WASHINGTON — Government-controlled mortgage giant Freddie Mac has requested $6 billion in additional aid after posting a wider loss in the third quarter.

Freddie Mac said Thursday that it lost $6 billion, or $1.86 per share, in the July-September quarter. That compares with a loss of $4.1 billion, or $1.25 a share, in the same quarter of 2010.

The government rescued McLean, Va.-based Freddie Mac and sibling company Fannie Mae in September 2008 after massive losses on risky mortgages threatened to topple them. Since then, a federal regulator has controlled their financial decisions.

Taxpayers have spent about $169 billion to rescue Fannie and Freddie, the most expensive bailout of the 2008 financial crisis. The government estimates that it will cost at least $51 billion more to support the companies through 2014, and as much as $142 billion in the most extreme case.

Freddie and Washington-based Fannie own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans worth more than $5 trillion. Along with other federal agencies, they backed nearly 90 percent of new mortgages over the past year.

The two mortgage giants buy home loans from banks and other lenders, package them into bonds with a guarantee against default, and then sell them to investors around the world. When property values drop, homeowners default – either because they are unable to afford the payments or because they owe more than the property is worth. Because of the guarantees, Fannie and Freddie must pay for the losses.

Fewer foreclosures and delays in foreclosure processing because of a yearlong government investigation into mortgage lending practices have reduced the companies’ projected losses.

Fannie and Freddie are required to pay 10 percent dividends on the government money they receive. Freddie paid $1.6 billion in dividends to the Treasury Department in the July-September quarter.

Pressure continues on the government to eliminate Fannie and Freddie and reduce taxpayers’ exposure to risk. The Treasury Department put forward a plan in February to slowly dissolve Fannie and Freddie, although that process could take years. Abolishing Fannie and Freddie would transform how homes are bought and redefine who can afford them.

Copyright 2011 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.

Also see:
Watchdog: Fannie, Freddie Knew of Robo-Signing in 2003
Is ‘Occupy’ Ready to Move Into Foreclosed Homes?
Victims of Robo-Signing: Fight the Machine!

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Discussion of the housing crisis took up a significant chunk of Wednesday’s GOP primary debate, with candidates expressing their views on the sluggish market and how they aim to fix it.

Until Wednesday, housing had been something of a ghost issue this primary season. But with 4 million homeowners delinquent on their loans and about 23 percent of them underwater, candidates were bound to confront the issue sooner or later. CNBC’s “Your Money, Your Vote” debate nudged them into doing just that Wednesday.

While detailed proposals were mostly absent from discussion, many of the candidates said that Fannie and Freddie, government-sponsored mortgage-holders who own or guarantee a majority of the country’s mortgages, must go.

“I would find a way to unwind Fannie and Freddie Mac such that the marketplace can determine the future of the housing market,” said businessman Herman Cain.

“We need to put them back into bankruptcy,” added Minnesota Congresswoman Michele Bachmann later in the debate.

During the debate, candidates claimed that the government’s hand in the housing market, extended in the form of the two mortgage giants, disrupts natural market forces and leads to doomed-to-fail loans.

Former Massachusetts Gov. Mitt Romney (pictured above right, with Newt Gingrich) reasserted his strong opposition to any government action aimed at fixing the housing crisis, asking rhetorically, should the “federal government go out and buy all the homes in the country?”

“You’ll see home prices come back up if we allow this market to work,” he said.

Bachmann was particularly critical of Fannie and Freddie, railing against them for continually requesting bailouts that have already run far over $100 billion and could ultimately exceed $200 billion. She also attacked Fannie and Freddie for paying million-dollar bonuses to their executives, calling it “crony capitalism.”

Asked about his role as a consultant to Freddie in 2006, when his company was paid $300,000, former Speaker of the House Newt Gingrich said, “I offered them advice on precisely what they didn’t do.” Gingrich, who said there was a “good case for breaking up” Fannie Mae and Freddie Mac, also denied ever lobbying for them.

While the candidates almost uniformly said that they would halt mainstream mortgage assistance to homeowners, they provided little insight into how they would accomplish the task. For his part, Cain outlined a general plan, saying that he would reduce the scope of Fannie and Freddie and then turn them into private companies.

Republicans have already proposed legislation designed to weaken Fannie and Freddie‘s dominance in the mortgage market by forcing the organizations, which currently guarantee mortgages at reduced rates in order to foster homeownership, to charge the same guarantee rates as private investors.

Also see:
Republican Candidates: Short on Housing Policy, Long on Houses
Viewpoint: Housing Is Ghost Issue in Presidential Race
132 Rms, Riv Vu: What If You Could Rent the White House?

