New QM Rules Produce Higher Costs and Elevated Risk Factors

first_img Share Save Subscribe The Best Markets For Residential Property Investors 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago New QM Rules Produce Higher Costs and Elevated Risk Factors Home / Daily Dose / New QM Rules Produce Higher Costs and Elevated Risk Factors Sandra Lane has extensive experience covering the default servicing industry. She contributed regularly to DS News’ predecessor, REO Magazine, from 2004 to 2006, covering local market trends, the effects of macroeconomic shifts on market conditions, and “big-picture” analyses of industry-driving indicators. But her understanding of the mortgage and real estate business extends even beyond those pre-crisis days. She is a former real estate broker and grew up in what she calls “a real estate family.” A journalism graduate of the University of North Texas, she has written articles for various newspapers and trade journals, as well as company communications for several major corporations. in Daily Dose, Featured, Headlines, Market Studies, News February 17, 2014 699 Views  Print This Post The Week Ahead: Nearing the Forbearance Exit 2 days ago About Author: Sandra Lane Servicers Navigate the Post-Pandemic World 2 days ago Demand Propels Home Prices Upward 2 days agocenter_img Although the new QM rules are expected to bring stability to loan manufacturing, the many nuances of compliance have resulted in doubling the cost of loan origination. This assessment was offered by Tom Showalter, Chief Analytic Officer at Digital Risk, a top provider of risk, compliance, and transaction management solutions.A major part of the increased cost is attributable to a new kind of risk involved in the process, which Showalter calls “manufacturing risk.” During an interview with Louis Amaya on Mortgage Markets Today, Showalter explained that “manufacturing risk” consists of a corrupted or misrepresented key data element in the loan process.”There are several areas that could be corrupted or stated incorrectly,” Showalter said, “including the borrower’s income, debt-to-income (DTI) ratio, and loan-to-value (LTV) comparison, which are all key elements in assessing credit risk.”Showalter explained that QM has one particular information element that is very crucial, and it’s called the ability-to-repay, which is determined by DTI. A potential borrower with a DTI greater than 43 percent is considered to be unacceptable. To ensure that the loans they purchase are sound loans, the GSEs are now publishing a list of defects standards. “There is a target defects rate for a lender’s population, and lenders have to be below that defect rate or Fannie will not buy their loans,” Showalter said. “Freddie is issuing similar guidelines.”In addition, Showalter said that not only are the GSEs issuing defects standards for their sellers, they are also issuing what they call governance guidelines. “This is a new twist,” he explained. “Not only are the GSEs interested in the defect rate of a population of loans, they are also interested in how well the lender is organized to manage and control a specific defect rate. This means that the GSEs are not only holding the head of the QC team accountable, they are actually going all the way up to the CEO and holding him or her accountable as well,” he said.As a result, there will be an application of penalties, fines, and other kinds of retribution should the GSEs feel that a particular lender is not following the program.To determine whether information is accurate or not, GSEs in the past would review maybe 1 to 2 percent of the loans they received each month.”So, you have this process where 2 percent of the loans were subject to a manual review by experts and 98 percent of the loans were not reviewed at all, and that is the current process,” Showalter said.In order to achieve a higher rate of accuracy in defect detection, he said, “That’s going to eventually prompt the industry to go from its current manual methods to something much higher tech that produces more efficient results without having to crack a loan file every time a defect rate needs to be calculated,” he continued.Showalter said that lender communities, especially the larger ones, are starting to explore such technology that will detect manufacturing defects, enabling them to take a more efficient look at a broader population of loans.Among smaller and mid-sized lenders that do not have the financial ability to purchase such technology, he said there are two trends emerging.”One is that some are also seeking less expensive tools that will help augment their process in surveying loans electronically and therefore not expend as much labor in the process of analyzing and meeting a defect rate goal,” Showalter explained. “Others are thinking about issuing non-QM qualified mortgages and selling them on the private market, therefore avoiding any dealings with the GSEs,” he continued.However, he noted that at the present time, this segment is waiting and watching to see what may happen to the private label market.Showalter thinks a coming trend will be that small lenders may rely on larger ones who have invested millions in the creation of infrastructure capable of managing the new and more stringent loan requirements. “I honestly think that the loan manufacturing requirements placed on the industry is far more than most lenders will be able to respond to quickly, especially the smaller or mid-sized ones,” he concluded.Showalter offers some predictions for 2014: “I think you will see bigger lenders buying up smaller ones so that they can increase their market share and spread the expenses for compliance across more loans. Another reason for acquisition and consolidation is that the mortgage loan volume is not particularly high right now, and as long as it’s in the doldrums, there will be a lot of pressure to consolidate.”He also believes that although housing prices have gone up a little and interest rates are still stable, median income and the labor participation rate will continue to go down. “This means there are fewer well-employed people who are able to qualify and buy a home,” he explained. “In addition, most origination now is going to be on a purchase money basis as opposed to a refinance basis, which brought in a lot of borrowers in the past several years. Now mortgage lenders are looking for purchase money candidates, and let’s face it, the number of fish in that pond is just not what it used to be.”This year’s attendance at the Five Star Government Forum on March 25, 2014, is more critical than ever. Leaders of the Housing and Mortgage Servicing industry will engage government officials and regulators in meaningful discussion on housing and mortgage policy. This show was brought to you by Iserve Companies. Sign up for DS News Daily Servicers Navigate the Post-Pandemic World 2 days ago Demand Propels Home Prices Upward 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Related Articles Tagged with: Loan Origination Qualified Mortgage The Best Markets For Residential Property Investors 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Previous: Bank of America Cuts More Jobs Next: NTS Offers New Service for 2014 Data Provider Black Knight to Acquire Top of Mind 2 days ago Loan Origination Qualified Mortgage 2014-02-17 Sandra Lanelast_img read more

