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Senators voted yesterday to confirm the leader of the Federal Housing Administration, an agency that may need an infusion of taxpayer money next year for the first time in its history, the Wall Street Journal reported yesterday. Carol Galante, the FHA's acting commissioner since mid-2011, was approved by the Senate on a 69-24 vote. Galante, as FHA commissioner, faces the daunting task of stabilizing the agency's finances after an independent annual audit released last month found the agency's reserves would be insufficient to cover projected losses in coming years, resulting in a $16.3 billion deficit. The agency is part of the Department of Housing and Urban Development.

A year after the Justice Department reached a $335 million deal with Bank of America Corp. to compensate minority borrowers for alleged discrimination, much remains to be done, according to a Wall Street Journal reported today. The department's settlement administrator just began notifying affected borrowers in November, about five months later than originally planned. Then, weeks after letters went out to more than 233,000 presumed victims, about 10 percent of those letters have been returned as undeliverable, according to Justice Department officials. U.S. officials had warned that it might take two years for eligible borrowers to receive money from the settlement, but they also expressed hope that checks could be mailed out sooner.

Banking regulators are close to a $10 billion settlement with 14 banks that would end the government’s efforts to hold lenders responsible for foreclosure abuses like faulty paperwork and excessive fees that may have led to evictions, the New York Times reported today. Under the settlement, a significant amount of the money, $3.75 billion, would go to people who have already lost their homes, making it potentially more generous to former homeowners than a broad-reaching pact in February between state attorneys general and five large banks. That set aside $1.5 billion in cash relief for Americans. Most of the relief in both agreements is meant for people who are struggling to stay in their homes and need the banks to reduce their payments or lower the amount of principal they owe. The $10 billion pact would be the latest in a series of settlements that regulators and law enforcement officials have reached with banks to hold them accountable for their role in the 2008 financial crisis that sent the housing market into the deepest slump since the Great Depression. As of early 2012, four million Americans had been foreclosed upon since the beginning of 2007.

American Realty Trust wants more time behind the shield of bankruptcy to figure out how to pay off a judgment from a failed apartment building sale, Dow Jones DBR Small Cap reported today. Lawyers for American Realty are seeking a six-month extension of its exclusive right to file a chapter 11 plan explaining how it intends to pay off creditors, including a disputed $73 million judgment to a Michigan real estate developer.

Deutsche Bank AG was sued in New York by Landesbank Baden-Wuerttemberg (LBBW), which accuses the German bank of fraud in the sale of $173 million in mortgage-backed securities in 2007, Bloomberg News reported yesterday. Deutsche Bank engaged in "egregious fraud," selling securities that were riskier than promised and leading to losses, LBBW said in a complaint filed yesterday in New York State Supreme Court. LBBW, Germany’s biggest state-owned lender, said Deutsche Bank's misconduct resulted in "astounding" rates of default on loans underlying the securities.

Home prices are on track to notch their first yearly gain since 2006, the strongest performance since the housing bust and a development that could accelerate the real-estate rebound even as the broader economy stutters, the Wall Street Journal. The Standard & Poor's/Case-Shiller 20-city index showed that prices rose by 4.3 percent from a year ago in October. Since January, prices are up 6.9 percent so far this year, the largest year-to-date gain since 2005. A separate index released Wednesday by Lender Processing Services Inc. showed that national home prices were up by 5.2 percent this year through October.

For more on the 20-city housing price index, see ABI's Chart of the Day:
http://news.abi.org/chart-of-the-day/cumulative-housing-price-declines-…

Among the tax breaks at risk in the negotiations between the White House and Congress to avert the “fiscal cliff” is a measure aimed at helping struggling homeowners, the Washington Post reported on Friday. Since 2008, more than 800,000 homeowners have been allowed to sell their homes for less than they were worth, known as a short sale, through a government program. In other cases, banks have lowered the balance owed on mortgages to make the payments more affordable and to encourage homeowners not to walk away. Both types of mortgage relief were key to a $25 billion mortgage settlement between the government and big banks this year. In a short sale, the difference between what is owed on a mortgage and the price at which a homeowner is allowed to sell his or her home could be considered taxable income. The same is true when the principal balance of a mortgage is reduced. That tax liability was waived under the Mortgage Forgiveness Debt Relief Act of 2007, which expires at the end of this month.

The Obama administration is considering expanding its mortgage-refinancing programs to include borrowers whose mortgages are not backed by the government and who owe more than their homes are worth, the Wall Street Journal reported today. About 22 percent of all homes with a mortgage, or around 10.8 million homes, were worth less than the outstanding balance at the end of June, according to CoreLogic. That number has fallen from 12.1 million at the end of last year as home prices have picked up, but around 10 percent of all homeowners with a mortgage are still deeply underwater. Fannie and Freddie own or insure about half of all home loans, and most underwater borrowers with their backing can refinance to get a lower mortgage rate as long as they are current on their loans. That initiative has benefited holders of more than 330,000 underwater mortgages through October this year, up from around 60,000 in all of 2011. Officials at the Treasury Department and the White House now would like to include borrowers who have been locked out because their loans are not backed by the firms. Those loans are held by private lenders or investors, and some of them were issued by subprime lenders and bundled into securities by Wall Street firms.

Bank of America Corp.'s Merrill Lynch unit was sued by two trusts that hold and administer mortgages on behalf of investors who own more than $1 billion of securities collateralized by the loans, Bloomberg News reported yesterday. Merrill bought more than 6,000 mortgages with an original principal balance of more than $1.1 billion from a third-party loan originator, ResMAE Mortgage Corp., in 2006 and turned them into tradeable securities that were sold to investors, according to the complaint filed yesterday in New York State Supreme Court. ResMAE filed for bankruptcy in February 2007 and the trusts pursued claims against ResMAE in bankruptcy through LaSalle Bank, demanding that it buy back loans where borrowers had missed their first or second payments or provide other compensation, according to the complaint. LaSalle in July 2008 settled those claims on behalf of five Merrill-sponsored trusts, including the two plaintiffs in yesterday's suit.

A bankruptcy court judge in Greenbelt, Md., has approved the sale of Maryland's only ski resort to a unit of a Kansas City-based real estate investment trust for $23.5 million, the Associated Press reported yesterday. The judge approved the sale of the Wisp resort to EPT Ski Properties, a unit of EPR Properties, on Tuesday. The judge also approved the sale of a golf course and other land to National Land Partners for $6.1 million. The resort filed for chapter 11 bankruptcy protection in 2011 after defaulting on nearly $30 million in loans it had received from BB&T Corp. of Winston-Salem, N.C., to build a golf course community near the ski hill. Formal closing dates for the sales are expected this month.