A study by Freddie Mac has found that illness and excessive debt are gaining ground on job or income loss as the leading cause of mortgage delinquencies.Freddie Mac said unemployment and income losses caused 36% of delinquencies among Freddie Mac loans in 2006, down from 43% between 2001 and 2005. But delinquencies caused by excessive financial obligations rose to 13.6% last year, up from 11.1% in prior years. Late payments linked to a borrower or family illness rose from 19.2% to 21.1%. Noting that only 0.53% of Freddie Mac loans were 90 or more days overdue at the end of 2006, chief economist Frank Nothaft said the drop in job- or income-based severe delinquencies reflects increases in payroll jobs outside the manufacturing sector. "But the increase in late payments due to excessive debt is potentially troubling because it is independent of economic trends and suggests some borrowers are having a harder time handling their financial obligations than in past years." Freddie Mac can be found online at http://www.freddiemac.com.
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A federal judge in Texas dismissed the Consumer Financial Protection Bureau's medical debt rule and prohibited states from passing their own laws prohibiting medical debt on credit reports.
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Dr. Mark Calabria takes on the additional role of chief statistician of the United States; retired Ally Bank executive Diane Morais has joined First Citizens Bancshares' board of directors; MainStreet Bank has promoted Alex Vari to chief financial officer; and more in this week's banking news roundup.
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While refinances are behind the latest increases, the pace of purchase activity may be a stronger indicator of where the housing market sits.
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The share of economists expecting a September rate reduction grew in the July Wolters Kluwer survey, but the October or later percentage also increased.
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Rising home prices and softening sales offer a mixed view of a market that some say is shifting to favor buyers.
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The notes are backed by home improvement installment loans originated by approved dealers in Foundation Finance Company's network.
July 11