Mortgage Program Money Unspent

The federal government will disburse just $432 million from a $1
billion program to help unemployed homeowners avoid foreclosure,
a government official said.  The rest of the money will return to
the US Treasury because the Emergency Homeowners' Loan Program
has ended, and not enough people were approved in time to receive
aid.  The funding provided forgivable loans up to $50,000 to
temporarily help unemployed or underemployed people avoid
foreclosure in 32 states and Puerto Rico.  Out of 100,000
applicants, 11,832 were conditionally approved for the program
that the government initially said could help up to 30,000
people. Assistance will average $35,000 to $45,000 a homeowner,
said Brian Sullivan, a spokesman for the Department of Housing
and Urban Development.

The program's failure to reach or process enough applicants in
time is "sad and shameful," says Lewis Finfer, executive director
of the Massachusetts Communities Action Network. It worked to
pass the legislation to make the program possible.  HUD started
taking applications in June — almost a year after the program
was made possible by Wall Street reform legislation — and six
months later than HUD first intended. The deadline for HUD to
commit the funds was Sept. 30.  Of the 32 states, five had
similar programs, so they ran their own while HUD administered
the program in the other 27 states.  Pennsylvania, one of the
five, spent its entire allocation of $106 million and approved
3,056 homeowners — 26% of the US total. Only Texas and New York
got more funds than Pennsylvania.  The HUD loans are to be
forgiven if homeowners keep their homes for five years.

Recession over, incomes still falling

Between June 2009, when the recession officially ended, and June
2011, inflation-adjusted median household income fell 6.7%, to
$49,909, according to a study by two former Census Bureau
officials. During the recession — from December 2007 to June
2009 — household income fell 3.2%.  The finding helps explain
why Americans’ attitudes toward the economy, the country’s
direction and its political leaders have continued to sour even
as the economy has been growing. Unhappiness and anger have come
to dominate the political scene, including the early stages of
the 2012 presidential campaign.  The full 9.8% drop in income
from the start of the recession to this June — the most recent
month in the study — appears to be the largest in several
decades, according to other Census Bureau data. Gordon W. Green
Jr., who wrote the report with John F. Coder, called the decline
“a significant reduction in the American standard of living.”
 That reduction occurred even though the unemployment rate fell
slightly, to 9.2% in June compared with 9.5% two years earlier.
Two main forces appear to have held down pay: the number of
people outside the labor force — neither working nor looking
for work — has risen; and the hourly pay of employed people has
failed to keep pace with inflation, as the prices of oil products
and many foods have jumped.  The new study by Mr. Green and Mr.
Coder is based on monthly census surveys, rather than the annual
data that appeared in last month’s census report on income. The
monthly figures allow researchers to measure income changes more
precisely during a recession or a recovery and provide more
current information.

In their new study, Mr. Green and Mr. Coder found that income
dropped more, in percentage terms, for some groups already making
less, a factor that they say may have contributed to rising
income inequality.  From June 2007 to June of this year, they
said, median annual household income declined by 7.8% for
non-Hispanic whites, to $56,320, and by 6.8% for Hispanics, to
$39,901. For blacks, household income declined 9.2%, to $31,784.
Income, after adjustment for inflation, declined fairly
substantially for households headed by people under age 62, but
it rose 4.7% for those headed by people 65 to 74, many of whom
are not in the labor force. The change was negligible for those
62 to 64. The type of employment also made a difference. Real
median annual income declined to a similar degree for households
headed by private-sector wage workers (4.3%) and
government-sector workers (3.9%), but fell much more for the
self-employed (12.3%).  Family households generally had larger
declines in real income than other households. Men living alone
showed a bigger decline than women living alone.  Education
levels were also a factor. Median annual income declined most for
households headed by someone with an associate’s degree,
dropping 14%, to $53,195, in the four-year period that ended in
June 2011, the report said.  For households headed by people who
had not completed high school, median income declined by 7.9%, to
$25,157. For those with a bachelor’s degree or more, income
declined by 6.8%, to $82,846.

Republicans blame Mr. Obama for the slump, saying he has issued a
blizzard of regulations and promised future tax increases that
have hurt business and consumer confidence.  Those arguments may
be heard repeatedly this week, as the Senate begins debating the
jobs bill. The full bill — a mix of tax cuts, public works,
unemployment benefits and other items, costing $447 billion —
is unlikely to pass, but individual parts seem to have a
significant chance.

Housing industry jobs down

The housing industry lost 5,700 jobs in September, marking its
fourth consecutive month of employment shrinkage, preliminary
figures from the Department of Labor show.  Residential building
employment rose by 1,800, but was offset by 7,500 job losses in
the real estate industry, according to seasonally adjusted data
from the Labor Department.  Given the housing crash and the
market's current anemic performance, it's hard to expect industry
employment to do anything but move sideways for a while, said
Paul Dales, senior US economist with Capital Economics, a
Toronto-based research consultancy.

The numbers bear out his point, as housing industry employment
started to flatten out last year and has remained fairly steady
since then.  "If you go back and look at how many people were
employed in those sectors two years or even four years ago, there
would have been a hell of a lot more people employed," Dales
said.  "Any industry that’s been exposed to the housing market
has really seen a lot of job losses over the last few years."
The ranks of mortgage brokers are also continuing to thin out.
Employment among mortgage and non-mortgage loan brokers declined
by 1,500 in September, although that data was not adjusted for
seasonal variations, which are substantial in the housing
industry.  The trend, though, is clear. The mortgage loan
brokerage industry has lost more than 100,000 jobs since
employment peaked at 148,200 in April 2006, Labor Department data
shows. Employment in September was 47,400, according to the
Department's preliminary estimate.  "These industries have
suffered a lot and they’ll probably continue to suffer," said
Dales.

Debt supercommittee deadlocked?

While the panel members themselves aren't doing much talking,
other lawmakers, aides and lobbyists closely tracking the
so-called "supercommittee" are increasingly skeptical, even
pessimistic, that the panel will be able to meet its assigned
goal of at least $1.2 trillion in deficit savings over the next
10 years.  The reason? A familiar deadlock over taxes and cuts to
major programs like the Medicare and Medicaid health care
programs for the elderly, poor and disabled.  Democrats won't go
for an agreement that doesn't include lots of new tax revenue;
Republicans are just as ardently anti-tax. The impasse over
revenues means that Democrats won't agree to cost curbs on
popular entitlement programs like Medicare.  Democrats are
insistent on taxes.  "There's been no movement on revenues and
I'm not sure the Democrats will agree to anything without
revenues," added a Democratic lobbyist who required anonymity to
speak candidly.

