A report by RealtyTrac on Thursday revealed default notices filed by banks — which represent the first step in the foreclosure process —were up 33 percent in August from July. Many analysts believe this is due to banks beginning to clear backlogged filings caused by the robo-signing controversy of 2010, which created a de facto moratorium on foreclosures around the country. In California, filings were up even more than the average at 55 percent, and in New Jersey levels of default notices reached 42 percent.

Bank of America announced a $2.8 billion settlement with Freddie Mac and Fannie Mae on Monday. The American-owned firms demanded that Bank of America buy back mortgages whose quality was misrepresented by Countrywide, which is owned by Bank of America. Louise Story, Wall Street and finance reporter for The New York Times analyzes the implications of the settlement.

Shares of financial companies dropped yesterday on concerns about how reviews of home-foreclosure practices will affect their balance sheets. Louise Story, Wall Street and finance reporter for our partner, The New York Times, has been looking at analyses of how hard the blow may be for banks, and how long it might last.

At least 40 states' attorneys general across the country will launch an investigation into the mortgage servicing industry today, which will possibly result in a push for a national moratorium on foreclosures. If they do, it comes as a response to recent announcements by several major banks, who admitted submitting fraudulent or erroneous documents in their foreclosure programs as they worked through massive amounts of foreclosure paperwork.

The number of foreclosures on houses in the United States is growing at a rapid rate. The signs of a broken housing market have permeated nearly the entire country. With the federal government now in control of mortgage finance giants Fannie Mae and Freddie Mac, is it fair to blame the feds for the crisis?

The statistics are staggering. Nearly 528,000 homes were taken over by lenders in the first half of this year and the country is on track to see the repossession of one million homes by the end of 2010. By comparison, in years past, lenders have historically taken over approximately 100,000 homes every year.  

Grosse Pointe, Michigan resident, David Fleig sees signs of the damaged housing market everyday in his neighborhood. Fleig says, "The 'For Sale' signs are like weeds." He and his neighbors joke that all houses are "50 percent off."

As home values fall, more and more homeowners are walking away from their mortgage payments and foreclosing on their properties. And some say this is the right decision.

The Federal Housing Administration used to be a little-known government agency before the housing meltdown. But when Fannie Mae and Freddie Mac collapsed, the FHA started backing more and more loans to homeowners. Now, a growing number of borrowers are defaulting on loans backed by the FHA — and some are wondering if the FHA itself might soon need a bailout.

We find out how the agency is trying to weather the storm created by increased lending. We also get a first-hand look at how the housing crisis is affecting Cleveland, Ohio.

UPDATED: 7:55 PM

Alex Goldmark here watching over the night shift.

A few things have changed since Anna's last post. We've been reading between the lines of some interesting comments about Don't Ask Don't Tell today. General Gates told a Congressional hearing: “If legislation is passed repealing the law, we feel strongly we will need time for implementation of that change.” Well, what changes exactly? How does officially recognizing that someone is gay change the way you treat them or the institutions of the military? And what are the potential ripple effects of altering the way gays are treated in the military that might go beyond life in uniform?

On a side note, we're having a fierce debate here on how much humor is appropriate, if any, for this topic. One producer has concientiously objected to pulling and editing some movie clips that others here think might lighten the tone and mood of the interview tomorrow. Tune in to see who gets their way.

We're also going to hear from the Boy Scouts. They are turning 100 years old this year, and in honor of that milestone they are making a special effort to reach out to hispanic youths.

Our deficit explanations (referenced below) that Anna was hunting down before might have to wait until Thursday. So goes live radio.