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Study Finds Refinancing Bill Would Save Homeowners $35B

If it becomes law, a Senate bill could increase the number of homeowners who refinance under the Home Affordable Refinance Program by up to 13 million. That's the consensus reached by professors with Columbia University Business School, which released the study on Thursday. The study sketched the likely effects of a bill recently co-sponsored by Sens. Barbara Boxer and Robert Menendez. Researchers said that new HARP modifications could lead to roughly $35 billion in savings for homeowners, a number that could help stem the rate of foreclosure activity nationally.

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GAO Reports 6,327 Tax Debtors Received FHA-Insured Mortgages

Under federal policy, those who are behind on their taxes are ineligible for FHA mortgage insurance unless they repay their debt or are in a valid repayment agreement with the IRS. However, the Government Accountability Office (GAO) found that FHA insured over $1.44 billion in mortgages for 6,327 borrowers who had a total of $77.6 million in federal tax debt. The watchdog group explained that the borrowers benefited from the 2009 American Recovery and Reinvestment Act, which includes a provision that increased mortgage insurance loan limits and provided an estimated $12 billion in Recovery Act First-Time Homebuyer Credits (FTHBCs) to 1.7 million individuals.

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Treasury Projecting $204M in Proceeds from TARP Bank Sale

In May, Treasury announced exit strategies to wind down on the remaining investments it still holds from the Troubled Asset Relief Program (TARP). One of those strategies involved a second round of auctions to sell off preferred stocks it holds. On June 25, Treasury began the public offerings and announced Thursday it expects proceeds to be $204 million from the sale of preferred stock in seven financial institutions.

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Reverse Mortgages Put Confused Homeowners at Risk of Foreclosure

A reverse mortgage is a type of home loan that lets older homeowners access the equity they have built up on their homes and defer loan payment until they sell the home, move out, or pass away. The original purpose of reverse mortgages was to allow these homeowners to convert home equity into an income stream or line or credit to use in retirement. Reverse mortgages require no monthly mortgage payments, but borrowers must still pay property taxes and homeowner's insurance. The CFPB released a report that showed nearly 10 percent of reverse mortgage borrowers are at risk of foreclosure because they failed to pay those costs.

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Mortgage Rates in ‘Holding Pattern,’ Match Record Lows

Mortgage rates remained somewhat flat for the week ending June 28, according to Freddie Mac's Primary Mortgage Market Survey (PMMS). The 30-year fixed averaged 3.66 percent (0.7 point), staying level with the all-time low that was achieved the previous week. At this time in 2011, the 30-year fixed averaged 4.51 percent. The 15-year fixed averaged 2.94 percent (0.7 point), down slightly from 2.95 percent the previous week. This week's average matches the all-time low set in the first week of June 2012. At the same time last year, the 15-year fixed rate mortgage averaged 3.69 percent.

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GDP Growth at 1.9% in Q1 as Expected

The US economy grew at an annual rate of 1.9 percent in the first quarter, the Bureau of Economic Analysis reported Thursday in its third estimate of economic performance in the first quarter. The BEA report was consistent with market expectations but emphasized a moribund economy.

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Initial Jobless Claims Down from Prior Week, Still High

First time claims for unemployment insurance fell to 387,000 for the week ended June 23, from the prior week's 392,000, (revised from the originally reported 387,000) the Labor Department reported Thursday. Economists had expected the report would show 386,000 initial claims.

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California Homeowners’ Rights Bills Pass Committee

The Foreclosure Reduction Act and the Due Process Rights Act were approved by the Joint Conference Committee in a 4-1 vote, sending them up to an expected vote in both the Assembly and Senate next week. The Foreclosure Reduction Act restricts the process of ""dual-tracked foreclosures,"" in which lenders work with homeowners on trial loan modifications while at the same time continuing the foreclosure process. The Due Process Rights Act guarantees a reliable contact for struggling homeowners to discuss their loans with and imposes civil penalties on robosigning.

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Bank, Groups Attempt to Do Away with CFPB

The Consumer Financial Protection Bureau faces a new legal challenge as a Texas community bank and two conservative groups launch a lawsuit to undo it and the financial reform law that created it two years ago. The suit challenges the constitutionality of the CFPB and Dodd-Frank Act, as well as Richard Cordray's appointment. A spokeperson for the CFPB said the lawsuit appears to dredge up old arguments that have already been discredited.

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