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.

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

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

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   

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

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

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 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

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

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

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.