Government

The recent stretch of days with no bank failures has come to an end after a short three-week stint. Horizon Bank in Bradenton, Florida, was closed over the weekend by the Florida Office of Financial Regulation. It pushes the FDIC's failed-bank tally for the year to 119. Florida has been a hot-bed for bank busts in 2010. So far 23 FDIC-insured institutions in the Sunshine State have gone under, more than in any other state.

The Federal Housing Administration (FHA) has failed to root out several executives with criminal records whose firms continue to do business with the agency, according to the Center for Public Integrity. The Center's investigation found that more than 34,000 home loans have been issued over the past two years by FHA-approved lenders that have employed people who were convicted of felonies, banned from the securities industry, or previously worked for firms barred by FHA. Nine percent of these loans are delinquent.

Housing conditions continued to show signs of stabilizing during the second quarter, following a downward trend that began to reverse itself in mid-2009, HUD says in a new report. The federal agency immediately follows that assessment, though, with ""the housing market's recovery remains fragile."" HUD's quarterly commentary on the state of housing in the U.S. sums up a dichotomy of positives and negatives in market indicators. For example, sales and prices of existing homes rose in Q2, but fell for new homes.

The California Housing Finance Agency (CalHFA) has partnered with the Federal Housing Administration (FHA) to offer a fixed rate, 30-year FHA-insured mortgage to low- and moderate- income California families who purchase their first home. Benefits include below-market interest rates and affordable down payments. CalHFA says many first-time homebuyers cannot meet the loan requirements of conventional lenders and its new program will help open the door to homeownership for California families.

LendingTree has filed a lawsuit against the online real estate marketplace Zillow Inc. and three other competitors, which alleges the companies stole LendingTree's method for providing borrowers with a comparison shopping experience for home mortgage products. The North Carolina-based online lending exchange claims its four rivals all infringed on LendingTree's 2002- and 2003-patented formulas for competitively matching borrowers with lenders based upon a single loan application from the consumer.

Nearly 31,000 borrowers with Fannie Mae and Freddie Mac loans forfeited their homes through a short sale or deed-in-lieu of foreclosure during the second quarter of this year. The figure represents a 27 percent increase over the previous three-month period. The GSEs also reported that their volume of permanent modifications under the administration's Home Affordable Modification Program (HAMP) increased 65 percent, but at the same time, foreclosure starts and foreclosure sales were also up by double digits.

Steve Archambault, Democratic candidate for attorney general in the state of Rhode Island, recently released details of his plan to combat mortgage fraud and protect consumers in his state. According to the Mortgage Asset Research Institute, Rhode Island led the nation in mortgage fraud in 2008. Archambault says he also plans to target current banking practices that contributed to historically low home values.

Economic growth is still grinding along, but has slowed considerably since earlier in the year, according to the Federal Reserve's popular Beige Book report released Wednesday. Reports from the 12 Fed districts on their local economies painted a picture of ""widespread signs of a deceleration."" Real estate remains a drag on economic growth in regions across the country, with major trouble spots identified in poor home sales and weak demand for commercial space.

HUD awarded an additional $1 billion Wednesday to state and county governments to help communities reverse the effects of the foreclosure crisis and assist with the cleanup of vacant homes. The grants represent the third round of Neighborhood Stabilization Program funding - which so far amounts to a total of $7 billion - earmarked for acquiring, redeveloping, or demolishing foreclosed properties. Recipients are able to take advantage of HUD's new REO ""First Look"" program with the nation's largest mortgage lenders.

The Federal Reserve has issued new rules intended to protect consumers from deceptive mortgage lending, including explicit restrictions on how mortgage brokers and loan officers can be compensated. Specifically, the impending payment requirements, which go into effect next April, prohibit loan originators from double-charging for origination fees and from steering borrowers into less-than-optimal loan products in return for higher compensation. Moody's says these changes will translate into a lower probability of default on mortgage loans.