Government

Federal regulators stepped in this weekend to shut down Coastal Bank in Cocoa Beach, Florida, making it the 40th FDIC-insured institution to fail so far this year. Miami's Premier American Bank, N.A., which is a wholly-owned subsidiary of Bond Street Holdings, Inc. entered into an agreement with the FDIC to purchase essentially all of the assets, and assume all of the deposits and certain other liabilities, of Coastal Bank. According to Premier American, this transaction makes it the sixth largest independent bank in Florida.

Fannie Mae reported a net loss of $8.7 billion for the first three months of this year, which company executives say was primarily driven by a decline in home prices during the quarter. Fannie's first-quarter shortfall actually narrowed compared to a year earlier, when the company reported a loss of $13 billion. The GSE has requested another $8.5 billion in taxpayer funds from Treasury, bringing its total draws to nearly $100 billion. Fannie Mae acquired 53,549 single-family REO properties through foreclosure in the first quarter.

HUD has released a report detailing recent business activity at the Federal Housing Administration (FHA). It shows that the federal agency's inventory of REO homes has ballooned as sales from this portfolio fell sharply during the final months of 2010 and early part of this year. The number of repossessed single-family properties held at the end of February 2011 was 68,801. That figure represents an increase of more than 50 percent from a year earlier.

Sixteen percent of homeowners receiving permanent assistance through the government's Home Affordable Modification Program (HAMP) have been disqualified from the program for missing three consecutive payments, according to Treasury. Federal officials say HAMP's permanent mods are performing well over time, with a better track record of sustainability than the industry's private modifications. There are currently 587,000 borrowers in a permanent HAMP modification.

The national unemployment rate rose to 9.0 percent in April, up from 8.8 percent in March, according to figures released Friday by the U.S. Department of Labor. Employers added 244,000 new jobs to their payrolls last month, but the government agency says the number of unemployed was little changed at 13.7 million, as people who had previously given up looking for work resumed their search. Job creation in the private sector accounted for all of last month's gains.

In the wake of the industry's robo-signing issues, the Government Accountability Office (GAO) has released a report urging the new Consumer Financial Protection Bureau to make mortgage servicing standards a priority. After examining applicable laws and interviewing mortgage investors and other industry participants, the agency concluded that federal laws do not specifically address the foreclosure process, and as a result, oversight of servicers has been ""limited and fragmented.""

Germany's largest bank has been hit with its second lawsuit of the week related to the company's U.S. mortgage business. The city of Los Angeles has filed a civil law enforcement action against Deutsche Bank for allowing properties it has foreclosed on to fall into ""serious disrepair"" and for the alleged illegal eviction of hundreds of low-income tenants renting the foreclosed homes. The city attorney says Deutsche Bank has become one of the largest slumlords in Los Angeles.

In an effort to help mortgage servicers respond to the consent orders issued by regulators last month, Lender Processing Services (LPS) has announced enhancements to its mortgage loan servicing platform (MSP). The consent orders require servicers to provide borrowers with a dedicated single point-of-contact for specific loss mitigation and servicing functions. Via LPS's MSP, clients can assign, view, and obtain detailed information on the single point-of-contact assigned to each specific loan throughout the life of the loan.

The FDIC has released a special report highlighting what it describes as ""lessons learned"" from the interagency review of foreclosure processes and procedures at the nation's largest mortgage servicers. The FDIC says most institutions that own or service residential real estate loans have been affected by the dramatic increase in foreclosures, but the delinquency rates on loans originated by community banks have been far lower and as a result, ""robo-signing"" practices and process deficiencies are principally isolated to the largest servicers.

The nation's second largest mortgage company reported Wednesday that it pulled in net income of $676 million during the first three months of this year. Freddie Mac closed the quarter with positive net worth of $1.2 billion. As a result, no additional funding from Treasury was required for the first quarter of 2011. It's the first time since the fourth quarter of 2009 that the company has not needed to draw on taxpayer support. REO dispositions reached record levels in the first quarter with approximately 30,000 homes sold.