I2CREDIT Nº 1
Mortgage activity surges at US banks
US banks are having trouble handling a surge of mortgage applications spurred by dramatically lower interest rates, after record loan defaults and thousands of job cuts have stretched mortgage industry resources to the limit.
Por: Saskia Scholtes in New York | Financial Times (Copyright The Financial Times Limited 2008)
With average rates for a 30-year, fixed-rate mortgage now at about 5.2 per cent, growing numbers of borrowers have an incentive to refinance to bring down their mortgage costs.
But tighter underwriting standards for prospective borrowers, combined with funding and staffing difficulties for mortgage originators, are likely to restrict the supply of new mortgages.
"The mortgage industry is collectively unprepared to deal with a cascade of business; staffs were pared to the bone as the market for mortgages shrank over the past year," analysts at HSH Associates wrote in a note to clients.
Mahesh Swaminathan, mortgage analyst at Credit Suisse, said that as a result, lower rates would not necessarily create a wave of mortgage refinancing on the scale that was seen in 2003, when credit markets were healthy.
"There is a lot of pipeline congestion. Originators don't have the staffing or the credit lines to fund a lot of loans," said Mr Swaminathan. "You have more due diligence which requires more staffing. It is not something that can be changed overnight."
Part of the problem is that banks have directed the bulk of their manpower toward their servicing arms in a bid to stem the tide of mortgage defaults and foreclosures.
While banks have pledged to use capital they have received from the US Treasury to boost consumer lending, they are also under intense political pressure to modify loan terms for struggling borrowers. Loan modifications have continued to grow more quickly than other strategies such as subsidy programmes or refinancing into government loans, according to the Office of the Comptroller of the Currency.
The number of new loan modifications grew 16 per cent in the third quarter to more than 133,000, said the OCC. The rate of loan modification is likely to be even higher in fourth-quarter data, say analysts, as a result of recent initiatives by Fannie Mae and Freddie Mac, the two large mortgage financiers.
Ultimas Notas
I2CREDIT Nº 1
Collectors face a challenge with increased amounts of delinquent accounts
Opportunity for overseas services in Latin America
The enormous debt and credit card delinquency levels were the mainstay of the Miami-held 6th Latin American Congress on Credit and Collections. These debts could reach 55 million dollars in 2009.
Por: Laura Rivera | Mercado de Dinero USA
Retailers Want In on Stimulus Plan
The country's largest retail trade association asked President-elect Barack Obama Tuesday to add a series of sales tax-exempt shopping days to a coming economic stimulus package in an effort to revive consumer confidence and spur spending.
Por: Ann Zimmerman
Tougher rules for credit card issuers in works
Washington - Cash-strapped consumers can expect a special delivery this holiday season: sweeping new rules on credit cards.
Federal regulators will unveil final rules within the next several weeks to restrict credit card practices seen as unfair or deceptive. Proposals would prohibit institutions from practices such as increasing rates on an outstanding balance, except under limited circumstances; applying consumers’ payments over the minimum so as to maximize interest charges; and giving consumers an unreasonably short time to make payments.
Por: Ruth Mantell | McClatchy Tribune
Lose Confidence in Your Bank? Turn to the Web
When the financial sector took a dive this fall, the entrepreneurs behind a new batch of personal finance sites worried that they were in the wrong place at the wrong time.
After all, if people no longer trusted their banks, why would they trust some start-up with their most private financial information?
Por: Claire Cain Miller | The New York Times
Top Two Successful Credit Card Debt Recovery Strategies
The senior executives of many card issuers are increasing their expectations of recovery operations as more recovered dollars are contributing to reported earnings. At the same time, the challenges
facing recovery executives, such as increased chargeoffs, lower collectability in contingency networks, and lower proceeds from debt sales, are making such expectations more difficult to meet.
Por: Kaulkin Media
Anatomy of a Meltdown, Ben Bernanke and the financial crisis.
Some are born radical. Some are made radical. And some have radicalism thrust upon them. That is the way with Ben Bernanke, as he struggles to rescue the American financial system from collapse. Early every morning, weekends included, Bernanke arrives at the headquarters of the Federal Reserve, an austere white marble pile on Constitution Avenue in Foggy Bottom.
Por: John Cassidy | The New Yorker
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- 2011
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