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Monday, December 31, 2012

Happy New Year!

Happy and Healthy New Year wishes from St Casimirs Savings Bank.

Wednesday, December 26, 2012

Safe LIke St Casimirs

Small Banks to Depositors: Trust Us

The looming end of the Transaction Account Guarantee program has small banks nationwide reaching out to affected customers to assure them the banks can be trusted to hold their deposits. Keith Costello, chief executive of Broward Bank of Commerce, a Fort Lauderdale, Fla.-based unit of Broward Financial Holdings that holds $129 million in assets, said the bank is telling customers "that we have a loan portfolio that has no nonperforming loans, which is a very clear statement that our bank is very solvent, very safe and very secure."

From "Small Banks to Depositors: Trust Us"
Wall Street Journal (12/26/12) Sidel, Robin

Friday, December 21, 2012

Christmas Cheer

Thanks to Maryland Financial Bank and all its sponsors the Christmas reception at the Maryland Club. Pictured at the podium are Ed Nolley (Advisory Board Chair) and Bob Chafey (President/CEO.) The beautiful setting is the Maryland Club on Eager Street in Baltimore.

Wednesday, December 19, 2012

FDIC Releases Community Banking Study

The FDIC yesterday released its “data-driven” Community Banking Study that looks at community banks over the past 25 years to identify and explore issues and questions about them. The study, which is part of the FDIC’s year-long community banking initiative, “is designed to be foundational, providing a platform for future research and analysis by the FDIC and other interested parties,” the agency said in a press release.

It explores such key areas as the definition of a community bank; structural changes among community and noncommunity banks; the geography of community banking; the performance of community banks compared to noncommunity banks; the performance of community bank lending specialty groups; and capital formation at community banks.

The study uses detailed balance sheet and geographic data to define community banks primarily in terms of their traditional relationship banking and limited geographic scope of operations.

“Based on this definition, there were 7,658 FDIC-insured community banks operating within 6,914 separate banking organizations (or 94 percent of all banking organizations) as of year-end 2010,” it said. The study added that 330 of those institutions exceeded the $1 billion limit that might have identified them as noncommunity banks if a strict asset-size definition had been applied.

The study also found, among other things, that in in 600 counties -- out of slightly more than 3,000 -- there wouldn’t be any banking services if it weren’t for the local community bank; the best-performing banks are those that specialize in agricultural lending, residential real estate, or are diversified with no specialty; and 40 percent of community banks never needed to raise external capital during the 25-year period.---

ABA Daily Newsbytes

Tuesday, December 18, 2012

As Mortgage Rates Keep Falling, More Are Scratching 15-Year Itch

Fifteen-year loans made up nearly 16 percent of the fixed-rate mortgages that lenders sold to Freddie Mac in the third quarter, up from almost 10 percent a year prior, the firm reports. CoreLogic, meanwhile, says about a third of refinancings in the first seven months of the year were 15-year mortgages; the figure has risen since 2007. Borrowers favor the shorter option because of low interest rates, which make it easier to manage payments and still pay off their notes in half the time of a traditional 30-year loan.

From "As Mortgage Rates Keep Falling, More Are Scratching 15-Year Itch"
Wall Street Journal (12/18/12) P. C9 Andriotis, Annamaria

Monday, December 17, 2012

U.S. Banks Increase Retention of Mortgages

U.S. banks are keeping more home loans on their balance sheets instead of turning them over to Fannie Mae and Freddie Mac for securitization. The trend could signal increased confidence in the housing market and a first step toward a healthier securitization market, but it also could be the result of higher fees being charged by the government-sponsored enterprises as well as profit pressures created by low rates.

From "U.S. Banks Increase Retention of Mortgages"
Financial Times (12/16/12) Alloway, Tracy; Nasiripour, Shahien

Wednesday, December 12, 2012

Bank Data Confidentiality Rule Awaits Obama After Senate Passage

Banks moved closer to greater confidentiality for information they share with the Consumer Financial Protection Bureau after the U.S. Senate unanimously passed legislation to extend the protection. Senators backed amending the Federal Deposit Insurance Act to give lenders assurance that providing information to the bureau wouldn’t automatically waive any privileged status. Senators agreed to pass the bill by unanimous consent after Senator Jim DeMint (R-S.C.) removed a procedural block on the measure. The House passed the bill on March 26 with bipartisan support. The legislation now goes to President Barack Obama to be signed into law.

From "Bank Data Confidentiality Rule Awaits Obama After Senate Passage"
Bloomberg (12/11/12) Dougherty, Carter


Monday, December 10, 2012

CFPB Sends First Fair Lending Report to Congress

The Consumer Financial Protection Bureau late last week sent to Congress its first fair lending report. “We are responsible for ensuring ‘fair, equitable, and nondiscriminatory access to credit’ under the Dodd-Frank Act … [and] we submitted a report … on our efforts to fulfill this fair lending mandate,” Patrice Ficklin, the CFPB assistant director for fair lending, explained in a blog on the agency’s website.

