News

Federal regulators completed unprecedented stress tests of the largest banks’ balance sheets last month, and found that 10 of the 19 institutions screened had enough capital on hand to not only sustain lending in the current environment, but could continue lending even if economic conditions worsen.

The U.S. Federal Reserve’s plan to buy up mortgage-backed securities (MBS) has proven to be a high-ticket project. According to a recent Wall Street Journal:http://www.wsjonline.com report, which cited analysis by JP Morgan Chase, the Fed is underwater on its MBS portfolio by about one percent, and it would have to take approximately $5 billion in losses if it were to mark its portfolio to the market.

Denver, Colorado-based Integrated Asset Services, LLC (IAS) says its latest study on home prices indicates some return to normalcy in markets that have been hit hardest by the housing downturn. The company’s IAS360 House Price Index for April reflects the first non-declining numbers in 10 months.

Foreclosure filings fell six percent during the month of May, according to the U.S. Foreclosure Market Report released by RealtyTrac on Thursday. Despite the monthly decline, the nation’s foreclosure numbers are nearly 18 percent higher than they were in May 2008.

The Treasury Department announced new rules late Wednesday that limit executive compensation for lenders who have received bailout money from the government. Such restrictions have stirred controversy within the financial sector and are the primary reason many banks want to start repaying the taxpayer funding they received through the Troubled Asset Relief Program (TARP).

Cincinnati-based Convergys Corporation has announced the immediate availability of its new Convergys Loan Modification Solutions. The company says these solutions leverage live agent assistance; outbound communications via voice, email, or text; and analytics to encourage loan retention and help servicers respond to increasing consumer demand.

Long-term mortgage interest rates have climbed to their highest levels since late last year, casting a dark cloud on any early signs of a housing recovery and stalling the recent wave of refinances many struggling homeowners employed to get out from under unsustainable mortgages.

NeighborWorks America has boosted funding for foreclosure prevention guidance through its National Foreclosure Mitigation Counseling Program, yet an alarming number of distressed homeowners who have been instructed by advisors to contact their mortgage servicer have had a hard time reaching them or received disappointing resolutions.

The Mortgage Bankers Association (MBA) released its Mortgage Applications Survey on Wednesday, for the week ending June 5, 2009. The association’s study shows that refinances, typically an effective tool for lowering distressed homeowners’ monthly payments, continued to fall last week – a trend that has prevailed for several weeks now.

The Congressional Oversight Panel, one of the federal watchdogs that oversees the government’s $700 billion bailout of the financial industry, says regulators’ stress tests of the nation’s 19 largest banks should be administered again using more severe economic assumptions, and should be conducted over a longer period.