SEC KNEW ABOUT SUBPRIME ACCOUNTING FRAUD A DECADE AGO

by Elizabeth MacDonald FoxBusiness

The Securities and Exchange  Commission is missing a bigger fraud while it chases the banks. Even though it knew about this massive, plain old fashioned accounting fraud back in 1998.
Instead, the market cops are probing simpler disclosure cases that could charge bank and Wall Street with not telling investors about their conflicts of interest in selling securities they knew were damaged while making bets against those same securities behind the scenes, via credit default swaps.
Those probes have gotten headlines, but there aren’t too many signs that this will lead to anything close to massive settlements or fines.

For instance, the SEC doesn’t appear to be investigating how banks frontloaded their profits via channel stuffing — securitizing loans and shoving paper securitizations onto investors, while booking those revenues immediately, even though the mortgage payments underlying those paper daisy chains were coming in the door years, even decades, later. Those moves helped lead to $2.4 trillion in writedowns worldwide.
The agency said it  believed banks were committing subprime securitization accounting frauds back in 1998 and claimed to be ‘probing’ them.
I had written about these SEC probes into potential frauds while covering corporate accounting abuses at The Wall Street Journal. The rules essentially let banks frontload into their revenue the sale of subprime mortgages or other loans that they then packaged and sold off as securities, even though the payments on those underlying loans were coming in the door over the next seven, 10, 20, or 30 years.
Estimating those revenues based on the value of future mortgage payments involved plenty of guesswork.

Securitization: Free Market Became a Free For All
The total amount of overall mortgage-backed securities generated by Wall Street virtually tripled between 1996 and 2007, to $7.3 trillion. Subprime mortgage securitizations increased from 54% in 2001, to 75% in 2006. Back in 1998, the SEC had warned a dozen top accounting firms that they must do a  better job policing how subprime lenders book profits from loans that are repackaged as securities and sold on the secondary market. The SEC “is becoming increasingly concerned” over the way lenders use what are called “gain on sale” accounting rules when they securitize these loans, Jane B. Adams, the SEC’s deputy chief accountant, said in a letter sent to the Financial Accounting Standards Board, the nation’s chief accounting rule makers.
At that time, subprime lenders had come under fire from consumer groups and Congress, who said banks were using aggressive accounting to frontload profits from securitizing subprime loans. Subprime auto lender Mercury Finance collapsed after a spectacular accounting fraud and shareholder suits, New Century Financial was tanking as well for the same reason.

SEC Knew About Subprime Fraud More than a Decade Ago
The SEC more than a decade ago believed that subprime lenders were abusing the accounting rules.
When lenders repackage consumer loans as asset-backed securities, they must book the fair value of profits or losses from the deals. But regulators said lenders were overvaluing the loan assets they kept on their books in order to inflate current profits. Others delayed booking assets in order to increase future earnings. Lenders were also using poor default and prepayment rate assumptions to overestimate the fair value of their securitizations.
Counting future revenue was perfectly legal under too lax rules.
But without it many lenders that are in an objective sense doing quite well would look as if they were headed for bankruptcy.
At that time, the SEC’s eyebrows were raised when Dan Phillips, chief executive officer of FirstPlus Financial Group, a Dallas subprime home equity lenders, had said the poor accounting actually levitated profits at lenders.
“The reality is that companies like us wouldn’t be here without gain on sale,” he said, adding, “a lot of people abuse it.”
But this much larger accounting trick, one that has exacerbated the ties that blind between company and auditor, is more difficult to nail down because it involves wading through a lot of math, a calculus that Wall Street stretched it until it snapped.

Impenetrably Absurd Accounting
These were the most idiotic accounting rules known to man, rules manufactured by a quiescent Financial Accounting Standards Board [FASB] that let bank executives make up profits out of thin air.
It resulted in a folie à deux between Wall Street and complicit accounting firms that swallowed whole guesstimates pulled out of the atmosphere.
Their accounting gamesmanship set alight the most massive off-balance sheet bubble of all, a rule that helped tear the stock market off its moorings.
The rules helped five Wall Street firms – Bear Stearns, Lehman Bros., Morgan Stanley, Goldman Sachs and Merrill Lynch – earn an estimated $312 billion based on fictitious profits during the bubble years.

