Federal Reserve
By Krista Franks | 02/08/2012
Four federal regulatory agencies issued guidance for junior lien holders regarding loan loss allowances. Junior liens include second mortgages and home equity lines of credit. The Federal Reserve, FDIC, National Credit Union Administration, and Office of the Comptroller of the Currency issued the guidance not to enact new rules, but rather "to reiterate policy and to remind regulated financial institutions to monitor all credit quality indicators relevant to credit portfolios, including junior liens," according to a joint release from the agencies.
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By Carrie Bay | 01/25/2012
The Federal Reserve said Wednesday that it will hold a key benchmark interest rate near zero through 2014. The setting of this federal funds rate - the rate at which banks lend to one another - is one of the most fundamental and principal tools in the central bank's chest of economic influence. The Fed has kept the target range for the rate at 0 to 0.25 percent for three years now. The decision to maintain this range for another three years is testament to just how slow the U.S. economy's recovery is likely to be.
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By Krista Franks | 01/19/2012
Principal reductions - the merits of which have been debated strongly in recent years - are gaining support from lawmakers. Two congressmen are pushing to subpoena the Federal Housing Finance Agency (FHFA) for its analysis of the potential effects of principal reductions by the GSEs. Reps. Elijah Cummings of Maryland and John Tierney of Massachusetts sent a letter Wednesday to the chairman of the House Oversight Committee urging him to issue a subpoena after several failed attempts to procure the desired information from FHFA.
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By Carrie Bay | 01/18/2012
Wolters Kluwer Financial Services continues to expand its regulatory and risk management consulting services. The company recently brought on Timothy R. Burniston to serve as VP and senior director of professional services for its risk and compliance business. Burniston, previously a senior associate director with the Federal Reserve Board's division of consumer and community affairs, joins the company's growing roster of more than 400 in-house regulatory and risk management experts.
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By Carrie Bay | 01/16/2012
The U.S. economy ended 2011 in better standing than earlier in the year, according to the Federal Reserve's polling of key business contacts, economists, and market experts throughout its 12 regional districts. Reporting for the latest Beige Book publication, all 12 districts characterized economic growth as modest to moderate - and that's without the typical recovery model in which housing serves as a primary contributor to economic expansion. Across the board, Fed districts labeled residential real estate activity as "sluggish."
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By Krista Franks | 01/11/2012
With a common goal of economic recovery, Congress and the Federal Reserve diverge on the best means to that end. Should the housing sector finance the government's economic policies, or should the government help boost the housing sector? Federal Reserve Chairman Ben Bernanke submitted a white paper to Congress last week as a framework for policymakers to help the housing market, but that move has drawn the ire of at least one senator.
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By Krista Franks | 01/09/2012
Standing before the Association of American Law Schools in Washington D.C., Federal Reserve Governor Sarah Bloom Raskin discussed the importance of enforcement and monetary penalties in the mortgage servicing industry. Her message stated simply that "laws and regulations must be enforced." A lack of enforcement leads to the entrenchment of bad practices and an increase in the costs of correction, Raskin said, calling many of the mortgage servicing industry's practices "shoddy."
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By Carrie Bay | 01/05/2012
The Federal Reserve is throwing its support behind a large-scale REO-to-rental program to address the oversupply of vacant homes and prevent property values from falling further. The Fed notes that in contrast to the market for owner-occupied homes, rental housing is strengthening. Officials say a government-facilitated program has the potential to help the housing market and improve loss recoveries. They've identified specific markets with large concentrations of vacant REOs, where bulk sales to investors make sense.
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By Carrie Bay | 12/16/2011
The ongoing turmoil still gripping housing markets across the country has manifested itself in the Federal Reserve's macro assessment of household wealth and capital flow. With foreclosure stripping millions of Americans of their largest asset and potential homebuyers still watching for the market bottom, the total sum of home mortgage debt in the U.S. has dropped to its lowest level in nearly five years. Outstanding mortgage debt contracted by 1.8 percent over the third-quarter period to $9.88 trillion.
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By Krista Franks | 12/14/2011
At a Senate subcommittee hearing examining the progress of the foreclosure review process ordered earlier this year, lawmakers questioned officials from the Office of the Comptroller of the Currency and the Federal Reserve about the impartiality of the "independent reviews." Senators asked whether any of the consultants hired to conduct the reviews had worked with the servicers previously. The regulators admitted that some had. Members of the subcommittee say these past ties raise doubts about the true independence of the examiners.
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