Finance & Business World

Mortgage finance giants Fannie Mae and Freddie Mac could need as much as $363 billion in government payments by 2013, regulators said Thursday.

The Treasury Department has pumped $148 billion into the agencies since the government took them over in 2008.

The new projections by the Federal Housing Finance Agency, based on a series of assumptions about home prices, indicate that Fannie and Freddie will require an additional $73 billion to $215 billion before 2013.

But the net loss to taxpayers is expected to be much lower, Treasury said.

For one, Fannie and Freddie will continue to turn around and pay dividends on stock owned by Treasury.

Also, Treasury believes that under the most likely scenario for the housing market, taxpayers will be on the hook for only about $20 billion.

Fannie (FNMA) and Freddie (FMCC) were essentially given a blank check from the government late last year when Treasury lifted a $200 billion funding limit for each.

And now the federal housing agency is offering projections on how much more money the government-backed mortgage companies will need to maintain positive net worth.

"These projections are intended to give policymakers and the public useful snapshots of potential outcomes for the taxpayer support of Fannie Mae and Freddie Mac," said FHFA Acting Director Edward DeMarco in a statement.

Of course, it’s the taxpayer that is funding the bailout, and DeMarco says the report is intended to increase public understanding.

"FHFA is releasing these projections to enhance public understanding of Fannie Mae’s and Freddie Mac’s financial performance," DeMarco said.

The Congressional Budget Office said in a September report that propping up Fannie and Freddie is expected to cost taxpayers $53 billion between 2011 and 2020.

In August, FHFA released its first ever quarterly report on Fannie and Freddie, which revealed the companies have burned through $226 billion in the last three years. 

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Albuquerque and Santa Fe are being allocated a total of $118,000 in federal grants to improve local farmers’ markets, and expand access to them by more low-income families.

The money is from the U.S. Department of Agriculture’s 2010 Farmers Market Promotion Program.

The city of Albuquerque will receive $63,914 to establish a sales and marketing organization to help create a permanent indoor/outdoor growers’ market in the city.

The Santa Fe Farmers Market Institute will get $54,086 to improve the Santa Fe Farmers Market with professional development workshops and consumer education. About $4,000 will be used to promote the existing electronic benefits program, which makes it possible for recipients of the Supplemental Nutrition Assistance Program and the Special Supplemental Nutrition Program for Women, Infants and Children to use assistance funds to purchase locally grown fresh fruits and vegetables.

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Charles Schwab Corp. is buying a nine-acre parcel of land from the city of Phoenix that could help create 400 new jobs.

The new land will be used to facilitate job growth at Schwab’s main location near 24th Street and Lincoln Drive, dubbed the Peak Campus. The financial services company is paying $2.06 million for the land, according to Phoenix economic development program manager Bruce MacTurk.

The deal is expected to close in the spring and Schwab will use the land for surface parking. The new parking should be ready by third quarter 2011.

“We are at our capacity for parking. We’re running shuttles from temporary locations,” said Schwab Chief Financial Office Joe Martinetto.

Schwab has about 3,200 employees locally, making it one of the largest private employees in the Valley. The company intends to hire 200 employees by the end of the year and 400 more jobs in the next several years. About one-third of Schwab’s employees are located at a South Mountain campus near 48th Street and Baseline Road. The rest are at the 24th Street location.

Schwab’s operations in Phoenix are its largest in the country.

“We’ve found that Phoenix is a great place to fill jobs. It’s an educated, diverse work force. We’ve had great success there,” Martinetto said.

Currently a Phoenix police precinct is located on the land Schwab will acquire. The city is building a new precinct nearby, which should be ready in February. After the police move, the old precinct building will be razed and the sale will be consummated. The price of the land was based upon an independent appraisal, MacTurk said.

He said it’s a good deal for everyone, and should create new jobs in Phoenix.

“We’ve had a longstanding relationship with Schwab for some 18, 19 years,” MacTurk said.

The company opened a service center in Phoenix in 1992. It purchased the Peak Campus in 1995.