The report said that some of the CFPB’s first-year accomplishments included using fair lending supervisory oversight and enforcement to identify and eliminate consumer harm; educating consumers and promoting awareness of federal fair lending laws; and completing fair lending reviews at dozens of bank and nonbank institutions.

“We are still in the process of building our … program and expect the CFPB’s contribution to the work of ensuring compliance with fair lending laws and promoting access to credit will grow … ,” the report said. “We are also developing risk-based approaches to our … supervision and enforcement work to efficiently allocate the CFPB’s resources in a manner that provides the greatest benefit to consumers.  --ABA Daily Newsbytes

Friday, December 7, 2012

Friday Rate Update

Mortgage Rates Rise Slightly

The average interest rate on 30-year, fixed-rate mortgages edged up to 3.34 percent this week from a record low of 3.32 percent last week, Freddie Mac reported yesterday. A year ago, rates for 30-year mortgages averaged 3.99 percent.
--ABA Daily Newbytes

Monday, December 3, 2012

Fannie, Freddie Loan Limits Unchanged in 2013

The maximum conforming loan limits for mortgages Fannie Mae and Freddie Mac purchase in 2013 will remain at current levels, the Federal Housing Finance Agency said last week. That means the loan limit in most areas will be $417,000 for one-unit properties. In high-cost areas, such as Los Angeles and Washington, D.C., the maximum will remain at $625,500, the FHFA said.

Agency officials explained in a press release that the loan limits are established under the terms of the 2008 Housing and Economic Recovery Act and are calculated each year.

“The law sets loan limits as a function of median home values in local areas,” the FHFA said. “While some counties saw increases in home prices in 2012, no loan-limit increases were evident after other HERA terms such as the statutory ceiling and floor were taken into account.

--ABA Daily Newsbytes

Friday, November 30, 2012

Friday Rate Update

Mortgage Rates Rise Slightly

The average interest rate on 30-year, fixed-rate mortgages edged up to 3.32 percent this week from a record low of 3.31 percent last week, Freddie Mac reported yesterday. A year ago, rates for 30-year mortgages averaged 4.00 percent.

Thursday, November 29, 2012

U.S. Home Prices Rose 4.4 Percent in September From Prior Year

The Federal Housing Finance Agency reports a 4.4 percent jump in home prices during the year-over-year period ended in September, but the 0.2 percent increase from August fell under the 0.4 percent gain anticipated by economists surveyed by Bloomberg. Home prices climbed 1.1 percent in the third quarter from the second quarter and 4 percent from the third quarter of 2011, with the gains attributed to a better job market, record-low mortgage rates and a lean supply of homes for sale.

From "U.S. Home Prices Rose 4.4 Percent in September From Prior Year"
Bloomberg (11/27/12) Gopal, Prashant


Tuesday, November 27, 2012

Powerful Interests Defend Mortgage Deduction

Powerful housing lobbying groups continue to be concerned that the mortgage interest tax deduction is being targeted as part of the fiscal cliff discussions now going on in Washington. According to the Congressional Research Service, the deduction ranks as the third largest tax expenditure on the federal budget and the amount of revenue the U.S. government would forgo from those claiming mortgage interest deductions is estimated to top $100 billion by 2014. Several times, the White House has proposed slashing the deduction to 28 percent from 35 percent of mortgage interest payments for Americans in the top income bracket, but such proposals have been scuttled by the effective lobbying efforts of the Mortgage Bankers Association, the National Association of Realtors and others.

From "Powerful Interests Defend Mortgage Deduction"
CNN (11/27/12) Liberto, Jennifer

Monday, November 26, 2012

Home Equity Loans Make Comeback Fueling U.S. Spending

After six years of declines, Moody's forecasts that lending for home equity lines of credit will rise 30 percent to $79.6 billion this year, the highest level since the start of the financial crisis four years ago. Meanwhile, Moody's projects that originations in 2013 will jump another 31 percent to $104 billion. The Mortgage Bankers Association notes that the amount of equity homeowners had in the second quarter increased by $406 billion to $7.3 trillion, the highest level since 2007.

From "Home Equity Loans Make Comeback Fueling U.S. Spending"
Bloomberg (11/26/12) Howley, Kathleen M. ---BAI   

Wednesday, November 21, 2012

Happy Thanksgiving from all of us at St Casimirs Savings Bank.                 Go Ravens!
Keating Op-Ed Calls for Safe Harbor for All Qualified Mortgages

It’s essential for lenders that the Consumer Financial Protection Bureau structure the “qualified mortgage” -- or QM -- standard under its pending ability-to-repay rule as a legal safe harbor with clear, well-defined standards, ABA President and CEO Frank Keating said in a Bank Think column in yesterday’s American Banker newspaper.

