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Probe Finds WaMu’s Demise in Subprime Lending, Regulatory Turf War

A federal investigation into Wall Street and the economic crisis has honed in on Washington Mutual, making the bank that was absorbed by JPMorgan Chase in 2008 the poster child for what went wrong with the nation's financial system. After two days of hearings, the Senate Permanent Subcommittee on Investigations has concluded that federal banking regulators failed to step in and curtail shoddy lending practices and ignored excessive risk-taking at what was once the sixth largest U.S. bank.

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Fannie Updates Policies for Loan Eligibility After a Pre-Foreclosure Event

Fannie Mae has updated several policies regarding borrowers' future eligibility to obtain a new mortgage loan after experiencing a pre-foreclosure event, including a deed-in-lieu or short sale. The waiting period for a new loan will now be based on the loan-to-value ratio, occupancy of the property, and whether extenuating circumstances played a part in the borrower's inability to make mortgage payments. The GSE says the updated policies will further support overall market stability and reinforce the importance of borrowers working with their servicers.

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Goldman Faces SEC Charges for Defrauding Mortgage Investors

On Friday, Goldman Sachs and one of its VPs were charged by the Securities and Exchange Commission for defrauding investors by misstating key facts about a collateralized debt obligation (CDO) tied to subprime mortgages. The SEC said as the U.S. housing market was beginning to falter, Goldman Sachs collaborated with hedge fund Paulson & Co. to cherry-pick loan pools for the CDO that the companies were betting would default. Investors are said to have lost more than $1 billion.

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Moody’s Anticipates a Spring Thaw for Housing

The end of the housing correction is looking closer, as the job market finally turns the corner, investors step up home purchases, and the Obama administration revamps its foreclosure mitigation efforts, according to Moody's Investors Service. The credit ratings agency says it has lifted its outlook for home prices, and with the wide-ranging changes to the Home Affordable Modification Program, the foreclosure crisis just might end earlier than anticipated.

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Lawmakers Deliberate HAMP Revisions

The House Financial Services' housing subcommittee held a formal hearing this week on the administration's new initiatives to provide help to underwater and unemployed homeowners through the Home Affordable Modification Program (HAMP). Most of the industry participants testifying on Capitol Hill applauded the Treasury's efforts to tackle these foreclosure triggers, but there are some who are questioning the logistics and the true effectiveness of the new program enhancements.

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Fed Beige Book on Real Estate: Residential Improving, Commercial Weak

The U.S. economy is continuing to show signs of recovery, according to the Federal Reserve Beige Book published this week. Based on information collected across the country from businesses and contacts outside the Fed, residential real estate activity has begun to pick up speed, with sales increasing and prices holding steady. The snapshot of commercial real estate, on the other hand, was a bit more dismal, described by the central bank as ""weak"" throughout the nation.

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NCCI Sees Expansion of Field Service Role with Government Programs

Two government programs that extend new options to homeowners who are unable to make their mortgage payments will lean even more heavily upon field service firms, according to National Creditors Connection Inc. (NCCI). The California-based company says the role of these field service providers will expand from basic borrower contact to a targeted evaluation of a borrower's financial condition.

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Wolters Kluwer Helps Lenders Stay Ahead of Regulatory Change

Regulatory compliance has become a major issue in the mortgage industry. And to help lenders stay ahead of pending state and regulatory changes, Wolters Kluwer Financial Services, a Minneapolis-based provider of compliance, content, and technology solutions and services for the mortgage industry, has added new functionality to its StateLink tool, a Web-based compliance knowledge base.

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HAMP Report Shows 230,000 Homeowners in Permanent Mods

The Home Affordable Modification Program (HAMP) has been the target of some heavy criticism, with naysayers taking aim at everything from the program's slow progress to servicers' lack of capacity to handle large-volume modification work. The latest numbers may be more fodder for the fire. Treasury's HAMP report card shows 230,801 homeowners have been granted permanent modifications under the program, and the number of permanently modified loans to re-default has nearly doubled in one month's time.

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GSEs Bolster Foreclosure Prevention Activities in Q4 2009

The Federal Housing Finance Agency (FHFA) recently released its Foreclosure Prevention and Refinance Report, detailing the actions the government-sponsored enterprises (GSEs) have taken to prevent foreclosures and keep people in their home. The findings were positive, showing notable improvements across the board.

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