If bankruptcy judges begin to reduce or "cram down" the principal amount of residential mortgages, Federal Housing Administration servicers would have to absorb the losses because the government cannot pay a claim on a cramdown, according to the Mortgage Bankers Association.Passage of the bankruptcy bill (H.R. 3609) to permits cramdowns and loan modifications would make it riskier for lenders to originate FHA-insured and Department of Veterans Affairs-guaranteed loans, MBA chairman-elect David Kittle warned a House Judiciary Committee panel. As a result, lenders would have to charge higher interest rates and fees. The MBA also noted that Fannie Mae and Freddie Mac would be required to purchase loans out of mortgage-backed securities pools if loans are modified. "If this bill becomes law, we believe mortgage rates would jump significantly, going up 1 1/2 to 2 points for everyone taking out a loan," Mr. Kittle told the commercial and administration law subcommittee. The association can be found on the Web at http://www.mortgagebankers.org.
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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.
6h 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.
8h 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.
8h ago -
The quasi-public entity's plan to buy certain closed-end seconds would constitute "unnecessary government encroachment," the Structured Finance Association said.
11h ago -
The mortgage subsidiary of Hilltop Holdings posted another quarterly loss and volume slipped, but management also sees signs of optimism.
11h ago -
The increasing frequency and severity of droughts was top of mind for panelists at AmeriCatalyst's "Going to Extremes" conference Thursday.
April 18