“I think you’ve got to move away from a situation where when private shareholder gain and government taxpayer losses, and that is what this bill seeks to do, it really transforms how we doing housing finance hopefully we will be able to pass something that puts us on a better course than where we are,” said Sen. Corker in an interview Tuesday on CNBC.

(Read More: Big Banks Bet on Jumbo Mortgages Again)

Some analysts say the lawsuit could actually push Congress to act more quickly on winding down Fannie and Freddie.

“What we just a few days ago saw as only a remote possibility is now a 25 percent chance for action,” wrote Jaret Seiberg of Guggenheim Partners in a note to investors. “This is because we suspect this will anger many on Capitol Hill who believe Fannie and Freddie are only alive and kicking because taxpayers put $187 billion at risk. We see the suit reinforcing the view on Capitol Hill that Fannie and Freddie included too much upside for investors and too much risk for taxpayers.”

(Read More: Reverse Mortgages Backfiring on Seniors)

—By CNBC’s Diana Olick; Follow her on Twitter @Diana_Olick or on Facebook at facebook.com/DianaOlickCNBC

Questions? Comments? RealtyCheck@cnbc.com

Article source: http://www.cnbc.com/id/100806300

(Read More: Mortgage Deduction Is Popular, but Few Claim It)

Nearly one third (1.3 million) of sales in the past twelve months have been distressed, either REO (bank-owned homes) or short sales, according to LPS. That compares to just 226,000 in 2005 when overall home sales were twice the pace they are today.

It doesn’t stop there. The California Homeowners Bill of Rights goes into effect January 1, 2013. Similar legislation in Nevada doubled the foreclosure pipeline over the past year.

Another reason for the drop in new foreclosures may be a surge in loan modifications involving principal reduction. These are also mandated by the mortgage servicing settlement. Principal reduction modifications jumped 62 percent from October to November, according to Amherst Securities’ Laurie Goodman.

(Read More: Mortgage Applications Rose Last Week)

Article source: http://www.cnbc.com/id/100280694

In response, Senator Mark DeSaulnier (D-Concord), Chair of the Senate Transportation and Housing Committee, issued the following statement:

“MTC is disconnected from those they serve,” said DeSaulnier.  “By refusing to await an independent review by the State Auditor, today MTC became a prime example of what is wrong with government.  MTC needs to be held accountable for their use of toll payer money.  I am also concerned that if MTC is spending reserve revenues for this acquisition, there may not be sufficient funds available for an emergency.”

“MTC has not demonstrated an immediate need to spend $179 million of toll payer funds on a building in San Francisco,” said DeSaulnier.  “After MTC’s behavior I plan on introducing comprehensive legislation next year to drastically overhaul regional governance in the nine county Bay Area region.  Government needs to be more transparent and responsive to the people they serve.”

The Senate Transportation and Housing Committee will also hold hearings this fall to examine MTC’s governance structure and statutory scope of authority.  The Committee’s review may include but not be limited to the following:  (The State Auditor is also scheduled to examine much of this.)

• How did the MTC AdHoc Committee (charged with making a recommendation to the Commission on this deal) do its research to make its recommendations?  Did it meet in public?  If not, why not?  As the Committee took an official vote, was the AdHoc Committee governed by the Brown Act?  If so, how did the AdHoc Committee comply with the Act?
• The promise MTC made with voters to spend excess toll proceeds for transportation improvements:  Is it legal and appropriate for MTC/Bay Area Transportation Authority (BATA) to spend toll revenues on the purchase of an office building?
• Should the Commission have sought legislation to amend the law to provide the authority for this deal?  The Legislature regularly analyzes changes in law to provide specific statutory authority for real property acquisitions and disposal.  Why didn’t MTC/BATA seek such authority for this project and the creation of the Bay Area Headquarters Authority, where it could be fully vetted and debated in public?
• Where did MTC/BATA get the $179 million available for this project? 
• Are there projects that will not be built because MTC/BATA is tying up toll revenues for decades to pay off bonds issued to finance the building? 
• If there are no projects to spend this money on, doesn’t that imply that the tolls are too high and can be lowered? 
• If these are bond proceeds, does that mean MTC/BATA issued too many bonds and are keeping tolls unnecessarily high to support them?

Give us your opinion on this issue….

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Article source: http://www.sfgate.com/cgi-bin/blogs/incontracosta/detail?entry_id=98585