Tag Archives: Federal Reserve

The Mortgage Bankers Association and six other industry groups sent a letter to Federal Reserve Chairman Ben Bernanke Monday, voicing their concern that the Fed, which has jurisdiction over the Truth in Lending Act (TILA), and HUD, which oversees the Real Estate Settlement Procedures Act (RESPA), will create regulatory rules that overlap. The Dodd-Frank Act created the Consumer Financial Protection Bureau, which will be overseen by yet another agency, the Treasury, and will have regulatory authority over consumer disclosures.

The Federal Reserve says both large and small banks are beginning to ease back on their credit requirements for ""some categories of loans"" to households and businesses. However, standards continue to tighten on prime mortgages and home-equity loans, particularly at smaller institutions. According to the Federal Reserve's study, consumer demand for residential mortgages decreased during the three months ending in October compared to earlier survey periods, with the falloff again most evident at smaller banks.

Freddie Mac's report on mortgage interest rates this week says long-term 30-year rates rose slightly, while 15-year rates eased and short-term adjustable-rate mortgages set new lows. A separate study from Bankrate claims mortgage interest rates dropped across the board to record lows. On Wednesday, the Federal Reserve announced another injection of $600 billion into the nation's sluggish economy, but it remains to be seen if this is enough to push Treasury yields and mortgage rates lower, and if so, by how much.

The Federal Reserve decided Wednesday to pump another $600 billion into the economy in the hopes of bolstering what it called a ""disappointingly slow"" recovery. The capital injection will come in the form of purchases of long-term Treasury securities by the central bank, about $75 billion a month between now and the end of June 2011. The goal is to buoy economic growth by inducing banks to lend more while keeping interest rates low. If it plays out correctly, the move is expected to spur spending, foster job creation, and keep deflation in check.

Treasury's latest report on the administration's Home Affordable Modification Program (HAMP) shows that over half of the trial plans started have been canceled and 11 percent of borrowers have re-defaulted on their new loan. The TARP special inspector general told Congress that HAMP is ""failing to meet its goal of preserving homeownership"" and risks igniting public anger and mistrust. A Fed economist says HAMP is a reflection of the Obama administration's ""failed policies,"" and the government must be prepared to ""pay lenders a lot of money"" to modify loans.

An estimated 4.1 million borrowers are in the process of foreclosure or are more than 90 days delinquent. Their homes make up what's been termed the shadow inventory -- a pent up supply of REOs that could drive down home prices and perhaps cause another wave of defaults. Guhan Venkatu, an economist at the Federal Reserve Bank of Cleveland, says even under the most benign projections, the stock of REO properties is likely to remain elevated for the next several years.

The Federal Reserve's popular Beige Book released this week suggests economic activity across most of the nation is showing signs of ""modest"" growth, but it's not enough to improve the anemic jobs picture. Housing markets remained weak with most of the 12 regional districts reporting sales below year-ago levels. But the central bank says its seeing stability in home prices. Conditions in the commercial real estate sector were soft, while overall lending activity was described as stable in most districts.

Mortgage interest rates dropped again this week, setting new record-lows across the board. Analysts say we have bond investors to thank for the continuing declines. Investors are expecting the Fed to begin pumping more money into the economy to reinvigorate the now lukewarm recovery, so there's been a rush to buy up mass amounts of government- and mortgage-backed debt. This, in turn, has served to drive mortgage rates lower - now at their lowest point in more than a half-century.

House Speaker Nancy Pelosi and fellow members of the California Democratic Congressional Delegation are petitioning federal regulators and the U.S. Department of Justice to launch a formal investigation into servicers' foreclosure practices. The request was prompted by the recent reports of systemic mishandling of foreclosure affidavits by three major mortgage servicers. Delegation members say they have received thousands of complaints from their constituents, which ""appear to outline a clear pattern of misconduct on the part of lenders and servicers.""

How low can we go? When it comes to mortgage rates, the floor keeps dropping. Industry reports released Thursday show that interest rates for home loans - already at their lowest marks in more than a half-century - dropped again this week. Market analysis conducted by Freddie Mac puts the 30-year fixed rate at 4.32 percent and the 15-year rate at 3.75 percent. Bankrate says rates for the larger jumbo 30-year fixed mortgage also inched lower to 5.16 percent.