Asked last week whether she is confident that the panel can hit
its $1.2 trillion goal, co-chairman Sen. Patty Murray, a
Washington state Democrat, sidestepped the question.  "I am
confident that the public is watching us very closely to see if
we can show this country that this democracy can work," Murray
told reporters. "I carry that weight on my shoulders every day
and so does every member of this committee."  The two parties
have equal strength on the panel, which has until the
Thanksgiving holiday at the end of November to come up with a
plan to submit for up-or-down House and Senate votes in
December.

DSNews.com - slow recovery but slower prices declines

Veros has released its market forecast for the 12-month period
ending September 1, 2012. Nationally, Veros’ own home price
index continues to show stability in its quarterly results,
holding fairly constant at -1.7%.  The company says recent
performance in home prices indicates slight depreciation over the
next 12 months. With no significant drags on the national index
and few markets showing strong appreciation, a very slow recovery
for housing prices is anticipated, according to Veros.
Unemployment and housing supply continue to be key discriminators
between the strongest and weakest housing markets, according to
Veros.

The company explained that areas of North Dakota are showing
strength due to a notably low unemployment rate at 3.5% and a
growing economy and population fueled by an oil boom and strong
demand for agriculture.  Honolulu attributes its strength to an
unemployment rate of 5.7%, its lowest housing supply in the past
five years, and a high rate of affordability.  According to
Veros, Pittsburgh, Washington D.C., and Boston remain the
strongest big city markets, with visible strength also returning
to the Denver housing market.  Additionally, regions in Alaska
and Hawaii continue to maintain a strong housing market due to
affordability, lower interest rates and unemployment, as well as
an increasing population.

By Veros’ assessment, the nation’s weakest housing markets
can be found in Nevada and the inland areas of California. Beyond
the five bottom-rung markets listed above, the company also sees
weakness in Washington and Oregon housing markets.  While some
markets in Arizona and Florida are still pointedly weak, Veros
has seen notable improvements in such areas as Miami, Tampa, and
Fort Myers, Florida.  According to Eric Fox, VP of statistical
and economic modeling for Veros, some of the hardest hit markets
during the downturn are continuing to show some surprising
strengths, although they are not out of negative territory.  For
example, Miami is forecast to see a slight one to two%
depreciation versus the 10% depreciation of the recent past.
“Overall, the recovery in the housing market is limited to just
a few markets and is taking a long time to occur, Fox said.
“The encouraging news is that many markets are no longer
expected to be rapidly declining.”  Veros’ 12-month forecast
indicates that there will not be a return to double-digit
declines in home prices. The company anticipates a maximum of
five% appreciation for growing housing markets and five to six%
decline for weaker markets.

How To Prepare Your House For Sale

Prepping and staging a house. Every seller wants her home to sell fast and bring top dollar. Does that sound good to you? Well, it's not luck that makes that happen. It's careful planning and knowing how to professionally spruce up your home that will send home buyers scurrying for their checkbooks. Here is how to prep a house and turn it into an irresistible and marketable home.

Difficulty: Average

Time Required: Seven to 10 Days

Here's How:

1. Disassociate Yourself With Your Home.
   • Say to yourself, "This is not my home; it is a house -- a product to be sold much like a box of cereal on the grocery store shelf.
   • Make the mental decision to "let go" of your emotions and focus on the fact that soon this house will no longer be yours.
   • Picture yourself handing over the keys and envelopes containing appliance warranties to the new owners!
   • Say goodbye to every room.
   • Don't look backwards -- look toward the future.
2. De-Personalize.
   Pack up those personal photographs and family heirlooms. Buyers can't see past personal artifacts, and you don't want them to be distracted. You want buyers to imagine their own photos on the walls, and they can't do that if yours are there! You don't want to make any buyer ask, "I wonder what kind of people live in this home?" You want buyers to say, "I can see myself living here."
3. De-Clutter!
   People collect an amazing quantity of junk. Consider this: if you haven't used it in over a year, you probably don't need it.
   • If you don't need it, why not donate it or throw it away?
   • Remove all books from bookcases.
   • Pack up those knickknacks.
   • Clean off everything on kitchen counters.
   • Put essential items used daily in a small box that can be stored in a closet when not in use.
   • Think of this process as a head-start on the packing you will eventually need to do anyway.
4. Rearrange Bedroom Closets and Kitchen Cabinets. 
   Buyers love to snoop and will open closet and cabinet doors. Think of the message it sends if items fall out! Now imagine what a buyer believes about you if she sees everything organized. It says you probably take good care of the rest of the house as well. This means:
   • Alphabetize spice jars.
   • Neatly stack dishes.
   • Turn coffee cup handles facing the same way.
   • Hang shirts together, buttoned and facing the same direction.
   • Line up shoes.
5. Rent a Storage Unit. 
   Almost every home shows better with less furniture. Remove pieces of furniture that block or hamper paths and walkways and put them in storage. Since your bookcases are now empty, store them. Remove extra leaves from your dining room table to make the room appear larger. Leave just enough furniture in each room to showcase the room's purpose and plenty of room to move around. You don't want buyers scratching their heads and saying,"What is this room used for?"
6. Remove/Replace Favorite Items.
   If you want to take window coverings, built-in appliances or fixtures with you, remove them now. If the chandelier in the dining room once belonged to your great grandmother, take it down. If a buyer never sees it, she won't want it. Once you tell a buyer she can't have an item, she will covet it, and it could blow your deal. Pack those items and replace them, if necessary.
7. Make Minor Repairs.
   
   • Replace cracked floor or counter tiles.
   • Patch holes in walls.
   • Fix leaky faucets.
   • Fix doors that don't close properly and kitchen drawers that jam.
   • Consider painting your walls neutral colors, especially if you have grown accustomed to purple or pink walls.
     (Don't give buyers any reason to remember your home as "the house with the orange bathroom.")
   • Replace burned-out light bulbs.
   • If you've considered replacing a worn bedspread, do so now!
8. Make the House Sparkle!
   
   • Wash windows inside and out.
   • Rent a pressure washer and spray down sidewalks and exterior.
   • Clean out cobwebs.
   • Re-caulk tubs, showers and sinks.
   • Polish chrome faucets and mirrors.
   • Clean out the refrigerator.
   • Vacuum daily.
   • Wax floors.
   • Dust furniture, ceiling fan blades and light fixtures.
   • Bleach dingy grout.
   • Replace worn rugs.
   • Hang up fresh towels.
   • Bathroom towels look great fastened with ribbon and bows.
   • Clean and air out any musty smelling areas. Odors are a no-no.
9. Scrutinize. 
   
