Government

Fannie Mae has extended its contract with Lenders One Mortgage Cooperative as a preferred investor. The organization says continuing its preferred investor relationship with Fannie ensures that cooperative members selling to the GSE have access to more competitive pricing and technology than they would working with Fannie Mae independently.

Florida has been aptly dubbed one of the nation's foreclosure hotspots, and its courts have a wall of foreclosure cases to back up that claim. The backlog has gotten so bad, that it's pushed the Florida State Courts Administration to ask legislators for $9.6 million to bring in additional case managers and judges to help clear the still-growing glut of case files. The state's court administrators estimate that there are currently 500,000 pending foreclosure cases. Local judges say ""the numbers are just overwhelming.""

Federal regulators are warning that by the end of 2010, half of all commercial real estate mortgages will be underwater. Their biggest concern is that most of these souring loans are concentrated in mid-sized banks, making them especially vulnerable to failure. The Treasury secretary, though, says commercial real estate is a problem that can be managed, and news from the field supports his assumption, as lenders appear to be moving more aggressively to modify commercial mortgages and avert another default tsunami.

The Treasury Market Practices Group (TMPG), an organization created by the New York Federal Reserve to advise on the trading of Treasury bonds, announced Tuesday that it is expanding its scope to include government agency debt - such as that from mortgage giants Fannie Mae and Freddie Mac - and agency mortgage-backed securities (MBS). There is speculation that the organization's extended reach is in response to an increase in unresolved mortgage deals and secondary market trades.

The Wisconsin Office of the Commissioner of Insurance has taken control of mortgage bond insurer Ambac Assurance Corp.'s ""most troubled holdings,"" as the insurance commissioner phrased it. The commandeering occurred last week, as rumors began to surface that the company may be headed for bankruptcy, which could trigger billions of dollars in losses for municipalities who invested in mortgage securities insured by Ambac.

The U.S. Department of the Treasury announced Monday that it is ready sell off its 27 percent ownership stake in Citigroup. The Wall Street bank was one of the biggest bailout recipients among financial institutions, and the government is expected to turn a pretty penny for its efforts to keep Citi afloat - a net of more than $8 billion, according to preliminary estimates. Treasury said it plans to fully dispose of its 7.7 billion shares of Citigroup common stock by the end of the year.

First American CoreLogic estimates that the typical underwater homeowner will not begin to surface until late 2015 to early 2016. It's an even longer stretch for some of the most depressed markets, where the company says the typical borrower in negative equity may not experience positive equity until 2020 or later. Of the markets studied, the Washington D.C. area is expected to return to positive territory first, while homeowners in Detroit will have the longest duration of negative equity.

The Treasury Department's supplemental directives for the Home Affordable Modification Program (HAMP) have placed increased requirements on lenders and servicers helping distressed borrowers. But Houston-based Stewart Lender Services (SLS), a wholly-owned subsidiary of Stewart Title Company, recently announced its ability to help national lenders and services comply with these directives in a timely, cost-effective manner.

The administration announced Monday that it is expanding its initiative to provide funding for state housing finance agencies to develop their own localized mortgage assistance programs. A second round of funding, totaling $600 million, will go to five additional states: North Carolina, Ohio, Oregon, Rhode Island, and South Carolina. Last month, $1.5 billion in aid was allocated to be divided between California, Nevada, Arizona, Florida, and Michigan.

Mortgage fraud remains a major problem in many U.S. cities, but the fight against it is growing. Last week, representatives of the Financial Fraud Enforcement Task Force met in Phoenix for the second of a series of Mortgage Fraud Summits, marking an important step in the task force's collaborative effort to combat mortgage fraud and protect American homeowners. The U.S. attorney general has allocated nearly $8 million in federal funding for mortgage fraud enforcement.