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Secondary Market

Home Loans Now Less of a Toxic Threat than Commercial Real Estate

While the housing crisis is what triggered the economic downturn and pushed so many lenders under early on in the receession, it seems the biggest threat has now shifted from residential mortgages to souring commercial real estate (CRE) loans. Commercial real estate proved to be the downfall of the 12 banks that failed last month, according to a report by Trepp, LLC. The company says CRE loans made up 72 percent of the failed banks' nonperforming assets, while residential loans were a distant second, comprising just 20 percent.

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Fannie Mae Adds 14 States to Mandatory Foreclosure Attorney Network

Fannie Mae issued a servicing guide update Tuesday, which adds 14 additional states to the GSE's list of jurisdictions in which its servicers must use one of the legal firms approved by Fannie Mae to handle all foreclosure and bankruptcy matters. As specified by the GSE, the firms within its retained attorney network must handle all issues relating to mortgage loans held in Fannie Mae's portfolio as well as certain securities. As of now, the District of Columbia and all states except for six are subject to the GSE's retained attorney requirements.

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Treasury Appoints Ally Board Member, Plans Sale of Ally Securities

The U.S. Department of the Treasury on Monday exercised its right to appoint a member to the Ally Financial Inc. board of directors, naming John D. Durrett of the investment firm Serent Capital. Treasury also announced Tuesday that it will sell some of the $2.7 billion in trust preferred securities (TruPs) received from Ally as part of the government's bailout of the mortgage and auto lender.

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Geithner Concedes Government Incentives Distorted Housing Market

Treasury Secretary Timothy Geithner told lawmakers Tuesday that the government played a role in bringing down the housing market. He also blamed the government for creating moral hazard and leaving taxpayers responsible for cleaning up the mess, and said the government made mistakes that were avoidable. As part of his pitch to lawmakers for housing finance reform, Geithner stressed that fundamental change is needed -- change that is based on a shift of what many believe is the ""American Dream.""

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Romspen Investment Selects New CRE Loan Servicing Software

Romspen Investment Corporation, the largest non-bank lender in Canada, will use the Mortgage Office from Applied Business Software Inc. (ABS) to administer its commercial loan portfolio and manage its mortgage investment fund. ABS is a Los Angeles-based global provider of software systems to the lending industry. Romspen's current portfolio is $500 million, and the company's mortgage investment fund has thousands of investors.

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FHFA Home Price Index Records Largest Quarterly Drop in Over a Year

The Federal Housing Finance Agency (FHFA) reports that home prices nationally dropped 0.8 percent in the fourth quarter of 2010 when compared to the previous three-month period. On a year-over-year basis, the agency's index is down 3.9 percent. It's the largest annual decline recorded since the third quarter of 2009. Home prices have come in below their year-ago levels for 13 consecutive quarters now. The ongoing depreciation is being attributed, in part, to an elevated number of distressed properties weighing heavy on surrounding home prices.

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Talks Continue over Servicer Penalties in Robo-Signing Settlement

Regulators and attorneys general say their investigations of servicing practices have uncovered critical deficiencies and shortcomings that have resulted in violations of foreclosure laws. They've made it clear that mortgage servicers will be required to make operational changes and will be hit with sanctions and penalties. It's been reported that the 14 servicers subject to the investigations will, as a group, face a hefty $20 billion in fines, but there is dissension even among the government agencies involved over the amount. Negotiations are ongoing.

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Allonhill Hires Managing Director of Credit Risk Management

Allonhill, an independent third-party review firm specializing in mortgage due diligence and credit risk management, announced this week that Megan Von Wald joined the firm as managing director of credit risk management. Von Wald will oversee the day-to-day operations of the company's credit risk management services for the private and public sectors. Previously she served as director of operations for the mortgage servicing firm Statebridge Company.

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Fannie Mae Turns a Profit for First Time in Three Years

Fannie Mae has released its fourth-quarter and full-year 2010 earnings results. The GSE reported net income of $73 million for the last three months of 2010. It's the first time the company's been in the black in over three years. Still, after a hefty $2.2 billion fourth-quarter dividend payment to the U.S. Treasury, Fannie Mae had a net worth deficit as of the end of last year and has requested $2.6 billion more in taxpayer dollars. For the full year of 2010, Fannie Mae recorded a net loss of $14 billion, compared with a loss of $72 billion for 2009.

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Freddie Mac Needs $500M More from Taxpayers after Q4 Loss

Freddie Mac reported Thursday that it lost $113 million in the fourth quarter of 2010. The loss, compounded by the company's $1.6 billion quarterly dividend payment to Treasury for bailout money, left the GSE with a net worth deficit again. Freddie's regulator is requesting another draw from Treasury, this time to the tune of $500 million. The company's fourth-quarter shortfall was actually the smallest of 2010 and brings the GSE's losses for the full year to $14 billion.

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