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Posts Tagged ‘trillion’

CFPB Director takes Questions

June 25th, 2013 Comments off

Consumer Financial Protection Bureau Director Richard Cordray, in a speech followed by a Q and A before the Exchequer Club, said more commotion than necessary is being made about the qualified mortgage (QM) rule. He says lenders will continue lending as they have in the past, even outside the rule, according to nationalmortgagenews. For a lender “to not make those mortgages and leave that money on the table and leave people un-served because of some vague fear that they can’t quite articulate; that doesn’t sound to me like the kind of good decision-making that lenders have made for years,” said Cordray. He agrees with the chief economist at Moody’s Analytics, Mark Zandi, who says $20 billion of the $1.25 trillion mortgage market will fall outside the QM rule, which amounts to two percent of the total. Noting the agency is trying to be flexible in its overall approach, when questioned about the extensive mortgage data the CFPB is currently gathering, Cordray said the information collected will help a future director make more solid policy decisions. Speaking of his own battle with Republicans over his confirmation, as MHProNews has learned, he does not profess to know what was in the mind of the Dodd-Frank Act congressional creators, but feels the structure allows the ability to reshape policy as needed.

(Photo credit: ABCNews–CFPB Director Richard Cordray)

FHA may be Teetering on the Edge

December 26th, 2012 Comments off

Townhall tells MHProNews the Federal Housing Administration (FHA) continues to make risky loans to borrowers with low credit scores and/or high debt ratios. Based on zip codes, these borrowers have an expected foreclosure rate of 15 percent, accounting for 44 percent of FHA loans to people of low to moderate means. Not only are taxpayers exposed to the possibility of a bailout, but foreclosures and the ensuing blight reduce the tax rate, making it tougher for municipalities to provide services to those neighborhoods. Backing over $1 trillion in U.S. home loans, the FHA may be facing a $16.3 billion shortfall by the end of Sept. 2013, according to an article in The Wall Street Journal. FHA is attempting reforms that may or may not be successful, but time may be running out for an effective correction to be made.

(Image credit: FHA)

Home Values Finally Show Gain

December 25th, 2012 Comments off

After analyzing 177 metro areas, real estate analyst Zillow tells HousingWire 75 percent showed home value gains in 2012. For the five years from 2007 to 2011 home values dropped each year, the largest occurring in 2008 when home values declined $3.2 trillion. This year the value of homes is expected to increase over $1.3 trillion in cumulative value, the first annual increase in six years when homes gained $483 billion. While 2011 home values fell over $792 billion from 2010, home price are expected to increase 3.1 percent in 2013. Metro areas that experienced the largest gains in value include Los Angeles, San Francisco and San Jose, Calif., as well as Phoenix and Miami-Fort Lauderdale Fla. MHProNews has learned Philadelphia was the only large metro area that did not record an annual gain.

(Image credit: ehow)

Housing Values Keep Adding Up

December 20th, 2012 Comments off

Nationalmortgagenews reports the national value of homes remains $5.8 trillion short of the $29.5 trillion peak from the third quarter of 2006, according to home-listing service Zillow Inc. As the housing market recovers from its worst slump in 75 years, house values advanced six percent this year, the first increase since 2006, moving up $1.3 trillion to $23.7 trillion since Dec. 2011. The National Association of Realtors (NAR) says sales of previously-owned homes rose 5.9 percent Nov. over Oct. 2012, hitting an annual pace of 5.04 million. As MHProNews has learned the median resale price increased ten percent over Nov. 2011 to $180,600.

(Image credit: Benzinga–magnifying money)

Originations Likely to Fall in 2013

December 12th, 2012 Comments off

On the heels of a strong 2012, nationalmortgagenews reports Freddie Mac’s chief economist Frank Nothaft predicts single-family loans will decline about 15 percent in 2013 as refinancings recede and home purchases decrease. Noting many borrowers have already taken advantage of low rates this year, Freddie forecasts refinancings will account for 60 percent of originations in 2013, as opposed to 75 percent this year. Nothaft says single-family fundings will hit close to $2 trillion in 2012, but drop to $1.7 trillion in 2013 as the interest rate rises but continues below four percent. Meanwhile, a Nov. Fannie Mae survey has revealed 23 percent of home owners believe now is a good time to sell, an increase of five points from Oct. 2012. Plus, as MHProNews has learned, 51 percent said a mortgage is within their grasp, up from 41 percent a year ago.

(Image credit: Joshua Scott/CNNMoney)

Will Pent-up Demand Continue Penting?

