New Home Sales Rise in January
Sales
of new homes rose 9.6 percent in January to a seasonally adjusted annual rate
of 468,000, according to the Department of Commerce yesterday. Sales were 2.2
percent higher than a year before. The median new home price was $260,200.
--ABA Daily Newsbytes
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Thursday, February 27, 2014
Monday, February 24, 2014
Mortgage Woes Approach Prerecession Levels
The number of troubled mortgages has declined to a level last seen since the early months of the recession. The delinquency rate fell to 6.39 percent of loans in the fourth quarter of 2013, down from 7.09 percent a year earlier and the lowest rate since the first quarter of 2008, according to the Mortgage Bankers Association. The backlog of foreclosure inventory declined to its lowest level since 2008 as well; and the number of loans on which lenders initiated foreclosure was the lowest since 2006, when the housing bubble was starting to burst. Also, three-quarters of the nation's problem loans were made in 2007 or earlier, and delinquency rates for loans made after that point are near historical norms. "The legacy of very high foreclosure rates is a problem of older loans," said MBA chief economist Michael Fratantoni. Florida had the highest share of loans in foreclosure, 8.56 percent, but the figure was down more than half of its peak rate.
From "Mortgage Woes Approach Prerecession Levels"
Wall Street Journal (02/21/14) Dougherty, Conor
The number of troubled mortgages has declined to a level last seen since the early months of the recession. The delinquency rate fell to 6.39 percent of loans in the fourth quarter of 2013, down from 7.09 percent a year earlier and the lowest rate since the first quarter of 2008, according to the Mortgage Bankers Association. The backlog of foreclosure inventory declined to its lowest level since 2008 as well; and the number of loans on which lenders initiated foreclosure was the lowest since 2006, when the housing bubble was starting to burst. Also, three-quarters of the nation's problem loans were made in 2007 or earlier, and delinquency rates for loans made after that point are near historical norms. "The legacy of very high foreclosure rates is a problem of older loans," said MBA chief economist Michael Fratantoni. Florida had the highest share of loans in foreclosure, 8.56 percent, but the figure was down more than half of its peak rate.
From "Mortgage Woes Approach Prerecession Levels"
Wall Street Journal (02/21/14) Dougherty, Conor
Friday, February 21, 2014
Friday Rate Update
Mortgage Rates Tick Up Slightly
The average rate for a 30-year fixed-rate mortgage edged up slightly to 4.33 percent from last week's rate of 4.28 percent, Freddie Mac said yesterday. At this time in 2013, the 30-year FRM rate averaged 3.56 percent.
The average rate for a 30-year fixed-rate mortgage edged up slightly to 4.33 percent from last week's rate of 4.28 percent, Freddie Mac said yesterday. At this time in 2013, the 30-year FRM rate averaged 3.56 percent.
Wednesday, February 19, 2014
Student Debt May Hurt Housing Recovery by Hampering First-Time
Buyers
The housing recovery could lose steam amid escalating student loan debt carried by millions of Americans. With so many people owing so much for their college education, a generation of potential buyers is being discouraged and even blocked from making their first home purchase. Recent improvements in the housing market have been fueled primarily by investors, but that demand now appears to be ebbing as both prices and borrowing costs rise. A recent Mortgage Bankers Association analysis determined that loan applications for home purchases decreased almost 20 percent in the last four months versus the same period a year earlier. First-time buyers are simply not stepping up to fill the void, having accounted for only about 33 percent of activity over the last year -- well under the historical norm. The concern is that many young adults can no longer save for a down payment or qualify for financing.
From "Student Debt May Hurt Housing Recovery by Hampering First-Time Buyers"
Washington Post (02/18/14) P. A1 ElBoghdady, Dina
The housing recovery could lose steam amid escalating student loan debt carried by millions of Americans. With so many people owing so much for their college education, a generation of potential buyers is being discouraged and even blocked from making their first home purchase. Recent improvements in the housing market have been fueled primarily by investors, but that demand now appears to be ebbing as both prices and borrowing costs rise. A recent Mortgage Bankers Association analysis determined that loan applications for home purchases decreased almost 20 percent in the last four months versus the same period a year earlier. First-time buyers are simply not stepping up to fill the void, having accounted for only about 33 percent of activity over the last year -- well under the historical norm. The concern is that many young adults can no longer save for a down payment or qualify for financing.
