Capital One this week announced that it’s throwing in the towel on mortgage finance, laying off staff and shuttering offices in an attempt to improve profits. And now comes the big question: will other banks follow in its wake?
The House Financial Services Subcommittee on Housing and Insurance convened a third hearing on housing-finance reform this week, this time hearing from Washington think tanks. A staffer said the hearings are meant to lay “a groundwork for legislation the committee is working on to finally build a housing finance system that is sustainable for homeowners, for hardworking taxpayers, and for our economy.”
A few mortgage lenders are offering a purchase-loan option that provides protection to borrowers who make a downpayment on their house and later have to sell at a loss due to a decline in value.
Two of the nation’s largest reverse mortgage lending platforms are on the auction block with a third contemplating an exit via a servicing sale. Coupled with higher upfront premiums on the product, all is not well with the sector.
A corporate tax cut, now being debated on Capitol Hill, could wreak havoc on the government-sponsored enterprises’ deferred tax assets and result in Fannie Mae and Freddie Mac having to take draws from the U.S. Treasury.
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