Government

The legal wranglings continue for what was once the nation's premier subprime mortgage lender, Countrywide Financial Corp. The company was hit with another lawsuit Wednesday, this time from United Western Bank. The bank is suing Countrywide for losses it incurred on six private-label mortgage-backed securities (MBS) purchased from the subprime lender. Bank of America, UBS Securities, and certain officers of Countrywide are also named as defendants.

Software provider eMason, Inc. has made key enhancements to its Clarifire application that the company says will allow servicers to respond more rapidly to federal loan modification guidelines. Specifically, eMason says the upgrades provide automatic decision-making and processing for borrowers who ""fall out"" of the Home Affordable Modification Program (HAMP), including consideration for Fannie Mae's recently announced Alternative Modification (Alt Mod).

The Arizona Department of Housing (ADOH), one of five state housing finance agencies slated to receive federal funding through the administration's Hardest Hit Fund, has submitted a proposal to the U.S. Treasury Department detailing how it plans to use this financial aid. According to the proposal, the funding has the potential to assist approximately 4,000 households across Arizona and will be used for permanent mortgage modifications, second mortgage settlement, temporary mortgage assistance, and homeowner advocacy through HUD counselors.

The Federal Reserve voted Wednesday to keep its federal funds rate at 0 to 0.25 percent ""for an extended period."" The central bank has said since December 2008 that economic conditions call for the benchmark rate to be held exceptionally low, and its board continues to hold true to that stance despite concerns that if the rate doesn't rise, the near-zero level will give rise to inflation. One area that the Fed did not address is what it plans to do with the $1.25 trillion in mortgage-backed securities purchased from the GSEs, but there are plenty of others with their own ideas of how to dispose of these assets.

Freddie Mac reported Wednesday that it had sold 207 HomeSteps REO homes to first-time buyers and other owner-occupants at auctions in Las Vegas and Riverside-San Bernardino, California on April 24 and 25. The auctions, managed by New Vista and Real Estate Disposition Corporation (REDC), drew thousands of bidders. Freddie Mac sold 90 percent of the REO properties set aside for the auctions. Altogether HomeSteps found buyers for 107 repossessed homes in Las Vegas and 100 homes in Riverside/San Bernardino.

An Equifax survey of 3,000 lenders, brokers, and borrowers shows that the majority of mortgage providers are compliant with the new regulations of the Real Estate Settlement Procedures Act (RESPA) for loan originations. However, according to the findings, the RESPA changes have caused borrower confusion and increased application time.

The House Financial Services Committee approved legislation Tuesday that lawmakers say will ensure the Federal Housing Administration (FHA) remains viable and continues its mission of insuring mortgage loans. The measure was drafted after rising defaults caused the federal agency's reserves to fall below the two percent level required by law. It allows FHA to raise annual premiums charged to borrowers, and enhances the agency's authority to terminate lenders' business when incidences of fraud or noncompliance are uncovered.

Treasury announced plans in March to allow principal reductions for distressed borrowers who owe more on their mortgage than the home is worth. The move has sparked a debate over the ramifications of mortgage debt forgiveness. The credit ratings agency DBRS says even investor reaction to the push for debt forgiveness has been mixed. But the firm says if done properly, principal write-downs will benefit securities investors in the long-run, and could moderate the ever-increasing delinquency pipeline and shrink swollen housing supplies.

As part of its ongoing efforts to stabilize neighborhoods across the country, Fannie Mae announced Tuesday that it has extended its seller assistance incentive on properties purchased through HomePath, the company's REO disposition operation. Through this program, qualified buyers receive 3.5 percent of the final sales price to be used toward closing cost assistance or their choice of selected appliances. The offer is available to any owner-occupant who closes on the purchase of an REO property listed on the HomePath Web site by June 30, 2010.

Goldman Sachs is battling allegations that it misled investors in its mortgage securities business. That battle may have just gotten a little tougher. The firm maintains that like everyone else, it suffered heavy losses from the mortgage meltdown. But a Senate investigative committee has released several internal documents obtained from the Wall Street firm that reveal it made ""some serious money"" betting against the housing market, as Sachs' top execs' put it.