Who Used the Rule?
Banks and investment firms including Citigroup, Bank of America and Merrill all used this “legit” rule.
Countrywide Financial made widespread use of this accounting chicanery (see below). So did Washington Mutual. So did IndyMac Bancorp. So did FirstPlus Financial Group, and as noted Mercury Finance Co. and New Century Financial Corp.
Brought to the cliff’s edge, these banks were either bailed out, taken over or went through bankruptcies.
Many banks sold those securitized loans to Enron-style off-balance sheet trusts, otherwise called “structured investment vehicles” (SIVs), again booking profits immediately (Citigroup invented the SIV in 1988).
So, presto-change-o, banks got to dump loans off their books, making their leverage ratios look a whole lot nicer, so in turn they could borrow more.
At the same time, the banks got to record immediate profits, even though those no-income, no-doc loans supporting those paper securities and paper gains were bellyflopping right and left.
The writedowns were then buried in obscure line items called “impairment charges,” and were then masked by new profits from issuing new loans or by refinancings.

Rulemakers Fight Back
The FASB has been fighting to restrict this and other types of accounting games, but the banks have been battling back with an army of lobbyists.
The FASB, which sets the rules for publicly traded companies, is still trying to hang tough and is trying to force all sorts of off-balance sheet borrowings back onto bank balance sheets.
But these “gain on sale” rules, along with the “fair value” or what are called “marked to market” rules, have either been watered down or have enough loopholes in them, escape hatches that were written into the rules by the accountants themselves, so that auditors can make a clean get away.
As the market turned down, banks got the FASB to back down on mark-to-market accounting, which had forced them to more immediately value these assets and take quarterly profit hits if those assets soured – even though they were booking immediate profits from this “gain on sale” rule on the way up.
Also, the FASB has clung fast to the Puritanism of their rulemaking by arguing a sale is a sale is a sale, so companies can immediately book the entire value of a sale of a loan turned into a bond, even though the cash from the underlying mortgage has yet to come in the door.

Old-Fashioned ‘Channel Stuffing’
This sanctioned “gain on sale” accounting is really old-fashioned “channel stuffing.”
The move lets companies pad their revenue and profit numbers by stuffing lots of goods and inventory (mortgages and subprime securities) into the system without actually getting the money in the door, and booking those channel-stuffed goods as actual sales in order to cook ever higher their earnings.
Sort of like what Sunbeam did with its barbecue grills in the ’90s.

Intergalactic Bank Justice League
Cleaning up the accounting rules is an easier fix instead of a new, belabored, top-heavy “Systemic Risk Council” of the heads of federal financial regulatory agencies, as Sen. Chris Dodd (D-Conn) envisions in financial regulatory reform.
An intergalactic Marvel Justice League of bank regulators can do nothing in the face of chicanery allowed in the rules.

Planes on a Tarmac
What happened was, banks and investment firms like Citigroup and Merrill Lynch who couldn’t sell these subprime bonds, or “collateralized debt obligations,” as well as other loan assets into these SIVs got caught out when the markets turned, stuck with this junk on their balance sheets like planes on a tarmac in a blizzard.
Bank of America saw its fourth-quarter 2007 profits plunge 95% largely due to SIV investments. SunTrust Banks’ earnings were nearly wiped out, a 98% drop in the same quarter, because of its SIVs.
Great Britain’s Northern Rock ran into huge problems in 2007 stemming from SIVs, and was later nationalized by the British government in February 2008.
Even the mortgage lending arm of tax preparer H&R Block used the move. Block sold its loans to off-balance-sheet vehicles so it could book gains about a month earlier than it otherwise would. Weee!
The company had $75 million of these items on its books at the end of its fiscal 2003 year. All totally within the rules.

Leverage Culture
The rampant fakery helped fuel a leverage culture that got a lot of homes put in hock.
Banks, for instance, started advertising home equity loans as “equity access,” or ways to “Live Richly” or as Fleet Bank once touted, “The smartest place to borrow? Your place.”
In fact, Washington Mutual and IndyMac got so excited by the gain on sale rules, they went so far as to count in profits futuristic gains even if they had only an “interest rate” commitment from a borrower, and not a final mortgage loan.
Talk about counting chickens before they hatch.

