Wachovia Corp. is taking a 25% loss on the sale of California homes financed by payment-option ARMs, and the banking company has seen the performance of those negatively amortizing loans deteriorate over the past few quarters. The Charlotte, N.C.-based bank reported a $1 billion increase in nonperforming option adjustable-rate mortgages as the percentage of loans 90 days or more past due in its $120 billion portfolio rose from 1.47% in the third quarter to 2.31% in the fourth quarter. Wachovia took a $93 million chargeoff against the portfolio. But company executives say they expect the option ARM business to remain profitable, despite rising chargeoffs and real-estate-owned sales. The banking company reported a 98% drop in earnings to $51 million in the fourth quarter compared with the level of a year earlier, mainly due to chargeoffs and provisioning relating to its residential and commercial mortgage portfolios. "Lower earnings largely reflect the effect of continued disruption in the capital markets, which resulted in net valuation losses of $1.7 billion as well as a provision for credit losses of $1.5 billion, which exceeded net chargeoffs by $1.0 billion," the bank said.
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House Republicans overcame internal divisions to narrowly pass President Trump's tax and spending package Thursday afternoon. The measure would cut the Consumer Financial Protection Bureau's funding level, among other provisions.
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A labor shortage is costing the market tens of thousands of new homes per year, and tariff uncertainty is adding thousands of dollars in expenses per unit.
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The pace of revenue growth slowed toward the end of 2024, with the trend continuing into the first three months of this year, NAHB reported.
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Capital One closed the deal to buy the credit card provider in May and as part of the review process, decided to exit its home equity lending business.
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The 10 basis point decline in the 30-year fixed mortgage was the most since March and the first time rates are below 6.7% since April, Freddie Mac said.
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The firm, now going by Fairway Home Mortgage, said the change is a representation of plans to create a "connected ecosystem."
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