Smaller banks are outpacing bigger institutions in terms of on-balance sheet growth in mortgage originations, according to an analysis by an economist at the Federal Reserve. The trend appears to be driven by lingering issues associated with the financial crisis along with regulations that increased capital requirements for large banks. Cindy Vojtech, a senior economist at the Fed, measured the volume of mortgages and other loan types being held in portfolio by 372 banks, including ...
Consumer demand for credit to refinance appears to be in decline, and some of that may be due to borrowers sensing they cannot qualify, findings from the latest survey of consumer expectations by the New York Federal Reserve Bank suggest. The survey was based on data from the mid-year 2016 mark through June of 2017, and it was benchmarked to a previous survey conducted in February. When it comes to consumer behavior, the data show that demand for credit ...
Low interest rates on mortgages continue to make home purchases attractive but many potential borrowers have been prevented from buying a home. Economists at Freddie Mac said a number of factors are making home purchases look unaffordable to potential buyers, even though affordability is at near-record levels. The Housing Affordability Index developed by the National Association of Realtors tracks the ratio of median family income required to qualify for a conventional mortgage ...
The Federal Reserve’s effort to normalize its balance sheet later this year would cause no significant falloff in the agency mortgage-backed securities market over the next six to 12 months, according to global investment firm Loomis Sayles. In an analysis, the firm concluded that agency MBS remain attractive for now with modest excess returns for agency MBS versus Treasurys. “We favor a modest overweight agency MBS stance versus Treasurys for the remainder of 2017 and ...
Mortgage principal reductions that left short-term payments unchanged had no effect on default or consumption for underwater borrowers, according to a new study from the Harvard Joint Center for Housing. Authors Peter Ganong and Pascal Noel believe the findings are significant in the design of loan modification programs – a key question for policymakers in their attempt to help struggling borrowers remain in their homes. The policy debate hinged on the effect of long-term debt ...
Getting Fannie Mae and Freddie Mac out of limbo should not result in the creation of multiple guarantors, according to community lenders testifying at a housing-finance reform hearing in the Senate Banking, Housing and Urban Affairs Committee last week. “The worst outcome in … reform would be to allow a small number of mega-firms to assume the size and scale of Fannie and Freddie under the pretense of creating a private sector solution strong enough to assure the markets in all economic conditions,” said Jack Hopkins, president and CEO of CorTrust Bank, on behalf of the Independent Community Bankers Association. Any plan that promotes consolidation is...
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