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New York Attorney General Eric Schneiderman has reportedly been designated co-chair of President Obama's new investigative team to probe the mortgage industry for past misconduct. In his State of the Union address, Obama announced the creation of a special unit of federal prosecutors and state attorneys general to examine the risky lending practices that led to the financial crisis. As the industry and the economy stagger toward recovery, some believe digging into the past may not be the best way to move forward.

Data released this week by the Federal Housing Finance Agency (FHFA) show purchase prices of homes backing mortgages that have been sold to or guaranteed by Fannie Mae and Freddie Mac rose 1.0 percent between October and November. The agency's index has recorded sporadic ups and downs throughout the year. For the 12 months ending in November, the net effect is a decline in property values of 1.8 percent. FHFA says prices are now roughly the same as in February 2004.

Illinois Attorney General Lisa Madigan filed a lawsuit against Standard & Poor's this week alleging the ratings agency inflated ratings of mortgage-backed securities investments - an act Madigan believes triggered the financial crisis. The suit, filed in Cook County Circuit Court, relies on internal emails from within the ratings agency as evidence of the company's misrepresentations of risk. Madigan references congressional testimony from a former managing director at S&P, stating ""profits were running the show.""

Foreclosure homes sold for 34 percent less than the average price of a non-distressed home during the third quarter of 2011, according to new data released by RealtyTrac Thursday. The average sales price of homes in the process of foreclosure or bank-owned was $165,322 over the July-to-September period last year. RealtyTrac says third parties purchased a total of 221,536 residential properties classified as foreclosures or REO during the third quarter of 2011, representing just 20 percent of all residential sales during that timeframe.

The Federal Reserve said Wednesday that it will hold a key benchmark interest rate near zero through 2014. The setting of this federal funds rate - the rate at which banks lend to one another - is one of the most fundamental and principal tools in the central bank's chest of economic influence. The Fed has kept the target range for the rate at 0 to 0.25 percent for three years now. The decision to maintain this range for another three years is testament to just how slow the U.S. economy's recovery is likely to be.

After reaching a 19-month high in November, pending home sales declined 3.5 percent in December, according to data released by the National Association of Realtors (NAR) Wednesday. November's pending home sales stood at 100.1 for the nation, just above the ""historically healthy"" average of 100, designated by NAR. The rate ticked down to 96.6 in December. Despite the decline, December's pending home sales are 5.6 percent higher than the rate recorded in December 2010.

The Mortgage Bankers Association (MBA) announced Wednesday the appointment of Peter J. Grace as the trade group's new VP of strategic planning and internal technology. Grace will facilitate the implementation of initiatives that involve membership engagement through a coordinated project management and leadership role. He joins MBA from HUD, where he most recently served as chief of staff for the Acting Deputy Secretary Estelle Richman.

ISGN Corporation has obtained a $20 million secured line of credit from JPMorgan Chase, the company announced Wednesday. The line of credit from JPMorgan is available through November 21, 2012, subject to certain conditions. ISGN says the terms allow the company to utilize the entire $20 million immediately to take advantage of market opportunities in the first half of 2012.

Despite rumors earlier in the week that President Barack Obama would announce a settlement between the state attorneys general and the nation's top servicers in his State of the Union address, the president made no such announcement Tuesday night. However, he did announce his intention to save millions of homeowners approximately $3,000 annually on their mortgages by allowing them to refinance at today's low interest rates. Obama also plans to create a Financial Crimes Unit to protect consumers from fraud schemes.

The ratings agency DBRS says mortgage servicers are going to continue to see ""much needed reform"" in 2012 as the industry moves to standardize the servicing business. The first go at such standardization will center around implementing the directives of regulators' consent orders, according to DBRS. The agency does expect the U.S. government to institute some of the REO programs currently being vetted, but doesn't foresee any tangible benefits in terms of loss recoveries until 2013.