“The bottom line is: The CFPB has to get this right,” Keating wrote. He noted that in recent weeks there have been suggestions that the CFPB might be considering “splitting the baby” by providing a safe harbor for some QM loans, which it would consider mainstream loans, but only a flimsy rebuttable presumption for other high-quality loans.

“That will only swing the pendulum further in the wrong direction,” Keating said. “The CFPB should be working to craft the best QM rule possible to determine what borrowers meet the ability-to-repay test, not working to further stratify the rule in a way that will make it needlessly more difficult -- and more costly-- for creditworthy borrowers to get loans.”

He emphasized that such a course could put homeownership out of reach for thousands of hard-working, creditworthy Americans and bring the housing recovery to an abrupt halt. “That's not something our economy, which already faces daunting ‘fiscal cliff’ challenges, can afford,” Keating said.

---ABA Daily Newsbytes

Monday, November 19, 2012

Rate Update

Freddie: FRM Rates at New Lows

Freddie Mac said fixed mortgage rates dipped to new record lows last week amid indicators of higher consumer confidence and lower wholesale prices. Rates on 30-year fixed-rate mortgages averaged 3.34 percent last week, down from 3.40 percent the previous week and 4.00 percent a year ago. Rates on 15-year FRMs averaged 2.65 percent, down from 2.69 percent the previous week and 3.31 percent last year.---- ICBA

Tuesday, November 13, 2012

Duke: Abandon One-Size-Fits-All Mortgage Rules

Policymakers should reassess regulations that make a traditional banking service -- namely mortgage lending -- too complicated or expensive for community banks to offer, Federal Reserve Governor Betsy Duke said in a speech last week.

Duke reviewed evidence indicating that community banks are important to the mortgage market and mortgage lending is important to their balance sheets and profitability. She also noted that community banks didn’t engage in many of the practices that Dodd-Frank Act rules seek to address, and that they lack to resources to effectively comply with such rules.

“[I] am convinced that the best course for policymakers would be to abandon efforts for a one-size-fits-all approach to mortgage lending,” said Duke, a former community banker and chairman of ABA. “I think an argument can be made that it is appropriate to establish a separate, simpler regulatory structure to cover such lending.”

“Such a regime should still establish appropriate safeguards to protect consumers, but it should do so in a way that recognizes the characteristics of community bank lending, perhaps by focusing on appropriate disclosures and relying on regular on-site supervision to test for appropriate underwriting and loan structuring,” Duke added

---ABA Daily Newsbytes

Friday, November 9, 2012

Friday Rate Update

Mortgage Rates Rise Slightly

The average interest rate on 30-year, fixed-rate mortgages edged up to 3.40 percent this week from 3.39 percent last week, Freddie Mac reported yesterday. A year ago, rates for 30-year mortgages averaged 3.99 percent.
--ABA Daily Newsbytes

Wednesday, November 7, 2012

New Mortgage Disclosures and APR Changes Costly to Consumers and Community Banks

ICBA filed two comment letters on Tuesday with the CFPB regarding the Bureau’s proposed rules on RESPA and TILA that will integrate three key mortgage disclosures. The Bureau is tasked with combining the Truth in Lending (TIL) Disclosure under Regulation Z and the Good Faith Estimate (GFE) under Regulation X, into one form now called the Loan Estimate. The CFPB is also renovating the HUD-1 and HUD 1A settlement statement, which will now be called the Closing Disclosure.

While the model forms themselves are a vast improvement over the current GFE, TIL and HUD-1 forms, the policy governing their use has broad impacts on community banks and will be costly to implement
----IICBA News

Monday, November 5, 2012

FHFA, CFPB to Create First National Mortgage Database

The Federal Housing Finance Agency and Consumer Financial Protection Bureau will team up to create a first-ever national mortgage database to track market trends and support their policymaking and research, the agencies said last week in a press release.

The database will include information spanning the life of a mortgage loan from origination through servicing, the agencies said. They explained that while the database won’t contain personally identifiable information, it will include the borrower’s financial and credit profile; the mortgage product and terms; the property purchased or refinanced; and the loan’s ongoing payment history.

Data will be updated on a monthly basis and go as far back as 1998. The FHFA and CFPB “will build the database by matching a nationwide sampling of credit bureau files on borrowers’ mortgages and payment histories with informational files such as the Home Mortgage Disclosure Act database, property valuation models, and other data files to create a comprehensive picture for each mortgage,” the agencies said.

--ABA Daily Newsbytes

Friday, November 2, 2012

Rate Update

Mortgage Rates Fall Slightly

The average interest rate on 30-year, fixed-rate mortgages fell to 3.39 percent this week from 3.41 percent last week, Freddie Mac reported yesterday. A year ago, rates for 30-year mortgages averaged 4.00 percent.

