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Secondary Market

International RMBS, CMBS Sales Impacting Banks Globally

In international news, the sale of securitized bonds is causing concern for the secondary market. Analysts from Morgan Stanley released a recent report indicating that securities earmarked for sale by the European banks holding the bonds could reach as high as $470 billion. For struggling companies, rising costs for funding and capital have weakened their positions, leading to the sale of assets; the institutions seeking to liquidate securities holdings encompass lenders focused on deleveraging and distressed banks.

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PMI Files for Chapter 11, Unable to Write New Policies

Embattled mortgage insurer The PMI Group, Inc., caved in to state-imposed roadblocks by voluntarily filing for Chapter 11 bankruptcy Wednesday. The move comes a day before a major U.S. holiday and on the heels of a seizure of subsidiaries PMI Mortgage Insurance Co. and PMI Insurance Co. by state regulators with the Arizona Department of Insurance. PMI said that $685 million in senior unsecured notes and about $51.5 million in junior unsecured notes became immediately due and payable as a result of the bankruptcy filing.

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Groups Ask CFPB for More Transparent Appraisal Forms

Do appraisal forms and documents need more transparency? At least one trade group says yes. The Appraisal Institute joined together with other organizations to petition the Consumer Financial Protection Bureau for stronger buyer communication when it comes to information about appraisal costs and settlement forms. Specifically, the letter delivered to the government group asked for the separation of appraisal fees from administration and processing fees on settlement forms given to consumers when purchasing a property.

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Drop in Rates Pushes Borrowing Costs to Historic Low

Mortgage rates continue to drop and recent statistics show that the price of long-term lending is approaching historically low numbers. Results of this week's survey from Freddie Mac show that an unexpected rise in home sales coupled with low rates have brought the cost of borrowing to its second-lowest level ever recorded. Percentages for a 30-year fixed rate mortgage loan fell to 3.98 percent off of 4 percent from the previous week, and the averages for 15-year fixed rate mortgages hit 3.3 percent, down from 3.31 percent.

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Thirty-Year Loan Falls Lowest in Seven Weeks: Zillow

With the global economy overshadowed by debt crises, fleeing investors keep mortgage rates at record lows, as Zillow reaffirmed Tuesday. The real estate Web site polled its online audience, reporting that the benchmark 30-year fixed-rate mortgage hit 3.8 percent, the lowest rate in seven weeks. A dearth for the 30-year fixed-rate loan reflects a fall by 10 basis points, down from 3.9 percent last week. The 15-year fixed-rate mortgage likewise hovered around 3.16 percent.

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New Fed Rule Means Capital Plans, Stress Tests for Banks

Fed

Under a final rule, banks with $50 billion or more in assets will need to submit capital plans to the Federal Reserve, which will also begin performing stress tests for the largest financial institutions next year. In accordance with the rule, the Fed will take responsibility for annual evaluations of each institution├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós capital adequacy, internal assessment processes, and capital distribution plans, including dividend payments and stock repurchases.

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Insured Banks Tallied $35.3B in Q3 Earnings: FDIC

Balance sheets improved steadily for commercial and savings financial institutions over the third quarter, according to the FDIC, with those insured by the federal agency offering $35.3 billion in profit margins. Loan portfolios snagged an updraft over the third quarter, posting an increase for the second consecutive quarter as loans and leases went up by $21.8 billion. Residential mortgage loan balances climbed by $23.7 billion. Notably, the FDIC's "Problems List" contracted for the second consecutive quarter.

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New Bill Aims to Create Appeals Process for Bank Complaints

If a new bill becomes law, it would establish a central appeals hub for financial institutions with concerns about actions taken by bank examiners, corralling the activities of several regulatory agencies for review. Reps. Shelley Moore Capito and Carolyn Maloney recently co-sponsored the Financial Institutions Examination Fairness and Reform Act, or H.R. 3461, which aims to create an Office of Examination Ombudsman responsible for any complaints from financial institutions about examiners.

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Lackluster Spending Tilts Against Homebuying: Freddie

Mortgage giant Freddie Mac tied weak homebuyer demand to a drop in consumer expenditures in an outlook it released Monday. The GSE captured a look at the financial mood of consumers by releasing the U.S. Economic and Housing Market Outlook, which makes forecasts according to key economic indicators that it uses. The outlook indexed overall economic health for the nation, finding a small uptick by domestic aggregate demand as it climbed to 3.6 percent ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô the second largest gain over the last five years.

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