From "Student Debt May Hurt Housing Recovery by Hampering First-Time Buyers"
Washington Post (02/18/14) P. A1 ElBoghdady, Dina
Tuesday, February 18, 2014
Friday, February 14, 2014
Late Payment Rate on Mortgages Falls
The return of home appreciation, a strengthening job market, and mortgage modification programs have bolstered Americans' finances, allowing more of them to keep current on their home loans. According to TransUnion, the share of mortgage borrowers two months or more behind in their payments shrank to 3.85 percent in the fourth quarter -- the lowest pace since the second quarter of 2007. The October-through-December delinquency rate was down from 4.09 percent in the previous three months and down from 5.08 percent a year earlier.
From "Late Payment Rate on Mortgages Falls"
Associated Press (02/11/14) Veiga, Alex
The return of home appreciation, a strengthening job market, and mortgage modification programs have bolstered Americans' finances, allowing more of them to keep current on their home loans. According to TransUnion, the share of mortgage borrowers two months or more behind in their payments shrank to 3.85 percent in the fourth quarter -- the lowest pace since the second quarter of 2007. The October-through-December delinquency rate was down from 4.09 percent in the previous three months and down from 5.08 percent a year earlier.
From "Late Payment Rate on Mortgages Falls"
Associated Press (02/11/14) Veiga, Alex
Wednesday, February 12, 2014
HARP Refis Top 3 Million
More than 3 million borrowers have refinanced their Fannie Mae or Freddie Mac mortgage loans through the Home Affordable Refinance Program since it was launched in 2009, the Federal Housing Finance Agency said yesterday. The HARP refis account for approximately 17 percent of total Fannie and Freddie mortgages that have been adjusted since the GSEs entered conservatorship.
---ABA Daily Newsbytes
More than 3 million borrowers have refinanced their Fannie Mae or Freddie Mac mortgage loans through the Home Affordable Refinance Program since it was launched in 2009, the Federal Housing Finance Agency said yesterday. The HARP refis account for approximately 17 percent of total Fannie and Freddie mortgages that have been adjusted since the GSEs entered conservatorship.
---ABA Daily Newsbytes
Monday, February 10, 2014
CFPB Seeking Feedback on Additional Mortgage Market
Reporting
The Consumer Financial Protection Bureau announced that it is convening a panel of small HMDA-reporting institutions to provide feedback on potential changes to mortgage information reported under the Home Mortgage Disclosure Act. The CFPB also unveiled a new online tool designed to help navigate publicly available HMDA data.
In the Dodd-Frank Act, Congress requires lenders to collect and report specific new information as part of the HMDA process. These new data points include the total points and fees, the term of the loan, the length of any teaser interest rates, and the borrower’s age and credit score.
The CFPB said additional mortgage information could help federal regulators, state regulators, lenders, consumer groups, and researchers better monitor the market. It is convening a Small Business Review Panel—as it is required to do by the Small Business Regulatory Enforcement Fairness Act whenever a rulemaking would have a significant impact on a substantial number of small entities.
The panel will gather feedback on the potential changes to the rule, including how data can be updated to better reflect what is happening in the market. ICBA members who serve on the Small Business Review Panel, as well as on the CFPB’s Community Bank Advisory Council, will have ample opportunity to weigh in on changes under consideration by the bureau.
---ABA Newsbytes
Friday, February 7, 2014
Friday Rate Update
Mortgage Rates Continue Slipping
The average rate for a 30-year fixed-rate mortgage fell to 4.23 percent from last week’s rate of 4.32 percent, Freddie Mac said yesterday. At this time in 2013, the 30-year FRM rate averaged 3.53 percent.
The average rate for a 30-year fixed-rate mortgage fell to 4.23 percent from last week’s rate of 4.32 percent, Freddie Mac said yesterday. At this time in 2013, the 30-year FRM rate averaged 3.53 percent.
Thursday, February 6, 2014
The Consumer Financial Protection Bureau: Caveat Vendor
The Consumer Financial Protection Bureau's (CFPB) efforts to rein in credit card and debt refinancing companies for misleading or deceitful marketing have been considered unobjectionable, but recently, its actions have become more controversial, especially as it rolled out new rules governing a borrower's ability to repay a mortgage. Mortgage lenders are concerned about the opacity and complexity of the new rules, and lawmakers recently questioned CFPB Director Richard Cordray about whether the rules might prevent banks from lending to low-income borrowers. Additionally, the CFPB orchestrated a $98 million settlement with Ally Financial for discriminating against minority borrowers, noting that although the company does not collect information on customers' race or ethnicity, such information could be inferred based on their surnames and where they live. There also are concerns about the CFPB's proposed rule to require financial firms to submit plans to ensure staff and suppliers are racially diverse and a plan under consideration to investigate loans to small businesses.
