Government

Private equity investment funds, in collaboration with the U.S. Treasury, have relieved the market of $10 billion in souring real estate assets, purchased through the federal government's Legacy Securities Public-Private Investment Program (PPIP). About 88 percent of the portfolio holdings, or $8.8 billion, are non-agency residential mortgage-backed securities (RMBS). Twelve percent, or $1.2 billion, are commercial mortgage-backed securities (CMBS). Of the RMBS assets, nearly half fall into the Alt-A loan category.

Neil Barofsky, TARP special inspector general, has been highly critical of the government's foreclosure prevention programs. On Tuesday, he put the administration's new initiatives to help unemployed and underwater homeowners under the microscope. Barofsky says several issues could impede program effectiveness, including the voluntary nature of principal write-downs, disparate appraisal requirements across subprograms, and the short timeframe given for unemployment forbearance.

Just four months after the fourth round of National Foreclosure Mitigation Counseling (NFMC) Program funds were appropriated, $59.5 million was awarded to 35 state housing financing agencies (HFAs), 15 HUD-approved housing counseling intermediaries, and 81 community-based NeighborWorks organizations to provide counseling to homeowners facing foreclosure, according to a recent announcement by Washington, D.C.-based NeighborWorks America, administrator of the NFMC Program.

Amid the legal storm building over allegations of securities fraud in the subprime mortgage space, Goldman Sachs said Tuesday that its first quarter business dealings turned a hefty $3.46 billion profit, more than doubling its numbers from a year ago and coming out far ahead of analysts' expectations. New details surrounding the SEC's partisan decision to sue the Wall Street fixture may be further evidence of the political motivation behind the charges, but Goldman Sachs isn't going down without a fight, and deep pockets mean a strong defense.

The Michigan State Housing Development Authority recently submitted its plan to the Treasury, detailing its intentions to use the majority of the $154.5 million it received under the Hardest Hit Fund to help unemployed borrowers. Through a nonprofit corporation set up specifically for the purpose of being an ""eligible entity"" under the Hardest-Hit Fund, MSHDA plans to administer three programs, including the Unemployment Mortgage Subsidy Program, the Principal Curtailment Program, and the Loan Rescue Program.

First-time homebuyers accounted for a record-high share of purchases last month, according to new data from Campbell Surveys. With the April 30 contract deadline to receive the federal homebuyer tax credit fast approaching, the momentum is likely to continue into this month. But some economists have warned that sales are being pulled forward to make the tax credit window, and as a result will slip fairly substantially in the months ahead. There are no plans to extend the credit again.

LenderLive Network Inc. said Monday that it has helped Caliber Funding streamline the upfront disclosure and good faith estimate (GFE) issuance process for brokers by creating completed signature-ready documents with a single click. Arizona-based Caliber Funding, started its partnership with LenderLive in 2007 with document preparation for back office services. Since then, the industry has changed drastically and more broker-specific regulations have been put into place.

Fraud allegations brought against Goldman Sachs Friday are still reverberating down Wall Street. Capital market analysts at Bernstein Research estimate that the suit could put Goldman Sachs on the hook for up to $700 million. The implications of the charges, though, stretch far beyond the walls of Sachs. With the federal government already gunning for big Wall Street firms as it pieces together financial reform legislation, the news has given Congress and the White House ammunition for tighter regulations.

The hits keep coming for small and mid-sized banks. Over the weekend, regulators shut down eight - three in Florida, two in California, and one each in Massachusetts, Michigan, and Washington. Altogether, this latest round of closures will cost the FDIC $985 million, and brings the total number of failed banks for the year to 50.

A federal investigation into Wall Street and the economic crisis has honed in on Washington Mutual, making the bank that was absorbed by JPMorgan Chase in 2008 the poster child for what went wrong with the nation's financial system. After two days of hearings, the Senate Permanent Subcommittee on Investigations has concluded that federal banking regulators failed to step in and curtail shoddy lending practices and ignored excessive risk-taking at what was once the sixth largest U.S. bank.