A look at stories across HousingWire’s weekend desk…with more coverage to come on bigger issues: Investment analysts at HSBC, a London-based private bank, are not subscribing to an upcoming double-dip in the U.S. economy. According to its investment outlook to the fourth quarter of 2010, the market is fearful of another recession stateside as the global recovery is not sustainable. But strength in corporate balance sheets, resilient domestic demand in the emerging markets and a gradual improvement for major banks will keep the U.S. out of another lull. “We believe it could take some time before the economic picture becomes clearer, but markets tend to anticipate economic sentiment,” according to HSBC. “They could therefore chart a more positive course before the economic consensus does, given what we currently see as overly cautious valuations.” HSBC said it will bet on this optimism by increasing its exposure to riskier assets while still acknowledging possible volatility ahead. An Ohio judge allowed the state’s lawsuit against HomEq to move forward last week. HomEq is the former servicing arm of Barclays Capital and has since been bought by Ocwen. Ohio Attorney General Richard Cordray filed suit against HomEq last December, alleging it made multiple violations of the state’s Consumer Sales Practices Act, including unfair and deceptive business practices. The Montgomery County Common Pleas Judge Timothy O’Connell overruled the defendant’s motion to dismiss. A pool of economists surveyed by Bloomberg expect home sales to increase 7% in August to an annualized rate of 4.3 million. Sales plummeted in July to a new decade-long low, and a possible uptick be a sign the market is stabilizing after the expiration of homebuyer tax credit. But a recent forecast from Freddie Mac estimated home sales would drop to an annualized rate of 4 million for the third quarter. Federal Reserve Governor Daniel Tarullo called for more attention to be paid to regulated financial institutions as they push more investment activity into the unregulated sectors not addressed in recent reforms. Revamped Basel III capital rules, the Dodd-Frank Act and the Fed’s adjustment of its large holding company supervision have not done enough to address the “shadow banking system.” Tarullo cited a paper by economists Gary Gorton and Andrew Metrick that proposes only “Narrow Funding Banks,” institutions that only carry asset-backed securities (ABS) and other high-quality investments, could by securitized assets. Such a proposal, Tarullo said, would address the information problem in the “repo” markets regarding the collateral of those securities. While Tarullo admits this and other proposals in the paper are not developed options, they will be considered for further discussion. There were six bank closings over the weekend, totaling 126 for the year. The Federal Deposit Insurance Corp. estimates the six closings this week to cost the Deposit Insurance Fund (DIF) a total of $347.6 million. Community & Southern Bank in Carrollton, Georgia acquired the deposits and assets of three closed banks in Georgia. The Georgia Department of Banking and Finance closed the Bank of Ellijay, which held $160.7 million in deposits and $168.8 million in total assets. The First Commerce Community Bank was also closed. It held $242 million in deposits and $248.2 million in assets. The Peoples Bank, also closed, held $398.2 million in deposits and $447.2 million in assets. The FDIC and Community & Southern Bank entered into a loss-share transaction on $602.5 million of the assets acquired. The FDIC estimates the three closings will cost the DIF $225.5 million total. The Office of Thrift Supervision closed Maritime Savings Bank in Wisconsin over the weekend. North Shore Bank, also based in the state, will assume all $248.1 million in deposits and agreed to purchase $177.6 million of the closed bank’s $350.5 million in total assets. The FDIC estimates the closing will cost the DIF $83.6 million. The Ohio Division of Financial Institutions closed Bramble Savings Bank. The Foundation Bank agreed to assume all $41.6 million in deposits and agreed to purchase essentially all $47.5 million in total assets. The FDIC estimates the closing to cost the DIF $14.6 million. The New Jersey Department of Banking and Insurance closed ISN Bank in Cherry Hill, New Jersey. New Century Bank will assume all $79.7 million in total deposits and agreed to assume essentially all $81.6 million in total assets. The FDIC estimates the closing to cost the DIF $23.9 million. Write to Jon Prior.

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