Closer Look at Wamu
Look at Wamu’s profits in just one year during the runup to the bubble. Such gains more than tripled in 2001 at Wamu, to just shy of $1 billion, or 22% of its pretax earnings before extraordinary items, up from $262 million, or 9%, in 2000.
But in 2001, Washington Mutual took $1.7 billion in charges, $1.1 billion of it in the final, fourth quarter, to reflect bleaker prospects for the revenue stream of all those servicing rights.
It papered over the hit with a nearly identical $1.8 billion gain on securitizations and portfolio sales.

Closer Look at Countrywide
The accounting fakery let Countrywide Financial Corp., the mortgage issuer now owned by Bank of America, triple its profit in 2003 to $2.4 billion on $8.5 billion in revenue.
At the height of the bubble, Countrywide booked $6.1 billion in gains from the sale of loans and securities. But this wasn’t cold, hard cash. No, this was potential future profits from servicing mortgage portfolios, meaning collecting monthly payments and late penalties.

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Applications For Foreclosures By Mighty Banks Are Often Speckled With Mistakes

Applications For Foreclosures By Mighty Banks Are Often Speckled With Mistakes

by  Karen,   published:  Wednesday May 19, 2010

There is an adage fixed to the walls in front of the chambers of Judge Arthur M. Schack in Supreme Court Building at Brooklyn – “Be sure brain in gear before engaging mouth.” Inside foreclosures are piled up high enough to vie with the Alps. Each week the high and mighty banks of USA seek out his court to snatch the houses of New York residents who have failed in paying mortgage dues. Very often, said Schack, the applications of the banks are speckled with mistakes.

Judge Schack points out one motion coming from Deutsche Bank. The representative of the bank had claimed to be the vice president of two banks. His office was located in Kansas City but the notarization of the signature was in Texas. Moreover the bank was not the owner of the mortgage when it started with foreclosure proceedings against the borrower. Promptly the matter was dismissed.

Judge Schack said, “I’m a little guy in Brooklyn who doesn’t belong to their country clubs, what I can tell you? I won’t accept their comedy of errors.”

While there are hot debates and angst against bailing out banks and demands for more action to help homeowners, Judge Schack is sparring with the deadliest sword of all – the law. The law is being used to put them lenders in their places. The sympathies of the judge are clear for all to see.

In the previous two years 102 foreclosure places had come before him. He has tossed out from these 46 cases. His slicing decisions laced with allusions to the wealth of the bank presidents that are reminders of the legendary King Croesus, have won the respect of the legal fraternity across USA and especially in Florida, Ohio and California.

One or two bank officials have tried to stand up against him complaining that the judge has been depriving them of what is rightfully theirs. Recently HSBC made an appeal against a ruling complaining that the judge has set before others a “dangerous precedent” by behaving like “both judge and jury.” He has got rid of foreclosure cases even before getting any response from the house owners.

Together with few other state and federal judges, Justice Schack has held up a magnifying glass before the doings of the mortgage industry. During the past decade the bankers in heady haste handed out millions of mortgage loans with terms that were an admixture of good, bad and dangerously ugly.

THIS IS WHAT THE ORIGINATORS USE BEHIND THE SCENES. IT IS CRITICAL FOR DISCOVERY

From: b.daviesmd6605

THIS DETAILS THE ORIGINATOR HANDBOOK FOR LOANS SOLD TO US BANK FROM BROKERS, THIS IS GOOD IT COVERS NOTES, LOANS, UNDERWRITING REQUIREMENTS AND MUCH MORE.

Calling on MERS “In fact, all the paper in the process is gone”.: Scott Cooley

Calling on MERS

VIENNA, VIRGINIA–BASED MERS IS A great example of how technological solutions can work for the betterment of our industry. MERS’story is more typical, though, in terms of how long it took the company’s solution to become mainstream.

I’ve found that typically new technologies or new technology firms take five to seven years to become successful in this industry. Of course, it is difficult for startup companies to last that long, which is one of the main reasons there is such a high failure rate among these firms. From the start, MERS had widespread support from the Mortgage Bankers Association(MBA) and all the major mortgage companies. Originally, MERS wasn’t well-funded ($5.2 million), but in 1998 it was recapitalized with significant contributions from MBA, FannieMae and Freddie Mac—mostly interms of a line of credit. Still, it took five to seven years until MERS wash and handling millions of loans. Today, it has handled more than 30 million loans and just launched it’s next endeavor, called the MERS® eRegistry. It’s a great success story overall.

