Government

The Federal Reserve is throwing its support behind a large-scale REO-to-rental program to address the oversupply of vacant homes and prevent property values from falling further. The Fed notes that in contrast to the market for owner-occupied homes, rental housing is strengthening. Officials say a government-facilitated program has the potential to help the housing market and improve loss recoveries. They've identified specific markets with large concentrations of vacant REOs, where bulk sales to investors make sense.

The Consumer Financial Protection Bureau (CFPB) now has the authority to oversee nonbank businesses, including mortgage servicers that are not part of a depository institution and companies providing loan modification and foreclosure relief services. This expanded authority came with the appointment of an agency director on Wednesday, and the bureau wasted no time. That very same day, the CFPB announced the official launch of its nonbank supervisory program.

Mortgage modification scams made the list of ""Top Ten Scams of 2011,"" assembled by the Better Business Bureau (BBB). Because the federal government announced or expanded several mortgage relief programs this year, the BBB says all kinds of sound-alike websites have popped up to try to fool consumers into parting with their money. Scammers are representing themselves as government agencies or the BBB itself in order to gain consumers' trust.

President Obama on Wednesday exercised his executive power by using Congress' recess to appoint Richard Cordray director of the Consumer Financial Protection Bureau (CFPB), devoid of a Senate confirmation vote. Without a confirmed director, the CFPB's reach was limited. Now that Obama has single-handedly positioned Cordray at the helm, the bureau has the authority to extend its regulatory powers to non-bank entities such as mortgage brokers and non-depository lenders.

Advertisements informing the public about the independent foreclosure reviews underway for 14 major mortgage servicers hit the presses and the radio airwaves Wednesday. Released by the Office of the Comptroller of the Currency (OCC), the announcements inform the public that those who underwent foreclosure in 2009 and 2010 might be eligible for an independent case review if there is reason to believe they suffered financially as a result of mistakes made by their servicer.

First American Title Insurance Company announced Tuesday the availability of Quick Start HARP - a title, signing, and settlement program that features proprietary technology to facilitate the processing of refinance closings under the newly revamped Home Affordable Refinance Program, more commonly known as HARP 2.0. Program changes are expected to help lenders reach a previously untapped population of American homeowners, and First American says its new solution will improve pull-through and closing times.

The two-month extension of the Temporary Payroll Tax Cut, signed by President Obama December 23, holds immediate implications for the GSEs. The law requires the Federal Housing Finance Agency (FHFA) to increase Fannie Mae's and Freddie Mac's guarantee fees by at least 10 basis points over the 2011 average for all single-family mortgage-backed securities. FHFA says the increase will be remitted to the U.S. Treasury, rather than retained as reserves by the two mortgage financiers.

The Federal Housing Administration (FHA) is extending the temporary waiver of its property anti-flipping rule. FHA rules typically prohibit insuring a mortgage on a home owned by the seller for less than 90 days. In 2010, however, the agency waived this regulation, and later extended the waiver through 2011. This latest extension permits the use of FHA-insured financing for HUD-owned and bank-owned properties, no matter how long the homeowner has held the title, through December 31, 2012.

Sen. Scott Brown of Massachusetts says the civil lawsuit filed by the Securities and Exchange Commission (SEC) last week against six former executives of Fannie Mae and Freddie Mac ""does not go nearly far enough."" Brown is pressing the Department of Justice and the SEC to immediately open criminal investigations into Fannie and Freddie. The senator says authorities need to take a closer look at the GSEs' business dealings prior to the housing collapse and their disclosure of subprime mortgage holdings.

Moody's Analytics' chief economist Mark Zandi has lowered his expectations for the growth of the U.S. economy into 2012. He says GDP will grow 2.6 percent next year and unemployment will likely remain high. Zandi and his colleagues at Moody's expect the U.S. economy to perform a bit better in 2012, but they say the outcome will depend on policy decisions coming out of both Europe and Washington.