msgbartop
Mortgage News Blog publishes home loan articles for brokers, lenders and consumers. People trust our mortgage blog for breaking the financing stories that matter.
msgbarbottom

02 Jul 09 Trend Upward for Mortgage Rates

The average rate on a 15-year fixed mortgage dropped to 4.81 % from 4.93 % the prior week. The rate on a one-year adjustable mortgage loans decreased to 6.52 % last week from 6.54 %, according to the mortgage bankers.  Home loan rates tracked by McLean, Virginia-based mortgage buyer Freddie Mac climbed along with Treasury yields through late May and early June on investor concern that a greater supply of government debt being sold to fund federal spending would fuel inflation.

This year the Federal Reserve purchases of mortgage bonds guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae brought down the yields on those securities, allowing lenders to reduce rates on new home loans and still sell them at a profit.  Still, rising foreclosures that sell at discounted prices are flooding the market and depressing home values, according to Lawrence Yun, chief economist of the Chicago-based Realtors’ group. This year the number of foreclosures may rise to 2.5 million, the highest on record, Yun said.

Share

Tags: , , , , ,

30 Jun 09 Top Court Allows NY State Home Lending Probe

A recent Reuters’ article revealed a divided U.S. Supreme Court ruled on Monday that the New York attorney general’s office can investigate whether national banks and mortgage lenders discriminated against minorities seeking mortgage loans.  The justices overturned part of a ruling by a U.S. appeals court that blocked state Attorney General Andrew Cuomo from investigating or enforcing the fair lending laws against national banks because they are subject instead to what has been viewed as less stringent federal regulation.

In a 5-4 ruling, Justice Antonin Scalia, one of the Court’s more conservative members, joined the four most liberal justices in allowing Cuomo to bring lawsuits, though he could not at the same time issue subpoenas. The ruling struck down a regulation by the Office of the Comptroller of the Currency that essentially preempted states from enforcing their own fair lending laws, even when federal law appeared inadequate to protect consumers.  Scalia said it would be “bizarre” for states to be blocked from enforcing valid, non-preempted laws against national banks, such that “the bark remains, but the bite does not.”  Cuomo, in a statement, called the ruling “a huge win for consumers across the nation,” saying it reaffirms the role of state attorneys general “in protecting consumers from illegal and improper home loan practices by our country’s biggest and most powerful banks.”

The Clearing House Association LLC, a group of big banks supporting the OCC rule, was “disappointed that the principle of uniformity in national bank enforcement has been breached,” according to a spokesman.  Comptroller of the Currency John Dugan said he was disappointed but his agency would work with the states to ensure fair access to financial services and consumer protections. “  Everyone benefits from clarification of the law,” Dugan said in a statement.

Cuomo was trying to revive a probe begun in 2005 by his predecessor, Eliot Spitzer, into possible racial discrimination in FHA mortgage lending.  Spitzer sent letters of inquiry to mortgage providers including Citigroup Inc, HSBC Holdings Plc, JPMorgan Chase & Co and Wells Fargo & Co in response to data he said appeared to show a significantly higher percentage of high-interest home mortgage loans issued to black and Hispanic borrowers than to white borrowers.  Two lower federal courts ruled against Cuomo, whose appeal won support from the other 49 states and Washington, D.C. Cuomo contended that the economic crisis, due in large part to reckless subprime mortgage lending, has shown the need for more regulatory oversight and consumer protection.

Spitzer told Reuters by telephone that his office was driven to pursue the case because of concerns about disparate lending practices and concerns that subprime debt was becoming pervasive. “Obviously, it’s a little late to forestall the cataclysm that emerged when the subprime debt fuse finally exploded,” Spitzer said.  “As we look forward, this is a good thing for states to be able to ask the questions and get the information from nationally chartered banks as well as state chartered banks.” 

The ruling is a “serious loss for the banking industry,” and also gives attorneys general a “bully pulpit.” said James Cox, a securities law professor at Duke University. “Even without subpoena power they can still hold press conferences and take steps to swing public opinion.”  Groups representing real estate agents, state bank officials, and consumer and civil rights organizations supported Cuomo’s appeal.

Monday’s ruling “is a victory for taxpayers, who have suffered enormously as a result of abusive business practices in all types of mortgage lending,” said Michael Calhoun, president of the Center for Responsible Lending.  The Supreme Court last addressed a similar issue in 2007, when it ruled that states cannot regulate the mortgage-lending subsidiaries of banks regulated by the Comptroller’s office, which is part of the U.S. Treasury Department. The case is Cuomo v. Clearing House Association LLC, No. 08-453.  (Additional reporting by Elinor Comlay, Jonathan Stempel and Joseph Giannone in New York and Karey Wutkowski in Washington, D.C.; Editing by Gerald E. McCormick and Tim Dobbyn)  Read the original James Vicini article >

Share

Tags: , , , , , , , ,

Switch to our mobile site