U.S. thrifts lost $5.4 billion in the second quarter and set aside a record amount to cover losses from bad mortgages and other loans. Data from the U.S. Office of Thrift Supervision released Wednesday show federally-insured savings and loan institutions posted their second-largest quarterly loss ever in the April-June period, after the $8.8 billion loss in the fourth quarter of last year. Heavily focused on mortgage lending, thrifts have been stung by mounting home-loan defaults. The $5.4 billion quarterly loss compared with net profits of $3.8 billion in the year-ago period, and a loss of $627 million in the first quarter. The 829 thrifts also set aside a record $14 billion to cover losses from bad mortgages and other loans.

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Shares of BankUnited Financial Corp., the Coral Gables-based lender ordered by regulators to raise money or lose its ''well-capitalized'' status, fell 19 percent after Stifel Nicolaus & Co. said it may be unable to survive. Capital is ''necessary to protect the solvency of the company,'' analyst David Bishop said Wednesday, cutting his rating on the shares to ''sell'' from ''hold.'' The Office of Thrift Supervision may drop the lender to ''adequately capitalized'' if it fails to raise at least $400 million, BankUnited said in a regulatory filing. BankUnited's stock tumbled 27 cents to $1.16. The shares are down 83 percent this year. Spokeswoman Melissa Gracey said BankUnited would not comment on analyst reports. ''We see the prospects for viability increasingly fraying,'' Bishop said in a note to investors. ``While any raise will be dilutive to tangible capital, at this point, we view this as a secondary concern behind the ability of the company to continue as a going concern.'' BankUnited is the largest lender based in Florida, a state with the third-highest foreclosure rate in the U.S., according to RealtyTrac, an Irvine, Calif., seller of foreclosure data. The lender said in June it was seeking $400 million to add to capital after losses on $10 billion in home loans.

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Hope Now has helped more than 2 million at-risk borrowers stay in their homes during the past 13 months, according to numbers released by the coalition on Wednesday. The alliance of mortgage servicers, counselors, and investors assembled to combat foreclosures fixed more than 192,000 problem loans during July, a one-month record that represents a 6% increase over June. Despite this progress, foreclosures continue to climb; 91,752 families lost their homes in July. That represents an increase of 14% from June and more than double the number of July 2007, when only 42,043 homes went to foreclosure. "The treadmill is still going a little faster than [Hope Now] can keep up with," said Nicholas Retsinas, Director of Harvard University's Joint Center for Housing Studies. "Foreclosures have outpaced the efforts to combat them."

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Initial jobless claims in the U.S. fell for a third straight week, a sign companies may be slowing the pace of job cuts. The number of Americans filing first-time claims for unemployment benefits decreased by 10,000 to 425,000 in the week ended Aug. 23, from a revised 435,000 the prior week. The number of people staying on rolls rose to 3.423 million, the highest since November 2003. Companies are trimming staff and freezing hiring plans as demand softens, forcing workers to stay on government assistance. Rising unemployment heightens job-security concerns and contributes to a slowdown in consumer spending, which accounts for more than two-thirds of the economy. ``The job situation still looks bleak to many,'' Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pennsylvania, said before the report. ``Declining home prices and job losses are still hanging over consumer spending, and that is not likely to change in the near term.''

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Battered mortgage-finance company Fannie Mae announced a sweeping management shake-up in an effort to come to grips with mounting credit losses and a shrinking capital base. The company's chief financial officer, Stephen Swad, was replaced and the chief business officer, Peter Niculescu, will take on an expanded role. Fannie Mae also appointed a new chief financial officer and chief risk officer, effective immediately. Daniel Mudd, the company's chief executive, will remain in place. "This team will be responsible for meeting the dual objectives of conserving capital and controlling credit losses while Fannie Mae continues to provide crucial liquidity to the U.S. housing and mortgage markets," Mudd said in a statement. The announcement came after the market closed.