DS News Webcast: Monday 2/24/2014

first_img February 24, 2014 496 Views DS News Webcast: Monday 2/24/2014 Governmental Measures Target Expanded Access to Affordable Housing 2 days ago in Featured, Media, Webcasts Related Articles Sign up for DS News Daily Servicers Navigate the Post-Pandemic World 2 days ago Share Save Demand Propels Home Prices Upward 2 days ago Previous: First-Time Buyers Face Affordability Issues Next: Fannie Mae Mortgage Yields Rise The Week Ahead: Nearing the Forbearance Exit 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days agocenter_img The Best Markets For Residential Property Investors 2 days ago The Best Markets For Residential Property Investors 2 days ago Is Rise in Forbearance Volume Cause for Concern? 2 days ago Fannie Mae released its Comprehensive Income Statement for the fourth quarter of 2013, noting a comprehensive income of $6.6 billion, the eighth consecutive quarterly profit for the government sponsored enterprise. The company’s annual net income was $84 billion. Fannie Mae credits the strong earnings in the fourth quarter of 2013 to stable revenues, credit-related income, and fair value gains.The company will pay $7.2 billion in dividends on senior preferred stock to the U.S. Department of the Treasury. The payment will mark the first time the company’s cumulative dividend payments to the Treasury will exceed total draws. The March dividend payment will push Fannie Mae’s total paid dividends to $121.1 billion, eclipsing the Treasury’s total draw of $117.1 billion. Fannie Mae has not received Treasury funds since the first quarter of 2012.The Mortgage Bankers Association released its National Delinquency Survey Thursday, noting the seasonally adjusted rate for delinquent mortgages fell in the fourth quarter of 2013 to 6.39%, its lowest level since 2008. Rates for loans in the foreclosure process declined to 2.86%, down 22 basis points from the third quarter, and down 88 basis points from last year. New foreclosure rates were listed at .54 percent, the lowest percentage in 8 years. Demand Propels Home Prices Upward 2 days ago Home / Featured / DS News Webcast: Monday 2/24/2014 Servicers Navigate the Post-Pandemic World 2 days ago  Print This Post 2014-02-24 DSNews Subscribe About Author: DSNewslast_img read more

