A pickup in loan modifications could be an important factor in keeping the U.S. economy out of recession, according to Mark Zandi, chief economist of Moody's Economy.com.Speaking at a housing forum sponsored by the Office of Thrift Supervision, Mr. Zandi argued that the Federal Reserve Board has to be aggressive in cutting interest rates and said 20% to 30% of adjustable-rate mortgages need to be modified before they reset to give the housing and mortgage markets any chance of a recovery. Countrywide Financial Corp. chairman and chief executive Angelo Mozilo said he supports the Bush administration's effort to increase loan modifications. However, he stressed that the lack of liquidity in the secondary market (except for Fannie Mae, Freddie Mac, and Federal Housing Administration-eligible loans) is putting downward pressure on sales and house prices. Mr. Mozilo called on the administration to relax its grip on Fannie and Freddie so the two mortgage giants can use their resources to "jump-start" the secondary mortgage market and restore investor confidence.
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The new Financial Stability Oversight Council report also recommends an expanded Ginnie Mae PTAP facility and an industry-funded liquidity resource.
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The publicly traded title holding companies all had stronger earnings as the mortgage market improved from one year prior.
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One in every 37 residential properties nationwide had a loan-to-value ratio of 125% or greater to begin the year, according to a new report.
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There's temporary leeway on formal compliance with replacement-cost value requirements in order to sort out insurer concerns with a recent re-emphasis on them.
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Max Levchin, CEO of the buy now/pay later lender, said recent tests show young adults prefer interacting with intelligent chatbots over phone-based agents, but the company doesn't foresee major cost savings from generative AI for a few more years.
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May 10