FDIC Chairman Sheila Bair - a recognized champion of homeownership preservation whose loan modification model has set the standard for the industry - is throwing her support behind the administration's Home Affordable Modification Program (HAMP). She also points out that the nation's mortgage problem has evolved, and it's underwater mortgages that are now the biggest threat. Bair says the FDIC is actively looking at principal write-downs as one way to encourage borrowers to stick with their mortgages and help mortgage owners avoid costly foreclosures.
According to the Federal Reserve's well-recognized Beige Book, U.S. economic conditions have shown signs of improvement through the first part of this year. Data from nine of the 12 Federal Reserve districts indicated that economic activity improved, but in most cases the increases were "modest." Residential real estate markets improved in a number of districts, while nearly all characterized commercial real estate as weak. Stronger home sales were attributed to the federal tax credit for homebuyers.
One of the nation's most visible and vocal lawmakers has cast some doubt on the safety of doing business with the nation's two largest mortgage financiers, Fannie Mae and Freddie Mac. Rep. Barney Frank (D-Massachusetts), chairman of the House Financial Services Committee, issued a public statement Friday which essentially warns investors that have lent money to the two GSEs and those that have purchased their mortgage-backed securities (MBS) to expect to incur some losses.
The California Housing Finance Agency (CalHFA) will receive nearly $700 million in new federal funding to help the state's most troubled homeowners stay in their homes. CalHFA is one of five housing agencies slated to receive a total of $1.5 billion in aid for states where unemployment is high and home prices have fallen more than 20 percent. CalHFA says it will submit its program plans to the federal government by April 16 and expects the new initiatives to be ready for implementation by mid-year or sooner.
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