(MBS Fails) Fed Finds No Good Deed Goes Unpunished as Mortgage Trades Fail   By Caroline Salas and Jody Shenn For all the good the Federal Reserve’s $1.25 trillion of mortgage-bond purchases have done, they’ve also left part of the market broken. By acquiring about a quarter of home-loan bonds with government-backed guarantees to bolster housing prices and the U.S. economy, the Fed helped make some securities so hard to find that Wall Street has been unable to complete an unprecedented amount of trades. Failures to deliver or receive mortgage debt totaled $1.34 trillion in the week ended July 21, compared with a weekly average of $150 billion in the five years through 2009, according to Fed data Bloomberg BusinessWeek

14.7 Million (19%) Of US Mortgages Have $770 Billion In Underwater Equity, $2.4 Trillion In Total Debt Impaired by Tyler Durden How Mark Zandi, who prepared this spreadsheet according to the meta data, could look at this data and come up with his recent paper in collaboration with Blinder, claiming that the recession is over, is simply beyond rationalization. Zero Hedge

Mortgage Banking Profits Drop During First Quarter says Report The average profit per loan originated by mortgage bankers and subsidiaries was $606 during the first quarter of 2010, down from $890 per loan in the fourth quarter of 2009 and $1,088 in the first quarter of 2009 according to the Mortgage Bankers Association. Reverse Mortgage Daily

5 reasons why the California real estate market will weaken from August to December of 2010: California budget delay, inventory growth, and three other important factors. -  Dr. Housing Bubble

Government Refi Wave Could Cost GSE Bondholders $350bn: KBW by JON PRIOR The costs will clearly outweigh the benefits of this program,” according to KBW. This is unlikely to be a zero sum transfer of wealth because mortgage spreads would almost certainly widen, so the benefit to the borrowers would be lower than the theoretical benefit implied by current mortgage rates. HousingWire