   • Go outside and open your front door. Stand there. Do you want to go inside? Does the house welcome you?
   • Linger in the doorway of every single room and imagine how your house will look to a buyer.
   • Examine carefully how furniture is arranged and move pieces around until it makes sense.
   • Make sure window coverings hang level.
   • Tune in to the room's statement and its emotional pull. Does it have impact and pizzazz?
   • Does it look like nobody lives in this house? You're almost finished.
10. Check Curb Appeal.
    If a buyer won't get out of her agent's car because she doesn't like the exterior of your home, you'll never get her inside.
    • Keep the sidewalks cleared.
    • Mow the lawn.
    • Paint faded window trim.
    • Plant yellow flowers or group flower pots together. Yellow evokes a buying emotion. Marigolds are inexpensive.
    • Trim your bushes.
    • Make sure visitors can clearly read your house number
      .

Irene Affects Financing

Irene affects home financing Damage from Hurricane Irene could
make it difficult for homeowners in the Northeast to close on
pending home refinancing and mortgage purchase applications.
"What has to happen — or what is required — is that they need to
have a re-inspection completed on the property by the original
appraiser to verify no damage has been done and the value of the
home has not been affected," by the storm, according to John
Walsh, president of Total Mortgage Services, a lender based in
Connecticut. Walsh said the re-appraisal issue will impact
homeowners who had pending home purchase and refinancing
applications in FEMA-designated disaster areas before the
hurricane.

The FEMA website names at least 11 states and Washington as
federal disaster areas impacted by last weekend's storm. Walsh
said somewhere between 15% to 50% of his firm's pending mortgage
application pipeline requires a new inspection. At the same
time, he stresses a required re-inspection does not mean all of
those properties were actually damaged by the storm. Even still,
he sees costs and delays as a problem. "There are going to be
homes that are uninhabitable," Walsh said. "One house that I
know of ended up with oil all over it." He said in situations
where the damage runs deep, a financial institution is not going
to lend on the property once the new appraisal shows the impact
of the storm. Walsh sees this paradigm as being particularly
difficult in situations where a person has yet to close on a
mortgage for a home damaged by the storm, especially if the
buyer has already sold his or her existing residence. "If I'm
buying that house and I can no longer purchase it, and I've
already sold my own home, the domino effect of that could be a
big problem," he said.

Andrew Wilson, a spokesman for Fannie Mae, said it's too early
to tell how many refinancing and purchase applications will be
impacted by Hurricane Irene, which swept up the coast hitting
every state between Virginia and Vermont. "If there has been
damage to a home that was looking to refinance, they indeed have
to seek a reappraisal," Wilson said. He said the larger issue
for the GSE is letting impacted homeowners with Fannie Mae loans
know that if they are facing flooding and other damages they can
qualify for a loan forbearance. "I don't know if we have
received requests for this from lenders yet," Wilson said.
However, he said lenders are empowered under GSE guidelines to
grant those forbearances in natural disaster situations.

No jobs created Economists had been expecting the Friday job
report to show a net of 75,000 jobs created, an unusually low
number considering the US is technically more than two years
removed from the end of the last recession. Instead, no jobs
were created and the unemployment rate moved higher at 9.1% in
August, fueling concerns that the US is heading for another
recession. Private payrolls actually rose 17,000, but that was
offset by continued shrinkage in government. The number of
people unemployed remained unchanged at 14 million. The
unemployment rate that counts those not looking for work rose to
16.2%, tied for the highest in 2011. The average duration of
unemployment edged lower to 40.3 weeks from its previous record
high of 40.4 weeks in July. However, the median level spiked
from 21.2 to 21.8 weeks.

Among the more disturbing numbers: the amount of people
"marginally attached to the labor force" rose to 2.6 million
from 2.4 million. These are workers not included in the
unemployment count because they had not sought work in the past
four weeks but have looked in the past year. Health care and
mining saw more jobs in the month, but telecommunications and
government both posted substantial losses. It was unclear how
much impact the Verizon strike, where 45,000 walked off their
jobs for two weeks, had on the total count. Many of those
workers likely received paychecks during the Labor Department's
counting period and may not be included in the number released
Friday. Manufacturing lost 3,000 jobs, construction dropped
5,000 and retail lost 8,000. Average hourly earnings slid 3
cents to $23.09 while average weekly hours edged lower to 34.2.
Unemployment rates held steady across the major categories, with
whites at 8.9%, Hispanics at 11.3% and blacks at 16.7%. The rate
for women is a comparatively low 8.0%. There were 331,000 more
people working in August than July. But 430,000 more were in the
category of working part-time for economic reasons.

WSJ - flood insurance fund Across the nation, program officials
refer to tens of thousands of houses, mostly older ones, as
"repetitive-loss properties"—and some others as "severe
repetitive-loss properties." In the 43-year history of the
flood-insurance program, they account for a disproportionately
large share of flood claims—157,000 properties with 462,000
claims totaling $11.1 billion since 1978, according to a report
this summer by the Congressional Research Service.
Repetitive-loss properties account for about 16% of all claims,
said a spokeswoman Thursday for the Federal Emergency Management
Agency, which runs the flood-insurance program all. Irene's
massive flood damage comes as Congress is set to debate a
possible overhaul of the debt-strapped insurance program. The
FEMA program fills a gap left in most standard homeowners'
policies, which typically exclude flood damage. But it is
weighed down by nearly $18 billion in debt to the Treasury,
mostly from Hurricane Katrina in 2005. As lawmakers seek to
improve the program's financial footing, the repeat-loss
properties are one of the trickiest elements. "There is no way
the flood-insurance program is sustainable as it is," said
Andrew Coburn, associate director of the Program for the Study
of Developed Shorelines at Western Carolina University.

Many of the government's 5.6 million policyholders enjoy deeply
subsidized rates, experts widely agree. A bill passed by the
House in July called for premium increases of up to 20% a year
for about 355,000 properties, including those with repetitive
claims. A Senate measure would allow rates to rise up to 15%
annually. Homeowners living in the highest-risk areas may pay
$5,900 a year for coverage of $250,000 for a dwelling and
$100,000 for its contents. For the same coverage, those living
in low-to-moderate risk areas may pay $365 a year. The insurance
program is scheduled to expire on Sept. 30. With so many issues
unresolved, a short-term extension is considered likely,
lawmakers said. FEMA has made several efforts over the years to
address repeat claims. An initial effort was to identify the
inventory of repeat-loss properties and work with local
officials to flood-proof them.

