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Monday, December 31, 2012
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
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
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
Friday, December 14, 2012
Credit Report Disputes
http://consumerist.com/2012/12/13/cfpb-says-credit-reporting-firms-often-ignore-consumers-evidence-in-report-disputes/
If you're having trouble getting the credit agencies to correct your report, you're not alone.
If you're having trouble getting the credit agencies to correct your report, you're not alone.
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
--BAI
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
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
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
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.
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
--BAI
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
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
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
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
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
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
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
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.
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.
In the meantime, check out this gentleman with the highest recorded credit score.
Friday, October 26, 2012
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
--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
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
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.
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)
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
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
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
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
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
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
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
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
Monday, September 10, 2012
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
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
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
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
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
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.
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.
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
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
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
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
“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. http://consumerist.com/2012/07/fhfa-says-no-to-cutting-amount-homeowners-owe-on-fannie-mae-freddie-mac-mortgages.html
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. http://consumerist.com/2012/07/fhfa-says-no-to-cutting-amount-homeowners-owe-on-fannie-mae-freddie-mac-mortgages.html
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.
From Consumerist.com:
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. http://consumerist.com/2012/07/its-not-in-banks-best-interest-to-look-too-closely-at-new-flood-plain-maps.html
From Consumerist.com:
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. http://consumerist.com/2012/07/its-not-in-banks-best-interest-to-look-too-closely-at-new-flood-plain-maps.html
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.
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
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, KevinHabitat 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.
From "Banks Win New Ally in Fight Over Mortgage Rules"
American Banker (07/20/12) Wack, KevinHabitat 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.
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