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Foreclosure via Facebook? With roughly 4 million foreclosures in the pipeline in this country, some legal experts say it’s just a matter of time until lenders win the right to serve foreclosure documents through the giant social network.

That day has already come for one couple in Australia. When they defaulted on a six-figure loan and couldn’t be found via a physical address or email, the lender’s enterprising lawyers located them on Facebook. The lawyers were able to verify the couple’s identities by matching up their names and birthdates — and, of course, the fact that they had “friended” each other.

Australian courts upheld the lender’s right to send foreclose notices via Facebook, citing the fact that the couple didn’t enable privacy protections on their Facebook accounts and were frequent enough visitors to the site that they would “reasonably receive notice as a result.”

While Marc Rotenberg, president of the Electronic Privacy Information Center in Washington, says he is unaware of Facebook being used in the U.S. to deliver legal notifications, but “it’s bound to happen,” he said. “The real concern the courts have is whether it’s a fair notice that the person actually receives.” According to Bloomberg BusinessWeek, courts in New Zealand, Canada and the U.K. already have adopted the Australian example to avoid having cases stall when people can’t be located and served in person.

“There are people who exist only online,” Joseph DeMarco, co-chair of the American Bar Association’s criminal justice cyber crime committee, told the publication. The ability to serve documents by social-media networks would be useful, he said.

Facebook has taken heat before about its policies protecting the personal data of its 694 million users worldwide. Following the case in Australia, which happened in 2008, company spokesman Barry Schnitt said the company was pleased to see the Australian court validate Facebook as a reliable, secure and private communication medium. (Facebook did not respond to messages left by AOL.)

Is it appropriate to use social networks to find people and deliver legal papers to them via the network?

“No one likes to receive a legal service,” said Rotenberg. Legal service, after all, usually isn’t good news: Someone wants you for something. And yes, he adds, “There are going to be privacy concerns, but in some respects they’re almost inescapable.”

Email, by contrast, is generally not considered by courts to be a safe or reliable way to deliver legal notices. We get too much email, much of it winds up in spam and we don’t always open everything in our in-boxes. Legal notices delivered this way can easily be discounted with a simple “I didn’t see the email.”

But Facebook, said Rotenberg, is different. If you don’t have thousands of friends and you regularly post status updates indicating that you are active on the site, you lose the excuse that you likely overlooked the notice. Of course not everyone with a Facebook page visits the site regularly, but save it for the judge whether you’re one of them.

Bottom line: It’s probably going to be determined to be legal, just not likely to be popular. And should use of Facebook as an electronic process-server escalate as a norm, you can expect it would have some adverse impact on the site’s participation levels. In the meantime, if you don’t want the banks to find you, the best defense is enabling your privacy settings on Facebook and be mindful of the personal data you post.

For more on mortgages and related topics see these AOL Real Estate guides:

• How to Buy Foreclosures
• Spot Foreclosure Scammers Before They Spot You
• Foreclosure: What it Means for Renters
• Foreclosure Help: What a Housing Counselor Can Do

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This $6.785 million residence, located in the luxurious Martis Camp community of North Lake Tahoe, Calif., boasts four bedrooms, 5½ baths, and an incredible array of cutting-edge amenities — including a home iPad interface system and hydronic heating throughout the flooring.

The master suite, which offers commanding views of majestic arboreal wilderness, includes a fireplace and spa-inspired bath. The lower level features a recreation-media room, complete with a surround-sound system and a bar, as well as a 1,000-bottle wine cellar and an exercise den. Moveable glass walls divide the living room from an outdoor patio and walk-out terrace, which offer extensive outdoor entertaining space including a spa, fire pit, dining area and landscaped lawn. Furnishings throughout are a combination of the rustic and the ultramodern.

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As if this all weren’t enough, Martis Camp residency offers several extra layers of luxury, including an 18-hole golf course, and a family recreation center with swimming, bowling, basketball, cinema and art. Finally, the community includes 26 miles of private trails for hiking, snowshoeing and cross-country skiing.

Brian Hull of Martis Camp has the listing.

Click on the images below to see more homes for sale near Lake Tahoe, Calif.

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Got a tip for House of the Day? Know of an exceptional or unusual property currently listed for sale? Please email krisanne.alcantara@huffingtonpost.com with your suggestions and be sure to include links to listing details and photos. (Due to the volume of response, we unfortunately are unable to reply to each submission.)

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LOS ANGELES — More U.S. homes entered the foreclosure process in October than in the previous month, with Florida, Pennsylvania and Indiana registering among the largest monthly increases, new data show.