Monday, October 29, 2012

St Casimirs is closed today due to inclement weather. Please be sure to call before coming out during the storm.

In the meantime, check out this gentleman with the highest recorded credit score.

Friday, October 26, 2012

Mortgage Rates Rise

The average interest rate on 30-year, fixed-rate mortgages rose to 3.41 percent this week from 3.37 percent last week, Freddie Mac reported yesterday. A year ago, rates for 30-year mortgages averaged 4.10 percent.
---ABA Daily Newsbytes

Monday, October 22, 2012

Existing Home Sales Up

Sales of existing homes rose 1.7 percent in September to a seasonally adjusted annual rate of 4.75 million units, the National Association of Realtors reported Friday. “Despite occasional month-to-month setbacks, we’re experiencing a genuine recovery,” NAR Chief Economist Lawrence Yun said. “More people are attempting to buy homes than are able to qualify for mortgages, and recent price increases are not deterring buyer interest. Rather, inventory shortages are limiting sales, notably in parts of the West.

--ABA Daily Newsbytes

Friday, October 19, 2012

Friday Rate Update

Mortgage Rates Drop; 15-Year Rate Sets Another Record Low

The average interest rate on 30-year, fixed-rate mortgages fell to 3.37 percent this week from 3.39 percent last week, Freddie Mac reported yesterday. A year ago, rates for 30-year mortgages averaged 4.11 percent.

Meanwhile, the average rate on 15-year, fixed-rate mortgages fell to a record low of 2.66 percent this week from 2.70 percent last week. A year ago, rates for 15-year mortgages averaged 3.38 percent.

--ABA Daily Newsbytes

Tuesday, October 16, 2012

Home Loans May Get Shield

Federal regulators are considering giving mortgage lenders protection from certain lawsuits, according to insiders, a move designed to encourage lending to well-qualified borrowers. The proposal for the first time would establish a basic national standard for loans, known as a "qualified mortgage." As part of its deliberation, the Consumer Financial Protection Bureau is considering providing a full legal shield for high-quality loans that qualify, mandating that judges rule in lenders' favor if consumers contest foreclosures. For a smaller category of loans that still meet the "qualified mortgage" guidelines but carry higher interest rates, lenders would receive fewer protections. In those cases, consumers could argue in court that lenders should have known that they couldn't afford the mortgage.

From "Home Loans May Get Shield"
Wall Street Journal (10/16/12) Zibel, Alan

Monday, October 15, 2012

ICBA Backs Broader Exemptions from Mortgage-Servicing Proposals

ICBA called on the Consumer Financial Protection Bureau to exempt small mortgage servicers from proposed servicing rules. In a comment letter to the bureau, ICBA advocated exempting servicers that service 10,000 or fewer mortgage loans from a proposed rule that would require more burdensome monthly mortgage statements. ICBA wrote that the bureau’s proposed threshold of 1,000 loans is too low to provide any real relief for community bank mortgage servicers.

Read more here.

Wednesday, October 10, 2012

US Sues Wells Fargo Over FHA-Insured Loan Defaults

The federal government has filed suit against Wells Fargo, alleging that the lender misrepresented the quality of thousands of loans in order to be eligible for federal loan insurance. The lawsuit seeks to recover "hundreds of millions of dollars" that the Federal Housing Administration paid out after borrowers defaulted on Wells Fargo mortgage loans. The lawsuit alleges that between May 2001 and October 2005, Wells Fargo certified that over 100,000 mortgage loans were eligible for the insurance. But "a very substantial percentage of those loans — nearly half in certain months" were not eligible, according to the lawsuit.

From "US Sues Wells Fargo Over FHA-Insured Loan Defaults"
Associated Press (10/09/12)

Tuesday, October 9, 2012

CFPB's New Regs Tightening Access to Credit

Mortgage Lenders Tighten Requirements Ahead of QM Rule

Many lenders are not waiting for regulators to define what a qualified mortgage is and instead are writing their own rules. Most notably, they are being super strict about debt-to-income ratios, which is limiting some borrowers from getting a home loan. Higher credit scores and stricter documentation requirements also are restricting access to credit. The Consumer Financial Protection Bureau is expected to finalize a rule in January requiring that lenders verify a borrower's ability to repay a loan unless the loan falls under the definition of a qualified mortgage. The qualified mortgage provision is expected to establish a general set of standards about a borrower's ability to repay a mortgage, including debt ratios and employment status.