In recent years, FEMA has provided grants to states to help
local governments acquire properties for demolition, elevation
or other flood-proofing. The agency has several other programs
to mitigate flood risk, but critics say they haven't had much
impact. Orrin Pilkey, a Duke University emeritus professor of
coastal geology, said the grants have been "meaningless," adding
that many local governments "don't want to lose buildings and
start to shrink" their tax base. The number of new repeat-loss
properties has averaged nearly 5,200 annually since 1978,
outpacing the number removed from the list by a factor of 10 to
one, according to a 2009 report by the Department of Homeland
Security's inspector general. The total number of repeat-loss
properties currently stands at 75,920, FEMA said Thursday. The
inspector general's report noted that many communities "lack the
necessary expertise, financial resources and will" to develop
hazard-mitigation projects. A FEMA spokeswoman said it agreed
"meaningful reforms" were in order, and that repetitive-loss
properties were "one of many areas that need to be addressed
through comprehensive changes." FEMA is "committed to working
with lawmakers and all of our stakeholders," she said.

No stimulus needed

A top White House aide says the new jobs plan President Obama
will announce next Thursday will provide "meaningful" tax relief
and include a strategy for helping the nation's long-term
unemployed. With small- and medium-sized businesses making up
the lion's share of America's jobs, there are expectations
Obama's plan could include incentives to get mom and pop shops
hiring. But analysts argue incentives will provide only a
short-term boost, if any, to corporate hiring and that a broader
long-term plan to rein in budget deficits and support demand
would ultimately have more impact. The fundamental problem is
firms don't see demand for their product," said Joel Prakken,
chairman of Macroeconomic Advisers LLC, which jointly developed
the ADP private employment report. "If they don't think they can
sell the product that a new hire would produce, it would have to
be quite an amazing incentive to convince them to do otherwise."

Olick - government vs banks - housing losses

"When I first read the New York Times story on an impending
lawsuit by the Federal Housing Finance Agency (FHFA),
conservator of mortgage giants Fannie Mae and Freddie Mac,
against more than a dozen big banks, I thought, why is the
government suing banks for billions of dollars when it just
spent billions of dollars bailing the banks out? And why would
the government want to weaken the banks further, when what the
ailing housing market needs most right now is mortgage
liquidity? Unfortunately, my questions are really the tip of the
iceberg. At face value, the lawsuit makes sense; the role of the
FHFA is to limit losses to Fannie and Freddie. The two have
taken about $33 billion in losses from mortgage backed
securities they bought from the big banks. They claim the big
banks misrepresented the loans in the securities, that said
loans were poorly underwritten, using inflated or falsified
borrower incomes. Fannie and Freddie were the largest buyers of
private label mortgage-backed securities from 2004 to 2007.

I'm not going to argue the merits of the suit, like what Fannie
and Freddie's role was in checking these securities they were
buying, given that they played a big part in crafting and
choosing them. What's more important to me is how this and the
growing ocean of litigation affect the housing recovery. Now you
have a government lawsuit hitting the big banks, just as the
government, in the form of the justice department, is trying to
negotiate a big bank settlement with the fifty state attorneys
general over so-called 'robo-signing' foreclosure practices.
That one allegedly has a $20 billion price-tag, but recent drama
over whether to include securitization issues in the settlement,
threatens to derail a big chunk of that and open the banks up to
more litigation. How ironic. If you're a big bank, facing
sizeable payment for your past sins (or as in the case of Bank
of America, sins of companies you bought, like Countrywide
Financial), what do you do now? You likely make loans more
expensive and harder to get, or you get out altogether. This
week Bank of America dropped its correspondent lending business,
a huge blow to that market. Bottom line, it hits housing.

'You're going to get liquidity withdrawn from the housing
sector. When you look at what the GSE's [Fannie and Freddie]
were set up to do, the GSE's were set up to add liquidity to the
system,' says Paul Miller of FBR Capital Markets. Meanwhile the
Obama administration is struggling for ways to try to save the
housing market, specifically a big refinance plan through Fannie
and Freddie, which would of course require cooperation from the
big banks who service so many of their loans. So is the
government, in the form of the FHFA, cutting off its nose to
spite its face? 'The problem is that there is no one set policy
by the government on housing, and the individual regulator and
government agencies are operating independently of each other,'
says Miller. 'It all goes back to Congress and the
Administration kicking the can on housing policy.

US Mortgage Purchase Applications at 15-Year Low

US Mortgage Purchase Applications at 15-Year Low

U.S. home mortgage applications for purchases fell to a nearly
15-year low last week as resurgent worries about the strength of
the economy kept buyers at bay, an industry group said on
Wednesday. The Mortgage Bankers Association said its seasonally
adjusted index of mortgage application activity, which includes
both refinancing and home purchase demand, fell 2.4 percent in
the week ended Aug.19. The seasonally adjusted gauge of loan
requests for home purchases tumbled 5.7 percent to its lowest
level since December 1996, the MBA said. Refinance demand also
sagged as interest rates rose, with the refinance index slipping
1.7 percent. "Another week of volatile markets and rampant
uncertainty regarding the economy kept prospective homebuyers on
the sidelines, with purchase applications falling to a 15-year
low," Mike Fratantoni, MBA's vice president of research and
economics, said in a statement. Fixed 30-year mortgage rates
averaged 4.39 percent, up from 4.32 percent.

The Speech that Could Rattle Markets

All those unprecedented monetary policies from Federal Reserve
have conditioned the markets to be treated with kid gloves,
whenever the going gets tough.  So what Ben Bernanke, the central
bank's chairman might end up rattling the markets, by whatever he
says on Friday, at the Fed's annual symposium in Jackson Hole,
Wyoming. With the stock market mired in a month-long slump and
both the U.S. and euro zone economies in danger of sliding into
recession, investors are bracing for a possible repeat of last
year’s performance when Bernanke hinted the Fed would act if
conditions deteriorated.  Two months later, the central bank
began pumping $600 billion into the financial system through
direct purchases of Treasury debt, a second round of stimulus
that markets dubbed "QE2," or quantitative easing  While the
jury's still out on how effective these purchases have been, few
are ready to rule out QE3 entirely. More stock market gains could
be in store if Bernanke gives a strong hint of future action.
After Bernanke's speech last August, the S&P 500 began a rally
that took it up nearly 25 percent by May 2011.

