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Tag Archives: Federal Reserve

OCC and Fed Release Amendments to Consent Orders

The Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board announced the release of amendments to their enforcement actions against 13 mortgage servicers over mortgage servicing and foreclosure practices. The amendments memorialize foreclosure agreements made between the regulators and 13 servicers. According to the release, 4.2 million borrowers are covered by the amendment and should expect to receive compensation ranging from hundreds of dollars up to $125,000. Rust Consulting, Inc., the paying agent, will contact borrowers by the end of March of this year with payment details.

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Bernanke Highlights Benefits, Risks of Fed Stimulus in Testimony

Federal Reserve Chairman Ben Bernanke underscored benefits of the Fed's quantitative easing policy while also pointing to associated costs and risks in his written testimony to Senators Tuesday. According to Bernanke, the benefits of the purchase and policy accommodation are clear. ""Monetary policy is providing important support to the recovery while keeping inflation close to the FOMC's 2 percent objective. Notably, keeping longer-term interest rates low has helped spark recovery in the housing market and led to increased sales and production of automobiles and other durable goods,"" he said.

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Capital Economics: Rise in Household Wealth to Boost GDP

With the increase in home and equity prices, Capital Economics suggests net household wealth may be on its way to rising above pre-recession levels later this year, which will lead to a boost to GDP. In a recent report, the firm forecasts the S&P 500 equity price index will end 2013 close to the current level of 1,500 and expects home prices to rise in the neighborhood of 5 percent. In turn, the growth in household wealth, the analytics firms says, could lift GDP by around 0.7 percent.

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Demand, Credit Terms for Loans Both Ease

The percentage of banks reporting stronger demand for mortgage loans dropped in the first quarter from the fourth quarter last year, the Federal Reserve reported Monday and a slightly greater percentage are lending standards. The results in the quarterly Senior Loan Officers Opinion Survey are consistent with anecdotal reports that mortgage loans are becoming easier to obtain. In the case of ""traditional"" mortgage loans, 1.5 percent of respondents reported ""somewhat"" tighter standings, 4.6 percent reported standards easing somewhat, and 1.5 percent reported standards easing considerably.

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Study: Securitization Elicits Risky Lending Practices

The act of securitizing mortgage loans can lead to riskier lending, and ultimately more defaults, according to a study posted by the Federal Reserve Bank of New York. About 60 percent of outstanding mortgage debt in the United States is traded in the mortgage-backed securities (MBS) market, ""making the U.S. secondary mortgage market the largest fixed-income market in the world,"" according to Fed researchers. While admitting the MBS market ""is an important innovation and has several merits,"" the study finds a darker side to the market.

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Lawmakers Ask for More Details on Abandoned Foreclosure Review

Although the Independent Foreclosure Review (IFC) has concluded after regulators reached an $8.5 billion foreclosure settlement with 10 banks, questions still remain concerning the abandoned foreclosure review process and the terms for the current settlement. In the search for more answers, three lawmakers recently wrote letters to the Office of the Comptroller (OCC) and the Federal Reserve. Sen. Elizabeth Warren (D-Massachusetts) and Rep. Elijah Cummings (D-Maryland) sent a joint letter dated January 31 to the OCC and the Fed requesting specific information, including the results of all performance reviews.

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FOMC Continues MBS Purchase Program

With a nod to the report the nation’s economy had contracted in the fourth quarter, the Federal Open Market Committee (FOMC) voted Wednesday to continue its program of purchasing $40 million a month of mortgage-backed securities (MBS) and to maintain the target Fed Funds rate at 0 to 0.25 percent.

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HSBC to Pay $249M in Foreclosure Settlement

HSBC is the latest bank joined in on the foreclosure settlement with federal regulators over allegations that the bank's practices led to wrongful foreclosures. The Federal Reserve Board and Office of the Comptroller of the Currency (OCC) announced HSBC will pay $249 million, with $96 million for direct payments to eligible borrowers and $153 million for mortgage assistance.

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Beige Book Sees Economy Expanding

Economic activity expanded in the closing weeks of 2012, the Federal Reserve said in its periodic Beige Book released Wednesday, reflecting a slow but steadily declining unemployment rate and low rates of inflation--conditions the Fed said would have to be met before it raises interest rates. According to the Beige Book, districts reported stronger consumer spending--about 70 percent of the nation's GDP--with holiday sales ""modestly higher"" than in 2011. At the same time, the report said business contacts were ""citing concerns that consumers will spend cautiously due to ongoing fiscal uncertainty.""

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End of Foreclosure Review Leads to 839 Layoffs at JPMorgan

The $8.5 billion foreclosure settlement on January 7 led to the conclusion of the Independent Foreclosure Review, and it also led to the layoff of more than 800 contract workers at JPMorgan Chase, according to a report from the Wall Street Journal. The Journal first reported 839 workers were laid off, including 529 in Brooklyn and 310 in Florence, South Carolina. Companies involved in the settlement were first required to hire third party consultants to review foreclosure actions that occurred in 2009 and 2010 as part of consent orders from regulators in 2011.

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