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Tag Archives: Federal Reserve

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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Beige Book Sees Continued Modest Improvement in Economy

Overall economic activity continued to increase at a modest to moderate pace in January and early February, the Federal Reserve said in its periodic Beige Book, an anecdotal report of conditions in each of the 12 Federal Reserve districts. The report showed economic improvement varying across the country -- economic activity rose at a somewhat faster pace in the Philadelphia and Atlanta districts but growth was slower in New York. Minneapolis characterized the pace of growth as firm.

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Real Estate Debt, Delinquencies Decline: Report

Real estate-related debts are on the decline, as are overall delinquencies, according to a quarterly report from the Federal Reserve Bank of New York. Debt maintained through mortgages and home equity lines of credit (HELOC) declined $146 billion during the fourth quarter of last year. Mortgages made up a majority of the decline – $134 billion – while HELOCs made up the remaining $12 billion. Also in the fourth quarter, the delinquency rate on consumer debt was reduced from 10 percent to 9.8 percent.

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AGA Seeks to Overturn Fed Ruling

The American Guild of Appraisers (AGA) petitioned the Fed and the Consumer Financial Protection Bureau to overturn a regulation that allows appraisers to be paid a fraction of what can be defined as a customary and reasonable fee, a release from the AGA stated. In 2010, Dodd-Frank rules were enacted to establish certain requirements for appraisals, including one to “ensure that creditors and their agents pay customary and reasonable fees to appraisers,” according to the Dodd-Frank website. But last year, the Fed introduced a new law that the AGA views as undermining the original Dodd-Frank requirement.

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Deadline to Request Foreclosure Review Extended Three Months

Consumers who want their foreclosure cases checked by a third party as part of federal regulators' independent foreclosure review directive now have until July 31, 2012, to submit their requests. The Federal Reserve and the Office of the Comptroller of the Currency announced Wednesday that the deadline has been pushed out by three months to give consumers more time to file for a case assessment if they believe they suffered financial injury as a result of errors in foreclosure actions in 2009 or 2010.

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Regulators Hit Servicers With Monetary Penalties for Robo-Signing

The Office of the Comptroller of the Currency (OCC) and the Federal Reserve issued statements Thursday detailing monetary penalties they have levied against the nation's largest servicers for ""unsafe and unsound mortgage servicing and foreclosure practices."" The OCC is assessing a total of $394 million in penalties against Bank of America, Citi, JPMorgan Chase, and Wells Fargo. The Federal Reserve's monetary sanctions total $766.5 million and target the same four institutions as well as Ally Financial.

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Federal Agencies Reiterate Guidelines for Junior Lien Holders

Four federal regulatory agencies issued guidance for junior lien holders regarding loan loss allowances. Junior liens include second mortgages and home equity lines of credit. The Federal Reserve, FDIC, National Credit Union Administration, and Office of the Comptroller of the Currency issued the guidance not to enact new rules, but rather ""to reiterate policy and to remind regulated financial institutions to monitor all credit quality indicators relevant to credit portfolios, including junior liens,"" according to a joint release from the agencies.

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Fed Extends Expectations for Low Rates Through 2014

The Federal Reserve said Wednesday that it will hold a key benchmark interest rate near zero through 2014. The setting of this federal funds rate - the rate at which banks lend to one another - is one of the most fundamental and principal tools in the central bank's chest of economic influence. The Fed has kept the target range for the rate at 0 to 0.25 percent for three years now. The decision to maintain this range for another three years is testament to just how slow the U.S. economy's recovery is likely to be.

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Congressmen Push for Subpoena of FHFA’s Principal Reduction Analysis

Principal reductions - the merits of which have been debated strongly in recent years - are gaining support from lawmakers. Two congressmen are pushing to subpoena the Federal Housing Finance Agency (FHFA) for its analysis of the potential effects of principal reductions by the GSEs. Reps. Elijah Cummings of Maryland and John Tierney of Massachusetts sent a letter Wednesday to the chairman of the House Oversight Committee urging him to issue a subpoena after several failed attempts to procure the desired information from FHFA.

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