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Initial filings for unemployment insurance fell to the lowest level in nearly three months last week, an encouraging sign ahead of the government’s highly anticipated monthly jobs report due Friday.

The number of first-time filers for unemployment benefits fell to 445,000 in the week ended Oct. 2, down 11,000 from the week before, the Labor Department reported Thursday.

The number was lower than economists’ forecasts of 455,000, according to consensus estimates by Briefing.com, but it still fell in a range that analysts say points to weakness in the job market.

"It’s a good data point for the week," said T.C. Robillard, a senior research analyst for Signal Hill Capital. "But, historically speaking, these are still relatively high levels for where we are in the recovery."

The last time initial claims ticked below 450,000 was during the week ended July 10.

But overall, the weekly number has been stuck in a tight range since last November, hovering in the mid to upper 400,000s and even ticking slightly above 500,000 in mid-August.

The most recent four-week moving average, which is calculated to smooth out volatility, was 455,750.

Economists say they’re looking for initial claims to fall to 400,000 or lower before they can say a jobs recovery has made noteworthy progress.

Businesses have been sitting on the fence when it comes to hiring, as they face uncertainty about the Bush tax cuts expiring at the end of the year and increased costs from health care reform.

More than 4,460,000 Americans continued to file ongoing unemployment claims in the week ended Sept. 25, the most recent data available.

On Friday, Wall Street will turn its attention to the government’s monthly jobs report. Economists polled by Briefing.com forecast the report to show the economy added no jobs in September, and that the unemployment rate ticked up to 9.7% from 9.6% in August. 

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UPMC Health Plan's Medical Assistance product — UPMC for You— and its Children's Health Insurance Program product — UPMC for Kids — are expanding into central and eastern Pennsylvania.

UPMC for You is available in 10 new counties, including Adams, Berks, Cumberland and Dauphin, and UPMC for Kids is now available in four new counties: Berks, Lancaster, Lehigh and Northampton. UPMC for You is already sold in 14 counties in western Pennsylvania, and UPMC for Kids is currently available in 32 counties.

"We are excited to expand our offerings to reach families in need in central Pennsylvania and eastern Pennsylvania," John Lovelace, president of UPMC for You, said in a prepared release. "Our benefits and services have made UPMC for You and UPMC for Kids the top choices for many in western Pennsylvania and we expect that will continue as we move eastward payday loans."

To facilitate the expansion, UPMC Health Plan added Berkshire Health Partners, a preferred provider organization in Berks County, to its network of providers for Medicaid and CHIP. The BHP network includes more than 3,900 doctors, 460 ancillary providers and 15 hospitals located in Berks, Upper Bucks, Carbon, Northern Lancaster, Lehigh, Montgomery, Northampton and Schuylkill counties.

Over the past decade, membership in UPMC for You has increased more than 150 percent, making it the fastest growing Medical Assistance plan and the biggest of the three Medicaid managed care organization in western Pennsylvania, according to the company. UPMC for You has more than 130,000 members in 14 counties in western Pennsylvania.

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U.S. Rep. Gabrelle Giffords (D-Ariz.) is calling for a three-month national moratorium on foreclosures, according to a news release posted on her website Friday.

Giffords’ stance comes on the heels of national stories that brought to light questionable practices whereby some lenders are now accused of rubber stamping foreclosures without looking at homeowner files and individual circumstances.

The New York Times reported Friday that GMAC Mortgage and JPMorgan Chase have suspended foreclosures in 23 states where they need court approval to foreclose. That will give them time to investigate the accusations. The Associated Press reported this afternoon that Bank of America would follow suit. Several state attorneys general have called for a complete suspension of foreclosures until the suspected practices are sorted through. Connecticut’s attorney general also announced today a 60-day moratorium on foreclosures in that state.

Giffords’ written statement said the moratorium is necessary “so lenders and loan servicers can address rampant problems that have led to homeowners being wrongly removed from their homes.”

She cited data showing that Arizona has the highest number of foreclosures behind Florida and Nevada, and that one in 165 homes in the state are in the foreclosure process.

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