Financial Solution News

WASHINGTON, DC – U.S. home prices fell in the second quarter of 2008 according to OFHEO’s seasonally-adjusted purchase-only house price index. The index, which is based on data from home sales, was 1.4 percent lower on a seasonally-adjusted basis in the second quarter than in the first quarter. This decline was less steep than the 1.7 percent decline in the prior quarter. Over the past year, prices fell 4.8 percent between the second quarter of 2007 and the second quarter of 2008. The decline is the largest in the purchase-only index’s 17-year history, but is much smaller than those of other indexes.
OFHEO’s all-transactions House Price Index (HPI) fell 1.4 percent in the latest quarter and was down 1.7 percent over the four-quarter period.
The figures were released today by OFHEO Director James B. Lockhart, as part of the quarterly report analyzing housing price appreciation trends.
“Tighter credit conditions and relatively high inventory […]

Original post by Admin

The preferred stock ratings of Freddie Mac and Fannie Mae have been downgraded from A1 to BAA3 by Moody’s Investors Service. Additionally, Fannie and Freddie’s Bank Financial Strength Ratings has been downgraded from B minus to D plus.
The downgraded ratings remain on review for possible further downgrade. Moody’s said the downgrades of the financial strength ratings reflect its view that the government sponsored enterprise’s flexibility to manage volatility in their mortgage risk exposures is “constricted” because they now have “limited access to common and preferred equity capital at economically attractive terms.”
The downgrades of the preferred stock ratings reflect a greater risk of dividend omission stemming from two issues.
First, the Government Sponsored Enterprises mortgage portfolio performance is “worse and more volatile than Moody’s expected”, which could lead them to breach the capital requirements governing their ability to pay a preferred dividend. Second, there is uncertainty about how the preferred stock would […]

Original post by Admin

The preferred stock ratings of Freddie Mac and Fannie Mae have been downgraded from A1 to BAA3 by Moody’s Investors Service. Additionally, Fannie and Freddie’s Bank Financial Strength Ratings has been downgraded from B minus to D plus.
The downgraded ratings remain on review for possible further downgrade. Moody’s said the downgrades of the financial strength ratings reflect its view that the government sponsored enterprise’s flexibility to manage volatility in their mortgage risk exposures is “constricted” because they now have “limited access to common and preferred equity capital at economically attractive terms.”
The downgrades of the preferred stock ratings reflect a greater risk of dividend omission stemming from two issues.
First, the Government Sponsored Enterprises mortgage portfolio performance is “worse and more volatile than Moody’s expected”, which could lead them to breach the capital requirements governing their ability to pay a preferred dividend. Second, there is uncertainty about how the preferred stock would […]

Original post by Admin

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 2 percent.
Economic activity expanded in the second quarter, partly reflecting growth in consumer spending and exports. However, labor markets have softened further and financial markets remain under considerable stress. Tight credit conditions, the ongoing housing contraction, and elevated energy prices are likely to weigh on economic growth over the next few quarters. Over time, the substantial easing of monetary policy, combined with ongoing measures to foster market liquidity, should help to promote moderate economic growth.
Inflation has been high, spurred by the earlier increases in the prices of energy and some other commodities, and some indicators of inflation expectations have been elevated. The Committee expects inflation to moderate later this year and next year, but the inflation outlook remains highly uncertain.
Although downside risks to growth remain, the upside risks to inflation are also of […]

Original post by Admin

House and Senate negotiators have reached an agreement on loan limits, and it appears that the maximum amount for the Government Sponsored Enterprise (GSE)Fannie Mae, Freddie Mac, and Federal Housing Administration FHA loans will be $625,000.
Negotiations on a massive housing bill are getting serious, with the House of Representatives scheduled to vote on the legislation tomorrow.
In markets where housing prices exceed the $417,000 conforming loan limit, the maximum loan amount of Fannie Mae and Freddie Mac loans would be determined by multiplying the median home price by 115%, up to a maximum of $625,000, sources say.
The same holds true for FHA loans, except that the multiplier kicks in at $271,050, or 65% of the conforming loan limit. If the median home price is $300,000, the maximum FHA loan amount in that area would be $345,000 ($300,000 x 115%).
House Financial Services Committee Chairman Barney Fran, D-Mass., told […]