Realtors: White House can Host Housing Summit

A housing recovery is seen as key to America’s economic
strength, and National Association of Realtors wants to make sure
that proposed legislation and regulatory rules or changes to
current programs and incentives don’t further exacerbate
problems within fragile real estate markets across the country.
To help develop policies that will stabilize the nation’s
housing market and support an economic recovery, the NAR had
urged the White House to host a summit of policy makers, industry
leaders and government stake holders focused on revitalizing the
nation’s housing.   “Housing and home ownership issues affect
all Americans, which is why we need strong policies that will
help stabilize the housing market and lead the way out of
today’s economic struggles.” said NAR President Ron Phipps,
broker-president of Phipps Realty in Warwick, R.I. A broad
discussion among all stakeholders about what needs to be done to
put the housing market and economy on a path to recovery could
provide valuable recommendations and solutions to promote
responsible, sustainable home ownership and stabilize and
revitalize the housing industry and economy.

Diana Olick: Best Builder Bets for 2012

Sales of newly built homes are on track to set a new record low
for this year... The street was expecting a flat to slightly down
reading in July, and while the number came in at -0.7%, that
figures in a very large downward revision for June. New homes
aren't selling, new delinquencies are rising, and inventories of
existing homes are way too high. So why am I titling this blog,
Best Builder Bets? Because some analysts out there think that
some builders are well-positioned to profit going forward. Jeff
Meli of Barclay's Capital is naming names and markets. "A couple
of the names that look appealing to us include, Meritage,
Standard Pacific and DR Horton,” says Meli.

He is looking at areas of the country that are seeing some price
appreciation and seeing which builders already have a substantial
base of operations there, because it takes builders up to two
years to get established in a new area. He's bullish on Atlanta,
Washington, DC and, Believe it or not, Phoenix. Phoenix?? He
believes that “Phoenix has a large number of foreclosures to go
through the system; however, looking forward 6-9 months, we think
that a lot of that distressed overhang will be worked through,
and it will actually reach an equilibrium and potentially provide
a robust place for homebuilders to be operating."  While Meli is
looking ahead to which builders are well positioned, Dan
Oppenheim at Credit Suisse is busy revising down estimates on the
big public builders. "We are lowering target prices by an average
of 30%, on the expectation of lower sales, greater pricing
pressure, and increased risk of impairments," he says, while
upgrading Ryland to "neutral" from "underperform."  As we've
suggested before, the housing recovery will be extremely
regional. While all real estate has always been local, factors in
today's housing market, like judicial versus non judicial
foreclosure states, and in today's economy, like unemployment,
make it even more so.

'Surrogate' signing scandal rock LPS and DocX

Lender Processing Services Inc. and its DocX affiliate allegedly
caused American Home Mortgage Servicing Inc. to lose millions
from the surrogate signing of mortgage documents, a lawsuit filed
Tuesday contends. Coppell, Texas-based AHMSI filed suit in a
Dallas district court against Jacksonville, Fla.-based LPS
alleging more than 30,000 residential mortgages across the
country were affected by  "improper execution, notarization and
recording of assignments of mortgage."  The lawsuit comes on the
heels of what AHMSI claims was an unsuccessful attempt to recover
its losses during more than a year of talks with LPS. AHMSI said
that LPS first promised to indemnify AHMSI, and then later
claimed no duty to do so because the contract involved with the
faulty assignments had already expired. Certain DocX and LPS
employees were apparently appointed by AHMSI's board of directors
as "special officers" of AHMSI with powers limited to executing
mortgage-related documents, according to the mortgage servicer.

In October, LPS said varying signature styles from its
subsidiary, DocX, resulted from a DocX practice that has been
discontinued and only affected two lenders/servicers, but did not
identify those servicers. The servicer said it terminated its
contract with DocX after the revelation and conducted a 50-state
remediation effort to correct affected assignments. Also in
April, LPS signed a consent order with the Federal Reserve to
settle a federal investigation into foreclosure practices at the
firm and major mortgage servicers. LPS was required to boost
oversight of its processes.

DSNews.com: Median Home Prices Revert to Years Past

Home prices figured out the secret to time travel while no one
was looking. The research firm John Burns Real Estate Consulting
(JBRE) says if you’re looking to find a comparable point of
reference for current median home prices then prepare to take a
trip back in time. JBRE manager   A bevy of Texas markets fall
into this group, including Dallas, Houston, Austin, and San
Antonio, with median prices ranging from $148,000 to $193,000.
Baltimore, with a median of $235,000, and Indianapolis, at
$121,874, also fall into their 2006 price brackets. The firm says
elevated levels of distress, heavy employment losses, and large
booms of sprawling development are common themes among markets
that have lost the most ground. Falling in between the two
extremes of price deterioration, you’ll find Washington, D.C.
(2004 at $311,104), Los Angeles (2003 at $335,000), and Fort
Lauderdale (2002 at $150,000).

Short Sales Surged in Second Quater.

Short sales surged in second quarter: RealtyTrac

Second-quarter pre-foreclosure sales jumped 19% from the previous
quarter, suggesting more banks and distressed borrowers are
searching for efficient ways to offload properties that are near
foreclosure, RealtyTrac said. Third parties acquired 102,407
pre-foreclosures in the second quarter, while 162,680 bank-owned
homes were sold in the same period. Pre-foreclosure sales are
generally short sales and properties sold within the foreclosure
process. As for who is nabbing up distressed and bank-owned
properties, RealtyTrac said third parties acquired 265,087 homes
classified as in foreclosure or bank-owned in the second quarter.
That is up 6% from the revised first quarter figure and down 11%
from the second quarter of last year. The average sales price for
foreclosures or bank-owned properties hit $164,217 in 2Q, down
less than one percent from 1Q and 5% from the second quarter of
2010.  The sales price for distressed real estate was 32% below
the average sales price of homes not in foreclosure. States with
the largest quarterly increase in pre-foreclosure home sales
included Nevada, which experienced a 43% increase; Washington
(39%), California (38%); and Texas (34%). The states with the
highest number of foreclosure sales included Nevada, Arizona and
California.

