National banks are continuing to ease their underwriting standards on home loans when they should be tightening, according to Comptroller of the Currency John Dugan.With the red-hot housing market cooling, "we would normally expect" lenders to tighten their underwriting standards and require borrowers to provide more equity, Mr. Dugan told the American Bankers Association annual convention. However, examiners from the Office of the Comptroller of the Currency are finding that bankers, giving in to competitive pressures, are easing underwriting standards. The comptroller reported that the OCC's 2006 underwriting survey, which is due to be released soon, shows a significant easing in residential mortgage standards. "We saw more of what we observed the previous year: longer interest-only periods, more piggybank loans to avoid mortgage insurance requirements, higher allowable debt-to-income and loan-to-value ratios, and greater volumes of loans with reduced documentation requirements," he said. The OCC can be found on the Web at http://www.occ.treas.gov.
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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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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.
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