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Market Archive

Market

Foreclosure activity sinks to post-recession low: RealtyTrac

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WASHINGTON (6/20/14)--Foreclosure filings dropped by 5.2% in May, the second straight month of decline and a new post-recession low, according to RealtyTrac numbers (Economy.com June 19).

Starts, lender repossessions and scheduled auctions--the three types of foreclosure activities--all fell in May, led by states that benefit from foreclosure processes that take less time to complete, according to Moody's analysts.

"The number of households becoming delinquent on their mortgages continues to decline as house prices trend higher and the labor market heals," said Brent Campbell, Moody's analyst (Economy.com). "Fewer homeowners find themselves underwater or unable to meet their monthly mortgage payments. Aside from the distressed properties that are still moving through the foreclosure process in the judicial states, foreclosure filings continue to broadly head lower."

Specifically, starts sank by 5.9%, foreclosure auctions fell 4.4% and bank repossessions slipped 5.6%.

Florida experienced the highest rate of foreclosures, Maryland placed second and Nevada came in third.

National foreclosure inventories, meanwhile, fell 2.8% in May, and sit 19% lower than levels seen last year at this time.

Jobless claims still floundering

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WASHINGTON (6/20/14)--The number of U.S. citizens seeking unemployment insurance continues to rest at a post-recession low, as initial jobless claims fell by 6,000 to 312,000 for the week ending June 14, the Labor Department reported Thursday (MarketWatch June 19).

Averaged over the month to smooth out any spikes, jobless claims slipped by 3,750, also near a post-housing-bust low.

Marisa Di Natale, a Moody's analyst, said that despite some choppiness over the past couple of weeks surrounding the Memorial Day holiday, jobless claims continue their downward path and are about as low as they have been since the recession ended (economy.com June 19).  With the four-week moving average also dropping, this suggests that the pace of job growth, which has been above 200,000 in each of the last four months, held steady or improved slightly in June, Di Natale added.
 
Continuing claims, or those to receive unemployment benefits for at least a second straight week, fell by a seasonally adjusted 54,000 for the week that ended June 7.

News of the Competition (06/20/2014)

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  • WASHINGTON (6/20/14)--SunTrust is expected to pay the Federal Housing Administration $418 million in a move that will nudge the federal mortgage insurance agency's balance sheet toward the black (American Banker June 18). The sum would bolster the White House's fiscal year 2015 prediction that the FHA will have a $7.8 million surplus by the end of September. The payment is part of a $1 billion settlement with federal agencies to settle alleged violations of the False Claims Act. American Banker has reported that some of the $418 million earmarked for the FHA might, in turn, go to the U.S. Department of Veterans Affairs and the Rural Housing Service. Of the rest of the $1 billion in settlements, $500 million has been set aside for consumer relief and $50 million will finance additional cash penalties. Last year, the FHA received $1.7 billion in emergency funding from the U.S. Treasury, though it was not expected to need a cash injection this year, according Banker. The federal agency also received almost $1 billion from Bank of America in a similar settlement. The Justice Department said that SunTrust admitted that it lacked a quality control program, and that half of the FHA-backed loans it originated did not adhere to agency guidelines--and that the bank also failed to report to the Housing and Urban Develop Agency that it had detected faulty loans. The Atlanta-based bank said that it had already set aside reserves for the settlement and claims to have improved its underwriting process and internal oversight...
  • WASHINGTON (6/20/14)--Dozens of U.S. House members--both Republicans and Democrats--are appealing to the White House to nominate a Federal Reserve Board member with community banking experience (American Banker June 18). The 87 members who signed the letter were organized by Reps. Sean Duffy (R-Wisc.) and Ed Perlmutter (D-Colo.). The letter stated that "it's in the Federal Reserve's best interest to have a representative who understands the unique needs and perspectives of community banks when key economic and regulatory decisions are being debated." Recently, the Senate confirmed two members to the board--Stanley Fischer, who now serves as vice chairman, and Lael Brainard. It also recommended incumbent Gov. Jerome Powell for a new term. American Banker reported that observers believe the recent departures of former Govs. Elizabeth Duke and Sarah Bloom Raskin have created a dearth of institutional knowledge of community banking. A bipartisan coalition of senators introduced legislation in April, which would require that at least one Federal Reserve Governor have community banking or supervision experience. That bill, which was written by Sen. David Vitter (R-La.) and co-sponsored by six of his Republican colleagues and two Democrats, has been referred to the Senate Banking Committee...
     
  • NEW YORK (6/20/14)--Banking giants U.S. Bank, Wells Fargo and Citigroup have been targeted with lawsuits this week for their roles as trustees on mortgage-backed securities that were sold under their supervision in the years leading up to the financial crisis of 2008 (Wall Street Journal June 18). BlackRock Inc. and Pacific Investment Management Co., investment firms with billions at stake on the securities, claim the banks breached their duty to the bondholders by allegedly not forcing lenders and bond issuers to repurchase loans that did not meet the quality standards described to buyers when the securities were sold. Wells Fargo, Citigroup, HSBC Holdings and Bank of New York Mellon oversaw 2,000 bond issuances between 2004 and 2008. The investment companies are seeking damages for losses on the bonds surpassing $250 billion, according to a Wall Street Journal source...