Moody's Investors Service said June 15 that a host of negative rating actions it announced that day reflect the fact that second-lien subprime mortgage loans securitized in 2006 are defaulting at a "materially higher" rate than originally expected."Those loans were originated in an environment of aggressive underwriting and lack protection from home owner equity," the rating agency said. "The combination of this risk layering with slowing home price appreciation has caused significant loan performance deterioration and is the primary factor in these rating actions." The actions resulted in the downgrading of 131 securities (of which 111 remain on review for possible further downgrade), and 136 other classes were placed on review for possible downgrade, Moody's reported. The rating agency can be found online at http://www.moodys.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