News

FDIC-insured banks and savings institutions reported a total profit of $35.3 billion in the first quarter of 2012, a $6.6 billion increase from the $28.8 billion net income reported in the 2011 first quarter. The increase marks the 11th consecutive quarter of year-over-year gains. The number of ""problem"" institutions dropped to the smallest number since year-end 2009. ""Problem"" institutions declined from 813 to 772, with total assets of ""problem"" institutions shrinking from $319 billion to $292 billion.

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), along with the Consumer Financial Protection Bureau (CFPB) and the Treasury issued a fraud alert Thursday warning the armed services community about scams targeting homeowners seeking mortgage assistance. The alert specifically warned about scammers attempting to exploit the Home Affordable Modification Program (HAMP), which can provide mortgage relief for struggling homeowners through modified payments.

Freddie Mac released its U.S. Economic and Housing Market Outlook for May on Wednesday, pointing to the available data as an encouraging sign for housing and the economy in 2012-3. The release details information gathered about economic growth and housing markets over the first quarter of 2012. Although not all of the data is positive, the outlook stated that the data for the most part ""trend in the right direction.""

While seeming to recover, the housing market is still undoubtedly fragile, and there are millions of underwater borrowers who continue to struggle with making payments. While HARP proposes to address these concerns, the program has been limited in its ability to reach the masses. Through the Responsible Homeowner Refinancing Act of 2012 introduced by Democratic Sens. Bob Menendez (D-New Jersey) and Barbara Boxer (D-California), a new HARP 3.0 would break down barriers preventing millions more from refinancing. During a hearing on Thursday before a senate subcommittee, industry experts and leaders offered testimony on how the proposed legislation could impact the economy.

Fixed rate mortgages were little changed this week after falling and breaking record lows, according to Freddie Mac's Primary Mortgage Market Survey. The 30-year fixed-rate mortgage averaged 3.78 percent (0.8 point) for the week ending May 24, down slightly from last week when it averaged 3.79 percent. The 15-year rate was unchanged from last week's average at 3.04 percent (0.7 point). Bankrate.com reported little movement as well in its weekly survey.

First time claims for unemployment insurance dipped to 370,000 for the week ended May 19 from the previous week's upwardly revised reading of 372,000 the Labor Department reported Thursday. Economists had expected the report would show 371,000 initial claims.

About 15.7 million U.S. homeowners were underwater in the first quarter of 2012, according Zillow's Negative Equity Report released Thursday. Yet, most underwater homeowners are current on their mortgages, with nine in 10 continuing to make their payments on time. Also, just 10.1 percent of underwater homeowners are more than 90 days delinquent, Zillow reported.

Home prices for GSE-backed mortgages rose 0.6 percent on a seasonally adjusted basis in the first quarter of 2012 compared to the previous 2011 fourth quarter, according to FHFA's purchase-only home price index (HPI). Prices also showed a 0.5 percent increase from the year ago first quarter, and month-over-month, prices increased 1.8 percent in March. The purchase only HPI uses home sales price information from Fannie Mae and Freddie Mac loans and includes more than 6 million repeat sales transactions.

New home sales rose 3.3 percent month-over-month in April to a seasonally adjusted annual rate of 343,000, the Commerce Department and HUD reported Wednesday. On a yearly basis, new home sales rose 9.9 percent. And, the good news did not end there. This report was followed by the National Association of Realtor's existing home sales report released Tuesday, which showed the sale of existing homes rose 3.4 percent on a monthly basis and 10 percent year-over-year. In comparison to the sale of existing homes, Paul Diggle, property economist with Capital Economics, said new home sales will still continue to lag behind the existing home sales market, and one of the reasons for this is competition with discounted foreclosures and short sales.

Ellie Mae announced Wednesday that the United States Patent and Trademark Office has issued the company a patent for an advanced security model that enables managers, loan officers, and processors to securely access loan files and documents online. The patent is for an invention that allows multiple ownership of system files and resources while maintaining organizational control and security rules over users.