From "The Consumer Financial Protection Bureau: Caveat Vendor"
Economist (02/01/14)
The Consumer Financial Protection Bureau's (CFPB) efforts to rein in credit card and debt refinancing companies for misleading or deceitful marketing have been considered unobjectionable, but recently, its actions have become more controversial, especially as it rolled out new rules governing a borrower's ability to repay a mortgage. Mortgage lenders are concerned about the opacity and complexity of the new rules, and lawmakers recently questioned CFPB Director Richard Cordray about whether the rules might prevent banks from lending to low-income borrowers. Additionally, the CFPB orchestrated a $98 million settlement with Ally Financial for discriminating against minority borrowers, noting that although the company does not collect information on customers' race or ethnicity, such information could be inferred based on their surnames and where they live. There also are concerns about the CFPB's proposed rule to require financial firms to submit plans to ensure staff and suppliers are racially diverse and a plan under consideration to investigate loans to small businesses.
From "The Consumer Financial Protection Bureau: Caveat Vendor"
Economist (02/01/14)
Tuesday, February 4, 2014
Fewer New Rules, More Scrutiny Expected in 2014
Although the pace of new regulation will slow this year in comparison to last year, experts say community banks will face increased scrutiny, particularly in regards to consumer products, anti-money laundering measures, and compliance management. Pam Perdue, executive vice president of regulatory insight at the compliance software firm Continuity Control, says, "Proposed rules on the horizon run the gamut from easy to difficult, so we are in a wait-and-see mode for the first half of the year. [Still,] financial institutions are laboring under the weight of the cumulative burden that's already upon them." Continuity Control says new regulations in 2013 boosted the average community bank's compliance workload by 3,400 hours and $150,000, and there were 642 enforcement actions, up 5 percent from 2012. Some experts believe the beefed up regulatory scrutiny will spur more community banks to sell, though it also could cause some of those deals to hit snags.
From "Fewer New Rules, More Scrutiny Expected in 2014"
American Banker (02/03/14) Stewart, Jackie
Although the pace of new regulation will slow this year in comparison to last year, experts say community banks will face increased scrutiny, particularly in regards to consumer products, anti-money laundering measures, and compliance management. Pam Perdue, executive vice president of regulatory insight at the compliance software firm Continuity Control, says, "Proposed rules on the horizon run the gamut from easy to difficult, so we are in a wait-and-see mode for the first half of the year. [Still,] financial institutions are laboring under the weight of the cumulative burden that's already upon them." Continuity Control says new regulations in 2013 boosted the average community bank's compliance workload by 3,400 hours and $150,000, and there were 642 enforcement actions, up 5 percent from 2012. Some experts believe the beefed up regulatory scrutiny will spur more community banks to sell, though it also could cause some of those deals to hit snags.
From "Fewer New Rules, More Scrutiny Expected in 2014"
American Banker (02/03/14) Stewart, Jackie
Monday, February 3, 2014
U.S. Banks Start to Ease Limits on Lending
Big banks are beginning to loosen their tight grip on lending, creating a new opening for consumer and business borrowing. The U.S. Office of the Comptroller of the Currency (OCC) reports banks relaxed the criteria for businesses and consumers to obtain credit during the 18 months leading up to June 30, 2013. Fueling the loosening is a rosier economic picture, competition for a limited pool of loans, and a sustained low-interest-rate environment that has banks reaching for returns. The comptroller's report said it would still classify most banks' lending standards as "good or satisfactory" but did strike a cautionary tone. "The more [banks] loan, just naturally there is going to be more risk. It's a matter of how well they can control that risk," said Bob Piepergerdes, the OCC's director for retail credit risk. The OCC has already prodded banks to stop easing up standards on so-called leveraged loans, made to companies with high levels of debt, prompting big banks to step away from some deals.
From "U.S. Banks Start to Ease Limits on Lending"
Wall Street Journal (01/31/14) Tracy, Ryan; Chaudhiri, Saabira
Big banks are beginning to loosen their tight grip on lending, creating a new opening for consumer and business borrowing. The U.S. Office of the Comptroller of the Currency (OCC) reports banks relaxed the criteria for businesses and consumers to obtain credit during the 18 months leading up to June 30, 2013. Fueling the loosening is a rosier economic picture, competition for a limited pool of loans, and a sustained low-interest-rate environment that has banks reaching for returns. The comptroller's report said it would still classify most banks' lending standards as "good or satisfactory" but did strike a cautionary tone. "The more [banks] loan, just naturally there is going to be more risk. It's a matter of how well they can control that risk," said Bob Piepergerdes, the OCC's director for retail credit risk. The OCC has already prodded banks to stop easing up standards on so-called leveraged loans, made to companies with high levels of debt, prompting big banks to step away from some deals.
From "U.S. Banks Start to Ease Limits on Lending"
Wall Street Journal (01/31/14) Tracy, Ryan; Chaudhiri, Saabira
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