Budget Deficit Estimate Cut to $1.28 Trillion: CBO

The federal budget deficit will hit $1.28 trillion this year,
down slightly from the previous two years, with even bigger
savings to come over the next decade, according to congressional
projections released Wednesday.  The nonpartisan Congressional
Budget Office says budget deficits will be reduced by a total
$3.3 trillion over the next decade, largely because of the
deficit reduction package passed by Congress earlier this month.
Nevertheless, the federal budget will continue to be awash in red
ink for years to come. Even with the savings, budget deficits
will total nearly $3.5 trillion over the next decade—more if
Bush-era tax cuts scheduled to expire at the end of 2012 are
extended.  There is more bad news in the report: CBO projects
only modest economic growth over the next few years, with the
unemployment rate falling only slightly by the end of 2012. The
agency projects an unemployment rate of 8.5 percent for the last
four months of 2012. The presidential election is in November of
that year.

"The United States is facing profound budgetary and economic
challenges," the new CBO report says. "With modest economic
growth anticipated for the next few years, CBO expects employment
to expand slowly." Failure to pass a package would trigger $1.2
trillion in automatic spending cuts, affecting the Pentagon as
well as domestic programs.  The new CBO report projects that the
legislation will reduce deficits by a total of $2.1 trillion over
the next decade. The agency also projects savings of $600 billion
over the next decade from lower interest rates.

Diana Olick: Higher-End Housing Hits a Wall

Most of America won't shed a tear for those who own higher-priced
homes, especially given that the median home price in the nation
has now fallen to just $174,000, but investors and homeowners
alike should take note: Higher priced homes are taking a hit and
the outlook for them is worse than the overall market.  That will
have ramifications for recovery.  Despite the fact that just
eight percent of US loans are currently jumbo, according to
Inside Mortgage Finance, and that share will rise to just 10-12
percent when the conforming loan limit is lowered October 1st,
high-end housing is already being hit harder than the overall
market, which isn't exactly doing so well itself. For one, weekly
mortgage applications to purchase a home have been falling
steadily, down 5.7 percent last week. But jumbo loan purchase
applications fell 15 percent.

While sales of homes below $250,000 rose nearly 25 percent in
July year over year according to the National Association of
Realtors (June 2010 was the end of the home buyer tax credit, so
July 2010 was artificially low, still....) sales of homes over
$500,000 were basically flat.  Demand on the low end of the
housing market is boosted by investors largely buying distressed
properties; they either fix up and flip the homes or rent them
out, waiting for the market to recover. Higher end homes have far
fewer investors and may be more sensitive to a volatile stock
market, as potential buyers are more likely to be invested there.
Suffice it to say, we need all segments of the housing market
pushing forward in order to get the full market back to health.

Markets not impacted by rise in jobless claims

Initial jobless claims rose last week, increasing by 5,000
filings for a total of 417,000 claims on a seasonally adjusted
basis. That is up from the previous week's revised figure of
403,500 claims. The Labor Department noted the numbers for the
week ending Aug. 20 were impacted by 8,500 claims stemming from a
labor dispute between the Communications Workers of America and
Verizon Communications. Meanwhile, the advance seasonally
adjusted insured unemployment rate hit 2.9% for the week ending
Aug. 13, a slight decrease from the previous week's revised rate
of 3% Despite recent volatility in the stock market, analysts
with Econoday said Thursday the markets "are showing little
reaction to the report, which outside of the Verizon strike,
points to mildly improving conditions in the labor market."

Pre-Foreclosure Short Sales Jump 19% in Second Quarter

Short sales shot up 19 percent between the first and second
quarters, with 102,407 transactions completed during the
April-to-June period, according to RealtyTrac. Over the same
timeframe, a total of 162,680 bank-owned REO homes sold to third
parties, virtually unchanged from the first quarter.
RealtyTrac’s study also found that the time to complete a short
sale is down, while the time it takes to sell an REO has
increased. Pre-foreclosure short sales took an average of 245
days to sell after receiving the initial foreclosure notice
during the second quarter, RealtyTrac says. That’s down from an
average of 256 days in the first quarter and follows three
straight quarters in which the sales cycle has increased.
Nationally, REOs had an average sales price of $145,211, a
discount of nearly 40 percent below the average sales price of
non-distressed homes. The REO discount was 36 percent in the
previous quarter and 34 percent in the second quarter of 2010.
Together, REOs and short sales accounted for 31 percent of all
U.S. residential sales in the second quarter, RealtyTrac reports.
That’s down from nearly 36 percent of all sales in the first
quarter but up from 24 percent of all sales in the second quarter
of 2010.

NBA Predicts Greater Drop In Origination Volume in 2012

The Mortgage Bankers Association's (MBA) Economic and Mortgage
Finance Forecasts project $1.1 trillion in residential mortgage
origination volume in 2011, roughly $100 billion more than
earlier forecasts, as low mortgage rates have brought in higher
than expected refinance volume, while purchase volume has been
less than anticipated.  However, despite lower forecasted
mortgage rates, weaker projected economic growth in 2012 led to a
reduction in MBA's origination forecast for that year to $931
billion, which would be the lowest volume originated since 1997.

 Jay Brinkmann, MBA's Senior Vice President of Research and
Education and Chief Economist said, "We have lived through a
series of unprecedented events over the past month:  the debt
ceiling crisis, S&P's downgrade of US Treasury debt, the ongoing
sovereign debt crisis in Europe, a commitment by the Fed to keep
rates near zero for the next two years and stock market
volatility that has reached levels not seen since the fall of
2008." "While there is substantial uncertainty about how these
events will impact consumer and business behavior, we do not
believe that the economy is facing the same types of risks as in
2008.   Given that both fiscal and monetary policymakers' options
are limited at this point, it would be difficult for policy
changes to soften any blow." "The silver lining in all the
turmoil for our industry is that mortgage rates are once again at
or approaching historic lows.

Lower rates continue to boost refinance volumes above our earlier
projections, even though refinance application volume remains
quite constrained by tight credit standards, the weak job market,
and the large number of underwater borrowers. For the market as a
whole, we are now projecting total mortgage originations to be
$1.1 trillion in 2011, up about $100 billion from our earlier
projection, and $931 billion in 2012," Brinkmann concluded.