From "Mortgage Lenders Tighten Requirements Ahead of QM Rule"
American Banker (10/08/12) Berry, Kate

Thursday, October 4, 2012

Quick Updates

Burdened by Old Mortgages, Banks Are Slow to Lend Now

Thousands of aspiring homeowners are being locked out of the market as Fannie Mae and Freddie Mac force banks to buy back loans made during the boom years and sold to the two firms. According to Inside Mortgage Finance, they have asked banks to repurchase $66 billion in loans made between 2006 and 2008. Banks are tightening underwriting in order to ward off such demands in the future
From "Burdened by Old Mortgages, Banks Are Slow to Lend Now"
Wall Street Journal (10/04/12) Timiraos, Nick

Mortgage Lenders Brace for CFPB Exams; Fair-Lending Is Top Concern

Mortgage lenders discussing Consumer Financial Protection Bureau exams at a recent conference expressed concern about fair lending enforcement and the agency's independent litigation authority. It has scheduled 48 exams of banks and nonbank mortgage lenders so far; and experts believe it is focusing on the quality of data reported to regulators under the Home Mortgage Disclosure Act and on mortgage discrimination, even if it is unintentional.
From "Mortgage Lenders Brace for CFPB Exams; Fair-Lending Is Top Concern"
American Banker (10/04/12) Berry, Kate

Monday, October 1, 2012

CFPB Study: Credit Scores Used by Consumers, Lenders Can Differ

About one of five consumers buying a credit score from a credit bureau are likely to receive a meaningfully different score than the one a lender would use in making a credit decision, according to a Consumer Financial Protection Bureau study released yesterday.

The Dodd-Frank Act-mandated study analyzed credit scores from a total of 200,000 files at TransUnion, Equifax and Experian to compare scores sold to consumers with those sold to creditors.

“A meaningful difference means that the consumer would be likely to qualify for different credit offers -- either better or worse -- than they would expect to get based on the score they purchased,” the CFPB said in a press release.

The agency emphasized that there’s no way consumers can know how the score they receive will compare with the score a creditor uses in making a lending decision. They therefore can’t rely exclusively on the credit score they receive to determine how lenders will view their creditworthiness.

The CFPB recommended that borrowers shop around for credit, check the credit report for accuracy, and dispute errors. The bureau will begin supervising consumer reporting agencies on Sept. 30

Friday, September 21, 2012

Friday Rate Update

Mortgage Rates Again Hit Record Lows

Mortgage rates again hit record lows. The average interest rate on 30-year, fixed-rate mortgages matched its all-time low by dropping to 3.49 percent this week from 3.55 percent last week, Freddie Mac reported yesterday. A year ago, rates for 30-year mortgages averaged 4.09 percent.
Meanwhile, the average rate on 15-year, fixed-rate mortgages fell to a record low of 2.77 percent this week from 2.85 percent last week. A year ago, rates for 15-year mortgages averaged 3.29 percent

Thursday, September 20, 2012

Higher Mortgage Fees Proposed in Five States

The Federal Housing Finance Agency on Sept. 20 will propose charging more for mortgages in Connecticut, Florida, Illinois, New Jersey, and New York because it takes longer in these states for banks to foreclose. The rationale is that the longer it takes a lender to repossess the collateral behind a mortgage, the higher the potential costs. Although the fees Fannie Mae and Freddie Mac charge would only rise by 0.15 to 0.3 percentage point of the loan amount, creating state-level mortgage pricing could set a new precedent.
From "Higher Mortgage Fees Proposed in Five States"
Wall Street Journal (09/20/12) Timiraos, Nick; Zibel, Alan

Tuesday, September 18, 2012

CFPB Opposes 20 Percent Down Payment, Won't Abuse Powers: Cordray

The Consumer Financial Protection Bureau will not mandate a 20 percent down payment in new underwriting rules for low-risk loans, agency head Richard Cordray testified before the Senate Banking Committee on Sept. 13. The declaration was in response to a question about the CFPB's 'qualified mortgages' proposal, but it was unclear if he also would oppose a 20 percent down payment as part of a separate plan to designate certain loans as QMs. Cordray also said the bureau does not believe it has the power to ignore or rewrite the Dodd-Frank financial reform law.

From "CFPB Opposes 20 Percent Down Payment, Won't Abuse Powers: Cordray"
American Banker (09/17/12) Berry, Kate

Friday, September 14, 2012

Friday Rate Update

Mortgage Rates Remain Unchanged

The average interest rate on 30-year, fixed-rate mortgages remained unchanged at 3.55 percent this week, Freddie Mac reported yesterday. A year ago, rates for 30-year mortgages averaged 4.09 percent

Wednesday, September 12, 2012

No Problems Like This At St Casimirs

Study Says 800K Homeowners Should’ve Avoided Foreclosure But Big Banks Messed It All Up

Getting a mortgage modification has been hard enough for homeowners, what with disorganized big banks not having enough well-trained people on staff to deal with the necessary ins and outs of the process. But a new study says that things should've been easier under the Home Affordable Modification Program and resulted in 800,000 fewer foreclosures than we ended up with.

