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FHA Extends a Deadline for Loan Brokers
American Banker (03/09/10) P. 11
Mortgage brokers have until April 30 to submit audited financial statements now that the FHA has extended the deadline by 30 days. The move by HUD, which is working on a final rule that would make FHA lenders responsible for brokered loans, will allow brokers to avoid paying up to $15,000 for unnecessary audits. Under the new rule, brokers will no longer have to submit annual financial statements as part of the FHA approval process.
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Fannie Mae Mortgage-Bond Spreads Fall to Record: Credit Markets
BusinessWeek (03/09/10) Shenn, Jody
Despite the Federal Reserve's plans to cease purchases of mortgage-backed securities on March 31, the gap between yields on Fannie Mae's current-coupon 30-year fixed-rate mortgage bonds and those on 10-year Treasuries hit their narrowest point since 1984. The yield spread was 0.63 percentage points on March 8, with the gap closing 0.02 percentage points.
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Fed to Linger in Agency MBS Market After Exit
Reuters (03/09/10) Haviv, Julie
As the Federal Reserve prepares to halt its $1.25 trillion agency MBS purchase program at the end of the month, its large portfolio of mortgage bonds could be used to tighten credit once economic recovery takes root. With the world's largest mortgage bond portfolio, the Fed hopes to avoid selling agency MBS outright for now. Dumping its holdings would put much pressure on the sector and de-value the rest of its agency MBS holdings. Analysts say the central bank likely will initiate active and passive strategies to maneuver its balance sheet and may not sell MBS holdings until next year, at the earliest.
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FDIC Auctions Apt to Hurt Some Banks
Boston Globe (03/09/10) Sterngold, James
The FDIC in April will auction off more than $1 billion in assets seized from failed banks, a move that could spark write-downs that hurt lenders nationwide. Silverton Bank NA originated nearly half of the loans, and community banks that helped it finance dozens of projects may have to write down their ownership stakes to reflect sale prices. The implications are broad, warns New York University securities law professor Geoffrey Miller, who says that "unlike the subprime mortgage problems, which hit mostly bigger financial institutions, the commercial real estate crisis is going to hit mostly smaller and regional banks."
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Fed's Reach May Be Curbed Under Plan
New York Times (03/09/10) P. B2; Chan, Sewell
A Senate plan that would limit the Federal Reserve's bank supervisory powers to the 23 largest banks has won the support of Sens. Christopher Dodd, D-Conn.; Mark Warner, D-Va.; and Bob Corker, R-Tenn. Most bank holding companies would be governed by a regulatory agency formed from a merger of the Office of the Comptroller of the Currency and the Office of Thrift Supervision; and the FDIC would regulate state banks.
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