Government

U.S. District Judge Jed S. Rakoff criticized the Securities and Exchange Commission's (SEC) $285 million proposal to Citigroup to settle allegations related to its mortgage trading, and said he will need time to consider the deal. Rakoff questioned several of the settlement's terms, including the agreed-upon monetary penalty. Rakoff is particularly leery of this condition because the SEC has reportedly reached settlements with Citigroup in the past after which the bank allegedly broke the agreements through security law violations.

Lawmakers are outraged at the amount of bonus pay awarded to executives at Fannie Mae and Freddie Mac...and they're not stopping with hot-tempered rhetoric. Rep. Spencer Bachus, chairman of the House Financial Services Committee, has scheduled a committee vote for next Tuesday on a bill that would suspend the compensation packages awarded to the GSEs' top executives. Sens. Jay Rockefeller and John McCain say they plan to follow suit with a similar bill in their own chamber.

As Americans consider the best candidates for the 2012 presidential and congressional elections, housing is at the forefront of the debate for many. About 70 percent of Americans say a candidate's position on housing could sway their vote, according to a survey released by Move, Inc. However, Americans differ in their views of what the housing market needs most. The survey found 30.9 percent of Americans believe the next president's priority for his or her first 100 days in office should be helping homeowners avoid foreclosures.

Lawmakers on Capitol Hill are up in arms over the news that the Federal Housing Finance Agency (FHFA) approved $12.79 million in bonus pay for 10 executives at Fannie Mae and Freddie Mac. Sixty senators put their partisan differences aside and presented a united front in a letter to FHFA Acting Director Edward DeMarco and Treasury Secretary Timothy Geithner, in which they criticized such compensation as ""wildly imprudent"" and expressed concern over the message it sends to millions of American families who are tightening their belts.

State and federal regulators have closed the doors on two more community-based lenders in Nebraska and Utah, bringing this year's tally of failed banks to 87. Mid City Bank, Inc. in Omaha has been acquired by Purdum State Bank, which is now operating under the name Premier Bank. Utah's SunFirst Bank has been largely absorbed by Cache Valley Bank. However, the FDIC says it is retaining $15 million in deposits that may be subject to external litigation involving SunFirst Bank, along with $20.8 million of its assets which Cache Valley Bank elected not to acquire.

Hudson & Marshall has once again been selected to partner with HUD to auction over 100 foreclosed homes located in Nevada and Arizona. The auction will take place this Saturday, November 5th at the JW Marriott in Las Vegas. There will be two separate auction events on that day - one strictly for owner occupants and the second open to all bidders, including investors. HUD will pay a 3 percent selling agent commission to qualified brokers who are registered with HUD.

The nation's unemployment rate slipped to 9.0 percent in October, as employers added 80,000 new jobs to their payrolls, according to the U.S. Department of Labor. Officials called the rate ""little changed,"" down from 9.1 percent the month before. The unemployment rate has remained in a narrow range from 9.0 to 9.2 percent since April. Government data shows that there are 13.9 million people out of work in the United States. Extended unemployment has become the biggest driver of mortgage delinquencies.

Treasury has released a new progress report on its Making Home Affordable initiative, covering all the ""H"" acronyms. Since the program started in April 2009, 857,000 homeowners have received permanent loan restructurings under HAMP, and 894,000 have refinanced their mortgages through HARP. HAFA transactions tally just under 19,000. Officials say they continue to see a fall in mortgage defaults due in part to foreclosure prevention programs reaching more borrowers upstream in the process, but there's ""much more work to do.""

While the newly revised Home Affordable Refinance Program (HARP) includes several provisions aimed at widening the program's reach, Sens. Barbara Boxer of California and Johnny Isakson of Georgia are asking the Obama administration to broaden the program even more by opening it up to homeowners with higher equity in their homes. Currently, the revised program is aimed at helping those with less than 20 percent equity. Lawmakers say nearly 12 million more borrowers would benefit if there were no equity restraints.

The nation's second largest mortgage company is asking the U.S. Treasury for another $6 billion in capital support after posting its largest quarterly loss in over a year. Freddie Mac says it recorded a net loss of $4.4 billion for the quarter ended September 30, 2011, after shouldering a $4.8 billion loss on derivatives and a $3.6 billion provision for credit losses related to high levels of mortgage refinancing and lower mortgage insurance recoveries. The GSE's REO operations expense skyrocketed to $221 million in the third quarter, compared to $27 million for the second quarter.