Consumer Confidence Takes a Hit in January

Consumer confidence declined sharply in January and erased all the gains made in 2012, the Conference Board reported. The Consumer Confidence Index dropped from 66.7 to 58.6. The Conference Board said consumers are more pessimistic about the economic outlook and their financial situation and cited the increase in payroll taxes as a contributing factor.


--ICBA

Pending Home Sales Decline

The Pending Home Sales Index fell 4.3 percent to 101.7 in December from 106.3 in November, the National Association of Realtors said yesterday. The index, which reflects contracts but not closings on existing homes, is still 6.9 percent higher than the 95.1 it posted in December 2011.

“The supply limitation appears to be the main factor holding back contract signings in the past month. Still, contract activity has risen for 20 straight months on a year-over-year basis,” NAR Chief Economist Lawrence Yun said. “Buyer interest remains solid, as evidenced by a separate Realtor survey which shows that buyer foot traffic is easily outpacing seller traffic.”


---ABA Daily Newsbytes

Friday Rate Update

Mortgage Rates Rise

The average interest rate on 30-year, fixed-rate mortgages rose to 3.42 percent this week from 3.38 percent last week, Freddie Mac reported yesterday. A year ago, rates for 30-year mortgages averaged 3.98 percent.


--ABA Daily Newsbytes

MBA and Member Banks Participate in Culminating Event with the American Red Cross for Hurricane Sandy Disaster Relief

MBA and 17 participating member banks partnered with the American Red Cross over a 6 week period to assist in the response and recovery efforts of those affected by the devastation of Hurricane Sandy. Last week, the culminating event was held at the American Red Cross of the Chesapeake Region headquarters in Baltimore. We concluded the event by presenting the American Red Cross with a check reflective of the total amount contributed by all 17 banks and their communities, which was an incredible amount of $37,132.71.

We owe a special thanks to MBA member Russell Grimes, President & CEO, Carroll Community Bank, who led the initiative to partner with the Red Cross. We also owe a huge thank you to everyone who participated in this important initiative – the participating banks are listed below. As MBA’s Kathleen Murphy stated in the press release, “Support of the relief effort is just another way that the Maryland Banking Industry demonstrates its commitment to giving back.” Again, we greatly appreciate everyone’s generous support!

Participating Banks
Arundel Federal Savings Bank
Baltimore County Savings Bank
Bay-Vanguard FSB
Carroll Community Bank
Fraternity Federal Savings & Loan
Harford Bank
M&T Bank
Monument Bank
OBA Bank
Prince George’s Federal Savings Bank
Sandy Spring Bank
Slavie Federal Savings Bank
St. Casimir’s Savings Bank
SunTrust Bank
The Bank of Glen Burnie
The Columbia Bank
The National Bank of Cambridge

Mortgage Rates Drop Slightly


The average interest rate on 30-year, fixed-rate mortgages edged down to 3.38 percent this week from 3.40 percent last week, Freddie Mac reported yesterday. A year ago, rates for 30-year mortgages averaged 3.88 percent--- ABA Daily Newsbytes

Congratulations Baltimore Ravens!!

St Casimirs will be closed on Monday, January 21 in observance of MLK Day.

Go Ravens!!

FDIC to Consider Rule on Higher-Risk Mortgage Appraisals

The FDIC Board at its meeting today is scheduled to consider a Dodd-Frank Act-mandated final rule that will establish new appraisal requirements for “higher-risk mortgage loans.” The FDIC, along with five other federal financial regulatory agencies, issued the proposed rule last August.  ---ABA Daily Newsbytes

What's being considered is a new requirement that lenders must order and pay for a second appraisal for certain "higher risk/higher cost" mortgages.  Since lenders will have to foot the bill, how long will it be before they just stop offering riskier loans and close many potential borrowers out of the market?

Keating: Final ‘Qualified Mortgage’ Standard Ensures Access to Safe Credit

The “qualified mortgage” standard under the ability-to-repay final rule that the Consumer Financial Protection Bureau issued yesterday ensures that most consumers will continue to have access to safe credit, ABA President and CEO Frank Keating said.

“Qualified mortgage, as defined by the rule, imposes strict lending standards. While QM encompasses many of the loans being underwritten today, it must also interact with a number of other mortgage rules that the CFPB will be issuing this month,” Keating said. “There is a very real impact to these rules, and they will transform our lending practices and could restrict access to credit.”

He commended the bureau for recognizing the need for a safe harbor to prevent a reduction in credit availability and unwarranted lawsuits that ultimately would drive up the cost of loans for consumers.

“We appreciate the thought, time and work the CFPB put into developing this rule. It is clear that the bureau has implemented tough consumer protections with an eye toward limiting market disruptions,” Keating said. “ABA will continue to work with the CFPB to achieve a strong housing recovery.”

The ability-to-repay final rule will take effect on Jan. 10, 2014.
--ABA Daily Newsbytes

Key ‘Qualified Mortgage’ Rule Expected Soon



The Consumer Financial Protection Bureau may release its final ability-to-repay rule, which will include a definition of “qualified mortgage,” in conjunction with a field hearing planned for Thursday, Jan. 10, in Baltimore, according to press reports.

The rule will implement a Dodd-Frank Act requirement that creditors determine a consumer’s ability to repay a mortgage before making a loan. Because it will provide protections for what it defines as qualified mortgages, the rule is expected to have a significant impact on the future of mortgage lending.

ABA and a broad coalition have long advocated that the bureau structure its qualified mortgage as a legal safe harbor that properly shields lenders when they originate compliant loans. They also have urged the CFPB to craft a rule that encompasses a wide range of mortgage products and underwriting practices to protect credit availability. ---ABA Daily Newsbytes

Friday Rate Update

Mortgage Rates Drop Slightly



The average interest rate on 30-year, fixed-rate mortgages edged down to 3.34 percent this week from 3.35 percent last week, Freddie Mac reported yesterday. A year ago, rates for 30-year mortgages averaged 3.91 percent. --- ABA Daily Newsbytes

“Fiscal Cliff” Deal Passes Congress



Last night, a bipartisan plan to avoid federal spending cuts and tax increases passed the House (257 to 167 votes).  This plan passed the Senate previously as is expected to be signed by the President in the near future.  The plan raises income tax rates on households earning more than $450,000 and postpones $110 billion in spending cuts for two months.  If unresolved, the fiscal cliff would have hit Maryland especially hard, given the State’s close proximity to Washington D.C. and the strong role federal contracts and spending has on Maryland’s budget and employment numbers.

--MBA