A look at stories across HousingWire’s weekend desk…with more coverage to come on bigger issues: Federal Reserve chairman Ben Bernanke said there are options to re-shape US housing finance that don’t involve government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. “There are a variety of organizational forms that might replace Fannie Mae and Freddie Mac that could likely provide mortgage credit without the systemic risks associated with these institutions in the past,” Bernanke said in a July 23 letter to Ohio Democrat Rep. Marcy Kaptur, according to reports by multiple media reports. That notion would seem to be another alternative to options Bernanke touted during July 22 testimony to Congress — including breaking up and privatizing the companies, “perhaps supported by a government insurance program for their mortgages that they would pay for,” or the government could “make them more like government utilities,” Bloomberg Businessweek reported. The weekend news of the letter, first made public of Friday, come at the same time that The Washington Post reports that Fannie and Freddie’s diminishing political support has come as a consequence of GSE conservatorship. After years of favorable consideration by both Republican and Democrats — the result of millions in lobbying expenses — Fannie and Freddie find themselves personae non grata on Capitol Hill. “What I’m afraid of is that people on either side of the aisle will potentially play politics and point fingers,” incoming Mortgage Bankers Association (MBA) chairman Michael Berman told the Post. “There’s some folks that are so afraid of having any government involvement at all because of the losses we’ve had.” For the 14th consecutive quarter, national US home prices declined 3.2% year-over-year during Q210, according to a quarterly market report produced by real estate listing website Zillow. The report said the average sales price for residential properties was $182,500 during the quarter, down 0.6% from Q110. A bit of positive news from the report is that the rate of borrowers underwater on their mortgage declined. In Q210, 21.5% of mortgage properties were in negative equity positions, compared with 23.3% in Q110. In addition, California markets showed improvement, with 10 of the 26 markets surveyed posting year-over-year gains and 20 showing quarter-over-quarter gains. Zillow attributed the Q210 improvement in California to “double tax credits” — the federal and state credits for homebuyers encouraged more buying activity. Of all the 144 markets Zillow tracks, 99 posted year-over-year declines. Markets in Florida and Arizona continue to experience the highest decreases in home prices, with Miami decreased 15.2% and Phoenix down 11.8%, both year-over-year “As the national housing market limps toward stabilization, individual markets are a mixed bag,” said Zillow chief economist Stan Humphries. “The double tax credits for some California homebuyers have certainly stimulated housing demand there and are partly responsible for the rapid — and likely unsustainable — rates of appreciation in many markets across the state. While there is some uncertainty about how home values will respond in those markets once all incentives are removed, it’s certain they can’t continue at their current rates of appreciation, but is unlikely they will re-test the low points reached in 2009. “Markets in other parts of the country, like Miami and Phoenix, are not yet showing signs of reaching a bottom in home values. High supply continues to be a challenge in states like Florida and Arizona,” Humphries added. While Washington DC regulators would like to see reliance on the big three credit rating agencies (CRAs) — Fitch Ratings, Moody’s Investors Service and Standard & Poor’s (S&P) — decline, there are few alternatives to replace them, according to a report in American Banker. The Federal Deposit Insurance Corp. (FDIC) is expected to meet Tuesday to discuss alternatives to relying on external ratings to set capital requirements, the first step in what’s expected to be a yearlong process to be in compliance with financial reform legislation requiring other credit information sources. According to American Banker, lawmakers and regulators agree the steps are necessary, but some industry observers believe the agencies are venturing into uncharted waters. The federal government isn’t the only one looking for an alternative to the big three. Earlier this year, Jules Kroll began promoting his new venture, Kroll Bond Ratings. Kroll, a pioneer in the modernization of the intelligence and security sectors, said his new firm will use intensive analysis in its ratings system, with emphasis on ratings accuracy. The company will begin by rating mortgage-backed securities (MBS), where Kroll said existing credit rating agencies have suffered the most damage to their credibility. The FDIC reported only one bank failure on Friday. The Illinois Department of Financial and Professional Regulation – Division of Banking closed Chicago-based Ravenswood Bank. Northbrook, Ill.-based Northbrook Bank and Trust Company will pay the FDIC a premium of 0.9% to purchase Ravenswood’s $269.6m in deposits and will purchase essentially all of the failed bank’s $264.6m in total assets. The two Ravenswood branches reopened as locations of Northbrook Bank and Trust and the closure is expected to cost the FDIC Deposit Insurance Fund (DIF) $68.1m. The closure brings the total numbers of failed banks so far in 2010 to 109. Through the same part of 2009, there were 72 bank failures. Write to Austin Kilgore.