Article Archive for April 2012
By Ryan Schuette | 04/30/2012
The former president of a lending institution in Louisiana pled guilty Friday to bilking his own company out of millions of dollars. Reginald Harper, onetime CEO of Hammond-based First Community Bank, reportedly drew on straw buyers and developed false loan information to misrepresent borrower income and the ability to repay. According to a statement released by the FBI, the misrepresentation impacted an application to the Troubled Asset Relief Program, which initially approved $3.3 million in emergency funds for the financial institution.
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By Ryan Schuette | 04/30/2012
Five banks went under Friday, lifting the national tally for the year to 22, even while bank failures continue to slow nationally in contrast with the rate of closure for financial institutions in recent years. The failed banks included two in Maryland, plus others in California, Minnesota, and South Carolina. The cost to the FDIC’s Deposit Insurance Fund: $272.6 million. This is the first time for five banks to close in a single weekend since April last year. Despite the uptick, FDIC spokespeople continue to consider 2010 the "high-water mark" for bank failures nationally.
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By Mark Lieberman, Five Star Institute Economist | 04/30/2012
With an upsurge in demand, banks resumed tightening standards for residential mortgage loans, the Federal Reserve said Monday in a quarterly survey for bank lending standards. According to the survey, a net 30.2 percent of bank surveyed in the Senior Loan Officer Opinion Survey saw increased demand in the first quarter for traditional mortgage loans compared with a net 3.8 percent reporting stronger demand in the fourth quarter. The survey found that a net 1.9 percent of survey respondents also reported tightening loan standards.
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By Mark Lieberman, Five Star Institute Economist | 04/30/2012
Homeownership rates dropped to 65.4 percent in the first quarter, reaching lows not seen in fifteen years, the Census Bureau said Monday. According to government data, the homeowner vacancy rate also fell to 2.2 percent nationwide, down from 2.6 percent in the first quarter of 2011 and the rental vacancy rate dropped to 8.8 percent from 9.7 percent one year earlier. The median asking sale price for a vacant home fell to $133,700 – the lowest level since second quarter 2005 – from $133,800 in the fourth quarter and $143,700 one year earlier.
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By Mark Lieberman, Five Star Institute Economist | 04/30/2012
Consumer spending grew just 0.3 percent in March, down from the 0.9 percent growth in February, the Bureau of Economic Analysis reported Monday. Economists had expected spending to be up 0.4 percent. At the same time, personal income grew 0.4 percent in March, BEA said, slightly faster than February’s 0.
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By Ryan Schuette | 04/27/2012
Twenty-four trade groups and associations signed off on a comment letter Friday that calls on the Consumer Financial Protection Bureau to give creditors more legal leeway when it comes to Qualified Mortgages. The two-page letter – headed up by the American Bankers Association, Mortgage Bankers Association, National Association of Home Builders, and National Association of Realtors, among others – framed forthcoming rules around credit availability and sound home loans. Influential trade groups continue to criticize the rule.
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By Mark Lieberman, Five Star Institute Economist | 04/27/2012
With only one dissent, the Federal Open Market Committee Wednesday voted to continue the target federal funds rate. The comments on the housing sector varied slightly from the March statement which did not include any reference to improvement. The major change in the assessment of the economy came in the description of inflation which was cited as "subdued" in March while today's statement acknowledged the impact of crude oil and gasoline prices on inflation. The FOMC's overall economic outlook was more positive than it had been in March.
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By Abby Gregory | 04/27/2012
The Appraisal Institute has submitted its response to a recent report released by the Financial Crimes Enforcement Network. The group's March 2012 Mortgage Loan Fraud Update showed that incidences of mortgage fraud rose by 20 percent year-over-year between the third-quarter of 2011 and the third-quarter of 2010. The group's March 2012 Mortgage Loan Fraud Update showed that incidences of mortgage fraud rose by 20 percent year-over-year between the third-quarter of 2011 and the third-quarter of 2010.
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By Abby Gregory | 04/27/2012
Transwestern has announced the appointment of a new president for its Midwest region. The company recently named Mike Watts to the leadership role, and Watts will take over responsibilities for overall strategy, business development, recruitment, and financial performance for the region.
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By Ryan Schuette | 04/27/2012
Life insurer MetLife announced Thursday that it will exit the reverse mortgage origination business, with plans to sell the division responsible for these loans to Nationstar Mortgage LLC. It was not immediately clear how much Nationstar paid to buy the reverse mortgage portfolio from MetLife. The life insurer also said that it would cease receiving any new reverse mortgage loan applications and registrations. MetLife said that retail banking, including reverse mortgages, accounted for less than 2 percent of operating earnings for the company last year.
