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More Home Loans Modified in April
Los Angeles Times (05/18/10) P. B2; Puzzanghera, Jim
Treasury Department data shows a 30 percent increase in permanent mortgage modifications to 295,348 in April. However, 23 percent of modifications were canceled, with the number of canceled trial modifications up to 277,640 from 155,173 in March; only 81 of 3,744 canceled permanent modifications involved loans being paid off. Treasury officials attribute the cancellations to temporary modifications being approved by servicers before verifying borrowers' incomes -- a practice that will come to an end on June 1.
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Ahead of the Bell: Housing Starts
Forbes (05/18/10)
The Commerce Department is expected to release its April housing starts report on May 18, and a Thomson Reuters survey of economists shows an anticipated 3.8 percent increase to an annual rate of 650,000. However, with builders hesitant to break ground on new projects due to competition from foreclosures, economists predict an 0.7 percent decrease in building permit applications to an annual rate of 680,000 from 685,000 in March.
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Home Builders' Optimism Growing
Boston Globe (05/18/10) P. 8
The National Association of Home Builders reports that its housing market index has risen to its highest level since August 2007. The index, which tracks industry confidence, rose three points in May to 22. Readings below 50 indicate most home builders have a negative view of the housing market, and the last time the index was above 50 was April 2006. Home builders are more confident about sales in the coming months due to low mortgage rates, but tax credits for home purchases have come to an end.
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Fed Economists See Rapid Recovery
UPI (05/18/10)
The U.S. economy is likely to recover faster than it did after the two previous recessions, according to a new report from Federal Reserve Bank of San Francisco economists John Williams and Justin Weidner. Williams says he sees no signs of a double-dip recession, as some economists have indicated, noting that the economy is gaining momentum and consumer spending and business investment is improving. However, Christopher Thornberg, founding principal of Beacon Economics, says the Fed's forecast is very optimistic, considering the financial market is volatile, banks are continuing to have their share of problems, and the commercial real estate market is struggling.
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In Mortgage Regs, States Catch-Up, and Then Some
American Banker (05/18/10) P. 1; Berry, Kate
Under the Safe and Fair Enforcement for Mortgage Licensing Act of 2008, nonbank lenders will be required to file call reports and as part of a multistate examination already underway in 30 states, they must upload files into an automated system for every mortgage originated during the exam period. The quarterly call reports would detail lending activity by state, along with financial data. Although lenders are worried about the additional work that accompanies the quarterly reports on top of annual reports required in some states and multistate exams, they expect less work in the long run as more states take part in the multistate exams.
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