December 11th, 2012 Comments off

InvestorPlace informs MHProNews hordes of college grads unable to find work are moving back home, according to the Census Bureau. In addition to their education, they are carrying one trillion dollars in student loans, which is undoubtedly preventing them from investing in big ticket items like cars and homes, especially with tight credit. The homeownership rate among adults younger than 35 fell by 12% between 2006 and 2011, according to Harvard University’s Joint Center for Housing Studies. The pent-up demand for new housing may remain pent-up: By the time the twenty somethings discharge their debt, they may be helping their own kids with tuition, which itself is rising fast.

(Image credit: Fotosearch)

Buffett: Wealthy Leaving Middle Class in the Dust

November 27th, 2012 2 comments

In a New York Times op-ed piece, billionaire investor Warren Buffett says its ridiculous to think higher capital gains taxes will prevent the super wealthy from investing their money. He notes in the 1950s when the capital gains rate rose from 25 to 27.5 percent no one complained of not being able to find investment opportunities. He contends complaints from the super wealthy about paying taxes is especially absurd since the Forbes 400 wealthiest Americans made $1.7 trillion this year compared to $300 billion 20 years ago. Noting the 400 highest incomes paid a tax rate of 26.4 percent in 1992, he says that percentage fell to 19.4 percent in 2009, and nearly 25 percent of them paid less than 15 percent. A few paid nothing. In addition to eliminating the Bush-era tax cuts on the wealthy, and raising the cut-off for the minimum tax from the $250,000 that President Obama proposes to $500,000, Buffett suggests a 30 percent tax on incomes from $1 to $10 million, and 35 percent on anything above that. He states the government needs to achieve a better balance in its revenues and expenses, and needs more tax reform. As MHProNews has learned, the bottom line is the super rich will continue to invest regardless of higher taxes. Buffett’s Berkshire Hathaway owns Clayton Homes, the largest producer of manufactured housing in North America.

(Photo credit: Business Insider)

Delinquency Rate Drops

November 16th, 2012 Comments off

NationalMortgageNews tells MHProNews the delinquency rate for government-backed loans inched down third quarter 2012 over the second quarter, from 11.89 percent to 11.14 percent as of Sept. 30. The Mortgage Bankers Association (MBA) reports the rate a year ago was 12.09 percent. Federal Housing Administration (FHA) loans late 90 days or more also nudged down from nine percent June 30 to 8.54 percent Sept. 30. With consumers owing approximately $9.4 trillion on home loans, MBA says 7.4 percent of all outstanding mortgages were late as of Sept. 30, 2012, a drop from 7.99 percent a year ago.

(Image credit: moneycontrol)

MetLife Selling Mortgage Servicing Portfolio

November 5th, 2012 Comments off

BusinessWire informs MHProNews JPMorgan Chase Bank, N.A. is purchasing MetLife Bank, N.A.’s approximately $70 billion mortgage servicing portfolio as MetLife continues to divest itself of its bank holding company structure, a move it began in 2011 when it decided to no longer sell residential mortgages. MetLife Bank President Jim Rose said, “ Since that time, MetLife has entered into agreements to sell MetLife Bank’s deposit business to GE Capital, sold the bank’s warehouse finance business to EverBank, (and) sold the bank’s reverse mortgage servicing rights to Nationstar.” MetLife will return to its focus on insurance and employee benefits where it serves 90 million customers. While the company’s retail banking business, including mortgages, accounted for less than two percent of its 2011 earnings, the $70 billion servicing portfolio will increase Chase’s $1.1 trillion servicing business by over five percent.

(Image credit: bankrate)

MBA Prognosis: Slow Crawl to Health with Potential Busted Knees

October 24th, 2012 Comments off

HousingWire reports in the wake of the financial meltdown, the nation gained 4.8 million renters in the last six years while losing 1.7 million owner households, according to the Mortgage Bankers Association (MBA). In the housing finance sector, the MBA predicts mortgage originations will hit $1.7 trillion in 2012, an increase from $1.4 trillion in 2011, but will fall to $1.3 trillion in 2013 and $1.1 trillion the following year. Additionally, as long as the fiscal cliff is avoided by Congress next year, MBA anticipates GDP (gross domestic product) will rise from 1.6 percent this year to two percent in 2013, and forecasts existing home sales will increase to 4.78 million in 2013, up from 4.6 million this year. Noting the harm a tax increase could foster, MBA chief economist Jay Brinkman tells MHProNews: “We believe that the entire package of tax increases and spending cuts, if left unaltered, would cut 3.5 to 4 percentage points from our growth forecast.” One other contingency: If the finalized Qualified Mortgage Rule (QRM) does not give lenders a safety valve it could have adverse effects. Says Debra Still, new MBA Chairwoman: “The bottom line is if there is conflict in rulemaking and policy, it’s the consumer who will ultimately be negatively impacted and credit will be tighter.”

(Image credit: FotoSearch)