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Tag Archives: Federal Reserve

Banks Resume Mortgage Tightening Lending Standards

With an upsurge in demand, banks resumed tightening standards for residential mortgage loans, the Federal Reserve reported Monday (April 30) in its quarterly survey of bank lending standards. According to the survey, a net 30.2 percent of banks surveyed in the Senior Loan Officer Opinion Survey reported increased demand in the first quarter for traditional mortgage loans compared with a net 3.8 percent reporting stronger demand in the fourth quarter. According to the survey though, a net 1.9 percent of survey respondents reported tightening loan standards compared with the first quarter when a net 5.7 percent said they were easing standards.

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FOMC Maintains Rate Posture, Forecasts Higher Rates in 2 Years

With a lone dissent, the Federal Open Market Committee Wednesday voted no change in the target federal funds rate. The economy has been expanding moderately, the FOMC said in the statement issued at the conclusion of its two-day meeting, echoing language in the statement following its meeting last month. After the meeting, the FOMC released its quarterly forecast of the economy and interest rates with more members of the Committee seeing higher rates in 2014 than in the prior forecast.

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House Committee Approves Bill to Repeal Dodd-Frank Bailout Fund

The House Financial Services Committee signed off on legislation Wednesday that would repeal bailout funds under the Dodd-Frank Act and more than half the Consumer Financial Protection Bureau's (CFPB) budget. Clearing the legislation by a party-line vote, committee members billed it as a way to slash $35 billion from the national deficit.

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Beige Book Cites Modest to Moderate Growth, Concerns About Gas Prices

The economy continued to expand at a modest to moderate pace from mid-February through late March, the Federal Reserve said Wednesday in its periodic Beige Book, reporting faster and solid growth in Kansas City and Minneapolis but moderate or modest growth in Boston, Atlanta, Chicago, Dallas, San Francisco Cleveland and St. Louis. New York reported economic growth picked up somewhat while Philadelphia and Richmond cited improving business conditions.

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Federal Reserve Issues Policy Statement on Foreclosures as Rentals

The general policy of the Federal Reserve is that banks should make every effort to dispose of foreclosed properties and get them off their books as quickly as feasibly possible. However, holding onto these properties and renting them out to tenants may be the way to go ""in light of the extraordinary market conditions that currently prevail,"" the Fed said Thursday. Provided their REO rentals constitute community development under the Community Reinvestment Act (CRA), lenders will receive favorable CRA consideration for this course of action.

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Morgan Stanley Next Federal Target for Servicing Practices

Morgan Stanley may have sold its servicing sector off, but it's still going to be under a watchful eye for previous practices. The Federal Reserve issued a consent order against Morgan Stanley Tuesday to address servicing and foreclosure issues from the company’s former subsidiary Saxon Mortgage Services. The consent order requires Morgan Stanley to hire an independent consultant to review foreclosure proceedings initiated by Saxon that occurred between 2009 and 2010. According to the Fed, Saxon was ranked the 34th largest residential servicer.

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Mortgage Rates Up, With 30-Year Fixed Above 4 Percent

Moving along side higher yields on bonds, mortgage rates continued to climb upwards, with the 30-year fixed-rate mortgage above the 4 percent benchmark for the first time since October 27, 2011, according Freddie Mac's Primary Mortgage Market Survey. The 30-year fixed-rate mortgage averaged 4.08 percent for the week ending March 22. Frank Nothaft, chief economist for Freddie Mac, attributed an improving assessment of the state of the economy by the Fed, better than expected results of the bank stress tests, and the likelihood of a second bailout for Greece as reasons for higher bond yields.

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Fed Study: Overpriced Foreclosures Hiking REO Carrying Costs

Appraisers, lenders, and investors appear to be routinely overestimating the values of homes prior to foreclosure, especially in the weakest housing markets, according to two economists with the Federal Reserve Bank of Cleveland. Their report suggests that more accurate pricing could speed the clearing of REO inventories, save lenders money by reducing the carrying costs associated with bank-owned homes, and bring greater stability to housing markets across the country.

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Mortgage Rates Head Higher on Positive Economic Data

Rates for all mortgage loan products headed higher this week as positive employment indicators rolled in, with job growth over the last six months the strongest it's been since 2006. That, coupled with the Greek debt restructuring on the international front and the results of the Federal Reserve's stress tests pointing to a stronger U.S. banking system, boosted investor confidence and drove bond yields higher. Studies from both Freddie Mac and Bankrate showed the same measurable increases in rates across-the-board.

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Fed’s Stress Test Shows 15 out of 19 Banks Would Weather Storms

If extremely severe economic conditions were to fall upon the U.S., 15 of the 19 banks tested by the Fed's stress scenario projections are said to be able to survive and continue to lend. The hypothetical stressful scenario included a 13 percent unemployment rate, 50 percent decline in equity prices, and a 20 percent decline in home prices. The scenario covers nine quarters into the fourth quarter of 2013, and the four banks that failed - Ally Financial, Citigroup, SunTrust, and MetLife - were said to have one or more projected regulatory capital ratios that fell below the 5 percent minimum levels at some point over the stress scenario horizon, according to the Fed.

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