ProPublica delves into the study by the Federal Reserve Bank of Chicago, the government's Office of the Comptroller of the Currency (OCC), Ohio State University, Columbia Business School, and the University of Chicago. The results come down that hefty number of 800,000 homeowners who ended up in foreclosure but shouldn't have under the government's foreclosure prevention program.

The results showed that some banks were better than modifying loans than others because they had the extra ammo of larger staffs and better trained employees who knew the best way to guide homeowners to avoid foreclosure.
The study found that if all the mortgage servicers that weren't as good at modifying loans had performed as well as their peers, there would've been 800,000 more modifications under HAMP.


Monday, September 10, 2012

Little Change in Mortgage Rates

The average interest rate on 30-year, fixed-rate mortgages was 3.55 percent this week, close to last week’s 3.59 percent average, Freddie Mac reported yesterday. A year ago, rates for 30-year mortgages averaged 4.12 percent.

--ABA Daily Newsbytes

Tuesday, September 4, 2012

It's Getting More Confusing. . .

CFPB Extends Comment Period on APR Changes

The Consumer Financial Protection Bureau on Friday extended the comment period for proposed changes that would create a new, higher “all in” annual percentage rate calculation and establish a new high-cost mortgage coverage test. Comments on the changes, which were proposed July 9 along with extensive revisions to Truth in Lending Act and Real Estate Settlement Procedures Act rules and disclosures, were initially due Sept. 7 but now are due Nov. 6.

The comment period extension follows an Aug. 13 meeting between ABA President and CEO Frank Keating and ABA EVP Bob Davis and senior CFPB staff. Keating and Davis questioned the need for extensive changes to the APR when the calculation was being de-emphasized in proposed new RESPA/TILA disclosures. They also expressed concern that the proposed changes would be costly and confusing to consumers.   --ABA Daily Newsbytes

Friday, August 31, 2012

Friday Rate Update

Mortgage Rates Drop

The average interest rate on 30-year, fixed-rate mortgages dipped to 3.59 percent this week from 3.66 percent last week, Freddie Mac reported yesterday. A year ago, rates for 30-year mortgages averaged 4.22 percent.

Wednesday, August 29, 2012

Notes on the Economy

Consumer Confidence Falls in August

The Consumer Confidence Index declined to 60.6 in August from 65.4 in July, the New York-based Conference Board reported yesterday. “A more pessimistic outlook was the primary reason for this month’s decline in confidence,” said Lynn Franco, director of the Conference Board’s Consumer Research Center. “Consumers were more apprehensive about business and employment prospects, but more optimistic about their financial prospects despite rising inflation expectations. Read more.

Home Prices Increase in July
The Standard & Poor's/Case-Shiller Home Price Index of 20 major cities rose 2.3 percent in June, the third straight monthly increase, the group said yesterday. Prices rose in all 20 cities tracked by the index, with Detroit, Chicago and Atlanta posting the highest monthly increases. 

--ABA Daily Newsbytes

Monday, August 27, 2012

Fannie Tightens Some Mortgage Standards

Fannie Mae is changing some qualification standards for people buying homes or refinancing loans based on new data and loan performance, the company said in a memo to lenders this week.

The changes include a reduction from 97 percent to 90 percent in the maximum loan-to-value ratios for some adjustable-rate mortgages; an increase from 620 to 640 in minimum credit scores for adjustable-rate mortgages not vetted by Desktop Underwriter computer software; and an end to the FannieNeighbors option that offered underwriting flexibility for borrowers in underserved areas

---ABA Daily Newsbytes

Wednesday, August 22, 2012

Rates on the Rise

MBA: Mortgage Refinance Activity declines as Rates Increase

by Bill McBride on 8/22/2012 07:01:00 AM
From the MBA: Refinance Applications Decline as Rates Increase
The Refinance Index decreased 9 percent from the previous week to the lowest level since early July. The seasonally adjusted Purchase Index increased 0.9 percent from one week earlier.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 3.86 percent from 3.76 percent, with points decreasing to 0.42 from 0.47 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans


Monday, August 20, 2012

Treasury Announces Moves to Expedite GSEs’ Resolution

The Treasury Department on Friday modified its financial support of Fannie Mae and Freddie Mac to accelerate the winding down of the government-sponsored enterprises.
The GSEs will no longer pay a 10 percent annual dividend to Treasury on its preferred stock investments in Freddie and Fannie. Instead, they will give Treasury all of their profits, agency officials said. The GSEs also will reduce their investment portfolios at a 15-percent annual rate, rather than 10 percent per year. As a result, the GSEs’ investment portfolios would reach the $250 billion goal in 2018, four years earlier than originally scheduled.

“With today’s announcement, we are taking the next step toward responsibly winding down Fannie Mae and Freddie Mac, while continuing to support the necessary process of repair and recovery in the housing market,” said Michael Stegman, counselor to the Treasury secretary for housing finance policy.