Some 77,733 properties received an initial default notice last month, up 10 percent from September, foreclosure listing firm RealtyTrac Inc. said Thursday.

The number of homes scheduled to be auctioned or repossessed by lenders also posted monthly increases.

All told, notices of default, scheduled auctions and bank repossessions – warnings that can eventually lead to a home being lost to foreclosure – hit a seven-month high in October.

The numbers are further evidence foreclosure activity is picking up.

The activity slowed a year ago after problems surfaced with the way many lenders were handling foreclosure documentation, namely shoddy mortgage paperwork comprising several shortcuts known collectively as robo-signing. Many of the nation’s largest banks reacted by temporarily ceasing all foreclosures, re-filing previously filed foreclosure cases and revisiting pending cases to prevent errors.

But banks appear to be moving past those problems now and starting to tackle a swelling backlog of homes with mortgages that have gone unpaid – something that lenders are seeing more of as the economy struggles and unemployment remains high.

The rate that homeowners were 60 or more days late on their mortgage payment rose in the June-to-September period for the first time since the last three months of 2009, according to TransUnion.

The credit reporting agency said 5.88 percent of homeowners missed two or more payments, an early sign of possible foreclosure. That was up from 5.82 percent in the second quarter of 2011.

The number of U.S. homeowners underwater on their mortgage, or owe more than their homes are worth, represent another potential source of trouble for lenders.

As of June 30, some 22.5 percent of all U.S. homes had a mortgage that was under water, according to CoreLogic. That’s 10.9 million properties. Another 2.4 million borrowers had less than 5 percent equity in their home, the firm said.

Industry experts say a housing market turnaround isn’t likely to occur as long as there remains a glut of potential foreclosures hovering over the market, so October’s increase in foreclosure activity means a potentially faster revival for housing.

“We all know that there is an underlying amount of properties that need to go into foreclosure and the sooner we clear that the sooner we can get housing to a normal level,” said RealtyTrac CEO James Saccacio.

In some states, the number of homeowners put on notice by banks for missing payments far exceeded the national average for October.

Florida posted a 28 percent jump in October from September in homes receiving an initial default notice. Pennsylvania saw a 50 percent increase and Indiana registered a 61 percent gain, according to RealtyTrac.

In some cases, though, government intervention is slowing lenders down.

Take Nevada, where a law went into effect Oct. 1 requiring that foreclosure documents must be filed in the county where a property is located and a lender must provide a notarized affidavit detailing their legal right to proceed.

Saccacio said the law helped cause a 75 percent drop in initial default notices in Nevada last month versus September, bringing defaults to the lowest level since June 2006 at the peak of the housing boom.

“It’s like a rain delay,” Saccacio said. “We’ll eventually see foreclosure processing go up.”

Despite registering a 34 percent drop in foreclosure activity overall, Nevada still registered the highest foreclosure rate in the nation for October, with one in every 180 households receiving a foreclosure-related notice, RealtyTrac said.

In all, 230,678 U.S. homes received a foreclosure-related warning last month, up 7 percent from September, but down nearly 31 percent from October 2010.

Foreclosure auctions rose 8 percent from September, but climbed by more than 35 percent in several states, including Florida, Minnesota and Illinois.

Lenders took back 67,624 properties in October, up 4 percent from the previous month, but down 27 percent from a year earlier.

Bank repossessions increased by a far larger margin in several states. In Oregon they climbed 45 percent, while in New Jersey they posted a 48 percent jump. Indiana registered a 73 percent increase.

Copyright 2011 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.

Also see:
‘Mortgage Prof’: 5 Reasons Banks Would Rather Foreclose
The Mortgage Fix That Can Save the Economy
5 Foreclosure Flip Tips From the ‘Flip Men’

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Updated Jan. 7: Andre Hall came back from the holidays to continue repairing a 4-bedroom, 1-bath home he had acquired from a friend facing foreclosure in the West End area of Pittsburgh in November only to find that a city contractor had demolished the 1916-built house that had been vacant for five years.

“When I came back I saw a guy with a backhoe tearing the house down,” Hall told AOL Real Estate.

City records show Hall had six months from the November acquisition date to make repairs on the once-condemned Sheraden neighborhood home that had previously sustained water damage, reported the Pittsburgh Tribune-Review.

Hall, 40, who works in home repairs, said he was about three weeks away from being able to

move into the 1,613-square-foot home that had an assessed value of $31,000. He planned to live there with his girlfriend, her three children, and his three daughters when they would come visit in the summers from Kansas City, Kan. The couple currently lives in a one-bedroom apartment.

“I wasn’t even able to do Christmas for my girls because everything I had I was putting into the house. This was my gift to them,” he said.

