Archive for the ‘Government’ Category

All U.S. Banks Pass Stress Tests

Posted on June 23, 2017 by Laura Lam

For the second year in a row, all of the nation’s largest financial institutions passed their stress tests, meaning each company has enough capital on hand to survive a “severe recession.”  On Thursday, the Federal Reserve announced the results of the annual stress testing, which showed that all 34 participating financial institutions are adequately capitalized and could withstand another economic downturn. “The nation’s largest bank holding companies have strong capital levels and retain their ability to lend to households and businesses during a severe recession,” the Fed stated. “This year’s results show that, even during a severe recession, our large banks…

Is the New Household Debt Record Cause for Concern?

Posted on June 14, 2017 by Laura Lam

Last month, the New York Federal Reserve reported that household debt across the nation has hit a dubious milestone in the first quarter: It surpassed the peak debt level of 2008 at $12.7 trillion. Household debt — including mortgages, auto and student loans, and credit cards — rose $149 billion compared with the last quarter of 2016, with nearly all the gain coming from mortgages. Reaching the peak raises questions about whether the backdrop exists again for another financial meltdown.  But the data show the current structure of debt is substantially different from 2008. According to a research officer at…

Banks See Slower Loan Growth, Higher Charge-Offs

Posted on June 12, 2017 by Laura Lam

FDIC-insured banks reported that the pace of loan growth slowed in the first quarter and that charge-offs on loans to individuals increased. But banks still recorded robust earnings for the period.  Total loans and leases fell by $8.1 billion, or 0.1% year-over-year, in the 3 months ended March 31, led by credit card loans, which posted a seasonal decline of $43.7 billion, or 5.5%. In its Quarterly Banking Profile, the FDIC attributed the decline to cardholders paying down outstanding balances, but residential mortgages also fell, by 0.5%. Credit to businesses offset some of the decline, with commercial and industrial loans up…

Beige Book: Slower Growth, Less Optimism

Posted on June 09, 2017 by Laura Lam

Economic growth slowed across parts of the U.S. in recent weeks, and some firms have become a bit less optimistic about the future, according to a new report from the Federal Reserve.  “A majority of districts reported that firms expressed positive near-term outlooks; however, optimism waned somewhat in a few districts,” the Fed said in its latest Beige Book report. Broadly, the Fed said economic growth was modest in 7 districts, moderate in 4 districts and “flattened out” in the New York Fed district. The prior beige book said activity expanded in all 12 regions with the pace equally split…

Foreclosure Activity Hits Post-Recession Low in April

Posted on June 08, 2017 by Laura Lam

ATTOM Data Solutions released its April 2017 U.S. Foreclosure Market data, which shows foreclosure filings – default notices, scheduled auctions and bank repossessions – were reported on 77,049 U.S. properties in April, down 7% from the previous month and down 23% from a year ago to the lowest level since November 2005. “Foreclosure activity continued to search for a new post-recession floor in April thanks in large part to the above-par performance of mortgages originated in the past 7 years,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Meanwhile we are seeing an elevated share of repeat foreclosures…

Mortgage Origination Volume Falls 34%

Posted on June 07, 2017 by Laura Lam

Mortgage origination volume fell 34% in the first quarter compared with the fourth quarter, driven mainly by a 45% drop in refinances, according to Black Knight Financial Services’ Mortgage Monitor report.  Overall, lenders originated about $372 billion in first-lien mortgages in the first quarter – the lowest volume seen since the fourth quarter of 2014.  Purchase originations fell 21% compared with the fourth quarter but were up 3.0% compared with the first quarter of 2016, according to the report. An ATTOM Data Solutions report also showed that a little over 1.4 million loans (refinance and purchase loans) were originated in the…

Home Prices Not Back To Pre-Crisis Levels

Posted on June 05, 2017 by Laura Lam

Home prices increase a little more each month, even hitting new peaks in many markets, yet experts insist they are not back at bubble-era levels.  The most recent Case-Shiller results show home prices rose 5.8% from last year to the highest pace in 33 months.  Black Knight also released its Home Price Index Report, showing home prices rose to a median $272,000 in March. This represents a new peak in home prices, and a rise of 2.3% from the start of the year. In fact, the chart from Calculated Risks shows home prices are nearing, if not level with, pre-crisis peaks, according to different measures of home…

Electronic Communications: A Growing Compliance Risk

Posted on June 01, 2017 by Laura Lam

The 7th annual Electronic Communications Compliance Survey from Smarsh reveals that finaical firms are struggling to keep up with the multitude of electronic communications channels.  More than half of respondents (52%) cited text messages as their current No. 1 source of non-email content compliance risk. About 33% of respondents cited social media communications as the greatest compliance risk, and 8% cited instant messaging. The survey also found that almost half of firms have no oversight or retention of text messages.  “Firms need to leverage new and emerging channels to communicate with their customers and stay competitive, but they’re failing to manage the risk,”…

Mortgage Origination Volume Hits 5-Year High

Posted on June 01, 2017 by Laura Lam

First lien originations jumped in 2016 to $2.1 trillion, the highest point since 2012, according to a report from the Urban Institute.  Of these originations, the share of portfolio originations increased to 30.9%, up from 30.2% in 2015, the report shows. The GSE share increased to 45.9%, up from 45.7% the previous year and the FHA and VA share decreased to 22.8%, down from 23.3% in 2015. The chart shows, unlike pre-crisis years, private-label securities no longer hold a significant share in the market. In both 2015 and 2016 the share of private-label securities totaled well below 1%. But despite the increase…

First-Time Homebuyers Deterred by Misconceptions

Posted on May 25, 2017 by Laura Lam

The lack of knowledge around the home purchase process was cited by 39% of mortgage executives as the leading barrier keeping potential first-time buyers from entering the market.  That topped a lack of inventory (29%), excess student loan debt (27%) and rising interest rates (6%), according to a survey taken during the Mortgage Bankers Association’s National Secondary Market Conference by Genworth Mortgage Insurance. The greatest cause of confusion among first-time homebuyers is the role of a 20% down payment.  Of those surveyed, 28% said consumers still mistakenly believe that a 20% down payment is a requirement for purchasing a home,…