Stocks poised for a bounce

U.S. stocks were poised for an early bounce Monday, following the
biggest four-week loss since March 2009. Dow Jones industrial
average, S&P 500 and Nasdaq futures were up more than 1% ahead of
the opening bell. Stock futures indicate the possible direction
of the markets when they open at 9:30 a.m. On Friday, U.S.Stocks
capped a difficult week, with the S&P 500 posting its biggest
four-week loss since March 2009, amid fears that the U.S. economy
is heading into another recession, and ongoing concerns about
Europe's debt crisis. The Dow, S&P 500 and Nasdaq fell between 4%
and 6% last week. The big event for investors this week will be
on Friday, when Federal Reserve Chairman Ben Bernanke will give
his keynote speech at the Kansas City Fed's annual retreat in
Jackson Hole, Wyo.  "The Fed's annual gathering in Jackson Hole
this year presents yet another opportunity to calibrate Chairman
Bernanke's thoughts on the forces of structural weakness in the
economy and the appropriate Fed policy stance over the medium
term," said Marc Chandler, global head of currency strategy at
Brown Brothers Harriman.  At last year's annual meeting, the Fed
chief prepared the market for QE2, a policy that is widely
credited for supporting stocks earlier this year.

Shadow inventory improves but still threatens housing recovery

Despite all those millions of distressed properties out on sale,
depressing home prices even further, there is one glimmer of hope
according Standard & Poor.  According to the report  the time it
would take for banks to purge all of this so-called "shadow
inventory" from the market (through foreclosure sales, mortgage
modifications and other measures) shrunk to 47 months during the
second quarter, a significant drop from the 52 months it
estimated for the first quarter of this year. The report also
found that the total dollar value of the loans on these
properties -- known as non-agency loans because they are not
backed by Fannie Mae, Freddie Mac or the Federal Housing
Administration -- also fell to $405 billion at the end of June
from $433 billion three months earlier. S&P said the decline was
helped by stabilizing liquidation rates and by fewer borrowers
falling behind on their mortgage payments as the economy slowly
recovered during the quarter.

S&P estimates that there are still a total of between 4 million
and 5 million homes, including those with agency-backed loans, in
shadow inventory, an amount that continues to jeopardize the
housing market's recovery. Nevertheless, Fannie and Freddie are
looking to rid themselves of a large percentage the shadow
inventory they do have -- and quickly. Earlier this month, the
Federal Housing Finance Agency (FHFA), the Treasury Department
and the U.S. Department of Housing and Urban Development were
seeking suggestions on how to dispose all the repossessed homes
now owned by Fannie Mae, Freddie Mac and the Federal Housing
Administration in a way that would benefit local communities.

Layoffs Slide Morale at Wall Street

Before layoffs began sweeping across Wall Street, the timing of
rampant job-cutting by organizations like Credit Suisse,
Barclays, HSBC, Goldman Sachs, Bank of New York Mellon,
illustrated the unanticipated dangers of such acts, which tend to
run in cycles on Wall Street. Employee morale often plummets at a
time when survivors are asked to pick up more responsibility and
customer relations can suffer as service and relationships
deteriorate.  What's more, layoffs inartfully constructed can
come across to shareholders as Band-Aid solutions that at best
temporarily cut expenses and at worst pare away reserves of
talented people. "They finished cutting the fat and now they're
into the muscle and bone," said Tim White, a managing partner who
specializes in wealth management at the recruiting firm
Kaye/Bassman International in Dallas.

The planned cuts at Bank of America have pushed the number of
financial sector layoffs this year to 18,252 — 6 percent higher
than in the comparable period in 2010. That is not good for
morale. Hours have become longer, trading floors have more open
seats and fresh young faces are taking over offices where
high-level personnel once sat. The highest-paid people can be
easy targets for layoffs now, given the cost of keeping them
employed and the eagerness of younger workers to take on their
roles, even at less pay, executive recruiters said Changes in
pay structures mandated in part by the Dodd-Frank financial
reform laws have exacerbated the problem. "When people are getting
hired, fired, hired, fired, every two years, it's very difficult
to run a business," said Conrad Ciccotello, a finance professor
at Georgia State University who has studied the issue. "There is
precious human capital destroyed in vicious boom-and-bust cycles
that is costly to replace.

Diana Olick: Refinance Surge…Not so much

As mortgage rates hit new record lows, refinance applications
have surged accordingly. That, as always, is leading economists
to talk once again about what the effect of all that refinancing
might be on the greater economy. It's even bringing up an old
proposal by Columbia University's Christopher Meyer to have the
government blanket refinance all loans backed by Fannie Mae and
Freddie Mac, pumping billions of dollars of spending back into
the economy.  But we have to take a look at the refinance picture
in today's market, since we all know that today's economic
reality is not usual. The value of refinance is around $1
trillion in mortgage debt annually, in normal times. If you
assume an average savings of one percentage point in the refi,
then you get about $10 billion in savings (including average
fees). But we have to remember that many borrowers are not
qualifying for refis now because they are underwater on their
mortgages (owe more than the homes are worth).

Fannie and Freddie have programs for underwater borrowers to
refi, but they have strict standards to meet. This from Dean
Baker at the Center for Economic and Policy Research: "To get
some rough numbers, we have around 12 million underwater
mortgages. Probably around 4-5 million are with Fannie and
Freddie. Assuming an average value of 200k, that gets you $800
billion to $1 trillion in debt. If we assume that by easing the
rules we get half of these people to refi (probably way high) and
the average saving is 1.5 pp, this saves between $6-7.5 billion a
year in interest. It's something, but it's not going to be some
huge stimulus." Even for those not underwater, most already
refinanced last year, and some argue, due to that, mortgage rates
have to go far lower than 4 percent to make a second refinance
worthwhile.

Commercial property prices inch higher in June

The price of commercial property inched up in June, representing
a firming up of the bottom as continued market turmoil and less
lending keep any significant gains at bay, according to Moody's
Investors Service. The ratings agency said its commercial
property price index increased 0.9% in June from the prior month.
Analysts said the 254 repeat-sale transactions in June were the
highest non-year-end level in about three years. Tightening of
10-year Treasury yield "has largely offset widening loan spreads,
helping maintain attractive financing costs and increasing
transaction volume." Distressed transactions accounted for 28.7%
of all sales, higher than the two-year average of 25.9%. "The
broad middle portion of the commercial real estate market
(neither trophy nor distressed) continues to perform well,
helping sustain positive movement in the aggregate index,"
according to analysts. Three of the four Moody's property type
indices showed prices gains in the second quarter led by office
space with a 8.9% gain, industrial 2.5% and apartments 0.6%. The
retail space index fell 0.3% for the second quarter.