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By Mark Lieberman, Five Star Institute Economist | 04/27/2012
The U.S. economy grew at a disappointing 2.2 percent rate in the first quarter, the Labor Department reported Friday, down from the 3.0 percent growth rate in the fourth quarter and below expectations. Economists had expected GDP to grow at 2.5 percent in the first quarter. A drop in government spending was the biggest factor in the slowdown in growth. In dollar terms, GDP increased $73.4 billion, most of which was an increase in personal consumption - $68.1 billion.
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By Ryan Schuette | 04/26/2012
Debt crises in Europe once more left interest rates for mortgage loans near record lows. Finance Web site Bankrate.com found 30-year fixed-rate mortgages averaging 4.09 percent, down from 4.10 percent last week, alongside a 15-year loan that hit 3.28 percent this week, down from 3.32 percent. Bankrate.com found said that 5-year and 1-year adjustable-rate mortgages meanwhile fell from 3.05 percent last week to 3.03 percent this week. News out of Britain this week found that the bulwark economy slipped into a double-dip recession during the first quarter.
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By Ryan Schuette | 04/26/2012
Talk of reform for Fannie Mae, Freddie Mac, and the Federal Housing Administration featured prominently at a hearing convened by the Senate Banking Committee Thursday to address HUD’s budget for the next fiscal year. The FHA has fallen under scrutiny in recent years over an inability to meet the 2 percent capital ratio buffer required by law. GSE also reform remains a dead issue this election year, despite numerous proposals for reform from lawmakers and public outcry over more than $180 billion in taxpayer funds sunken into conservatorship.
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By Mark Lieberman, Five Star Institute Economist | 04/26/2012
First time claims for unemployment insurance remained over 380,000 for the third straight week for the week ended April 21, the Labor Department reported Thursday, the highest levels of the year. According to the report there were 388,000 initial claims, down from the revised 389,000 one week earlier.
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By Abby Gregory | 04/26/2012
PNC Financial Services Group has announced the appointment of William S. Demchak as the company's president of the corporation. The board of directors elected Demchak, who will also serve as PNC's president for its principal banking subsidiary, PNC Bank.
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By Abby Gregory | 04/26/2012
LenderMobile is getting an upgrade, recently announcing improvements to LenderMobile. The newly enhanced mobile mortgage loan service will now enable the ordering of vendor services.
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By Ryan Schuette | 04/26/2012
Lawmakers seated on the Senate Banking Committee convened a hearing Wednesday to determine just how radically draft legislation should lift barriers to refinance opportunities for homeowners and lenders. The message from those testifying: More refinance modifications would help, but beware of the impact for investors and lenders. The Obama administration moved on expansions to HARP last fall by working with the Federal Housing Finance Agency to sign off on lower loan-to-value ratio requirements and remove obstacles for lenders and servicers.
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By Mark Lieberman, Five Star Institute Economist | 04/26/2012
The Pending Home Sales Index rose sharply in March to 101.4 from February's revised 97.4, the National Association of Realtors said Thursday. Economists had expected the Index to increase 1.0 percent from February. The index is now at the highest level since April 2010 when it reached 111.3. The index improved for the third straight month and fifth time in the last six month. The March reading is up 12.8 percent from March 2011, the strongest year-over-year gain since last July. The PHSI has been drifting upward, albeit modestly for most of the past two years.
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By Ryan Schuette | 04/25/2012
The FDIC projects that it will replenish the hard-hit Deposit Insurance Fund on schedule, as fewer community banks fail and the economic recovery turns a corner. The agency made the projections in a semi-annual update Tuesday that also found so-called Problem Institutions falling from 844 in September last year to 813 by the fourth quarter. Requirements under the Dodd-Frank Act require that the FDIC shore up the fund by 1.35 percent by 2020. The FDIC said that the fund ended last year at $11.8 billion – the equivalent of a shift to 0.17 percent for the reserve ratio.
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By Ryan Schuette | 04/25/2012
Mortgage applications fell 3.8 percent from the week earlier, according to the Mortgage Bankers Association. The trade group found that application volume waned by 3.3 percent on a seasonally unadjusted basis from the week before. Purchases went up 2.7 percent from one week earlier, climbing by a seasonally unadjusted 3.6 percent in the same vein. Refinance applications declined on the whole. The Refinance Index dipped by 5.6 percent from the week before, as conventional refis slipped by 6.1 percent and government refis climbed down by 2.1 percent.
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