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WHAT'S NEXT Falling Back into Growth? posted marginal improvements in their net worth over the second quarter. Will jobs bring the economy back to life or will private capital reach it first? Important figures for the economy slowly drifted upward in June and July, as the GSEs NOW Fannie Mae and Freddie Mac posted marginal gains over the second quarter, evading the need for any further Treasury draws—for now. Fannie saw $2.8 billion in net worth, marking the second straight quarter it rebuffed Treasury, while Freddie recorded $3 billion in net worth during the same time frame. The economy bucked a sober outlook in July with news from the Labor Department that it picked up roughly 163,000 jobs, a spike from low job growth seen in past months. As employers gain confidence in the economic recovery, the logic goes that voters may place more confidence in the incumbent party. Romney Slowly but surely, mortgage rates climbed higher in June and July, as good news came in the form of stronger jobs numbers and some slack in the eurozone. Freddie Mac found the 30-year fixed-rate mortgage averaging 3.59 percent in early August as the 15-year loan ticked up to 2.84 percent. The Office of Mortgage Settlement Oversight recently chose five new firms to serve as its eyes and ears as the settlement grinds forward. The new secondary professional firms include BKD, LLP; Baker Tilly Virchow Krause, LLP; Crowe Horwath, LLP; Grant Thornton, LLP; and McGladrey, LLP. Smith FHFA issued a notice to warn of the controversial use of eminent domain recently proposed in San Bernardino County. California officials are considering the use of eminent domain to seize underwater mortgages. The mortgages would be taken at fair market value. What's next for the eminent domain policy? Chicago and Berkeley are also exploring the proposed use of eminent domain. FHFA said that in relation to Fannie Mae and Freddie Mac, the use of an eminent domain program could result in substantial cost to taxpayers and investors alike. Is the worst over? If so, the fortunes may rise for housing as it rebuilds. Home sales and prices ticked up over the summer as first-time unemployment claims either staggered or fell. Still, economists caution overeager reports about the future of housing as Europe wobbles. Settlement monitor Joseph A. Smith Jr. told us in recent interviews that he plans to roll out a national operation replete with several professional firms. The new firms will only serve to assist the primary firm, however, making audits for the settlement even more exclusive. VS. NEXT Fannie Mae and Freddie Mac are declining draws from the Treasury Department. What does it mean? While spokespeople claim success for the companies, others suggest that a few profits here and there by no means signal the end of federal funds for the beleaguered mortgage giants. It's the economy, stupid—or so the Bill Clinton team told Americans in 1993. The same seems to apply even today, with a recent poll by Fox News finding that President Barack Obama would outmatch Republican challenger Mitt Romney with 49 percent to 40 percent in a general election. THE M REPORT | 19