“My dream is done now,” he said. “Someone needs to man up and take responsibility for this.”

P.J. Deller Excavating & Hauling was hired to tear down the home immediately next door, and although it did so, it is accused of also demolishing Hall’s home.

“We have stopped any contracting from going to P.J. Deller until further notice,” a spokeswoman for Mayor Luke Ravenstahl told competing publication the Pittsburgh Post Gazette. “They will not be doing any demolition for the city until our Law Department has appraised the matter.”

The Bureau of Building Inspection wrote to and called Deller in early November, telling the firm that Hall’s home was no longer scheduled for demolition, according to John Jennings, acting chief of Pittsburgh’s Bureau of Building Inspection, who added that the city did not have record of Hall obtaining a building permit to do work on the house.

Still, that doesn’t change that Hall’s house, a pool table, furniture and even his tools inside are now gone. “One of the [demolition] workers even had my lumber in the back of his truck.”

Hall said the workers said they were also to tear down the house next door, but they had started on his first. They had not gotten to the other home by time Hall arrived. If only they had done the other one first.

Hall’s girlfriend, Shawna Jones, told AOL Real Estate that they have not heard from the city at all. “The city has not contacted us and the contractor is missing in action. No one has called us but the news media.”

Hall, who said he was still finalizing homeowner’s insurance for the home at the time of the demolition, said he has contacted a couple of attorneys, but all he wants is a house to live in. He went on a month-to-month lease ever since the previous owner of the home, Lorraine Nichols, began working with him to help him obtain the home. “Everytime I had a court date [about the foreclosure] Lorraine was with me. She gave me the home and didn’t want me to pay her anything. She just wanted me to take care of the $15,000 in back taxes that were owed.” He says there was no mortgage on the home and he would’ve owned it free and clear after the taxes were paid.

“I just need some help getting this resolved, that’s all. I just hope it don’t take three years because I was planning on being in there in three weeks.”

In April, a 69-year-old Denton, Texas woman was also the victim of a wrongful demolition after a crew wrongly tore down most of her house, instead of one across the street, reported the Denton Record-Chronicle.

Thinking about adding value with home improvements? Here are some AOL Real Estate guides to help you, whether you’re selling or staying.

• Home Improvements: Do It Yourself or Hire a Contractor?
  
• 10 Home Improvements That Pay You Back
  
• Home Renovation: Tips for Thrifty Upgrades

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It didn’t take long before the carnage in the hit house-party movie “Project X” spilled onto the real real estate market.

Thirteen teenagers are being questioned for their possible involvement in a wild house party that will cost the builder nearly $100,000 in repairs, reports KHOU in Houston, Texas.

“It’s devastating. This is a new home that was ready to sell,” said private investigator Mark Stephens, who was hired by the homebuilder to observe the property. Stephens estimates the home to be worth $500,000.

A tour of the once pristine, 4,000-square-foot-home today reveals gaping holes in the walls, heaps of broken glass and liquor bottles strewn across the property.

Stephens told KHOU that the night after the property was vandalized, he returned to the neighborhood in the hope of catching the culprits in the act. Just down the street, in another vacant home, he came upon a group of teenagers throwing another massive party.

Police took 13 teenagers into custody, with two minors being young enough to be released back to their parents.

Stephens said that when he asked the teens why they broke into the home, they simply said “Project X.”

Yet this isn’t the first time the riotous teen flick reportedly has inspired copycat revelry. Another party in Houston turned deadly after an unidentified teen was shot multiple times at an illegal party in another vacant home, ABC News reports. The party, which drew between 500 to 1,000 high school and college-age students, was shut down by police, but the gunman reportedly escaped on foot.

Idle Hands, Empty Homes

An underlying problem in these and other cases of home vandalism is the glut of vacant homes sitting idle on the market. As foreclosures have flooded local real estate inventories, vacant properties have attracted all manner of blight, lowering property values and putting more financial stress on already struggling neighborhoods.

And the vacancy problem could continue to rise. Despite a new report that shows a 13 percent drop in completed foreclosures in the first month of this year, as compared to January 2011, there are signs that foreclosures could soon rise. With the $25 billion mortgage settlement finally underway, experts expect foreclosure activity to increase through 2012, as banks begin to clear a massive backlog of disputed foreclosures. One in every 637 homes received a foreclosure filing in February, according to RealtyTrac.

In Houston, where both wild parties took place, one in every 689 homes received a foreclosure notice in February — up nearly 10 percent from the previous month.

Also see:
Renters Beware: Fraudsters Still Lurking on Craigslist
‘Home Alone’ House Sells for $1.6 Million

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