News

Low interest rates and better debt management brought mortgage delinquencies down in Q2, the Federal Reserve Bank of New York reported Wednesday. The New York Fed released its latest Quarterly Report on Household Debt and Credit, revealing that the delinquency rate for mortgages declined from the first quarter to 6.3 percent. Meanwhile, an estimated 256,000 consumers had a foreclosure notation added to their credit reports, the lowest number since mid-2007.

Before the end of this year, Fannie Mae and Freddie Mac will raise guarantee fees (g-fees) on single-family mortgages by an average of 10 basis points. On Friday, FHFA announced it has directed Fannie Mae and Freddie Mac to increase g-fees as a step toward encouraging more mortgage market participation from private firms. The increase are scheduled to take effect on December 1 for loans exchanged for mortgage-backed securities and for loans sold for cash, the increases are scheduled for November 1, 2012.

The California Reinvestment Coalition (CRC) issued a release Thursday criticizing the banks on going back to business as usual by forgoing principal reduction efforts and prioritizing short sales, a plan most banks were using before the settlement was announced. While California attorney general Kamala Harris managed to negotiate a plan that includes $12 billion in principal reduction for homeowners in the state, CRC said banks have been reluctant to uphold that responsibility.

Residential Capital (ResCap) was denied approval from a federal bankruptcy judge to pay its executives bonuses, Reuters reported Wednesday. The key employee incentive plan (KEIP) plan was for bonuses between $4.1 million and $7 million to be distributed to 17 of the top 20 employees from ResCap.

California attorney general Kamala Harris announced Thursday that the final parts of the California Homeowner Bill of Rights have passed out of both houses and are awaiting action from the governor. Harris said the entirety of the Homeowner Bill of Rights stems from need to help homeowners and implement the sorts of reform that were outlined in the national mortgage settlement. Once signed into law, all aspects of the legislative package will take effect at the start of 2013.

A study completed by the University of Miami School of Business Administration suggests that fragile market bubbles could be prevented if the public were aware of how assets are valued. The research, set to be published in the Journal of Financial and Qualitative Analysis, analyzed China's 2007 stock market. The study found that stocks with a bigger amount of analyst coverage experienced significantly smaller bubbles than those that weren't covered as well.

Prices went up for foreclosure-related sales on a quarterly and yearly basis, with the annual increase marking the first rise in two years, according to RealtyTrac's Q2 foreclosure sales report. The average price for foreclosure-related sales stood at $170,040, a 6 percent increase from the previous quarter and a 7 percent hike from the second quarter of 2011. The annual increase is the first since the second quarter of 2010 and the biggest yearly increase since the fourth quarter of 2006.

After a month of weekly increases, mortgage rates followed Treasury bond yields down this week. Freddie Mac reported that the 30-year fixed averaged 3.59 percent (0.6 point) for the week ending August 30, down from 3.66 percent in the previous week's survey. Bankrate's survey showed that the 30-year fixed average took a substantial tumble, falling to 3.80 percent from 3.91 percent before.

Personal income rose $42.3 billion in July but consumer spending increased $46.0 billion, the Bureau of Economic Analysis reported Thursday. The increase in income 0.3 percent topped expectations of a 0.3 percent boost, and the 0.04 percent increase in spending also met economist expectations.

First time claims for unemployment were unchanged at 374,000 for the week ended August 25, the Labor Department reported Thursday after revising upward by 2,000 the prior week's originally reported 372,000 claims. Economists surveyed by Bloomberg had expected 370,000 initial claims.