A researcher for the nation's leading subprime trade group has confirmed what lenders have been talking about for months -- that profit margins in the niche are falling.Discussing his new study on subprime lending in New Jersey, Professor Richard DeMong of the University of Virginia noted that margins are "clearly" falling, saying one reason for the decline is that more lenders are flooding into the niche. At a Sept. 15 legislative conference sponsored by the National Home Equity Mortgage Association, Mr. DeMong said New Jersey's predatory-lending law (first enacted in 2002) has caused subprime lending to drop "significantly" in the state -- particularly first liens. The study, based on first-quarter results and sponsored by NHEMA, confirms the findings of two previous studies on how the Home Ownership Security Act reduced subprime lending in the state. NHEMA attorney Wright Andrews conceded that the group may have a credibility problem in Washington because even though "we keep saying the sky is falling," loan volumes keep going up. NHEMA is trying to combat this perception and believes its members (particularly national lenders) are "cross-subsidizing" difficult markets by charging higher rates in states where nonconforming loan laws are less onerous.
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According to the Federal Reserve Board's latest financial stability report, persistent inflation and policy uncertainty are the primary worries for banks. Survey respondents expressed heightened anxiety over murky policy outlooks due to geopolitical turmoil and rapidly approaching domestic elections.
4h ago -
Leaders of ORNL Federal Credit Union are piloting Zest AI's new artificial intelligence-powered assistant to ensure equitable underwriting practices and measure performance against similar institutions.
6h ago -
McCargo stabilized the agency at a crucial time as she helped navigate it through both a pandemic and subsequent dramatic interest-rate cycle change.
7h ago -
The quasi-public entity's plan to buy certain closed-end seconds would constitute "unnecessary government encroachment," the Structured Finance Association said.
9h ago -
The mortgage subsidiary of Hilltop Holdings posted another quarterly loss and volume slipped, but management also sees signs of optimism.
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The increasing frequency and severity of droughts was top of mind for panelists at AmeriCatalyst's "Going to Extremes" conference Thursday.
April 18