News Alerts, Sept. 1, 2013, Morning Edition, 3 New Articles, Real Estate +, Don’t Miss Them

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  1. Private mortgage insurers find their place | 2013-08-27 | HousingWirePrivate mortgage insurers find their place | 2013-08-27 | HousingWire

    [By] Christina Mlynski. August 27, 2013 11:23AM

    Fewer borrowers are refinancing into Federal Housing Administration loans, allowing private mortgage insurers to pick up some of the slack.

    The shift is coming at a time when insurance premiums on FHA loans continue to rise.

    Consequently, private mortgage insurers accounted for 36% of insurance written in the second quarter, the highest level since 2008, the Royal Bank of Scotland (RBS) pointed out in a new research report.

    “This trend is likely to continue in anticipation of new FHA legislation,” explained RBS co-head of agency mortgage-backed securities strategy Sarah Hu. The legislation in question would substantially reform the FHA and how it does business.

    She added, “If passed, the bill would require the FHA to establish a minimum annual mortgage insurance premium while increasing its maximum level from the current statutory limit of 1.55% to 2.05%. This rising insurance premiums could price out some Ginnie Mae borrowers in FHA refinance transactions and encourage them to refinance into conventional loans.”

    “FHA has raised prices and instituted policies that require many borrowers to pay MI for the life of the loan—in some cases up to 30 years,” Gould [Brian Gould, Chief Operating Officer, United Guaranty] stated.

    He continued, “In some scenarios, FHA’s non cancellable insurance premiums could be as much as four times the cost of United Guaranty MI over the life of a borrower’s loan.

    “Due to FHA’s recent price increases and policy changes, private MI now is less expensive than FHA coverage – upfront and over the life of the loan – for nearly all borrowers who make more than a 3.5% downpayment on a loan up to $625,000,” Turner [Kenny Turner, Director of Capital Markets, Genworth U.S. Mortgage Insurance (GNW)] said.

    Read the source article …

  2. U.S. Bank Legal Bills Exceed $100 Billion – Bloomberg News Alerts, Sept. 1, 2013, Morning Edition, 3 New Articles, Real Estate +, Don't Miss Them


    By Donal Griffin & Dakin Campbell – Aug 28, 2013 9:02 AM GMT-0700

    The six biggest U.S. banks, led by JPMorgan Chase & Co. (JPM) and Bank of America Corp., have piled up $103 billion in legal costs since the financial crisis, more than all dividends paid to shareholders in the past five years.

    That’s the amount allotted to lawyers and litigation, as well as for settling claims about shoddy mortgages and foreclosures, according to data compiled by Bloomberg. The sum, equivalent to spending $51 million a day, is enough to erase everything the banks earned for 2012.

    Five years after the financial crisis shook global markets, banks are facing accusations that they misled buyers of mortgage-backed securities, rigged interest rates used to price loans worldwide and manipulated markets for credit derivatives and commodities. …

    A U.S. housing regulator is seeking at least $6 billion to settle claims JPMorgan sold bad mortgage bonds to government-backed finance companies Fannie Mae (FNMA) and Freddie Mac, a person briefed on the matter said this week. …

    “There is wide political support for punitive action against these banks, and it’s not going away,” said Keith Davis, an analyst at Farr, Miller & Washington LLC, which manages about $930 million, including shares of JPMorgan and Goldman Sachs. …

    “We now have 103 billion reasons why not doing the right thing is costly to banks,” said Mark T. Williams, a Boston University lecturer and former Fed examiner specializing in risk management. …

    Read the source article …

  3. Shiller: Risk of a weakening housing market | Credit Writedowns

    by Edward Harrison / on 28 August 2013 at 08:18 /

    Yesterday, we learned that the Case-Shiller Housing Index is up 12.1% through June. In response, Robert Shiller said “housing is a market with momentum” and he believes that the momentum is up. The numbers speak to this. See the first CNBC video below for his full commentary. Let’s remember that the Case-Shiller Index is data from two months ago and is based on a trailing three-month aggregate. That means that Case-Shiller is about the housing market of April-June more than it is about the current housing market.

    Diana Olick gets to some of this in the second video below because rising interest rates are having a chilling effect on the U.S. housing market. So we should expect the house price inflation numbers to decelerate somewhat.

    Click through to watch the videos.

    Read the source article …