Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

Market Archive

Market

Mortgage Applications Up, New-home Sales Rebound

 Permanent link
WASHINGTON (9/26/13)--U.S. mortgage applications rose last week, and new-home sales increased in August, according to two separate reports.

Mortgage applications increased 5.5% from one week earlier, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending Sept. 20.
 
MBA's Market Composite Index, a measure of mortgage loan application volume, rose 5.5% on a seasonally adjusted basis from one week earlier. Unadjusted, the index gained 5%.
 
The seasonally adjusted Purchase Index rose 7%. The unadjusted Purchase Index went up 5%, compared with the previous week, and was 7% higher than the same week one year ago. The Purchase Index was at its highest level since July.
 
The Refinance Index increased 5%. The refinance share of mortgage activity was unchanged at 61% of total applications. The adjustable-rate mortgage share of activity was unchanged at 7% of total applications.
 
In a related matter, sales of new U.S. homes bounced back in August, following the weakest two months this year--indicating that consumers continue to purchase homes despite higher borrowing costs (The Wall Street Journal and Bloomberg.com Sept. 25).   

Sales rose 7.9% to a 421,000 annualized pace, after a 399,000 rate in July, the Commerce Department said Wednesday. 
 
The housing recovery will slide to some extent because the rise in mortgage costs is a substantial factor in decisions to purchase homes, Russell Price, a senior economist at American Financial Inc. in Detroit, told Bloomberg. However, tight inventories still will provide an opportunity on the supply side for builders to continue constructing more homes, he added.

W.Va. In $8M Settlement With Big Banks On Card Protection Programs

 Permanent link
CHARLESTON, W.Va. (9/26/13)--West Virginia Attorney General Patrick Morrisey Tuesday announced that four large banking companies will pay the state $1.95 million each--or $7.8 million total--to settle lawsuits alleging the companies' credit card protection programs violated West Virginia law.

The settlements were reached three months after the West Virginia Supreme Court of Appeals ruled in the case State ex rel. Discover Financial Services Inc. vs. Neibert that the Office of the Attorney General had the authority to use special assistant attorneys general in certain cases. The four financial institutions--Bank of America Corp., JP Morgan Chase & Co., Citibank/Citigroup Inc., and GE Money Bank--were parties in that case.

The banks engaged in misleading and deceptive tactics to enroll customers in payment protection programs, which involved fees of typically 89 cents per $100 credit card balance and collectively netted millions of dollars for the banks over a period of several years, according to the complaint filed by the office.

The complaint said bank representatives would ask new cardholders whether they were interested in entering a program that would cover minimum monthly payments in the event of a major life change, such as loss of income, spouse or other event. If cardholders even expressed "interest," they were automatically enrolled in the program without being given an opportunity to review its terms and conditions, including the fee structure, what the program would offer and how benefits would be determined. The banks denied the allegations.

The office did not settle with Discover Financial Services, HSBC Card Services or World Financial Network Bank. Claims against those institutions will continue, said Morrissey.

Under the terms of the settlement and the office's agreement with the governor and the state legislature, the settlement monies will help ensure the state's Consumer Protection Division has three years of operating revenue. The remainder will be returned to the legislature.