NYT: Raters Ignored Proof of Unsafe Loans, Panel Is Told
For more: http://s.nyt.com/u/mrbZ
Details of what Wall Street firms knew about the loans they were selling to investors, and when they knew it, are still trickling out in regulatory actions and private lawsuits.

Amid mountain of paperwork, shortcuts and forgeries mar foreclosure process
Washington Post story: http://bit.ly/9OvaSe
The nation's overburdened foreclosure system is riddled with faked documents, forged signatures and lenders who take shortcuts reviewing borrower's files, according to court documents and interviews with attorneys, housing advocates and company officials.

Louisville home sales down, but slump slows
Courier-Journal story: http://bit.ly/9U9j59
Members of the Greater Louisville Association of Realtors sold 13 percent fewer houses and condos in August than a year earlier. That comes after a 22 percent drop in July from the previous July.

Housing Starts in August Exceeded Analysts' Forecasts
For more: http://nyti.ms/9mh1gv
Housing starts in the United States increased more than expected in August, to their highest level in four months, and permits for residential construction also rose, government data showed on Tuesday, suggesting that the embattled market was starting to stabilize after the end of a tax credit.

NYT: GMAC Halts Foreclosures in 23 States for Review
For more: http://s.nyt.com/u/mi6f
States where the moratorium is being carried out include New York, Connecticut, New Jersey, Illinois, Florida and 18 others [including Kentucky - editor], mostly on the East Coast and in the Midwest. All of the affected states are so-called judicial foreclosure states, where courts control the interactions of defaulting homeowners and their lenders.

NYT: Layoffs Said to Be Near for Bank of America Unit
For more: http://s.nyt.com/u/mi1T
Echoing the slowdown in activity that has hit Wall Street’s biggest institutions, Bank of America plans to cut several hundred jobs in its investment banking unit this week, according to employees.

NYT: Reasons Not to Refinance a Mortgage
For more: http://s.nyt.com/u/miwr
As with most financial matters, this decision involves a bit of math. At the very least, homeowners will need to determine their closing costs and monthly savings. Divide closing costs by savings; that tells you how many months it will take to break even. If you plan to stay put that long, a refinance might work.

NYT: Citigroup to Sell Unit That Lends to Students
For more: http://s.nyt.com/u/mCVj
Citigroup will take a $500 million loss on the deals, resulting in a write-down for the third quarter, but in the process it will unload nearly $40 billion in student loans from its books.

Home mortgage modification snags spark lawsuits
USA TODAY for more: http://bit.ly/9dg15c
Most of the lawsuits allege that the three- or four-month trial payment plans are contracts, and that Bank of America and other servicers broke them by not giving permanent modifications to homeowners who made their trial payments on time and provided the necessary documentation.

NYT: Housing Woes Bring New Cry: Let Market Fall
For more: http://s.nyt.com/u/mwx6
“Housing needs to go back to reasonable levels,” said Anthony B. Sanders, a professor of real estate finance at George Mason University. “If we keep trying to stimulate the market, that’s the definition of insanity.”

NYT: Bernanke Blames Self For Not Seeing Sub-Prime Mortgage Flaws
For more: http://s.nyt.com/u/mdCj
“This is my own fault, in a sense,” Mr. Bernanke said, adding that he was worried at the time about contributing to panic in the markets. “I regret not being more straightforward there.”

NYT: More Banks in Trouble, but Profits Are Rising
For more: http://s.nyt.com/u/mXXo
Even as the economy remains weak and the number of troubled banks creeps higher, the Federal Deposit Insurance Corporation’s quarterly report card on Tuesday showed that the banking sector is slowly starting to recover.

NYT: 2 New Federal Programs to Help Borrowers Pay Their Mortgages
For more: http://s.nyt.com/u/9-Ju
The Obama administration plans to take two new steps in the next few weeks to help struggling homeowners pay their mortgages, said Shaun Donovan, the secretary of Housing and Urban Development.

20m Borrowers Could Be Underwater before 2012: Deutsche Bank
For more: http://bit.ly/aY1DsY
The presence of negative equity goes hand-in-hand with an increased likelihood of strategic default, as borrowers sometimes may not be willing to pay when the house has lost substantial amounts of value.

NYT: Rethinking Adjustable-Rate Mortgages
For more: http://s.nyt.com/u/9-zj
With mortgage rates and many financial indexes low, and the economy showing no signs of a quick recovery, current ARM borrowers face an interesting choice. If they keep their loans, they may well have lower payments in the next year than those who have fixed-rate loans.