Government

A2Z Field Services, an inspection and property preservation service provider headquartered in Ohio, announced the renewal of the company's three Field Services Management (FSM) contracts with HUD. The company provides property management services to HUD in 18 states and the District of Columbia and will continue to assist the federal agency with its bank-owned inventory over the next year.

HUD says foreclosures will have to be re-filed on some of its REO homes due to a Michigan court ruling. In April, the Michigan Court of Appeals issued a judgment stating that MERS does not meet the requirements under state statute to act as the foreclosing agent in non-judicial proceedings. HUD says most of the major title insurers in Michigan have ceased issuing title insurance for any repossessed properties involving MERS and a non-judicial foreclosure. The agency is directing mortgagees to re-foreclosure on any affected homes to cure the title defect.

Provided they live on in their current form, Fannie Mae and Freddie Mac will need another $42 billion from taxpayers over the next decade, according to the Congressional Budget Office (CBO). The agency says subsidies related to the GSEs' new business have fallen but they'll continue to need funding as long as their mortgage guarantees are priced below private institutions. CBO says the government faces two choices: either retain the GSEs' portfolios until the mortgages are paid off, or pay a private entity to assume the guarantee obligations.

The national unemployment rate edged up to 9.1 percent in May from 9.0 percent in April, according to figures released Friday morning by the U.S. Department of Labor. The economy added just 54,000 jobs in May, the weakest showing in eight months. Employment increases averaged 220,000 over the prior three months. Freddie Mac's chief economist Frank Nothaft says the economy needs to add over 250,000 new jobs per month, on a sustained basis, to reabsorb all the jobs lost since the recession.

Prosecutors with the Manhattan District Attorney's office have issued a subpoena to Goldman Sachs for information related to the company's trading of mortgage bonds backed by subprime loans. The action against the Wall Street institution stems from a congressional report issued in April by a Senate subcommittee on the key causes of the financial crisis. The U.S. Justice Department, SEC, and New York's attorney general have reportedly launched their own investigations into Goldman's dealings during the run-up to the mortgage meltdown.

Rep. Elijah Cummings has requested to see copies of the engagement letters between 14 mortgage servicers and the private consultants they've hired for foreclosure reviews. As part of the consent agreements with federal regulators to settle robo-signing allegations, the servicers are required to retain independent, third parties to review all 2009 and 2010 foreclosures. Consumer advocates have criticized the decision to allow the servicers to do the hiring, and Cummings says he wants to ensure regulators are holding them accountable.

Freddie Mac borrowers whose homes were damaged or destroyed by the recent storms in the Midwest can now take advantage of the GSE's full menu of relief policies. Homeowners residing in counties declared major disaster areas by President Obama are eligible for assistance. Freddie Mac's disaster relief policies allow servicers the discretion to reduce or suspend mortgage payments for up to 12 months.

The Justice Department announced a settlement with Bank of America and Saxon Mortgage to resolve allegations that the companies wrongfully foreclosed on active duty service members without obtaining court orders, a violation of the Servicemembers Civil Relief Act (SCRA). The combined settlements represent more than $22 million in monetary victim relief. Both companies have also agreed to repair negative credit reporting related to the foreclosures and will not pursue remaining amounts owed under the mortgages.

Fannie Mae and Freddie Mac have both reported another drop in the share of single-family home mortgages they hold that are 90 or more days delinquent. Fannie's serious delinquency rate declined 17 basis points to 4.27 percent. Freddie's fell 6 basis points to 3.57 percent. Except for one blip of an increase last September for Freddie, the GSEs have seen their serious delinquencies fall for 12 months. The servicing alignment initiative announced by the two companies is expected to speed the resolution process for past-due loans.

Washington state regulators stepped in to shut down First Heritage Bank in Snohomish late Friday. It was the only closing of an FDIC-insured institution last week but marks the 44th bank failure of the year, and the second in Washington. The FDIC brokered a deal with Tacoma's Columbia State Bank to take over the failed institution's operations.