The rigging of an international lending rate may have cost Fannie and Freddie Mac $3 billion in borrowing costs. While federal investigators try to unravel the details, several Georgia counties are suing HSBC for sleazy mortgage deals that damaged investors.
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Fannie, Freddie may have lost $3 billion in Libor: watchdog
Reuters December 19, 2012
Mortgage finance giants Fannie Mae and Freddie Mac may have suffered more than $3 billion in losses due to manipulation of the benchmark interest rate known as Libor, according to an internal memo by a federal watchdog.
The estimate was provided in a memo obtained by Reuters that was sent to Freddie and Fannie’s regulator, the Federal Housing Finance Agency, by its inspector general. The watchdog urged the regulator to consider whether or not the losses warranted a lawsuit against the banks that set Libor.
“We conducted a preliminary analysis of potential Libor-related losses at Fannie and Freddie and shared that with FHFA, recommending that they conduct a thorough review of the issue,” a spokeswoman for the inspector general’s office said when asked about the memo.
Dozens of U.S. and European banks are under scrutiny for allegedly rigging Libor, which has an impact on borrowing costs throughout the global economy. Libor is intended to measure the rate at which banks lend to one another and is used as a benchmark to set borrowing costs on financial instruments, including derivatives and mortgages.
The Wall Street Journal first reported the finding of the inspector general earlier on Wednesday.
US counties sue HSBC claiming loss of tax base
By Kate Brumback Associated Press December 24, 2012
ATLANTA — Three Atlanta-area counties have filed a lawsuit claiming that British bank HSBC cost them hundreds of millions of dollars in extra expenses and damage to their tax bases by aggressively signing minorities to housing loans that were likely to fail.
The Georgia counties’ failure or success with the relatively novel strategy could help determine whether other local governments try to hold big banks accountable for losses in tax revenue based on what they claim are discriminatory or predatory lending practices. Similar lawsuits resulted in settlements this year worth millions of dollars for communities in Maryland and Tennessee.
Fulton, DeKalb and Cobb counties say in their lawsuit, which was filed in October, that the housing foreclosure crisis was the “foreseeable and inevitable result” of big banks, such as HSBC and its American subsidiaries, aggressively pushing irresponsible loans or loans that were destined to fail. The counties say that crisis has caused them tremendous damage.
“It’s not only the personal damage that was done to people in our communities,” said DeKalb County Commissioner Jeff Rader. “That has a ripple effect on our tax digest and the demand for public services in these areas.”
Sales Of Existing Homes Hit Three-Year High
By Mike Memmott NPR December 20, 2012
There was a 5.9 percent rise in sales of previously owned homes in November from October, the National Association of Realtors says.
At their 5.04 million annual rate, sales were the highest since November 2009.
“Momentum continues to build,” NAR chief economist Lawrence Yun says in the organization’s report.
As Reuters notes, “the U.S. housing market tanked on the eve of the 2007-09 recession and has yet to fully recover, but steady job creation has helped the housing sector this year, when it is expected to add to economic growth for the first time since 2005.”
Earlier today, there was word that third-quarter economic growth has been revised upward again.
Austin area home sales jump 23 percent in November
By Shonda Novak Austin American-Statesman December 20, 2012
November marked another strong month for the local housing market, as sales of existing Central Texas homes shot up 23 percent and the median sales price rose 7 percent to $200,000, the latest figures show.
Defying the usual seasonal slowdown, 1,671 homes were sold last month compared with 1,354 the prior November, the Austin Board of Realtors said today. It was the 18th straight month of year-over-year sales volume increases, and the area’s most home sales in November since 2007, the board said.
“The typical lull of the Thanksgiving holiday did not slow down the Austin real estate market,” said Leonard Guerrero, chairman of the Austin Board of Realtors. “This is the strongest November housing market we’ve seen since the recession.”
The supply of homes continued to shrink, with the number of active listings at 5,737 — about 20 percent fewer than in November 2011.
The report showed 1,730 sales in the pipeline to close, 19 percent more than in November 2011.
Homes also spent less time on the market, 67 days compared with 83 in November 2011.
This week, Trulia put out its list of the top 10 healthiest housing markets heading into 2013, based on factors including strong job growth and low foreclosure inventory. Austin made the list at No. 5. Houston ranked first, followed by San Francisco, Bethesda-Rockville-Frederick and San Antonio.
Project would target residents with incomes below median
By Shonda Novak American-Statesman December 20, 2012
Another apartment project is in the works for the Mueller community in Northeast Austin — and developers say they complex would have rents within reach of working-class residents.
Catellus Development has chosen DMA Development Co. for the project, which is slated for 3 acres near Berkman Drive and Barbara Jordan Boulevard within the Mueller development.
The new apartment community would have at least 85 percent of its estimated 175 units reserved for families making 30 percent to 60 percent of the area’s median household income. Most one-bedroom units would have rents in the $575 to $740 a month range, while two-bedroom units would rent for $650 to $950 a month. About 17 units will be priced at about $360 a month.
Next month, DMA will pursue federal affordable housing tax credits, and company officials said they expect to know by summer 2013 if they will secure the tax credits to make the project possible.
“Despite a relatively brief and minor decline in home prices, Austin’s housing market is once again resurging, making it even more challenging for hard-working households to find affordable housing anywhere in Central Austin,” said Diana McIver, president of DMA Companies.
The units would be within the price range of people beginning careers as teachers, nurses and first responders, among others, McIver said.