Top News: week of November 15th, 2010

Don't underestimate foreclosure crisis, watchdog to warn

By Brady Dennis and Ariana Eunjung Cha
Washington Post Staff Writers
Tuesday, November 16, 2010; 12:09 AM

A congressional oversight panel is set to warn on Tuesday that a widespread problem of flawed and fraudulent foreclosure paperwork could upend the housing market and undermine the nation's financial stability, just as the issue is coming under greater scrutiny this week in Washington.

The report, issued by the Congressional Oversight Panel, which monitors the government's bailout program, marks the first time a federal watchdog has weighed in on the nationwide foreclosure mess.

The panel echoed concerns raised by consumer advocates and financial analysts, who have said that although the consequences of the foreclosure debacle remain unclear, the problems could throw into doubt the ownership not only of foreclosed properties but also the millions of ordinary mortgages that were pooled and traded by investors around the world.
more...

FHA's cash reserves rebounding, audit shows
By Dina ElBoghdady
Washington Post Staff Writer
Tuesday, November 16, 2010; 12:08 AM

The Federal Housing Administration's cash reserves remain below the level required by law, but they have not deteriorated much since last year and taxpayer funding will not be necessary to buoy the agency even under worst-case scenarios, federal officials said Monday.

The officials cited an independent audit, due to be released Tuesday, that examined the excess cash the agency must set aside to deal with unexpected losses in its flagship home-buying program. That program has played a critical role in propping up the housing market and currently supports one in five home purchases nationwide.

As of Sept. 30, the agency's reserves had an estimated value of $4.7 billion, up from $3.6 billion a year earlier. The current total represents 0.5 percent of all outstanding single-family home loans insured by the FHA, compared with 0.53 percent a year earlier. The margin narrowed from the previous fiscal year because the agency is insuring more loans.
more...