ABA applauded Treasury’s steps. “[The] changes are consistent with [the Federal Housing Finance Agency’s] strategic plan and ABA’s reform priority of a reduced government presence in the housing market,” association President and CEO Frank Keating said.

---ABA Daily Newsbytes

Friday, August 17, 2012

Friday Rate Update

Mortgage Rates Rise

The average interest rate on 30-year, fixed-rate mortgages rose to 3.62 percent this week from 3.59 percent last week, Freddie Mac reported yesterday. A year ago, rates for 30-year mortgages averaged 4.15 percent.

Thursday, August 16, 2012

St Casimirs Already Provides Appraisals

Federal Agencies Propose Rule for Higher-Risk Mortgages

Six federal regulatory bodies have proposed a rule for 'higher-risk' mortgages that would require a creditor to use a licensed or certified appraiser who writes a report based on inspection of the property's interior. The rule also would require a creditor to disclose information to loan applicants about the purpose of the appraisal and provide them with free copies of any appraisal report. Meanwhile, the Consumer Financial Protection Bureau has proposed a rule that would require lenders to give all mortgage applicants copies of appraisals and other home-value estimates generated in connection with their applications.

From "Federal Agencies Propose Rule for Higher-Risk Mortgages"
Philadelphia Inquirer (08/16/12) Heavens, Alan J.

Tuesday, August 14, 2012

Beware of Financial Spies

Consumer Bureau Seeks Sleuths for Bad Bankers

The Consumer Financial Protection Bureau is recruiting investigators in ads that suggest the agency plans to go undercover to pursue cases against banks, credit card companies and other financial companies. “As needed,” one recent recruitment ad stated to potential investigators, “establish and conduct surveillance activity to develop both intelligence and evidence to further investigations. Utilize surveillance activities to identify subjects, their activities and their associates, corroborate source information and collect evidence.” The bureau also said that investigators, who would earn $98,000 to $149,000 per year, may have to arrange for and oversee contracts with private investigators. These private investigators “may know the players, culture, history in a specific geographic area in which a case is centered,” according to the advertisements, which outline a host of other responsibilities.

From "Consumer Bureau Seeks Sleuths for Bad Bankers"
Washington Times (08/12/12) McElhatton, Jim

Friday, August 10, 2012

Consumer Protection Bureau Proposes to Tighten Rules on Mortgage Servicers

On Aug. 9, the Consumer Financial Protection Bureau formally proposed stricter rules for mortgage servicers that would require them to give borrowers monthly statements, inform them of impending interest rate adjustments, and provide more options to prevent foreclosure. Public comments on the proposal will be accepted through Oct. 9, with the final rules expected in January. The rules would amend the Truth in Lending Act and the Real Estate Settlement Procedures Act.

From "Consumer Protection Bureau Proposes to Tighten Rules on Mortgage Servicers"
New York Times (08/10/12) P. B4 Wyatt, Edward

Wednesday, August 8, 2012

Lower Losses for Freddie

by Bill McBride on 8/07/2012 03:30:00 PM

From Tom Lawler:

Freddie Mac reported that its GAAP net income “attributable” to Freddie Mac was $3.020 billion last quarter, up from $577 million in the previous quarter and a net loss of $2.371 billion in the second quarter of 2011. The biggest “swing” factor last quarter was a sharp drop in the provision for credit losses -- $155 million last quarter compared to $1.825 billion in the previous quarter and $2.529 billion in the comparable quarter of last year.

Freddie attributed the sharp drop in its loss provision – which fell far short of charge-offs, resulting in a steep drop in its loan loss reserves – to “improvements in the number of newly impaired loans and to lower estimated future losses due to the positive impact of an increase in national home prices.” Freddie’s internal national home price index, which is based on repeat transactions of homes backed by mortgages owned or guaranteed by Freddie or Fannie with state weights based on Freddie’s SF mortgage book, jumped by 4.8% from March to June, and the June HPI was up about 1.0% from a year ago.


Monday, August 6, 2012

Senators Advocate for Broad QM, Safe Harbor

Three senators in a letter Friday urged Consumer Financial Protection Bureau Director Richard Cordray to include a broad definition of “qualified mortgage” -- and a true legal safe harbor for conforming loans -- in the bureau’s pending ability-to-repay rule.

“If the ultimate definition of a QM is excessively narrow, otherwise creditworthy borrowers could find themselves unable to obtain affordable mortgage credit,” wrote Sens. Roy Blunt (R-Mo.), Jerry Moran (R-Kan.) and Mark Begich (D-Alaska).

The senators said a safe harbor also would prevent an unnecessary restriction of credit due to legal confusion or cost. “As the Federal Reserve correctly stated in its preamble to the draft rule, the ‘drawback of treating a qualified mortgage as providing a presumption of compliance is that it provides little legal certainty for the creditor, and thus little incentive to make a qualified mortgage,’” they said.

