CNBC says HUD Secretary Shaun Donovan will today float a plan to lower the risk profile of the Federal Housing Administration, which has become a very important player in the mortgage market during the recession. But restricting the FHA's range could have broader consequences.
FHA was originally created as a doorway to home ownership for low income borrowers with less than stellar credit. Last year, 51 percent of African American homebuyers and 45 percent of Hispanic homebuyers purchase homes using FHA financing. Raising the current premiums and FICO scores may elicit criticism that FHA is straying from its original mission.
Dec 3, 2009 9:48 AM
Bank of America says it will repay all $45 billion of federal funds provided it under the umbrella of the Troubled Asset Relief Program. Mixed in among the raises of restricted stock and "common equivalent securities" is a requirement to raise money by slimming down.
In addition, Bank of America agreed to increase equity by $4 billion through asset sales to be approved by the Board of Governors of the Federal Reserve and contracted for by June 30, 2010. To the extent those asset sales are not completed by the end of 2010, the company agreed it would raise a commensurate amount of common equity.SEE ALSO: Break it up, boys
Dec 3, 2009 7:20 AM
Scott Sumner gives the Obama administration an 'Incomplete' at best.
I can’t believe that after everything we have heard from the left about the sins of Bush-era deregulation, we are again trying to shovel government money to homebuyers with no income and no money for a down-payment. Surely this is the “re-regulation” we were told was necessary?
Nov 30, 2009 9:32 AM
The Obama administration says it will call out lenders who haven't moved quickly enough to lower the payments of in-trouble mortgage borrowers.
Mr. Barr said the government would try to use shame as a corrective, publicly naming those institutions that move too slowly to permanently lower mortgage payments. The Treasury Department also will wait until reductions are permanent before paying cash incentives that it promised to mortgage companies that lower loan payments. “They’re not getting a penny from the federal government until they move forward,” Mr. Barr said.
Nov 30, 2009 7:25 AM
Analyst David Hendler of CreditSights sees more of what got us to today's government-supported, not-really-healthy-at-all housing and banking sectors.
“[T]he prime residential mortgage crisis is probably going to require another massive government assistance program in that range of half a trillion [dollars] or more,” Hendler said. “And if this program is extended, it will lead to more bank regulatory restrictions with more capital and higher prudential liquidity levels. This would reduce the banks’ appetite and ability to take lending risks and put pressure on profitability.”
Nov 20, 2009 11:10 AM
If you're looking for even the slightest bit of optimism on the commercial real estate sector, you're very much in the wrong spot. Fitch Ratings says the delinquency rate on office-building loans rose by a fifth in October.
"Though longer leases on office properties have historically mitigated sharp changes in performance, continued job losses are expected to increase pressure on the office sector," said Managing Director and U.S. CMBS group head, Susan Merrick. "With the looming possibility of leases expiring on space under-utilized by companies that have downsized, office performance may not reach a trough for a few years."A page from First Horizon's recently updated investor presentation provides a microcosmic view of how the property market is getting sicker. (Go to page 19.) more CRE loans on their books as a percentage of their capital — although many bankers contend that this statistic is skewed by the inclusion of owner-occupied property loans, which they treat as more conventional C&I holdings. SEE ALSO: Clusterstock's concise, but detailed account of how we got here. For all the doom and gloom, it ends on a hopeful note (that I think isn't meant to be ironic.)
Fortunately, this time around we have an advantage. We know how a contained credit problem can morph into a monster that destroys financial institutions and cripples the economy. Living through the housing bust may make us better able to cope with the commercial real estate bust. At least, it's pretty to think so.
Nov 17, 2009 8:00 AM
For the second time in two months, a local bank has alerted the FDIC that fake checks bearing its name are making the rounds. This time around, the counterfeit cashier's checks are being presented in the name of First Farmers and Merchants Bank, the $940 million institution based in Columbia with 19 offices in seven counties on the south side of the Nashville MSA. SEE ALSO: Lebanon Bank warns of fake checks
Nov 9, 2009 10:44 AM
NYU professor Viral Acharya says we need to be careful when we talk about the financial crisis being caused by 'the market' failing to function properly. Regulators are there to patch up holes and prevent problems, he says, "but regulation also reduces market discipline" by introducing distorted incentives.
For instance, insured depositors are unlikely to “run” but they also freely deposit at the highest-yielding bank, not worrying about its credit risk. Thus, when regulators deem a bank as well-capitalized, the onus is on regulators that this be right. Markets may not have the incentive to gather this information nor possess the details of regulatory supervision that led to such an assessment. Conversely, when regulation allows itself to be arbitraged, the financial sector becomes more opaque exposing markets to unexpected outcomes.
Nov 6, 2009 9:18 AM
Dylan Ratigan gets on the soapbox and outlines a few steps Congress should follow to overhaul 'too big to fail' and produce some real financial regulatory reform. Among the thoughts guiding his plan: "Fortunes should not be made in minutes, but over years."
Nov 4, 2009 1:25 PM
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- ROSS, BRIDGETT D
- COOKE, ETHEN LANYARD TRUSTEE; COOKE, ETHEN LEWIS ESTATE
- JACOBS, JESSICA ALEXANDRA; JACOBS, ERIKA BESS