixth consecutive month of 100,000-plus job gains and the first such stretch employers have been able to string together since 2006. Over the 2011 calendar year, nonfarm payroll employment rose by 1.6 million. Employment in the private sector rose by 1.9 million over the past 12 months, while government employment fell by 280,000.