MERS’ eRegistry for eNotes was started in March 2003 (see http://www.mersinc.org for details). Its purpose is to provide a“pointer” to the location of the eNote, and it holds the legal identity of the controller. Any lender can then find the vault where the eNote is stored, as well as who controls it.

MERS provides the very valuable solution of tracking the eNote’s location without trying to compete with the private industry for all of the other actions that occur around an eNote, such as storage in a vault. By MERS’ own admission, this solution will take years before it becomes mainstream.

R.K. Arnold, MERS’ president and chief executive officer, stated at the time of the eRegistry’s launch, “Although it will take many years for the industry to fully adopt this system, it will become widely used because the market place is demanding a move toward less paper in the home-buying process.” As you might guess, I’ll say it will take five to seven years.

I applaud MERS in taking this step and for building the eRegistry in short order. Still, I’m calling on MERS to take it to the next level. In its current form, I expect the eRegistry might save the industry a few dollars per loan. Yet, MERS is so close to providing the one key component of a solution that I believe will save the industry hundreds of dollars per loan. This solution is what I call the virtual loan folder (VLF), and I consider it the holy grail of mortgage technology.

VLF is the use of an electronic vault where the entire loan file is stored—not just the note but every document from all the various parties. MERS would be the pointer so the industry’s computer systems will know where to look to post, retrieve or just view a document. Every person involved in the loan process would use the VLF. A few examples follow.

■ Realtor: The Realtor would post a purchase agreement and other supporting documents, and might also view the Good Faith Estimate to know about the terms of the loan.

■ Loan Officer: The loan officer would post the loan application and other supporting origination documents. He or she would also retrieve documents such as the appraisal, preliminary title and credit report.

■ Borrower: The borrower could view his or her predisclosure and closing documents, and could post documents such as a copy of a W-2.

■ Appraiser: The appraiser could view the loan application and would post the entire appraisal.

■ Loan Underwriter: The underwriter could view all of the documents and post a list of conditions.

■ Loan Closer: The closer could view the upfront disclosures and post the entire closing package.

■ Loan Servicer: The servicer could view all of the documents, even while talking on the phone with the borrower, at any time during the life of the loan.

Today, most of the aforementioned parties are shipping the documents at great cost through carriers such as Federal Express. With VLF, all such shipping and the manual handling of the traditional loan folder is eliminated. In fact, all the paper in the process is gone. Yes, this is a form of imaging that some mortgage companies are using today. However, it goes much further, in that it would be used by all parties involved with each loan. In addition, it would also store the electronic data file of the loan and do so in a Mortgage Industry Standards Maintenance Organization Inc . (MISMO) format.

All of the software systems in use by our industry would need to be modified to support the VLF system. Each system (such as title plant software, Realtor systems, appraiser software, loan origination systems, etc.) wouldinterface to the VLF to store and retrieve the documents and the data.

MERS is an important piece because it contributes to marketplace competition and adds validity to the system. The known problem with the VLF system is that if the vault is owned by a single entity, the power of that entity would become enormous (generating almost unlimited profits).

There have been reports that the government-sponsored enterprises (GSEs) have considered promoting the development of a VLF system for the industry, and they would then own the vault. However, it’s better if we have many vaults that would each compete on price and service. MERS would simply provide the pointer for every VLF. The vault would charge fees for posting and retrieving documents. Having many vaults would keep such transaction fees to a bare minimum. If MERS adopts a VLF solution, I believe the industry would move faster to adoption. MERS would certainly add validity to the concept, and it would push others to build the needed technological pieces.

Another significant contribution that MERS provides is the industry-standard MERS Identification Number (MIN). The MIN is more crucial than it might otherwise seem, because it’s the only way to uniquely assign an identification number for every new loan originated. Without the MIN, it would be almost impossible for all the computer systems to correctly identify each loan for such circumstances as a borrower applying for the same home loan with two different mortgage companies at the same time.

The step MERS has taken with eRegistry is a good one, but it’s just a baby step in terms of what needs to be done. I challenge MERS to announce a broader initiative with the hope of having something tangible in a year or so. From that  point in time, I know it’ll be five to seven years before the industry will be operating far more efficiently, and originating loans for about half the cost of what it takes today, in my opinion.

Scott Cooley is an independent mortgage technology consultant, analyst and author based in Los Gatos, California. He  can be reached at scooley@scooley.com.

