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Homeowner Rescue Bill Passes House
Washington Post (03/06/09) P. D1; Merle, Renae
The housing bill passed by the House March 5 would let bankruptcy judges modify home loans as well as offer incentives to lenders for lowering mortgage payments and revamp the Hope for Homeowners program. To win support from the financial services industry and moderate Democrats, the bankruptcy provision was revised to compel homeowners to share with lenders any proceeds from the sale of homes with loans modified during bankruptcy and to emphasize interest-rate cuts over principal reductions. According to Mortgage Bankers Association Chairman David Kittle, CMB, "We are pleased that the House moved to limit the harm this bill will do to consumers, and we want to work with the Senate to further contain the damage."
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Commercial Property Doing Relatively Well
Wall Street Journal (03/06/09) P. A14; Brinkmann, Jay
Jay Brinkmann, senior vice president of research and economics at the Mortgage Bankers Association, discredits reports stating that the market for commercial property loans has collapsed. He notes that commercial/multifamily mortgages--not counting construction loans--boast the lowest charge-off rates among bank-held loans. Additionally, they have the second-lowest delinquency rates for loans 30 or more days past due despite rising job losses, reduced consumer spending and tight credit markets.
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Freddie Unveils REO Rental Initiative
American Banker (03/06/09) P. 11
Under Freddie Mac's new REO Rental Initiative, tenants or former owners of foreclosed properties who meet certain guidelines will be able to lease the homes on a month-to-month basis. Tenants or former owners must live in the property, have enough money to make monthly rent payments and permit Freddie Mac's HomeSteps real estate unit to bring potential buyers in to view the home. Relocation aid will be provided for those who do not want to lease the properties.
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FDIC to Trim Emergency Fees
Washington Post (03/06/09) P. D2
The FDIC has reached a deal with Congress that lowers a new emergency fee on U.S. banks and thrifts. The new premium will be cut in half, but Congress will more than triple the amount of federal aid that FDIC may borrow to replenish the deposit insurance fund. Many small banks have complained that the new insurance fee would be a burden, but FDIC Chair Sheila Bair recently warned that the fund insuring deposits could run out of money this year.
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Overdue Mortgage Payments on the Rise
Wall Street Journal (03/06/09) P. A5
The Mortgage Bankers Association reports an increase in loans on one- to four-family homes that are 30 days or more overdue or in foreclosure to 11 percent at the end of last year from 10 percent in the third quarter and 8 percent at the end of 2007. The report shows that 3.3 percent of the mortgages are in foreclosure, while 7.9 percent are at least 30 days past due. The 11 percent rate is the highest reported by MBA in almost 40 years.
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Mortgage Rate Rises to 5.15 Percent
Tulsa World (OK) (03/06/09)
Freddie Mac reports that interest on 30-year, fixed home loans rose to an average of 5.15 percent this week, up from 5.07 percent a week ago. Mortgage rates rose along with the increase in bond yields following reports of a decline in economic growth in the fourth quarter and rising jobless claims, according to Freddie Mac chief economist Frank Nothaft. He also cites the slowing housing market as a factor.
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Geithner Effort to Staff Treasury Hit by Nazareth's Withdrawal
Bloomberg (03/06/09) Schmidt, Robert; Christie, Rebecca
Treasury Secretary Timothy Geithner's move to staff his agency with experts who will contribute to his financial stabilization plan has suffered new setbacks. In the latest developments, former SEC member Annette Nazareth and International Monetary Fund official Caroline Atkinson have removed themselves as candidates for Treasury positions. Geithner is left with no Senate-confirmed senior staff at a time when he is trying to build support for a Treasury plan to stabilize the nation's banks and kick-start the market for securities backed by loans.
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Bank Nationalizations: Why They Might Work
Time (03/06/09) Gandel, Stephen
There is growing momentum in the belief that Washington should consider nationalizing the country's most troubled financial institutions--most notably Bank of America, Citigroup and Wells Fargo. Advocates point to the recent success of IndyMac, a government-seized bank that is expected to seal a deal soon that will return the mortgage lender to private ownership in fewer than eight months. Under FDIC control, IndyMac modified the loans of more than 10,000 borrowers, in many cases averting foreclosure. On the downside, the Treasury Department estimates the IndyMac takeover will cost taxpayers nearly $11 billion.
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