With hundreds of thousands of homeowners facing imminent foreclosure and estimates of 2 million or more in the wings, are there any financial tools available to distressed borrowers that haven’t been tried yet? Equally important politically: Is there a way to help owners that won’t rack up huge federal expenditures and add to the deficit?

The Obama administration has been exploring options — including a new refinancing program expected later this month — but a concept has surfaced on Capitol Hill that might offer modest help with no revenue cost to the government: Amend the tax code to allow homeowners who have 401(k) retirement plans to pull out money to save their houses from foreclosure without the usual tax penalties. [more]

By agreeing to take on a lawsuit against Detroit-based Quicken Loans, the U.S. Supreme Court will rule on what constitutes illegal fees for mortgage lenders during the closing of a home sale, the Wall Street Journal said. It will clarify the interpretation of the 1974 Real Estate Settlement Procedures Act that prohibits mortgage lenders from receiving kickbacks or referral fees.

The Obama administration and the U.S. Department of Housing and Urban Development have interpreted the law as a clear order against lenders collecting unearned fees. But lower courts have ruled that the law doesn’t explicitly ban all unearned fees, rather it merely prohibits the payment or receipt of kickbacks. [more]

One of the Obama administration’s proposals for improving the housing market is allowing homeowners with federally-backed mortgages to refinance at the current, historically low rate. Christopher Mayer, a real estate finance and economics professor at Columbia University, told NPR the plan would work because it would offer middle-class homeowners the same advantage — the ability to get out from under debt and borrow less — that has helped many businesses become profitable. Though he acknowledges the damage it would do to bondholders, he explained that ultimately the entire country would be better off with what’s effectively a $70 billion tax cut for middle-income households. [more]

New York State Attorney General Eric Schneiderman is hindering federal efforts to negotiate a foreclosure settlement with Wall Street banks on behalf of homeowners, the Wall Street Journal said, by insisting banks should pay for investor losses, too.

In combating the robo-signing practice, the Obama administration “is very far down the road for a settlement that will create servicing standards and will also result in a significant financial contribution towards helping homeowners,” an administration official said, that is believed to be worth nearly $25 billion. [more]

Drastic changes are needed to stimulate a housing recovery according to a New York Times editorial, which urged President Barack Obama to push forward plans for principal reductions on home mortgages and easier refinancings.

The editorial argued that the overall economy won’t improve until the “tens of millions of Americans … crushed by the overhang of mortgage debt” get some relief. Because nationwide housing prices have declined 33 percent since the market’s peak, 14.6 million homeowners are underwater on their mortgages. Lowering interest rates, the argument goes, simply is not enough. [more]

You may have seen reports that the federal government is proposing new mortgage finance rules under which only home purchasers who can afford a minimum 20 percent down payment on a conventional loan would get a shot at the best available interest rates and terms.

That is correct, and it’s deeply sobering news for large numbers of first-time and moderate-income buyers who can’t come up with that much cash or afford to pay higher rates.

But some of the other requirements that federal agencies and the Obama administration are proposing in the same plan have gotten much less attention, yet could prove just as troublesome for consumers: [more]

Could Congress’ ambitious second round of home purchase tax credits — especially the $6,500 repeat buyer credit — turn out to be a wimp in terms of economic stimulus clout?
With the April 30 deadline to sign home purchase contracts for both the $8,000 first-time buyer credit and the $6,500 version looming, some real estate and building experts are concerned that fewer consumers may be motivated by the credits this spring than last fall.
The $6,500 credit, in particular, appears to be generating relatively little buzz among shoppers. As Gloria Ruesch, a broker with N.P. Dodge Real Estate in Omaha, Neb., put it, “I don’t think most people have any idea about it, or just don’t understand it. No one’s talking about it.” [more]

Palm Beach County saw a 63 percent surge in foreclosure filings last
month compared to a month earlier, according to national real estate
foreclosure tracking company RealtyTrac’s monthly foreclosure market
report released today (see report after the jump). Its 4,490 filings gave it a ninth-place ranking
statewide. Foreclosure filings in Miami-Dade County jumped 44
percent to 6,671. By rate of foreclosure filings, Broward County ranked
third in Florida behind Lee and St. Lucie counties with 7,872 filings
in February, a 3 percent month-over-month rise. Statewide,
foreclosure filings — default notices, scheduled auctions and bank
repossessions — rose nearly 15 percent in February, wiping out
January’s welcome declines and signaling that a rocky road still lies
ahead for struggling homeowners in the region, the data show. One
in every 163 Florida homeowners, or 54,032, received a foreclosure
filing last month, up 14.79 percent from January, the report says,
putting the state at third in the nation in terms of foreclosure rates,
behind Nevada and — just barely — Arizona. Bleak as the
numbers may be, the statewide surge in February likely reflects a
prolonged pattern of “peaks and valleys” rather than of a general
worsening of the housing crisis, said Daren Blomquist, a spokesperson for
RealtyTrac. [more]

The latest foreclosure prevention initiative unveiled by the Obama administration may have some homeowners scratching their heads. The Home Affordable Foreclosure Alternatives initiative is not a home loss prevention program but, rather, a way of facilitating short sales to eschew the foreclosure path. The program is, as Today Show financial editor Jean Chatzky explains in this video, “for people who’ve tried to get a loan modification, but haven’t been able to or didn’t succeed… Essentially it’s offering a formulaic short sale.”

As the Fed’s involvement in the mortgage-backed security market heads toward its expiration date, many in the industry are wondering whether the government’s involvement in the housing market has had a long-term impact. While certain programs’ impact remains to be seen, Shari Olefson, a partner with the law firm Fowler White Boggs, had no qualms about weighing in on one initiative. She told CNBC that the Obama administration’s mortgage modification program “was a big, fat failure.”