U.S. home prices and mortgage news have crept back into the headlines, as government officials took another swipe at helping homeowners Tuesday.
Officials from the Treasury Department and the Department of Housing and Urban Development sat down with bank executives in Washington to review the Make Homes Affordable program, which aims to help troubled homeowners with loan modifications.
It is a program with a goal of helping 4 million homeowners avoid foreclosure that has, to date, been frequently touted as underwhelming at best. Only 200,000 loans have been modified since March, The Washington Post reported Wednesday.
Banks have put some effort into the program, hiring and training new loan councilors and opening call centers, but the sluggish results point to a deeper problem than clarifying the rules and seeking standardized forms, which were part of the discussion Tuesday.
The problem, in a nutshell, is profits. After weeding out homeowners behind on their payments who may be able to catch up on their own, without assistance, and those who would fail to keep up payments even with a modified loan, there are few well-intended homeowners left, the Boston Federal Reserve Bank said in a study of the nation's housing predicament.
Scott Talbott of the Financial Services Roundtable said banks were "committed" to modifying an additional 500,000 mortgages by November and assistant Treasury Secretary Herbert Allison said, "there is a lot of common ground," on the issue. But, the Boston Fed study pointed out, "the number 'preventable' foreclosures may be far smaller than many commentators believe."
Out in the real world -- that is to say in the marketplace -- the decline in home prices slowed for the fourth consecutive month in May, the S&P/Case-Shiller report said Tuesday.
For the first time since the summer of 2006, a majority of cities in the 20-city index -- 13 out of 20 -- reported home prices had increased. In Dallas and Denver, prices have gone up three consecutive months, the report said.
While too soon to consider when appreciation might return to the market in a sustained manner, "this could be an indication that home price declines are finally stabilizing," said David Blitzer, chairman of the Index Committee at Standard & Poor's.
Regulators also took a first swipe at curbing speculation in the oil market Tuesday with the Commodities Futures Trading Commission holding the first of three hearings to explore moves to limit large bets that could manipulate prices.
Oil prices rose sharply in the summer of 2008, provoking concern that speculators were making fast gains at the public's expense. Following a humbling fall in prices last fall, prices moved forward again this year, gaining about 50 percent since January.
In August, the CFTC will issue a report documenting the size of oil positions and the number of firms participating, which could shed light on the speculative nature of oil investments, the Post reported.
Asian markets were mixed Wednesday. The Nikkei 225 in Japan rose 0.26 percent, while the Hang Seng in Hong Kong fell 2.37 percent. The Singapore Straits Times index dropped 0.76 percent. The S&P/ASX in Australia dropped 0.64 percent.
In midday trading in Europe, the FTSE 100 index rose 0.81 percent. The DAX 30 in Frankfurt rose 1.79 percent. In France, the CAC 40 gained 1.43 percent, while the broader DJStoxx600 rose 0.76 percent.