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Tag Archives: Federal Reserve

Moody’s Expects New Originator Compensation Rules to Lower Defaults

The Federal Reserve has issued new rules intended to protect consumers from deceptive mortgage lending, including explicit restrictions on how mortgage brokers and loan officers can be compensated. Specifically, the impending payment requirements, which go into effect next April, prohibit loan originators from double-charging for origination fees and from steering borrowers into less-than-optimal loan products in return for higher compensation. Moody's says these changes will translate into a lower probability of default on mortgage loans.

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REOs the Topic du Jour in Washington

Neighborhoods across the country are riddled with empty bank-owned homes and unoccupied foreclosures that erode neighboring property values and open the door for blight and criminal activity. The nation's glut of vacant REOs took center stage in Washington Wednesday. HUD announced a new nationwide REO ""First Look"" program, in partnership with the nation's largest mortgage lenders, and it was the first of a two-day Federal Reserve summit to examine the community impacts of foreclosed and vacant properties.

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Bernanke Promises Action at Meeting of World’s Central Bankers

All eyes were on Jackson Hole, Wyoming Friday, as leaders of the world's central banks convened for an annual retreat in the small, quiet town along the Teton mountain range. The most anticipated attraction - Fed Chairman Ben Bernanke, as market analysts, economists, and Wall Street looked for some semblance of the Fed's plan to deal with the nation's lukewarm economic recovery. Bernanke insisted that he doesn't believe the U.S. will revert into another recession, but he promised to react swiftly if the recovery doesn't pick up.

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Fed Issues New Mortgage Disclosure and Compensation Rules

The U.S. Federal Reserve on Monday published a long list of rules outlining new requirements that will govern compensation to mortgage professionals and disclosures to borrowers regarding their home loans. Among the new regulations are a ban on controversial yield spread premiums, and a stipulation that requires lenders to provide borrowers with a payment table, which includes a ""worst case"" scenario showing the maximum interest rate and mortgage payment they might see over the life of the loan.

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Fed to Use Mortgage Bond Proceeds to Reinvigorate Stalled Economy

The Federal Reserve's Tuesday policy meeting signaled a clear shift from earlier in the year, when officials professed stability and the central bank was crafting its exit strategy for stimulus programs. With economic growth in the United States slowing and the threat of a double-dip recession spreading, the Federal Reserve board has decided to take the proceeds from its investments in mortgage bonds and pump new capital into the system. The move is an indication of the Fed's heightened concerns over the current state of the economy.

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Bear Stearns Portfolio Puts New York Fed in Foreclosure Quandary

The U.S. Federal Reserve is in the same boat as the banks now, dealing with a mortgage portfolio that's riddled with deficiencies and delinquencies. The central bank's New York branch has been saddled with a heap of souring loans from the assets it picked up to support the 2008 bailout of Bear Stearns. And now, as more and more of these loans - both residential and commercial - fall into default, the New York Fed is faced with a dilemma: to foreclose or not to foreclose.

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Fed Raises Fee Amount for TILA and HOEPA Disclosures

The Federal Reserve has decided to raise the dollar amount of mortgage fees that trigger additional regulatory disclosure requirements under the Truth in Lending Act (TILA) and the Home Ownership and Equity Protection Act of 1994 (HOEPA). On Friday, the central bank's board of governors issued an adjustment to the rule, bumping the amount of the fee-based trigger up 2 percent to $592, effective January 1, 2011. Currently that threshold is set at $579.

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Regulators Issue SAFE Act Rules for Banks’ Loan Officers

Residential mortgage loan officers at banks, credit unions, and other federally regulated financial institutions are now required to register their names and fingerprints with a national database. Federal banking regulators approved new rules Wednesday that say all mortgage originators who are employees of both state and federally regulated lenders must meet the requirements of the Secure and Fair Enforcement for Mortgage Licensing Act (S.A.F.E. Act) by the middle of next year.

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Fed Paints Picture of Uneven Recovery, Still Hampered by Real Estate

The Federal Reserve's Beige Book depicts only intermittent spots of economic growth, with residential real estate markets across the country characterized as ""sluggish,"" and commercial real estate garnering a descriptor of ""weak."" Nearly all 12 Fed districts reported a slow-down in housing activity since the homebuyer tax credit expired. Most reported lending standards to be restrictive, with loan delinquencies above historic norms.

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