Friday, November 19, 2010

11/17 - Home Values Continue to Decline - Offset by Declining Defaults

CoreLogic: Home Values Continue to Decline

Home prices fell 1.1% in September after falling 1.2% in August, according to the just released CoreLogic house price index. Mortgage Originator 11/17/2010

Defaults Continue Decline
It has been nearly a year since monthly mortgage delinquency has risen.

Housing Starts Fall to a Near Record Low, Multifamily Hurt Too

Single-family housing starts fell to an annualized rate of 436,000 units in October, a near low that comes despite rock bottom mortgage rates. - Mortgage Originator 11/17/2010

Analysts: Low Mortgage Rates Sustain Historic Home Affordability

Historically low mortgage rates are a crucial component of record affordability for home buyers, but lack of confidence in the market and fear of further price declines are challenges that are outweighing that factor, Credit Suisse analysts wrote Wednesday. Mortgage Originator 11/17/2010

Expected Loan Limit Drop Could Fuel New Nonagency Business

An expected drop in the conforming loan limit could make new nonagency mortgages more compelling, according to executives at Invesco Mortgage Capital Inc. Mortgage Originator 11/17/2010

Rates Jump, Apps Down

An 18 basis point rise in rates for 30-year fixed-rate mortgages resulted in a decline in mortgage application volume of 14.4% last week on a seasonally adjusted basis, according to new figures released by the Mortgage Bankers Association. The data was not adjusted for Veterans Day. Mortgage Originator 11/17/2010

Slate writer Bethany McLean examines the home-appraisal industry for the online magazine.

McLean is skeptical that either the Dodd-Frank Act's provisions on appraisal practices or the Fed rule implementing them will effectively shield appraisers from bullying lenders' demands that they inflate valuations. "If appraisal independence wasn't enforced the last time around, why should we believe it will be enforced this time?" She notes that when New York Attorney General Andrew Cuomo proposed the Home Valuation Code of Conduct in 2008, federal regulators protested that the issue of appraiser independence was already "adequately addressed." 11/17 US Banker

Acting OTS Chief Attacks Dodd-Frank Law as Burdensome, Ineffective
WASHINGTON — John Bowman, the acting director of the Office of Thrift Supervision, lashed out Wednesday at the Dodd-Frank Act, arguing it made his agency the scapegoat for the financial crisis and could spell doom for the thrift charter. 11/17 American Banker

FDIC Conducting 50 Investigations at Failed Banks

The Federal Deposit Insurance Corp (FDIC) is conducting about 50 criminal investigations at U.S. banks that have failed since the start of the financial crisis, the Wall Street Journal said. The FDIC, which is responsible for dealing with bank failures, is probing former executives, directors and employees at failed U.S. banks and is taking efforts to punish alleged recklessness, fraud and other criminal behavior, the Journal said. Compliance Exchange 11/17

CSBS Adds New Credit Report Functionality to NMLS

On November 1, the Conference of State Bank Supervisors (CSBS) announced that the Nationwide Mortgage Licensing System and Registry (NMLS) now can process credit histories for individual mortgage loan originators (MLOs) and that, effective immediately, all licensed residential MLOs participating in the NMLS must complete a credit authorization process, regardless of prior state requirements. 11/17 - InfoBytes Buckley and Sandler

Cutting Losses on Loan Defaults
A growing number of borrowers with negative equity are opting to abandon their mortgage obligations, though a Wharton professor has a possible solution for such strategic defaulters. But for those loans that cannot be saved, an expanding array of service providers promise to make the disposition process more efficient and less costly.

In an article entitled Home is Where the Money Is: A New Incentive Program Aims to Slow Rising Mortgage Defaults, Wharton finance professor Alex Edmans claims that an incentive program could prevent strategic defaults for borrowers with negative equity. Dubbed "responsible homeowner reward," the incentive provides a "sizeable cash reward" for borrowers who repay their entire mortgages.

FHA DPA Losses Could Exceed $13 Billion
Losses on loans where the seller provided down payment assistance are ultimately expected to exceed $13 billion at the Federal Housing Administration. Had such programs been banned, FHA asserts, its capital reserve ratio would be in compliance with congressional mandates.

States Pushing Loan Mods:

The Journal said a probe by state attorneys general of foreclosure problems has expanded to include other things, like the fees servicers charge. The states want banks to modify mortgages in instances where doing so would result in a cash flow from the borrower that is greater than the likely proceeds of a foreclosure sale, Iowa Attorney General Tom Miller told the paper. The Post said the states are pushing lenders to create a nationwide fund to compensate borrowers who can prove they lost their home to a faulty foreclosure. "Among the most contentious issues, besides how much each lender would contribute, are the time period to be included and who would decide which homeowners deserved access to the fund." Wall Street Journal, Washington Post 11/17 - US Banker

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