Friday Rate Update

Mortgage Rates Continue Dropping


The average rate for a 30-year fixed-rate mortgage fell to 4.12 percent from the previous week’s 4.14 percent, Freddie Mac said yesterday. At this time in 2013, the 30-year FRM rate averaged 3.81 percent.

ABA Daily Newsbytes

Banks Earnings Slip in First Quarter as Housing Market Cools


FDIC-insured banks and savings institutions earned $37.2 billion in the first quarter, 7.6 percent lower than the industry’s earnings a year ago, the FDIC said yesterday. The fall in earnings was driven principally by a 10.7 percent decrease in noninterest income -- particularly lower mortgage activity and less trading revenue, the agency said.

The average return on assets dipped to 1.01 percent from 1.12 percent a year earlier. Net operating revenue fell 4 percent, or $6.7 billion, with the drop in noninterest income only mildly offset by a 0.3 percent increase in interest income. The decline in noninterest income reflected a continued cooling in the housing market, with income from mortgage sales, securitizations and servicing down 53.6 percent year-on-year.

Asset quality continued to improve as troubled loans and leases fell, however. Charge-offs were $10.4 billion in the first quarter, down 34.8 percent from a year earlier. The number of institutions on the problem bank list dropped for the 12th straight quarter from 467 to 411, and the Deposit Insurance Fund balance rose from $47.2 billion to $48.9 billion during the quarter.

“Banks are working hard to meet their customers’ needs despite challenges arising from persistently low interest rates, rising compliance costs and declining revenue from trading activities,” said ABA Chief Economist James Chessen. “The harsh winter weather put a chill on loan demand in the first quarter, particularly for mortgage loans. Springtime has brought renewed confidence for businesses and consumers, which should help to boost both credit demand and bank revenue.”

--James Chessen, ABA Daily Newsbytes
http://www.aba.com/Press/Pages/052814QuarterlyBankEarningsReport.aspx

St Casimirs will be closed on Monday May 26th in honor of Memorial Day.

Friday Rate Update

Mortgage Rates Near Seven-Month Low


The average rate for a 30-year fixed-rate mortgage fell to 4.14 percent from the previous week’s 4.20 percent, Freddie Mac said yesterday. At this time in 2013, the 30-year FRM rate averaged 3.51 percent.

--ABA Daily Newsbytes

CFPB Director: Student Loans Are Killing the Drive to Buy Homes

Armed with supporting data from different sources, Consumer Financial Protection Bureau Director Richard Cordray emphasized the need for his agency to take action on the hurdles that are keeping young Americans from buying homes. "We are seeing more student-loan borrowers shy away from making this investment," he recently told the Boulder Summer Conference on Consumer Financial Decision Making. Cordray cited a poll conducted by the National Association of Realtors, which reported that 49 percent of Americans named student loan debt as a "huge obstacle" to homeownership. Moreover, he said, "According to an analysis by the Federal Reserve Bank of New York, for the first time in at least a decade, households with student loan debt are less likely to have a mortgage than those without student loan debt." Cordray said the CFPB will dispatch examiners to identify, report, and penalize loan servicers for making it difficult to prepay and charging exorbitant fees for servicing processing errors.

From "CFPB Director: Student Loans Are Killing the Drive to Buy Homes"
Housing Wire (05/19/14) Gaffney, Jacob

Republicans Call Federal Mortgage Database an 'Unwarranted Intrusion'

Last month, the Federal Housing Finance Agency published a notice in the Federal Register indicating that it plans to create a database with the Consumer Financial Protection Bureau that would collect a wide range of information on mortgage borrowers to get a better understanding of housing market trends. The information that may be collected includes borrowers' names, addresses, zip codes, telephone numbers, birth dates, race, gender, religion, and detailed financial data. However, in a May 15 letter sent to FHFA Director Mel Watt and CFPB Director Richard Cordray, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) and U.S. Sen. Mike Crapo (R-Idaho), the top Republican on the Senate Banking Committee, said the collection of this information "represents an unwarranted intrusion into the private lives of ordinary Americans, and can be easily perceived as an abuse of the trust placed in your agencies by the American people." They asked the regulators to justify why such information, particularly information on religion, should be collected. Republicans have already questioned whether the agencies are taking adequate steps to protect consumers' privacy with regard to the database project.

From "Republicans Call Federal Mortgage Database an 'Unwarranted Intrusion'"
Wall Street Journal (05/16/14) Zibel, Alan

Friday Rate Update

Mortgage Rates at Six-Month Low

The average rate for a 30-year fixed-rate mortgage slipped to 4.20 percent from the previous week’s 4.21 percent -- a six-month low -- Freddie Mac said yesterday. At this time in 2013, the 30-year FRM rate averaged 3.51 percent.

 

Looking Beyond Buyers'
Credit Scores



Lenders today can tap a new array of technology, relying on nontraditional credit
data for insight into a consumer's debt-management history. Those tools mean
lenders can be far more confident about the quality of their loans, even as the
portion of automotive lending that goes to subprime borrowers continues to
rise. Peter Turek, TransUnion's vice president of automotive, says
nontraditional data help "expand the universe of potential borrowers for
lenders." In October, TransUnion launched its CreditVision tool, which
dives deep into consumer credit behavior going back 30 months. CreditVision can
tell whether consumers are "building balances on all their revolving
accounts over time, or paying down balances." According to TransUnion,
CreditVision also is able to see how much people spend on their credit cards
each month and whether that spending activity has increased or decreased from
the year before. TransUnion found during an analysis of new consumer auto and
credit card accounts that people who were revolving on their credit cards in
the month before opening a new one were two to three times more likely than
transacting consumers to become delinquent.



From "Looking Beyond Buyers' Credit Scores" 

Automotive News (05/12/14)
Bond, Vince

Mortgage Rates Fall

The average rate for a 30-year fixed-rate mortgage fell to 4.21 percent from the previous week’s 4.29 percent, Freddie Mac said yesterday. At this time in 2013, the 30-year FRM rate averaged 3.42 percent---ABA Daily Newsbytes

CFPB Examines Senior Citizens’ Mortgage Debt

Mortgage debt is rising among senior citizens, the Consumer Financial Protection Bureau said in a report yesterday. While a little over 80 percent of Americans over 65 own their home -- a consistent figure over time -- the percentage of seniors who carry a mortgage has risen from 22 percent in 2001 to 30 percent in 2011.

A boom in refinancing, a trend toward buying a first home later in life and home equity borrowing all contributed to the increase in mortgage debt, the bureau said. Seniors’ average outstanding balances relative to the value of their homes also rose from 30 to 46 percent over 2001-2011.

“Decreased home equity wealth is a great concern in light of Americans’ increased longevity and lack of financial preparedness for retirement,” the CFPB said. “For many, home equity -- which is often their primary and sometimes only asset -- may not be there when they are likely to need it later in life.”  

---ABA Daily Newsbytes

Mortgage Rates Edge Down

The average rate for a 30-year fixed-rate mortgage ticked down to 4.29 percent from the previous week’s 4.33 percent, Freddie Mac said yesterday. At this time in 2013, the 30-year FRM rate averaged 3.35 percent.


---ABA Daily Newsbytes