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Tag Archives: Federal Reserve

Watchdog Report Identifies Flaws in Foreclosure Review Process

When federal regulators announced the abrupt ending of the Independent Foreclosure Review in place of a new agreement, the conclusion to the review process led to more questions than answers. To identify challenges in the foreclosure review process, the Government Accountability Office (GAO) undertook its own investigation. In a report, the GAO identified three hurdles that prevented federal regulators from achieving their goals through the foreclosure review: complexity of the reviews, overly broad guidance, and limited monitoring.

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Foreclosed Properties Damage Quality of Life for Neighbors

Since the foreclosure crisis, several studies have linked foreclosures to falling property values for neighboring homes. However, one researcher from the Federal Reserve Bank of Boston recently set out to discover the impact of foreclosed properties on neighbors who aren't looking to sell their homes. The study found the likelihood of a neighbor complaining about a particular home doubles once a homeowner enters the foreclosure process. Once a property is in REO, the likelihood increases nine-fold, according to the study.

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FOMC Continues Interest Rate, Investment Policies

With an upbeat assessment of the economy, the Federal Open Market Committee voted 11-1 Wednesday to leave interest rates unchanged and to continue its program of purchasing agency mortgage backed securities and longer term Treasury securities ""to maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.""

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Commentary: Budget Pains

It's been two weeks since the dreaded sequester took effect, and so far, the only casualty has been the White House tour. There actually have been some positives, with both parties presenting budgets. However, both the GOP budget and the Democratic plan have one major similarity: Each is dead on arrival and destined to at best be a one-house budget, which leaves the country back where it was. Setting a target for practical balance would bring us closer to reducing the deficit and with less pain.

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Fed Rejects Capital Plans for Ally and BB&T; 14 Banks Accepted

Out of 18 large banks, the Federal Reserve announced 14 banks received approval for their capital plans, while the plans of two banks, Ally Financial and BB&T Corp., were rejected. According to the results, Goldman Sachs and JP Morgan Chase were not rejected but are required to submit new capital plans.

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Regulators Provide Payment Details for $9.3B Foreclosure Settlement

About 4.2 million eligible borrowers should expect to receive a check ranging from hundreds of dollars to $125,000 in the next few months as part of the new agreement that replaced the Independent Foreclosure Review (IFR), regulators announced during a call Wednesday. Suzanne Killian of the Federal Reserve and Ted Wartell of the OCC explained Rust Consulting, the paying agent, will send the 4.2 million borrowers a postcard notifying them of eligibility at the end of this month, and then additional correspondence and a check should follow in 4-8 weeks.

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Fed Governor’s Speech Addresses Costs of Mortgage Rules

As the industry prepares to implement the Consumer Financial Protection Bureau's (CFPB) new ability-to-repay rules, Federal Reserve Governor Elizabeth Duke warns new consumer protections may come at a cost to the industry as lower-quality-credit borrowers are precluded from the housing market. As the broader economy continues to improve, household formation will increase, according to Duke, ""but if credit is hard to get, these will be rental rather than owner-occupied households.""

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Fed’s Duke Says Recovery Is Sustainable and Will Strengthen

The evidence is clear that the recovery in housing is finally under way, but the question that remains open is whether the positive trends in housing are sustainable, Federal Reserve Board Governor Elizabeth A. Duke said in a speech at the Mortgage Bankers Association's Mid-Winter Housing Finance Conference. In her view, the recovery does appear to be sustainable. ""I do not believe that a flood of houses on the market from households that are currently underwater or from bank REO is likely to materialize or to be sufficient to outpace growing demand,"" she said.

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Commentary: Go With The Flow

Perhaps the most important piece of economic news in the last few days was not the continued drop in the unemployment rate or the positive blurbs in the Beige Book or even the Dow reaching a new record high, but Thursday's quarterly Flow of Funds report. According to the report for Q4 2012, household assets grew to $79.5 trillion in the fourth quarter, an increase of $1.3 trillion--not too shabby. Household financial assets were up $784 billion to $54.4 billion but home equity (the value of household real estate less loans against that real estate) grew $452.8 billion, the result of two moving parts: real estate values (which increased) and household mortgage liabilities, which dropped.

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Consumer Debt Rises in Q4, Mortgage Debt Flattens: Fed

Mortgage debt for U.S. households was roughly unchanged quarter-over-quarter, according to the Federal Reserve Bank of New York's Household Debt and Credit report. Mortgage debt stood at $8.03 trillion in Q4, making up the largest component of household debt. At the same time, overall consumer debt increased by $31 billion to $11.34 trillion, a slight 0.3 percent increase from the third quarter.

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