M O R T G A G E B A N K I N G . J U L Y 2 0 0 5

R E P R I N T E D  W I T H  P E R M I S S I O N  F R O M  T H E  M O R T G A G E  B A N K E R S  A S S O C I A T I O N  ( M B A )

“Fla. 3rd DCA REVERSED” Mortgage Electronic Registration Systems, Inc., Appellant, vs. Oscar Revoredo, et al., Appellees. 2007

Third District Court of Appeal
State of Florida, January Term, A.D. 2007

Opinion filed March 14, 2007.
Not final until disposition of timely filed motion for rehearing.
No. 3D05-2572
Lower Tribunal Nos. 05-11570; 05-2425; 05-12531; 05-15138
Mortgage Electronic Registration Systems, Inc.,
Appellant,
vs.
Oscar Revoredo, et al.,
Appellees.

An Appeal from the Circuit Court for Miami-Dade County, Jon I. Gordon, Judge.

Morgan, Lewis & Bockius and Robert M. Brochin, for appellant.

Jose A. Fuentes (Plantation), for appellees.

Greenberg Traurig and Elliot H. Scherker and Daniel M. Samson for Amicus Curiae Chase Home Finance LLC.

April Carrie Charney (Jacksonville) for Amicus Curiae Jacksonville Area Legal Aid, Inc.

Before FLETCHER and WELLS, JJ., and SCHWARTZ, Senior Judge.

SCHWARTZ, Senior Judge.

As in, and on the authority of, Mortgage Electronic Registration Systems, Inc. v. Azize, ___ So. 2d ____ (Fla. 2d DCA Case no. 2D05-4544, opinion filed, February 21, 2007)[32 Fla. L. Weekly D546], which involved a very similar procedural situation1 and the identical question of law, we reverse the dismissal below of a mortgage foreclosure action brought by Mortgage Electronic Registration Systems, Inc., entered on the asserted but erroneous conclusion that MERS, which acts essentially as a collection and litigation agent for the current owner of notes and mortgages, see Phyllis K. Slesinger & Daniel McLaughlin, Mortgage Electronic Registration System, 31 Idaho L. Rev. 805 (1995), could not establish its standing to proceed.

Although there is little to add to the Second District’s discussion of the issue, with which we entirely agree,2 we do note that this decision is in accord with

1 Unlike Azize, the trial court here went so far as to strike MERS’s pleadings as sham. Even if we were to reach an opposite conclusion on the merits, we do not think that the circumstances of this case, in which the court considered improper MERS’s perhaps disingenuous attempt to claim the status of a conventional “actual” mortgagee, would justify such a ruling. See Cromer v. Mullally, 861 So. 2d 523 (Fla. 3d DCA 2003).

2 Despite the existence of ambiguous language in the Second District opinion as to whether MERS was the “owner and holder of the note and the mortgage” in the clear majority of cases which have considered the question of MERS’s standing to maintain mortgage foreclosure proceedings. See, e.g., In re Huggins, ___ B.R. ____ (Bankr. D. Mass. Case no. 05-18826, opinion filed, December 14, 2006); In re Sina, No. A06-200, 2006 WL 2729544 (Minn. Ct. App. Sept. 26, 2006)(unpublished); Mortgage Elec. Registration Sys., Inc. v. Ventura, No. CV 054003168S, 2006 WL 1230265 (Conn. Super. Ct. April 20, 2006)(unpublished); Mortgage Elec. Registration Sys., Inc. v. Leslie, No. CV044001051, 2005 WL 1433922 (Conn. Super. Ct. May 25, 2005)(unpublished); but cf. LaSalle Bank Nat’l Ass’n v. Lamy, 824 N.Y.S.2d 769 (N.Y. Sup. Ct. 2006)(unreported table decision). To the extent that courts have encountered difficulties with the question, and have even ruled to the contrary of our conclusion, the problem arises from the difficulty of attempting to shoehorn a modern innovative instrument of commerce into nomenclature and legal categories which stem essentially from the medieval English land law. See MERSCORP, Inc. v. Romaine, 8 N.Y.3d 90, 101, 828