Real estate sales down in July as lack of lending hampers
recovery

Sales of residential property declined in July with experts
blaming a lack of lending that is holding back the real estate
recovery. But although sales were down they are still higher than
a year ago, according to the latest monthly reports from the
National Association of Realtors. Total completed sales fell 3.5%
to a seasonally adjusted annual rate of 4.67 million in July from
4.84 million in June, the NAR figures show. But they are 21%
above the 3.86 million unit pace in July 2010, which was a
cyclical low immediately following the expiration of the home
buyer tax credit. Lawrence Yun, NAR chief economist, said it is a
lack of lending that is holding the market back from recovery.
‘Affordability conditions this year have been the most
favourable on record dating back to 1970, but many buyers are
being held back because banks are offering financing to only the
most highly qualified borrowers, ignoring a large share of
otherwise creditworthy buyers,’ he said. According to Ron
Phipps, NAR President, an unacceptably high number of potential
home buyers are unable to complete transactions. ‘Beyond the
tight credit problems, all appraisals must be done by valuators
with local expertise and using reasonable comparisons, it
doesn’t make sense to consistently see so many valuations
coming in below negotiated prices, often below replacement
construction costs,’ he explained.

Housing Market Faces Long, Cold Winter: Altos

Housing market faces long, cold winter: Altos

Low interest rates and a glut of inventory failed to
substantially stimulate a weak housing market this summer,
according to Altos Research. Based on summer statistics and shaky
economic indicators, Altos is predicting a "long, cold winter"
with nothing on the horizon to suggest improved housing market
activity through the fall and winter. Home prices in July rose in
14 of the 20 metro areas surveyed for the Altos Research
Mid-Cities Report and inventory increased in 12 of the markets.
"The housing market in the United States is in a constant state
of flux. Volatility is the norm and the rules of yesterday's
market no longer apply," Altos said. Eight of the 20 markets saw
their housing inventory levels decline, while six of 20 markets
noted a drop in median prices. The Federal Reserve Bank of Dallas
recently said it expects home prices to bottom out by early 2012,
with market volatility somewhat limited to certain hard-hit
areas, such as Arizona, California and Nevada. The Fed said
markets like Texas, where jobs have been created during the
recession, could see the tide shift by the early part of 2012.

Stocks take a dip again

As renewed concerns about global economy did the rounds again,
turmoil returned to US stock markets, plunging major indexes and
pushing gold to a new record high. Investors were working through
bad news on various fronts, including a dismal forecast from
Morgan Stanley for global economic growth, and two U.S.
government-issued reports on inflation and the job market. The
investment bank slashed its global growth outlook for 2011 and
2012, adding that the United States and Europe are "hovering
dangerously close to a recession." Morgan Stanley cut GDP
forecasts to 3.9% in 2011 and 3.8% in 2012, down from 4.2% and
4.5%, respectively. Growth will be particularly sluggish in
developed nations, with GDP averaging an increase of 1.5%
Investors received an unpleasant surprise, when the Labor
Department reported that weekly jobless claims were worse than
expected. The government reported that jobless claims rose by
9,000 to 408,000 in the week ended Aug. 13.

Diana Olick: Wells Fargo Lowers Conforming Loan Limits

The deadline for ending temporarily higher loan limits at Fannie
Mae, Freddie Mac and the FHA is October 1st, but they are
effectively ended now.  A Wells Fargo spokesman confirms, "August
15th was the deadline for applications and rate locks for FHA and
conventional conforming loans with balances above the limits we
expect will be in place after September 30th."  The loan limits
were raised by Congress in 2008 temporarily from $417,000 to
$729,000 in the highest priced markets in order to help bring
much-needed liquidity to the mortgage market after the sub-prime
meltdown that sent investors fleeing. Even though the rule goes
into effect on October 1st, all loans have to be funded, sold and
shipped to the GSE's by then. Refi volume has been so high lately
that it can take 45 days to do a loan, so lenders have to cut off
in time.  What does that mean on the street? A check of Wells
Fargo's website shows it offering the 30-yr fixed conforming at
4.25 percent, and jumbos at 4.625 percent. Obviously the rate
changes will affect only the highest priced markets, largely on
the coasts.

This from mortgage expert Mark Hanson: "The realists note that
within certain mid-to-high end communities, which can underpin an
entire county's economy, the majority of houses and borrowers
could be impacted, again weakening the macro economic foundation.
Bottom line: The loss of high leverage GSE and FHA loans to $729k
will negatively impact mid-to-high end housing. To what extent, I
am not sure yet. However, I don't think it will be trivial. But
what I am sure of is that mid-to-high end housing is the segment
most at-risk for step-down in sales volume and prices...just look
at CA house sales over $500 in July for an example of how
volatile this market segment is." Wells Fargo is the first to
confirm the change, but other banks either will or have followed
suit. They have to, simply because of the timing.

Shadow inventory levels improve: S&P

Standard & Poor's analysts estimate it would take 47 months for
the housing market to work through the shadow inventory,
according to their second quarter research note. They revised
that down from 52 months in the first quarter, the first decline
since the middle of 2009. The amount of time it would take for
the housing market to move through properties lingering in the
foreclosure system is finally improving. S&P analyzed loan-level
private-label residential mortgage-backed securities data from
CoreLogic to calculate its estimates. It defines the shadow
inventory as a collection of properties in 90-day delinquency or
worse, foreclosure and REO. The unpaid principal balance on these
properties remains high at $405 billion, but it is a 6.4% drop
from the previous quarter and represents less than one-third of
the outstanding private-label RMBS market. "In conjunction with
stable liquidation rates, we believe these are positive signs
that the amount of time it will take to clear this 'shadow
inventory' should continue to decline over the next year,"
analysts said.

Debate on Housing finance reform stirs secondary mortgage market
Hours after The Washington Post published a story Tuesday
detailing the Obama administration's alleged plan to extend the
government's role in the mortgage market, the Treasury Department
quickly rejected the notion and stressed continued devotion to
installing private capital dominance in mortgage financing once
again. "The article made some waves, which helped bring the
denials, with the thought a new direction in policy — perhaps
after the 2012 elections — could perhaps preserve Fannie Mae
and Freddie Mac under different names and a different set of
capital requirements," Jim Vogel of FTN Financial said in a note
Wednesday. So far, Fannie and Freddie owe the Treasury $142.2
billion in still compiling rescue funds. Vogel pointed out that
even if the Obama administration issued such a proposal, it would
have a difficult time winding through a policy gridlock in
Washington, leaving the only window for such action after the
2012 election.