Mortgage Bonds
By Ryan Schuette | 05/15/2012
The Federal Housing Finance Agency unveiled new additions to the strategic plan it released in February this year, with many changes focused on moving the secondary mortgage market back to private capital sources and creating infrastructure needed to replace Fannie Mae and Freddie Mac. The additions include four principles, such as safety and security for the residential mortgage market, stability and liquidity in housing finance, and preservation of current enterprise assets. The plan, due for enactment if passed by Congress between the years 2013 and 2017.
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By Ryan Schuette | 03/19/2012
The potential for a lift in mortgage rates is unlikely to spell trouble for the housing recovery, according to a recent report. Paul Diggle, a property economist with Capital Economics, said in a note Monday that still-low home prices will help cushion the blow from interest rates. Mortgage rates continue to linger near record lows, with 30-year and 15-year fixed-rate mortgages hovering at or below 4 percent for the past several weeks. Waning confidence in Europe’s ability to halt the debt crisis in Greece drives investors to U.S. Treasury debt.
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By Ryan Schuette | 03/06/2012
A steady pace for home prices and sales signals housing recovery, but a disorderly default by any of the euro zone states overseas could choke affordability according to Capital Economics analysts.
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By Ryan Schuette | 03/06/2012
All-time highs for housing affordability persisted this week as interest rates for fixed-rate mortgages hovered near their record-breaking lows, a sign that Europe continues to ward off investors. Real estate Web site Zillow found only a minor shift for the 30-year fixed-rate mortgage, which lingered between 3.70 percent and 3.75 percent before nestling at 3.69 percent Tuesday. The 15-year loan stayed near 2.95 percent, along with rates for 5-year and 1-year adjustable-rate mortgages that averaged 2.65 percent, according to the Web site.
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By Ryan Schuette | 03/02/2012
Moody’s Investor Service slashed credit ratings for Wells Fargo Home Mortgage Thursday over concerns about deterioration in the quality of prime and subprime loans. The ratings agency downgraded the servicer from SQ1 to SQ2+. When reviewing residential mortgage servicers, Moody’s rates SQ1 as strong and SQ5 as weak, with modifiers like pluses and minuses signifying their relative strength and weakness in each category. Moody’s cited the $25-billion settlement as one reason why, saying that added public pressure over negotiations lengthened foreclosure timelines.
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By Ryan Schuette | 02/29/2012
A hearing held by House lawmakers Wednesday with Federal Reserve Chairman Ben Bernanke recast housing and the Dodd-Frank Act as issues critical to the economic recovery. The central banker said that 30 percent of home sales recently consisted of foreclosures and properties in distress, reflecting ongoing trouble for a market underpinned by high home vacancy rates and downward pressure for home prices. The underwriting process, down payments, and pending regulations also took center-stage during the discussion, with House members spotlighting recent servicer consent orders.
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By Ryan Schuette | 02/20/2012
Addressing Congress and the nation in January, President Barack Obama unveiled a so-called financial fraud unit that would pursue securities fraud from before the financial crisis and provide relief to homeowners. The unit – later described by officials as the Residential Mortgage-Backed Securities Working Group – will coordinate casework and investigations at the state and federal level. MReport speaks with experts from the legal field and servicing industry to gauge their thoughts about the new unit. The consensus: It could shake up market confidence.
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By Ryan Schuette | 02/08/2012
Goldman Sachs scooped up $6.2 billion in risky mortgage bonds from the Federal Reserve Bank of New York, the central bank said Wednesday. The Maiden Lane II assets stem from the taxpayer-funded bailout of American International Group during the financial crisis. An original senior loan in the amount of $19.5 billion needed repayment, and Credit Suisse offered an initial inquiry to pick up the tab for Maiden II assets last fall. The federal government held out on an offer until it felt the sale would mete out a higher rate of return for the public.
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By Ryan Schuette | 01/18/2012
Witnesses testifying before the House Financial Services Committee Wednesday warned lawmakers that the controversial Volcker Rule could tighten bank liquidity and make U.S. financial institutions less competitive with banks overseas. Once finalized by regulators, the rule – unless modified or repealed by lawmakers – will enact a provision under the Dodd-Frank Act that prohibits U.S. banks from engaging in short-term proprietary trading practices. Douglas Elliott, a fellow with the Brookings Institution, called for an outright repeal of the Volcker Rule.
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By Ryan Schuette | 01/17/2012
Earlier Tuesday the FDIC went forward with a notice of proposed rulemaking in the Federal Register that calls for annual stress tests to determine capital adequacy for banks. The notice built on the Basel Accords, which the Basel Committee on Banking Supervision revisited with help from a consortium of central bankers over 2010 and 2011. Basel III is the latest by BCBS to require stress tests for systemically important financial institutions, which include Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, and several other U.S. lenders.
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