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Fed Adopts Familiar Stimulus Plan, Will Spend $40B Monthly on MBS

The Federal Open Market Committee announced Thursday a new plan to stimulate a moribund economy, continuing two earlier plans which at best stopped the economy from contracting. The FOMC said it would keep the federal funds rate near zero into mid-2015, six months longer than it had said previously. The FOMC voted 11-1 ""to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month.""

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Eleven Indicted in California Mortgage Mod Scam

Federal agents arrested 10 defendants who worked at a Rancho Cucamonga, California-based business accused of offering false loan modification programs to homeowners, SIGTARP announced Wednesday. Those taken into custody are among 11 defendants named in a federal indictment over a mortgage fraud scheme that allegedly cost distressed homeowners more than $7 million.

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Isaac Pushes Up 1st Time Unemployment Claims

First-time claims for unemployment jumped 15,000 to 382,000 for the week ended September 8, the Labor Department reported Thursday. Several states reported increases in initial claims, as a result of Tropical Storm Isaac, which increased the total by about 9,000.

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FHFA’s New Guidelines Should Aid Recovery’s Momentum

The housing market is seeing signs of recovery, and this recovery may be bolstered by the new representation and warranty framework the Federal Housing Finance Agency (FHFA) announced Tuesday, according to Fitch. Relying on signing offers and home tours as a future indicator of home sales, Redfin, a technology-driven real estate broker, predicts the market improvement seen this summer will continue into the fall.

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ICBA Argues CFPB Rules Not Applicable for Community Banks

Community banks should be exempt from pending regulations on high-cost mortgages since they were not responsible for the mortgage crises, the Independent Community Bankers of America (ICBA) stated in a release. In July, the Consumer Financial Protection Bureau (CFPB) announced it was proposing rules for high-cost mortgages, which would be determined based on interest rates, points and fees, or prepayment penalties.

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House Passes FHA Bill to Prevent Financial Decline

House lawmakers overcame election-year gridlock on Tuesday to punt their version of a bill that would shore up the Federal Housing Administration, whose embattled Mutual Mortgage Insurance Fund falls short of the capital required by law. The lower chamber passed the Federal Housing Administration Fiscal Solvency Act by a sweeping vote of 402 -7.

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GSEs’ Rep and Warranty Guidelines Expected to Bring Clarity for Lenders

Fannie Mae and Freddie Mac new representations and warranty guidelines for lenders Tuesday to clarify lenders' risk regarding repurchase claims and define steps lenders can take to challenge repurchase claims they feel are without grounds. Under the new guidelines, if a loan is current for 36 consecutive months, lenders ""will be relieved of certain repurchase obligations,"" according to the Federal Housing Finance Agency, regulator of Fannie Mae and Freddie Mac.

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Treasury Expects Return of $15.1B from AIG Stock Sale

After bailing out American International Group, Inc. (AIG) at a price tag of $182.3 billion, Treasury and the Federal Reserve are expecting to see their full investment back, plus a return. On Monday, Treasury estimated a return of $12.4 billion after selling about $18 billion in shares. On Tuesday, Treasury then announced it expects to see an additional $2.7 billion.

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