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Home prices are improving in some parts of the country but still falling sharply in places like Phoenix, as the weak housing market and shaky consumer confidence continue to weigh on the U.S. economy. "We're starting to see some hopeful signals in parts of the country," said Nigel Gault, chief U.S. economist at Global Insight, a Lexington, Mass.-based forecasting firm. On a monthly basis, home-price declines in the nation's largest cities slowed in June, according to the S&P/Case-Shiller home-price indexes released Tuesday. Prices fell 0.6% on average from the month before after falling by 1% in May. The June performance was a marked improvement from monthly drops of 2% to 2.5% that occurred earlier this year. But prices are still much lower than they were a year ago. Home prices in 10 major metropolitan areas in June fell 17% from the year before, though the declines appear to be moderating.

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The University of Florida’s consumer confidence index rose in August from June’s all-time low, and survey director Chris McCarty has an unlikely reason: The housing market has hit bottom. “While prices in Florida markets are still declining, the pace of the declines has slowed,” the normally pessimistic McCarty says. “Overall the median price of a home in Florida, excluding condos, is beginning to flatten.” McCarty says July will prove to be the bottom in existing home prices “for most Florida markets.” Homeowners in Palm Beach County can only hope he’s right. The July median here plunged to $291,300, the Florida Association of Realtors said yesterday.

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This year the number of investors suing developers has skyrocketed. The investors looking to get out of high-rise contracts are contesting just about everything in the contract, including the building's name. A judge just ruled on the first of these suits and as CBS4's David Sutta reports, the decision is landmark. For as many condo's going up in South Florida, there are investors trying to get out of their contracts—many of them suing to do it. In Sunny Isles investors are suing Trump Towers, alleging the Trump name is only temporary. In Downtown Miami investors are suing the Related Group over condo deposits they say they are owed, for walking away from the deal. And in Edgewater, buyers are alleging false advertising. Lawyers are contesting ads featuring Opera Tower ocean front. The building appears surrounded by a marina. Reality is far from that. Margaret Pace Park is actually in front of Opera Tower. The marina is front of another building. "It really doesn't look like it's waterfront," said Tibor Hollo, Developer of the Opera. "If you look at the picture, it does not. It looks what it is, and they know exactly. They came to our sales center and they know exactly where the property was."

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A key housing-price index released yesterday offered a glimmer of hope that the downward spiral might be slowing in some places, but San Diego and other once-high-flying cities have yet to see any return to stability. The Standard & Poor's/Case-Shiller Home Price Index showed prices of single-family resale homes in 20 cities had dropped 0.5 percent from May to June, compared with a 0.9 percent decline from April to May. It was the smallest month-over-month decline in a year. San Diego's 1.5 percent decline was up from a 1.4 percent drop in May. San Diego prices were down a record 24.2 percent from year-ago levels, compared with the 15.9 percent drop for the index of 20 metro areas, also a record decline. Paul Habibi, an adjunct professor at the UCLA Anderson School of Management, said other cities may be improving, but it is the more dynamic markets in Southern California that he believes will need to recover before the nation can pull out of the housing slump that began two to three years ago.

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Home prices in South Florida continued their downward slide in July, weighed down by a mass of homes and condominiums on the market that won't go away amid burgeoning foreclosures and anemic sales. Another factor hobbling the market is mortgage fraud. In a new report released Monday, Florida maintained its top ranking as the most fraud-ridden state, accounting for nearly a quarter of reported home loan fraud incidents across the country in the first three months of 2008. ''In areas where there was fraud you will see prices going down further because they should have never gone up like they did,'' said Sara Gutierrez, CEO of South Bay Lending in Miami. Industry observers have long said that prices must come down from the soaring heights reached during the boom to a level that draws priced-out or jittery buyers back into the market.

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Discounts in Miami-Dade County’s coastal condominium markets are moving in different directions depending upon which side of Biscayne Bay a particular project is located, according to a new report from Condo Vultures® LLC. As the average discounts in percentage terms and total dollars deepens on Miami-Dade County’s Mainland where the bulk the new construction occurred, pricing is leveling off for condo units situated on the barrier island where the beaches are located, according to the Vultures Database™ Report for August 2008.