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HUD Treas. mark increased housing mkt. stability

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WASHINGTON (10/27/10)--Home prices are beginning to stabilize, and reduced interest rates are making homebuying more affordable, the U.S. Department of Housing and Urban Development and the U.S. Treasury reported in the Obama Administration’s most recent housing scorecard. The monthly housing scorecard serves as a catalog of several key housing market indicators. The report noted that “record low interest rates have helped more than 7.1 million homeowners to refinance, resulting in more stable home prices and $12.7 billion in total borrower savings” since April 2009. Total home sales remained below early 2010 levels, but home prices levelled off during the past year, with homeowners adding $95 billion of home equity in 2010 second quarter. Home prices had declined for the previous 33 months, according to the report. However, the number of completed foreclosures continues to increase, the agencies noted. Over 1.3 million trial Home Affordable Modification Program (HAMP) modifications have been serviced since April 2009, and nearly 90% of homeowners that took part in the HAMP Program have remained in their homes. “Early data indicate that HAMP permanent modifications are performing well over time, with lower delinquency rates than those reported by the industry at large. At nine months, less than 16 percent of permanent modifications are 60+ days delinquent,” the agencies added. For the full report, use the resource link.

Inside Washington (10/26/2010)

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* WASHINGTON (10/27/10)--Deputy Treasury Secretary Neal Wolin said the Obama Administration has made major strides toward enacting the regulatory reform law (American Banker Oct. 26). Noteworthy developments include the work done to set up a consumer protection bureau and a data collection agency as well as the creation of the Financial Stability Oversight Council and the Office of Financial Research (OFR). The OFR will aid regulators by standardizing financial reporting and reference data for better data collection and analysis. In a speech presented at Georgetown University's McDonough School of Business, Wolin countered concerns that the OFR would increase financial institutions’ reporting requirements by stating that the OFR will not duplicate existing data collection or create unnecessary burdens … * WASHINGTON (10/27/10)--There are more canceled mortgage loan modifications than active modifications in the foreclosure prevention program created by the Obama administration. A U.S. Treasury Department report stated that almost 700,000 loan modifications started under the program were canceled through Sept. 30, while 466,708 permanent modifications remain active (American Banker Oct. 26). A permanent modification is canceled when a mortgage holder falls behind on three or more consecutive monthly payments. Redefaults remain a problem for the program, with a permanent modification canceled if a borrower misses three or more consecutive monthly payments. In the first quarter of 2010, 9.8% of modifications that became permanent were delinquent by 60 days or more after six months. Delinquencies continue to increase, with 3 million loans delinquent as of Aug. 31 … * WASHINGTON (10/27/10)--Regulators should have recognized the warnings signs of eroding standards at foreclosure servicers, according to Sheila Bair, chairman of the Federal Deposit Insurance Corp. Bair said regulators failed to follow up on clues that some servicers were overloaded with foreclosures (American Banker Oct. 26). For example, regulators should have looked at major decreases in servicing fees in recent years and then asked how servicers could achieve those efficiencies without impacting quality. Bair said the temporary mortgage freeze enacted at several large institutions, including Bank of America Corp., indicates that securitization practices need to be revamped at every stage, from origination, to securities underwriting, to servicing. She called on the industry to ponder offering foreclosure “triage,” which might include providing safe harbor relief if a property is vacant or if the servicer offered a minimum payment reduction of at least 25% and the borrower still could not make the payments. Bair was addressing a regulatory symposium on the future of housing and finance…