question, see Azize, ___ So. 2d at ____ [32 Fla. L. Weekly at D547], we apply the holding that the thing called MERS, see R.K. Arnold, Yes, There is Life on MERS, 11 Prob. & Prop. 32 (July/August 1997), does not lack standing to foreclose to the facts of this case, in which it is clear that, in accordance with the usual practice, MERS was only the holder (by delivery) of the note. See Dasma Invs., LLC v. The Realty Assocs. Fund III, L.P., 459 F. Supp. 2d 1294 (S.D. Fla. 2006). Although it was called the “mortgagee” in the instrument and acted on behalf of the most recent purchaser-assignee-lender, however, MERS was not – again, as usual – its “owner.” We simply don’t think that this makes any difference. See Fla. R. Civ. P. 1.210(a)(action may be prosecuted in name of authorized person without joining party for whose benefit action is brought); 37 Fla. Jur. 2d Mortgages § 519 (2007)(mortgage security follows the note).

N.Y.S.2d 266, 271, 861 N.E.2d 81, ____ (N.Y. 2006)(Kaye, C.J., dissenting in part)(“It is the incongruity between the needs of the modern electronic secondary mortgage market and our venerable real property laws regulating the market that frames the issue before us.”). Because, however, it is apparent – and we so hold – that no substantive rights, obligations or defenses are affected by the use of the MERS device, there is no reason why mere form should overcome the salutary substance of permitting the use of this commercially effective means of business. See 22 Fla. Jur. 2d Equity § 64 (2007).

Accordingly, the orders under review are reversed and the cause is remanded for further proceedings to foreclose the mortgage in question.

Reversed and remanded.

Police: Foreclosure Led to Murder-Suicide

Suicide is not the answer people

Updated: Monday, 17 May 2010, 7:40 AM CDT
Published : Monday, 17 May 2010, 7:40 AM CDT

ALEXANDER SUPGUL MyFoxHouston
Web Producer

HOUSTON – Homicide investigators say a northwest Houston home under foreclosure apparently led the struggling residents to take their own lives.

Police arrived at approximately 11 p.m. Sunday to the home on Arncliffe Drive near Antoine Drive and found a married couple shot to death.

The couple left notes that indicated the shootings were suicides and a result of financial difficulties including the foreclosure of their home.

Investigators say the couple were found on their bed with the suicide notes alongside of them.

Because investigators say their corpses were decaying for more than one month, the stench of their bodies could be smelled across the street. The smell apparently alarmed a neighbor enough to contact police.

One gun was found inside the home.

Video source below: MMFLINT (Michael Moore)

Struggling housing markets to receive $1B in federal dollars: The HILL

Umm…look at where the funds are going…BACK TO THE BANKS!

Follow the money trail…

By Vicki Needham – 05/18/10 02:34 PM ET

Areas hardest hit by the nation’s housing crisis could get a share of up to $1 billion in reallocated federal funds.

Housing and Urban Development Secretary Shaun Donovan said during a breakfast with reporters Tuesday that his department intends to create a new formula for allocating dollars from an existing program launched by the George W. Bush administration.

Funding in the Neighborhood Stabilization Program will be shifted to communities hit hardest by foreclosures, vacancy rates, falling home values and unemployment during the recession, Donovan said.

The Bush administration spread funding more broadly, with each state government receiving a base allocation of $19.6 million, Donovan said.

The reallocation could offer big benefits to states such as Nevada, California and Arizona that are among the hardest hit by the housing crisis. Donovan said the reallocation could help Las Vegas more than any other single place.

The reallocated funding will be shifted from communities that haven’t committed to projects.

The idea behind the program is to avoid blight. Much of the funding will be used to demolish or revamp vacant properties. Those properties would then be sold to new buyers.

Funds would also be used to create “land banks” to assemble, temporarily manage and dispose of foreclosed homes, Donovan said.

Funds could also be used to help some homeowners avoid foreclosure, and to help prospective low- to middle-income homebuyers with a down payment or closing costs.

“We want this to produce a quality product that will create demand,” Donovan said.

Under the program, 17,000 homes so far have been renovated. HUD estimates that more than 63,000 homes will be demolished or fixed up.

The Neighborhood Stabilization Program has received $6 billion in funding — $4 billion to improve housing and $2 billion in targeted stimulus funding, which was awarded in December, Donovan said.

Donovan said he intends to work with Congress to procure more funding for the housing program and new foreclosure counseling efforts. The Housing and Economic Recovery Act of 2008 provided $150 million for counseling to provide options for struggling homeowners.