Government

President Obama's very own ""New Deal"" has officially been enacted into law. The president penned his name to the Dodd-Frank Wall Street Reform and Consumer Protection Act Wednesday -- legislation that's been crowned the strongest financial and regulatory reform measure since Franklin Roosevelt's response to the Great Depression. Speaking to reporters outside the Ronald Reagan Building after the signing, President Obama hailed the more than 2,300-page document as ""the strongest consumer financial protections in history.""

New data from the Treasury shows that the redefault rate for the Home Affordable Modification Program (HAMP) is far lower than many critics have projected and well below typical industry averages. According to the July report, the re-default rate (90 or more days past due) for homeowners in permanent modifications for at least six months is 1.7 percent. The latest figures from the OCC put the redefault rate of mortgages modified by the nation's 11 largest servicers - incorporating proprietary mod programs - at 57 percent.

A three-party consortium of opportunists has purchased a stake in an $898 million pool of nonperforming residential loans that the FDIC seized from AmTrust Bank last December. The procurers -- which include mortgage servicer Residential Credit Solutions, hedge fund CarVal Investors, and the Royal Bank of Scotland's RBS Financial Products subsidiary -- picked up the AmTrust portfolio with a winning bid amounting to 37 cents on the dollar. Ninety-six percent of the loans are delinquent.

This weekend, six community banks - including three in Florida, two in South Carolina, and one in Michigan - were forced to shut down by their state and federal regulators. This latest round of closings brings the number of FDIC-insured bank failures for the year to 96. Last year at this time, the year-to-date tally stood at 56.

Freddie Mac said Friday that it has teamed up with real estate auction specialist REDC and the asset management firm New Vista to sell off 135 homes the GSE has repossessed through foreclosure at an auction event in Phoenix, Arizona. The HomeSteps REO homes will be auctioned off to individual homebuyers at the Phoenix Convention Center on August 7. Almost a third of the homes are being set-aside specifically for first-time borrowers participating in the federal Neighborhood Stabilization Program (NSP).

Goldman Sachs agreed to pay more than half a billion dollars to settle federal charges that it misled investors to sink money into a product backed by dicey subprime mortgages just as the housing market was beginning to collapse. The SEC is touting the settlement as its largest-ever penalty against a Wall Street firm. Goldman has acknowledged that the marketing materials for the investment product contained incomplete information and says it will tighten up internal controls to ensure future disclosures on mortgage offerings are accurate.

Mortgage giants Fannie Mae and Freddie Mac have been hit with a lawsuit by California Attorney General Jerry Brown. He's suing the GSEs and their regulator for refusing to support the Property Assessed Clean Energy program, or PACE, for homeowners to make energy improvements to their properties. The GSEs argue the program does not ensure borrowers can repay the money and makes the first mortgage lien subordinate to the PACE loan. But Brown says their assessment of PACE funding as a loan is wrong.

After more than a year of drafts, rewrites, and debate, the U.S. Senate voted 60 to 39 on Thursday afternoon to approve sweeping new legislation to overhaul the nation's financial regulatory system. It took senators two weeks to round up enough votes for passage since the House approved the bill on July 1. President Obama now just needs to ink his name to the 2,300-plus pages of new rules and regulatory structures, which address a broad scope of financial market issues, from mortgage lending to ""too big to fail"" institutions.

A joint venture between the real estate investment firms Colony Capital, headquartered in Santa Monica, California, and the Cogsville Group of New York City placed the winning bid on a portfolio of $1.85 billion in distressed commercial real estate (CRE) loans from the FDIC. The portfolio includes 1,660 commercial mortgages, of which approximately 50 percent are already delinquent. All of the loans were seized by the FDIC from 22 banks that failed over the past two years.

Wolters Kluwer Financial Services announced this week that the company's Fair Lending Wiz software now includes an Ethnicity Proxy functionality to help improve the quality of Home Mortgage Disclosure Act (HMDA) loan data to detect potential problems that may contribute to discriminatory loans. The Department of Justice is currently investigating 18 lenders for potential fair lending violations as the housing crisis has made predatory lending an area of focus.