Government

Sen. Christopher Dodd introduced legislation Monday that outlines a revamp of the nation's financial regulatory system. The long-awaited reform bill calls for the creation of an ""independent"" Consumer Financial Protection Bureau to regulate mortgages and other loan products. It also establishes a systemic risk council, which has the authority to force complex firms to divest some of their holdings if they become ""too big to fail,"" and it requires the largest financial firms to contribute to a $50 billion fund that would be used to pay for future financial collapses.

With the expiration of several key government support programs looming, loss severities on distressed U.S. residential mortgage loans are likely to escalate, Fitch Ratings recently reported. The expiration in the coming months of both the homebuyer tax credit and the Federal Reserve's $1.25 trillion mortgage-backed securities (MBS) purchase program will increase negative pressure on home prices and loss severities.

In an effort to develop new strategies for stabilizing neighborhoods that experience large numbers of foreclosures, dozens of local officials from 12 of the regions hit hardest by the housing crisis are meeting at Harvard University this week for the Neighborhood Stabilization Boot Camp.

Bank of America completed 20,666 permanent modifications under the Home Affordable Modification Program as of February 28, 2010, up from 12,761 a month earlier. The bank also has 22,303 additional permanent HAMP modifications that are pending and leads the mortgage servicing industry with more than 240,000 active trial modifications under HAMP.

As of February 28, 2010, Wells Fargo & Co. had 505,832 active trial and completed modifications through its own modification programs and the federal Home Affordable Modification Program (HAMP). According to the administration's February HAMP report card released Friday, Wells Fargo completed more permanent modifications than any other HAMP servicer.

The tally of bank casualties in the wake of the real estate downturn and the ensuing economic crisis continues to swell. This weekend, regulators shut the doors on four more regional lenders - two in New York and one each in Florida and Louisiana. That brings the number of institutions on the FDIC's failed bank list to 30 for the year.

During the 2010 Multicultural Real Estate & Policy Conference last week in Washington D.C., the National Association of Hispanic Real Estate Professionals (NAHREP), the Asian Real Estate Association of America(AREAA), and the National Association of Real Estate Brokers (NAREB) introduced The Five-Point Plan: Creating a Sustainable Path to Minority Homeownership.

In testimony before a House subcommittee Thursday, Charles McMillan, immediate past president of the National Association of Realtors (NAR), said the Federal Housing Administration (FHA) remains financially strong because it has taken steps to ensure solid underwriting standards and responsible lending practices.

It's been a year since the government's Home Affordable Modification Program (HAMP) was implemented and only 170,000 troubled homeowners have received permanent loan restructurings. The number of modifications in the permanent column did increase 45 percent from 116,297 in January, but it's still a mere drop in the bucket when you consider the Treasury's own estimate that there are currently 1.8 million borrowers who are behind on their payments and eligible for the program.

The Congressional Oversight Panel recently released a report finding that throughout the federal bailout of GMAC, Treasury missed opportunities to increase accountability and better protect taxpayers' money. Despite the $17.2 billion investment the government has made in the company, the panel says there is still no clear business plan for GMAC, and questions why the Treasury didn't just allow the lender to go into bankruptcy. Administration officials estimate that $6.3 billion of the funds given to GMAC may never be repaid.