News

After four weekends characterized by bank failures in mass, regulators shut down only one financial institution Friday - Ravenswood Bank in Chicago. This latest closing brings the 2010 failed-bank tally to 109. The pace of closings this year is well ahead of the number of shut-downs seen this time last year - 72. The FDIC has said it doesn't expect bank closings to peak until the latter part of 2010.

Leaders of the House Financial Services Committee say they are looking for ways to recoup the billions of dollars the federal government has sunk into the GSEs over the past two years. Taxpayer support to shore up Fannie Mae and Freddie Mac stands at $145 billion so far, and the tab keeps rising. Rep. Paul Kanjorski says, ""Twenty years ago, we found a way for industry to pay back the sizable U.S. Treasury payments for resolving the savings-and-loan crisis. We can do it again.""

Fannie Mae says it is retiring one of its foreclosure prevention options. The GSE's HomeSaver Advance (HSA) program will be taken off the table on September 30. Fannie explained that HSA volume has shrunk significantly as other foreclosure prevention workouts, particularly modifications, have increased. Under the program, servicers were allowed to extend unsecured personal loans to delinquent homeowners to cure arrearages, but as housing and economic woes have worsened, such a short-term fix has not been enough to keep borrowers current.

Figures released Friday put July's job loss at 131,000 with the unemployment rate holding steady at 9.5 percent, though 71,000 jobs were added to the private sector. A recent report released by the Pennsylvania Association of Realtors revealed job loss as one of the top factors contributing to home foreclosures in the state. Across the country, too many Americans have learned that the loss of one's job can be directly related to the loss of one's home.

Nearly a quarter of U.S. homeowners with a mortgage owe more on the loan than their home is worth, and home prices are threatening to fall further. The Federal Housing Administration (FHA), though, is throwing out a lifeline. Starting September 7, the federal agency will offer new FHA-insured mortgages to certain underwater, non-FHA borrowers who are current on their mortgage payments and whose lenders agree to write off at least 10 percent of the unpaid principal balance.

The Minneapolis-Saint Paul commercial real estate market is beginning to stabilize, reports locally based NorthMarq. Though downward trends are still continuing in rental rates and vacancy rates continue to rise, residential land is beginning to trade as national homebuilders return to action. NorthMarq expects a long, gradual recovery to begin in late 2010 or early 2011.

The U.S. Federal Reserve is in the same boat as the banks now, dealing with a mortgage portfolio that's riddled with deficiencies and delinquencies. The central bank's New York branch has been saddled with a heap of souring loans from the assets it picked up to support the 2008 bailout of Bear Stearns. And now, as more and more of these loans - both residential and commercial - fall into default, the New York Fed is faced with a dilemma: to foreclose or not to foreclose.

Merscorp, Inc. (MERS), the electronic mortgage registry system, has selected technology management firm Genpact Limited to provide mortgage support services and member-facing helpdesk services, beginning December 2010. Under the seven-year contract between the two companies, Genpact will perform business process services in the United States for MERS, including managing the receipt, identification, and delivery of mortgage-related correspondence on behalf of MERS 2,500 members.

Fannie Mae's second-quarter losses narrowed considerably from the demoralizing financials of the past several years that found the nation's largest mortgage financier underwater itself in a sea of red ink. The GSE reported Thursday that it lost $1.2 billion last quarter. It was Fannie's smallest loss in more than three years. The company also said it needs far less money from taxpayers this quarter - $1.5 billion. The company acquired 68,838 single-family REOs through foreclosure in Q2, and its seriously delinquent rate dropped to 4.99 percent.

Dimont & Associates, a national claims management company headquartered, has engaged the services of mortgage industry veteran Joe McCloskey. The company says through this agreement, McCloskey will be assisting Dimont with its overall strategic growth initiatives, including strengthening the company's business practices and expanding its business services lines.