While nationwide demand for commercial real estate loans is up, banks are not loosening lending constraints, it would appear, reviewing figures from the Federal Reserve’s quarterly Senior Loan Officer Opinion Survey on Bank Lending Practices report, released yesterday.

A “moderate fraction” of the 56 domestic banks surveyed said that demand for commercial real estate loans had strengthened, on net, over the past three months. However, those banks reported little change in their lending standards, which spells bad news for many owners who will be in need of refinancing this year. U.S. branches of foreign banks reported that they had even tightened their lending standards in some cases, according to the report.
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In its research paper on the housing market, the Federal Reserve Bank of New York urged Congress to allow American homeowners an easier path to refinancing despite potential losses to investors because the benefits to homeowners outweigh losses to investors, according to the Wall Street Journal. [more]

Bank of America and Freddie Mac and Fannie Mae mortgage bonds were the big winners from a Federal Reserve housing study that circulated through Congress this week, Bloomberg News reported, while mortgage bonds backed by high-cost debt lost in a massive market-shakeup. [more]

Though the federal government has repeatedly attempted to work its way out of the housing market, Federal Reserve Chairman Ben Bernanke yesterday called for more public support for the market, which he said was a critical component of a broader sustained economic recovery. Outlined in a 26-page paper the Fed sent to Congress, Bloomberg News reported that support could include cutting mortgage obligations for U.S. homeowners, making taxpayer-supported Freddie Mac and Fannie Mae more susceptible to losses. [more]

Negative equity and underwater homeowners are frequently in the headlines, but what about positive equity in Americans’ homes?

Is there much of it left after the wealth-killing recession and real estate bust? Where is it? Who’s got equity? You might be surprised.

A new study, conducted by mortgage and real estate data firm CoreLogic for this column, found that there are substantial reserves of positive equity across the country. CoreLogic maintains the largest database on home loans — 42 million active accounts, more than 80 percent of all existing mortgages — with information supplied regularly by lenders and servicers.

First let me give some basics on equity. The Federal Reserve estimates that at the end of June, Americans held $6.2 trillion in equity in their homes. This was down sharply from its high mark of $13.2 trillion in 2005. Roughly one of every three homes is mortgage-free, according to federal and industry estimates. [more]

Attorney General Eric SchneidermanFrom the September issue: When New York State Attorney General Eric Schneiderman took office earlier this year, some critics feared he would do more ideological grandstanding than consumer protection and reform.
After eight months on the job, the former Democratic state senator (and ex-deputy sheriff) appears to be winning over some skeptics while enraging others.
The relatively low-profile Schneiderman exploded into the national spotlight last month when he filed a last-minute motion to block a proposed $8.5 billion settlement between Bank of America and investors in 530 New York trusts represented by Bank of New York Mellon.
The blockbuster move alleged that Bank of New York effectively tried to carve out a sweetheart deal for itself at the expense of the investors it was supposed to be representing. [more]

Morgan Stanley, which just kicked off the sale of its mortgage servicing arm and partnered with the Witkoff Group at a Broadway condominium conversion project, borrowed $107.3 billion from the Federal Reserve in 2008, the most of any bank, according to data compiled by Bloomberg News using information released in response to Freedom of Information Act requests, related court orders and an act of Congress.

An examination of the Fed’s emergency lending reveals how close Morgan Stanley came to bankruptcy because of a run on its prime brokerage, the unit that finances hedge funds’ trades, Bloomberg reported.

“Prime brokerage was presumed to be a pretty secure business, where the funding was not actually part of the liquidity of the bank,” said Frank Suozzo, president of advisory firm FXS Capital in Goldens Bridge, N.Y. [more]

U.S. regulators are barring certain law firms from assisting in eliminating foreclosure abuses, citing potential conflicts of interest, the Wall Street Journal reported.  In one case, the Federal Reserve rejected a GMAC mortgage proposal that Alabama-based attorney Bradley Cummings would assist with an independent, U.S.-mandated review of past home seizures, given that his firm had previously defended GMAC is a foreclosure-related lawsuit.
This is just the latest hurdle in a long-fought battle by U.S. bank regulators to have banks rectify shoddy foreclosure practices. [more]

In his second ever press conference as chairman of the Federal Reserve, Ben Bernanke was asked a question about the housing market, and the Wall Street Journal published his response. Bernanke said that while lower mortgage rates and falling housing prices have helped some homebuyers, those falling prices present a double-edged sword: people are afraid of “buying into a falling market.” That’s why he called on lenders to either modify loans where appropriate, or speed the process of foreclosure, so that owners’ confidence is restored and those homes weighing down on prices are taken “out of the pipeline.” Once those homes are off the market, Bernanke implied, housing prices will no longer appear so low and stability will be restored to the housing market. [WSJ] [more]

Disagreements are underway in Washington over how much to punish the banks involved in mortgage fraud abuse and over who should benefit from a settlement, the New York Times reported. The newly created Consumer Financial Protection Bureau is pushing for $20 billion or more in penalties, a measure which is supported by the attorneys general and the Federal Deposit Insurance Corporation. But other regulators, including the Office of the Comptroller of the Currency, which oversees national banks, and the Federal Reserve, do not favor such a large fine, contending that a small number of people were the victims of flawed foreclosure procedures. Comments