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GSEs Report Increase in Refinance Volumes, HAMP Modifications in December

The Federal Housing Finance Agency (FHFA) recently released its monthly Foreclosure Prevention Report, which summarizes loss mitigation activity for Fannie Mae and Freddie Mac. Under the administration's Home Affordable Modification Program (HAMP), the GSEs have initiated 43,000 permanent modifications and 442,500 active trials. FHFA also reported that in 2009, the two companies refinanced more than 4 million loans for struggling homeowners.

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Regulators Shut Down Six Community Banks

Already the number of regional bank failures has begun to mount, with regulators stepping in to close the doors on six institutions over the weekend - two in Georgia and one each in California, Florida, Minnesota, and Washington. Just one month into the year, and the number of 2010 bank collapses sits at 15. This latest round of closures is expected to cost the FDIC another $1.85 billion.

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Buybacks Mount for Big Banks as Regional Lenders Offload Nonperformers

Defaults on home loans held by Fannie Mae and Freddie Mac continue to climb, but the two aren't taking the losses lying down. The GSEs' forced banks to buy back $7 billion in soured loans during the first nine months of 2009, and it's the largest lenders that are taking the biggest hit. A growing number of community banks, on the other hand, are seeing interest from discerning buyers for assets already identified as ""bad loans,"" and they're shrinking their nonperforming portfolios by as much as 80 percent with one sale.

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Judge Dismisses Investors’ Suit Against Ratings Agencies

A federal judge in New York has thrown out a lawsuit against Standard & Poor's and Moody's brought by investors who claim the ratings agencies defrauded them on nearly $100 billion in mortgage-backed securities (MBS) issued by the now defunct Lehman Brothers Holdings, Inc. back in 2007.

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TARP Overseers Have Commercial Real Estate in Their Sights

The congressionally appointed committee charged with overseeing the government's $700 billion Troubled Asset Relief Program (TARP) headed to Atlanta to hold a hearing on problems in the commercial real estate (CRE) sector. Specifically panel members are hoping to get a better grasp on how CRE woes will affect the banking system and the role of TARP in addressing that impact, hoping to stave off another real estate-induced financial meltdown.

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Fannie Mae Offers Subsidy for REO Purchases

Fannie Mae says it will cover the closing costs on purchases of its REO homes - an incentive the GSE hopes will help it pare down a bloated supply of repossessed properties. From now until May 1, people purchasing a home through HomePath, Fannie Mae's REO disposition operation, will receive up to 3.5 percent of the final sales price, which can be applied toward closing costs or used to purchase appliances for their new home. At the end of September, Fannie Mae had 72,275 REO properties on its books, marking a 7 percent increase year-over-year.

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Freddie Mac Teams with Nonprofits on Borrower Outreach Pilot

Freddie Mac and 13 national and local nonprofit organizations have launched a pilot effort aimed at convincing discouraged delinquent borrowers to pursue mortgage workouts to save their homes from foreclosure. Freddie Mac has set up new Borrower Help Centers in Chicago, Phoenix, San Bernardino, and Washington, D.C. to provide mortgage counseling to delinquent Freddie Mac borrowers. The company is also launching a separate national phone campaign to reach distressed borrowers across the nation.

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Bernanke Confirmed for Second Term as Fed Chairman

The Senate has chosen the nation's foremost central banker for the next four years, and he's a familiar face already. In a 70 to 30 vote Thursday afternoon, senators confirmed Ben S. Bernanke to a second term as Federal Reserve chairman. Many lawmakers have criticized the Fed chief for failing to nip the financial crisis in the bud, but fellow economists have credited him with pulling the U.S. economy back from the brink of collapse and preventing a sequel of the Great Depression.

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Treasury Announces Documentation Changes to Expedite Permanent Mods

Treasury said Thursday that it will begin requiring servicers to obtain all required documentation upfront, prior to evaluating a borrower for a trial plan under the Home Affordable Modification Program (HAMP) - an about-face from the current process where trial mods can be initiated based on stated, not verified, income. Treasury officials also fielded speculation that they might make principal reduction a more central component of the program. They currently have no plans to address negative equity under HAMP, but called it a ""serious policy concern.""

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Fed Sees Signs of Recovery, Confirms Withdrawal from MBS Market

The Federal Reserve offered its most upbeat economic outlook in nearly a year at the conclusion of its two-day policy meeting Wednesday, but again voted to maintain the benchmark federal funds rate at near-zero. Policymakers also made it clear that they are sticking to their plan of pulling back from the secondary market, with the program to purchase mortgage-backed securities (MBS) coming to a close on March 31, as scheduled.

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