Bernanke: ‘Too Big To Fail’ is Unconscionable, Insidious

Financial institutions such as those that brought the world economy to the brink two years ago present an unconscionable threat and the most “insidious barriers” to competition in financial services, Federal Reserve Chairman Ben Bernanke said today. Speaking at the Independent Community Bankers of America convention in Orlando, Florida, Bernanke unleashed a wave of criticism against “too big to fail” financial firms and offered a three-part outline to prevent such institutions from posing systemic risk.

Republicans: Phase Out Fannie, Freddie Over 4 years

House Republicans are calling for the veritable end of a decades-old system of financing the majority of U.S. mortgages through two government-sponsored entities known as Fannie Mae and Freddie Mac, according to their proposed phase-out over the next four years. The group of Republicans led by Rep. Spencer Bachus, of Alabama, wants the operations of both Fannie and Freddie to wind down over a four-year process that would result in private capital as the primary source of mortgage financing.

FDIC’s Bair Warns of ‘Backdoor Bailouts’ in Oversight Reform

The chief of the Federal Deposit Insurance Corp., the agency that protects Americans’ bank accounts, today warned of possible “backdoor bailouts” that are written into the current draft of the Senate’s financial oversight reform bill.
FDIC Chairman Sheila Bair, an outspoken critic of the government’s bailout of the biggest banks, referred to the reform’s potential loophole in a prepared speech before the annual meeting of the Independent Community Bankers of America today in Orlando.

‘Deceptive’ Credit-Debt Repair Service Settles FTC Charges

The Federal Trade Commission has settled with a promoter of credit repair and debt relief services for $2.5 million over charges of deceiving customers with false promises of cleaning up their credit and drastically reducing their debt. The FTC complaint alleged that Sam Tarad Sky, and his companies – Credit Restoration Brokers and Debt Negotiations Associates – illegally charged consumers $2,199 before performing any service, and failed to tell customers they could cancel their contract within three business days.

Wells Fargo to Offer 2nd-Lien Help in Foreclosure Fix Program

Wells Fargo has agreed to modify second-lien mortgages as part of the government’s foreclosure prevention efforts, becoming the second lender following Bank of America’s announcement in January to take part in the new program. Designed to lower payments on second mortgages for distressed borrowers, the program is a component of the Obama Administration’s Home Affordable Modification Program, HAMP.

Repubs Blast Obama’s Foreclosure Fix as ‘Spin Over Substance’

The two most vocal Republican critics of President Obama’s foreclosure prevention program told U.S. Treasury Secretary Timothy Geithner in a letter that its mortgage modification reports were overstating results, shifting its initially stated goal and applying “spin over substance.” Rep. Darrell Issa, R-California, ranking member of the Oversight and Government Reform Committee, and Rep. Jim Jordan, R-Ohio, ranking member of the Domestic Policy Subcommittee, wrote the letter to Geithner, dated March 16, 2010.

Bernanke: Fed’s Role Over ‘All Banks’ Helps Monetary Policy

Federal Reserve Chairman Ben Bernanke said today in prepared testimony for a congressional hearing that the Central Bank’s ability to supervise banks of all sizes “significantly” improves its effectiveness in making monetary policy and fostering financial stability. Bernanke’s testimony was prepared for a hearing before the House Financial Services Committee on the Fed’s role as chief regulator over financial institutions.

Fed: Moderate Recovery Calls for ‘Extended’ Low Rates

The Federal Reserve left the key federal funds rate at the historically low 0-.25 percent level and – more significantly – maintained its “extended period” outlook based partially on weak housing and employment sectors. In the Fed’s overview of its policy-setting Federal Open Market Committee meeting today, it suggested that economic activity is strengthening with the labor market stabilizing. The FOMC last met in January.

Housing Starts, Building Permits Slip but Beat Estimates

Considering the impact of winter storms, the market for new residential construction held its own in February with new construction at a seasonally adjusted 575,000 units, a 5.9 percent drop from the January estimate of 611,000 units – but is about even with the figure for a year ago, according to the Commerce Department. Analysts had expected a figure as low as 510,000 units. And the January number was adjusted higher from the previous 591,000.

Short Sale Plan: Borrowers Who Vacate Can Still Avoid Foreclosure

The Obama Administration’s new short sale alternative to mortgage modifications can also apply to borrowers who have vacated their properties for up to 90 days prior to the short sale agreement, according to a new clarification of guidelines by administrators. The added options of a short sale or deed -in-lieu (DIL) to the government’s foreclosure rescue campaign launches April 5 — known as the Home Affordable Foreclosure Alternatives, or HAFA. It is for homeowners who are unable to qualify for or have rejected government mortgage reductions, or have failed to complete a trial modification.

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