News

The passing of the Dodd-Frank Reform Act last summer was hailed as the end of ""too-big-to-fail"" and the end of corporate bailouts. But in a report to be presented to Congress Wednesday, Neil Barofsky, head of the group charged with overseeing the government's handling of the Troubled Asset Relief Program (TARP) says the ""too-big-to-fail"" problem has not been solved; in fact, it's gotten worse, thanks to implicit guarantees that came with the massive bailouts of companies such as Citigroup, AIG, and Bank of America.

The National Association for Business Economics (NABE) released the results of its latest quarterly survey this week, which polls member firms to assess their upcoming hiring strategies and gauge expectations for economic growth. Fifty percent of the responding companies in the finance, insurance, and real estate category - which includes banks, mortgage lenders, and secondary market players, in addition to real estate-related businesses - said they expect to increase their payrolls over the next six months.

HomeAffordableGuide.com provides interactive software that guides borrowers through the application process for mortgage help programs, and the company now offers a 30-day satisfaction guarantee. If a homeowner is not happy with the site's abilities while applying for a loan modification or short sale, they may request a full refund within 30 days of purchase.

Lender Processing Services, Inc. (LPS) announced Monday that it successfully completed year-end mortgage loan processing for its mortgage servicing clients on January 1, 2011. The company processed nearly 37 million loans for 67 mortgage servicers within one day's time. Mortgage servicers must annually report prior-year account information to mortgagors to meet regulations for the Internal Revenue Service (IRS) and other government agencies, as well as to meet internal reporting requirements.

A recent report by Institutional Risk Analytics (IRA) says Bank of America and Wells Fargo are two of the most sued financial service firms in the United States. IRA says that mortgage exposure is what is causing these two banks and others in similar situations to be embroiled in so many federal legal cases. In addition, the firm points to the added burden many of these companies are also facing in litigation that will not reach federal court, such as cases involving foreclosure practices.

The latest Case-Shiller figures released by S&P Tuesday signal home prices across the United States continue to weaken. Based on data through November 2010, the 10-city composite of the closely watched gauge was down 0.4 percent and the 20-city composite fell 1.6 percent from their November 2009 levels. Home prices fell in 19 of 20 major metros on a month-to-month basis. S&P's analysts say a double-dip in home prices could be confirmed before spring.

Federal regulators took control of United Western Bank over the weekend after losses in 2009 and 2010 left the Denver-based bank ""undercapitalized and in an unsafe and unsound condition to transact business,"" according to the Office of Thrift Supervision. The institution's parent company called the seizure premature and indicated that the move will likely push it into bankruptcy. Three other smaller lenders were also shut down in Georgia, South Carolina, and North Carolina.

Consumers' trust in America's financial system has increased significantly since the economic crisis culminated, according to a study conducted by the University of Chicago and Northwestern University's Kellogg School of Business. Researchers from the two schools found that nearly 26 percent of Americans have faith in the nation's financial system, up from 20 percent two years ago. While trust and confidence are steadily increasing overall, the study found lingering discontent toward mortgage lenders.

VantageScore 2.0, the latest credit scoring model from VantageScore Solutions, is now fully implemented at all three major credit reporting agencies - Equifax, Experian, and TransUnion. VantageScore 2.0 was created in response to significant changes in consumer credit repayment behavior, and the company says it enables lenders to better mitigate risks and make more informed lending decisions.

Word on the street is that recovery is taking hold in the commercial real estate sector. Vacancy rates are starting to decline; delinquencies, although still elevated, are beginning to moderate; and property values are steadily increasing. Data released Monday by Moody's Investors Service validates this last point. The ratings agency reports that U.S. commercial real estate prices increased 0.6 percent in November, marking the third consecutive month of national price gains.