The federal regulator of the two government-sponsored enterprises (GSEs) that played a role in the mortgage crisis said that it would likely take $400 billion to bail out the firms – as initially feared.

Federal Housing Finance Agency (FHFA) acting director Edward J. DeMarco, however, believes that the rescue won’t go beyond that amount. So far, the government has spent $148.2 billion on Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corp.). The bad loans they purchased by the state-backed firms during the real estate boom are also continuing to fail so the amount is likely to grow.

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After a series of declines, rates on 30-year mortgages have shown improvement for the second-straight week. According to the Federal Home Loan Mortgage Corp., or Freddie Mac, the average rate for 30-year fixed-rate loans climbed to 4.37% this week from the previous week’s 4.35%.

The development came after interest rates dipped to the lowest level in decades, prompting investors to move their money into safer Treasury bonds. Two weeks ago, the average rate for 30-year fixed rate loans dropped to 4.32%, which was the lowest since Freddie Mac began keeping records in 1971.

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Home refinancing sank to its deepest level since early August despite very low mortgage rates.

The Mortgage Bankers Association reported that mortgage applications for home loan refinancing slipped again last week –the second straight week of decline. The trade group said that its seasonally adjusted index of mortgage applications slid by 8.9%. The index includes both home purchases and refinancing. The monthly average was down 0.8%.

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More households have lost their properties to foreclosures as lenders repossessed a record number of homes last month, latest data showed.

A report released by real estate data company RealtyTrac revealed that the number or repossessed homes rose to 1.2 million from under 1 million last year, with banks foreclosing 95,364 properties in August alone. It also showed that at least 3.2 million residential properties are in some stage of foreclosure. The Irvine, California-based data firm said the sharp increase was due to the lenders’ move to reduce a huge build up of distressed mortgages.

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A recent report has revealed that one of the solutions that are expected to put an end to the housing crisis is not that effective after all.

According to the Philadelphia Inquirer, short sales are not having their intended effect on the real estate market. The newspaper said that one of the reasons why short sales is deemed ineffective by some industry experts is that certain lenders are less likely to agree to a short sale as compared to others. Because of this, many distressed homeowners were left with no other choice but to have their properties foreclosed by the bank.

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Treasury Assistant Secretary Michael Barr would have his way, he would choose an overhaul of the two mortgage-finance institutions that have already cost taxpayers $150 billion in bailout money.

Barr, who is assistant secretary for financial institutions, said that Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corp.) should not exist in their current organization after the revamp.

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Almost half of homeowners who have claimed the first-time homebuyer tax credit on their 2009 tax returns are required to return their money to the government.

According to the Inspector General for Tax Administration, about 950,000 homeowners are required to repay the government after it was found out that homebuyers who qualified for the program were eligible for two different credits depending on when their homes were bought. Base on the rules, those who purchased properties in 2008 were to deduct either up to 10% of the home’s purchase price or $7,500, which was actually a no-interest loan that is repayable within 15 years. Those who purchased homes in 2009, on the other hand, were entitled to a bigger refund – not a loan.

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Florida, one of the states hardest hit by the housing crash, is getting some help from Fannie Mae. According to a real estate consultancy, the Federal National Mortgage Association approved more condominiums for financing so far this year.

Data from Bal Harbour-based Condo Vultures showed that the government-sponsored enterprise has approved funding for 123 new Florida condos so far, some 40% higher compared to the same period last year. Only 87 new condos were approved by Fannie Mae from January to August of 2009.

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Although only few people are interested in wanting to live in North and South Dakota, new data suggest that the region is one of the most ideal places to find a new home in the U.S.

According to data compiled by the Associated Press (AP), the Dakotas are more economically stable as compared to other states. Local housing markets are also more secure than in most part of the country. It was said that the Dakotas have the “least stressed counties.” North Dakota’s Ward and Burleigh counties were first and second on the AP’s list of least stressed counties with a population of more than 25,000, respectively. South Dakota’s Brown Country, on the other hand, was in third place.

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The Mortgage Bankers Association has reported the highest rate of home loan applications since May. But there’s a catch.

The loan applications were still around 40% lower compared to last year and more than 80% of them were for refinancing. Michael Fratantoni, MBA vice-president of research and economics, said that home purchase applications rose 6.3%, the highest increase in a few months. However, refinancing demand slip 3.1% from the highest levels since May 2009, leading to an overall drop of a seasonally adjusted 1.5% in all loans.

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