Fed issues annual reserve calculation adjustments

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WASHINGTON (10/27/10)—The Federal Reserve has announced the annual adjustments to its Regulation D, which sets the reserve and reporting requirements of depository institutions, effective Nov. 26. Regulation D sets the amount depository institutions must maintain as reserves in the form of vault cash, as a deposit in a Federal Reserve Bank, or as a deposit in a pass-through account at a correspondent institution. The reserve requirements are based on a depository institution’s net transaction accounts, which consist of demand deposits, automatic transfer services accounts, NOW accounts, share draft accounts, telephone or preauthorized transfer accounts, and obligations issued by affiliates maturing in seven days or less. Regulation D also includes periodic reporting requirements that are based on an institution’s level of deposits. Under the Fed adjustments, for net transaction accounts in 2011, the first $10.7 million, unchanged from its level in 2010, will be exempt from reserve requirements. A 3% reserve ratio will be assessed on net transaction accounts over $10.7 million up to and including $58.8 million, up from $55.2 million in 2010. A 10% reserve ratio will be assessed on net transaction accounts in excess of $58.8 million. These annual adjustments, known as the low-reserve tranche adjustment and the reserve requirement exemption amount adjustment, are based on growth in net transaction accounts and total reservable liabilities, respectively, at all depository institutions between June 30, 2009 and June 30, 2010, according to a Fed release. Use the resource link for more on the Fed changes.

Indirect lending is NCUA webinar focus

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ALEXANDRIA, Va. (10/27/10)—Balancing the risks and rewards of indirect lending is the subject of an upcoming webinar to be sponsored by the National Credit Union Administration (NCUA) Nov. 9. National Credit Union Administration (NCUA) board member Gigi Hyland will host the session, which the announcement said will draw from the diverse expertise at the NCUA Central Office and NCUA Regional Offices. "Indirect Lending: Balancing the Risks and Rewards" will provide guidance, best practices and insight into examination of indirect lending, and will highlight the recently issued Letter to Credit Unions 10-CU-15, “Indirect Lending and Appropriate Due Diligence.” Those making presentations include:
* Board member Gigi Hyland; * Timothy Segerson, director of supervision, NCUA Office of Examination & Insurance; * Marcus Vander Wall, program officer, NCUA Office of Examination & Insurance; and * Victoria Bennett, regional lending specialist, NCUA Region V.
The panelists will provide an examiner’s perspective as well as that of experts in the agency’s central office.Office of Examination & Insurance in the Central Office. The webinar is designed to be interactive, with questions and answers an integral part of the presentation.

Tough Pa. race brings CU support

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WASHINGTON (10/27/10)—Rep. Paul Kanjorski, a long-time advocate on Capitol Hill for credit union issues, is facing a strong challenge for his 11th district House seat in next Tuesday’s elections, and credit unions are working in support of his campaign efforts. Kanjorski, a Democrat from Pennsylvania, is running against Republican Lou Barietta, who currently is mayor of Hazleton, Pa. Over the past month, credit union folks have been involved in a number of events, including a rally
Click to view larger image Rep. Paul Kanjorski (D-Pa.), shown here addressing credit union representatives at a recent CUNA Governmental Affairs Conference in Washington, D.C., has been a member of the U.S. Congress since 1985. (CUNA photo)
Tuesday evening featuring a supportive appearance from former President Bill Clinton. Pennsylvania Credit Union Association (PCUA) CEO Jim McCormack and REAL Solutions Program Manager/retired CEO John Kebles and other credit union representatives from the district planned to attend. Other events attended by credit unions have included a Sunday Oktoberfest celebration, in Dunmore, with Kanjorski, who “tapped the keg.” Also, on Monday, credit unions gathered at a “Rally at the VFW,” in Duryea. The Credit Union National Association (CUNA) has also been involved in supporting Kanjorski, who has sponsored and promoted numerous pieces of legislation that would improve the regulatory structure of credit unions and modernize their powers. Most recently, Kanjorski designed a bill H.R. 3380), which carried broad bi-partisan support, that would increase the credit union member business lending cap. That bill is still pending a House vote. CUNA and the PCUA collaborated on a breakfast Oct. 5 to focus on a number of goals, including engaging credit unions, recruiting volunteers, and energizing credit unions that are doing mailings for Kanjorski. With the candidate in attendance at the 90-minute breakfast, CUNA and the league finalized plans for a direct-mail program, which resulted in five rounds of mailings being sent out. The mailings are being sent from PCUA to members of four credit unions in Kanjorski's district, with CUNA assisting with strategy, financing, and design. Also at the breakfast, additional volunteers were recruited.