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Inside Washington (11/16/2012)

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  • WASHINGTON (11/19/12)--Despite signs of recovery, the housing market is "far from being out of the woods," Federal Reserve Board Chairman Ben Bernanke said Thursday. House prices nationally have increased for nine consecutive months, residential investment has risen about 15% from its low point, and sales of both new and existing homes have edged up, Bernanke noted. However, construction activity, sales, and prices remain much lower than they were before the crisis. About 20% of mortgage borrowers owe more than their homes are worth. Despite marked improvements in overall credit quality, 7% of mortgages are either more than 90 days overdue or in the process of foreclosure. Tight credit was also an important factor in the weak recovery, Bernanke said. The Federal Reserve''s Senior Loan Officer Opinion Survey on Bank Lending Practices indicates that lenders began tightening mortgage credit standards in 2007 and have not significantly eased standards since. "Terms and standards have tightened most for borrowers with lower credit scores and with less money available for a down payment," Bernanke said …
  • WASHINGTON (11/19/12)--An independent audit released Friday reported that the Federal Housing Administration (FHA) incurred $16.3 billion in projected losses as of the end of the third quarter of this year (American Banker Nov. 16). The Banker article said that the losses may require the first taxpayer bailout in the agency's 78-year history. The audit found the FHA's reserve ratio had fallen to the negative (-1.44%). There is a statutory requirement that FHA maintain at least a 2% reserve. The article noted that the Department of Housing and Urban Development, which oversees FHA, was expected to announce a series of changes late Friday intended to bolster the flagging capital reserve and avoid the likelihood that FHA would have to draw from the U.S. Treasury …

CFPB delays some mortgage disclosure dates

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WASHINGTON (11/19/12)--The Credit Union National Association (CUNA) on Friday noted that without the effective date delay announced by the Consumer Financial Protection Bureau (CFPB) for several mortgage disclosures, credit unions and other lenders would have had to change their disclosure forms twice.

Final versions of new mortgage regulations, and related disclosures that combine elements of Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) disclosures into a single document are expected to be released in January. The CFPB is also developing rules to implement these disclosure form changes, and other related disclosures.

The disclosure changes and rules are expected to become effective sometime next year, according to the CFPB. An exact effective date has not been determined.

The CFPB on Friday said mortgage providers will not need to provide certain disclosures until after the CFPB's previously proposed mortgage disclosure rules are finalized. The provisions that the CFPB will delay are:
  • Warning regarding negative amortization features;
  • Disclosure of state law anti-deficiency protections;
  • Disclosure regarding creditor's partial payment policy;
  • Disclosure regarding mandatory escrow accounts;
  • Disclosure regarding waiver of escrow at consummation;
  • Disclosure of monthly payment, including escrow, at initial and fully-indexed rate for variable-rate transactions;
  • Repayment analysis disclosure to include amount of escrow payments for taxes and insurance;
  • Disclosure of settlement charges and fees and the approximate amount of the wholesale rate of funds;
  • Disclosure of mortgage originator fees;
  • Disclosure of total interest as a percentage of principal; and
  • Optional disclosure of appraisal management company fee.
The CFPB said that timing the effective date of the delayed disclosures to coincide with the effective date of broader TILA/RESPA changes "would ensure that the features of consumer credit transactions secured by real property are fully, accurately, and effectively disclosed to consumers in a manner that permits consumers to understand the costs, benefits, and risks associated with the product or service, in light of the facts and circumstances."

CUNA President/CEO Bill Cheney noted that in virtually every meeting with the CFPB, and in every comment letters CUNA has sent on these issues, CUNA has urged an effective date delay. "We're grateful that the CFPB listened to us," he said.

"This extra time will give CUNA and our members more opportunities to urge the agency to minimize the impact of these proposed rules on credit unions," Cheney added. However, Cheney noted that other CFPB rules that CUNA continues to be concerned about, such as rules addressing mortgage servicing and ability to repay rules, are not delayed and are still expected by Jan. 21.

CFA-CUNA reveal consumers holiday spending plans Weds

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WASHINGTON (11/19/12)--For the 13th consecutive year, news media from across the nation will be tuning in Wednesday as the Consumer Federation of America (CFA) and the Credit Union National Association (CUNA) release their latest consumer holiday spending survey.

CUNA Chief Economist Bill Hampel and CFA Executive Director Stephen Brobeck are scheduled to present the findings of the survey, which provides a glimpse into consumer holiday spending plans. Holiday debt concerns and general attitudes about the economy are also addressed by the survey.

CUNA and the CFA also will present tips for managing holiday spending, including low-cost and free ways for families to celebrate the holiday.

The survey is released just ahead of Black Friday and the official start of the holiday shopping season.

The release of the survey typically garners heavy media attention from local, national and international news outlets, including ABC News, CNN, National Public Radio, Xinhua, FOX News, Reuters and Business News Americas.

Matz named to NeighborWorks post

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ALEXANDRIA, Va. (11/19/12)--National Credit Union Administration (NCUA) Chairman Debbie Matz has been appointed vice chair to the board of directors of NeighborWorks America, an affordable housing and community development organization.

Matz previously served on the NeighborWorks board in 2004, and she said she is "honored to return" and help the organization continue its outstanding work to ensure individuals and families have access to safe, affordable homes.

Matz will take on the NCUA's slot on the NeighborWorks Board. That spot was previously filled by former NCUA board member Gigi Hyland, who left the NCUA this fall.

NeighborWorks also named Federal Reserve Board Governor Sarah Bloom Raskin as board chair.

NeighborWorks America works to provide access to homeownership and to safe and affordable rental housing. In the past five years, NeighborWorks' affiliated organizations have generated more than $19.5 billion in reinvestment in their communities, according to a release, which also stated that NeighborWorks America is the nation's leading trainer of community development and affordable housing professionals.

Determined by statute, NeighborWorks America's board consists of the heads of the financial regulatory agencies and the U.S. Department of Housing and Urban Development, who are presidential appointees subject to Senate confirmation, or their statutorily designated representatives.