ABA agrees with the lawmakers and will continue its aggressively advocacy -- which has included meetings with the CFPB, appeals to lawmakers, testimony, letters and coalition building -- for a broad QM that includes a safe harbor.

----ABA Daily Newsbytes

Thursday, August 2, 2012

Less Taxpayer Money for Fannie & Freddie

Saying Fannie Mae and Freddie Mac have already cost taxpayers more than $188 billion, the acting chief of the Federal Housing Finance Agency, which regulates those lenders, says he has concluded that those firms won't participate in the Obama administration's program to cut the amount struggling homeowners owe.

Edward DeMarco, the acting chief of the FHFA, said in a letter to the Senate Banking Committee that he's given the matter a lot of thought, but that the principal reduction part of the Home Affordable Modification Program "would not make a meaningful improvement in reducing foreclosures in a cost-effective way for taxpayers."

U.S. Treasury Secretary Timothy Geithner has already responded to express his disapproval of DeMarco's decision.

“I am concerned by your continued opposition to allowing Fannie Mae and Freddie Mac to use targeted principal reduction in their loan modification programs,” he wrote, according to MarketWatch. He argues that participating in the program could lead to help for 500,000 homeowners and save Fannie and Freddie $3.6 billion when compared to other loan-modification programs.

Read more here.

Tuesday, July 31, 2012

Got flood insurance?

Although strangely mis-titled, this article has some good info about flood insurance.   Banks are required by regulators to carefully check the flood determination zone of every property it loans on.


For the last few years, the folks at the Federal Emergency Management Agency have been issuing more accurate flood plain maps at the same time as the government has made a renewed push for mortgage lenders to help make sure homeowners who need flood insurance are actually purchasing it. But even though these new maps should be making it more clear to everyone whether or not one's home is in a flood plain, the banks appear to be playing fast and loose with the rules in order to force customers into more expensive insurance policies.

See, while part of your property might be in a Special Flood Hazard Area, that doesn't necessarily mean you need to purchase flood insurance. The insurance is only required if your actual house falls within that zone.

So if your house is far from that lake, creek or river or is high up above the area that could flood, you should not have to purchase the insurance. Problem is, as these new maps get around, banks are taking only cursory glances at them and not always checking to see where a house might be before deciding that flood insurance is needed.

Usually, banks give homeowners 45 days to provide proof of insurance. After that, the bank will just put you into a policy of its choosing -- one that is often significantly higher in price than what you'd pay if you bought it yourself.
Homeowners can appeal to FEMA, though that process will likely require 60 days. By that time, they will have either needed to find their own insurance or be placed into one by their lender.

Read more here.

Friday, July 27, 2012

ABA Daily Newsbytes

Mortgage Rates Again Set Record Lows

Meanwhile, the average rate on 15-year, fixed-rate mortgages fell to a record low of 2.80 percent this week from 2.83 percent last week. A year ago, rates for 15-year mortgages averaged 3.66 percent--

Mortgage rates again hit record lows, with the average interest rate on 30-year, fixed-rate mortgages dropping to 3.49 percent this week from 3.53 percent last week, Freddie Mac reported yesterday. A year ago, rates for 30-year mortgages averaged 4.55 percent.

Monday, July 23, 2012

WSJ: "As Homes Go, So Do Pickups"

by Bill McBride on 7/22/2012 08:34:00 PM
As residential investment increases, there will be positive spillover effects ... usually it is "As housing goes, so goes the economy!"

From Mike Ramsey at the WSJ: As Homes Go, So Do Pickups (ht Joe)
[I]n the past few months, more lots have been cleared for construction and [Hardwood's] phone has been ringing more frequently. So in June he went out and bought a new Chevrolet 2500 diesel truck with a backup camera and a hands-free Bluetooth phone link.

"There is a lot more steady and consistent work," said the 30-year-old Mr. Harwood, whose company Broadleaf Landscape, in Damascus, Md., does a lot of work at new homes. "I was more comfortable with buying a new truck at this point in time because of the market change."
In the first half of this year, sales of full-size pickups made by the Detroit Three increased 13%, to 707,175 vehicles.


Friday, July 20, 2012

Banks Win New Ally in Fight Over Mortgage Rules

From "Banks Win New Ally in Fight Over Mortgage Rules"
American Banker (07/20/12) Wack, Kevin
Habitat for Humanity believes the qualified mortgage rule could keep it from building and financing homes for needy people if the Consumer Financial Protection Bureau issues a final rule that is overly strict on borrower credit scores, employment history, and down payments. Its concerns were raised at a House subcommittee hearing with CFPB Deputy Director Raj Date on July 19. Habitat wants the rule to include an exception for non-profit lenders or a broad definition of QM that will not affect the organization.