Original post by Admin

The federal banking and thrift agencies today issued final guidance outlining the supervisory review process for banking organizations implementing the new advanced capital adequacy framework known as Basel II.  The final guidance relating to supervisory review is aimed at helping banking organizations meet certain qualification requirements in the advanced approaches rule, which took effect April 1.
The advanced approaches rule consists of three pillars:  minimum risk-based capital requirements (Pillar 1); supervisory review of capital adequacy (Pillar 2); and market discipline through enhanced public disclosures (Pillar 3).  The final Pillar 2 guidance details the agencies’ standards for ensuring that each institution subject to the advanced approaches rule has a rigorous process for assessing its overall capital adequacy in relation to its risk profile and a comprehensive strategy for maintaining appropriate capital levels.
Although the guidance does not differ significantly from the proposed Pillar 2 guidance issued in February 2007, the agencies made some […]

Original post by Admin

The Federal Reserve Board on Monday approved a final rule for home mortgage loans to better protect consumers and facilitate responsible lending. The rule prohibits unfair, abusive or deceptive home mortgage lending practices and restricts certain other mortgage practices. The final rule also establishes advertising standards and requires certain mortgage disclosures to be given to consumers earlier in the transaction.
The final rule, which amends Regulation Z (Truth in Lending) and was adopted under the Home Ownership and Equity Protection Act (HOEPA) , largely follows a proposal released by the Board in December 2007, with enhancements that address ensuing public comments, consumer testing, and further analysis.
"The proposed final rules are intended to protect consumers from unfair or deceptive acts and practices in mortgage lending, while keeping credit available to qualified borrowers and supporting sustainable homeownership," said Federal Reserve Chairman Ben Bernanke . "Importantly, the new […]

Original post by Admin

IndyMac will cover 50% of uninsured deposits as IndyMac Federal Bank.
The government is stepping in to support IndyMac. Having just changed its name from IndyMac Bancorp after it was seized Friday. The FDIC has assumed control saying it will cover 50% of uninsured deposits and fully insure all up to $100,000, which is normal.
John Bovenzi, the FDIC COO says there’s probably no bank in the country that has access to greater capital and liquidity than Indymac Federal Bank. He also states the FDIC expects to sell it in the next 90 days.
Because Charles Schumer has loose lips, IndyMac Bancorp became the second biggest federally insured financial company to be taken over by regulators.

Related Posts

FDIC Says Deposits in Failed IndyMac Bancorp Are ‘Safe’
Charles Schumer Is Politically Irresponsible
The Federal Reserve Reviews Bank Investment Rules
Challenges America’s Families and Neighborhoods Face

ShareThis

Original post by Admin

Two days after the Federal Deposit Insurance Company took over California based IndyMac Bancorp Inc, officials say the bank will reopen Monday morning (Today) for business as usual.

More From Consumer Mortgage Reports

Problems are Unprecedented But Could Be Better Long-Term for Markets
Option One Cuts 185 Account Executives - Sale Still On
Rentals And Occupancys Are Good - REITs Are Happening!
Todays Current Mortgage Interest Rates July 25 2007
This Day In America December 18

ShareThis

Original post by Admin

Financial stocks, especially those tied to the mortgage industry, helped fuel a 237-point drop in the Dow Jones industrial average on Wednesday.
Freddie Mac’s shares plunged by $3.20, or 24%, on the day, closing at a new 52-week low of $10.26.
Fannie Mae’s shares fell $2.31, or 13%, to close at $15.31.
Bank of America, which recently closed on its acquisition of Countrywide Financial, saw its shares fall $1.48, or 6%, to close at $22.06.
Radian Guaranty’s shares fell by 18 cents, or 11%, to close at $1.53.
Analysts attributed Wednesday’s broad market decline to concern about a slowing economy, more bad debt at banks, and higher oil and commodity prices.
Related Posts

Can Loan Mods Keep U.S. Out of Recession?
Fannie Mae Cuts Dividends 30% - Down 41% in 2007
Treasury Secretary Henry Paulson Speaks On Housing Part 2
James Lockhart Does Not Buy Into Fannie and Freddie Capital Concerns But Stockholders Do
This Week In Mortgages

ShareThis

Original post by Admin