Freddie Mac: Mortgage Rates Fall to 4.27 Percent

first_img in Daily Dose, Featured, Headlines, Market Studies, News The Best Markets For Residential Property Investors 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Demand Propels Home Prices Upward 2 days ago Freddie Mac: Mortgage Rates Fall to 4.27 Percent Data Provider Black Knight to Acquire Top of Mind 2 days ago Demand Propels Home Prices Upward 2 days ago Share Save Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Previous: Default Title Coalition Addresses Communication Issues, Training Next: DS News Webcast: Friday 4/18/2014 Related Articles Average fixed mortgage rates fall for the second straight week, bringing them to a six-week low—and easing affordability conditions slightly as the homebuying season gets under way.Per Freddie Mac’s Primary Mortgage Market Survey, the 30-year fixed rate mortgage (FRM) this week averaged a rate of 4.27 percent (0.7 point), down from 4.34 percent last week. A year ago, the 30-year FRM sat at 3.41 percent.At the same time, the 15-year FRM averaged 3.33 percent (0.6 point), down from an average 3.38 percent.Frank Nothaft, VP and chief economist for Freddie Mac, said the latest decline fits with a disappointing—though not dismal—construction report showing homebuilding rising at a rate of 2.8 percent in March.“Also, permits fell 2.4 percent in March to a seasonally adjusted annual rate of 990,000, which followed a slight downward revision of 4,000 permits in February,” Nothaft said.Numbers were mixed in adjustable rates. According to Freddie Mac, the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.03 percent (0.5 point), down from 3.09 percent in the prior week, while the 1-year ARM averaged 2.44 percent, up a few basis points.Bankrate.com also saw a drop in its weekly national survey, recording the 30-year fixed at 4.43 percent and the 15-year fixed at 3.48 percent.“Mortgage rates fall for the second week in a row amid mixed economic news abroad and in the United States,” said Polyana da Costa, senior mortgage analyst for the finance site. “Despite some recent economic news, the United States is still perceived by investors as one of the safest places to park their money.” April 17, 2014 770 Views center_img ARM Bank Rate Fixed-Rate Mortgage Freddie Mac Mortgage Rates 2014-04-17 Tory Barringer Home / Daily Dose / Freddie Mac: Mortgage Rates Fall to 4.27 Percent Tagged with: ARM Bank Rate Fixed-Rate Mortgage Freddie Mac Mortgage Rates The Best Markets For Residential Property Investors 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago  Print This Post Servicers Navigate the Post-Pandemic World 2 days ago Sign up for DS News Daily Subscribelast_img read more

CFPB: One Million Complaints Handled and Counting

first_img Governmental Measures Target Expanded Access to Affordable Housing 2 days ago About Author: Kendall Baer The Best Markets For Residential Property Investors 2 days ago in Daily Dose, Featured, News Demand Propels Home Prices Upward 2 days ago CFPB: One Million Complaints Handled and Counting Kendall Baer is a Baylor University graduate with a degree in news editorial journalism and a minor in marketing. She is fluent in both English and Italian, and studied abroad in Florence, Italy. Apart from her work as a journalist, she has also managed professional associations such as Association of Corporate Counsel, Commercial Real Estate Women, American Immigration Lawyers Association, and Project Management Institute for Association Management Consultants in Houston, Texas. Born and raised in Texas, Baer now works as the online editor for DS News. Share Save Demand Propels Home Prices Upward 2 days ago Previous: Record Highs in Price Appreciation Might Not Be Sustainable Next: June’s Low Cash Sales Are a Blast from the Past  Print This Post Home / Daily Dose / CFPB: One Million Complaints Handled and Counting Related Articles Servicers Navigate the Post-Pandemic World 2 days agocenter_img The Week Ahead: Nearing the Forbearance Exit 2 days ago Tagged with: CFPB Mortgage Complaints The Best Markets For Residential Property Investors 2 days ago Subscribe Data Provider Black Knight to Acquire Top of Mind 2 days ago September 27, 2016 1,192 Views Data Provider Black Knight to Acquire Top of Mind 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Slightly more than five years after opening its doors in July 2011, the Consumer Financial Protection Bureau (CFPB) has handled more than one million complaints.The Bureau surpassed the one million complaint-handled milestone this month, according to a release announcing the September 2016 Monthly Complaint Report (Volume 15), published on Tuesday.“Since opening our doors in 2011, we have handled over one million complaints from consumers about their problems with financial products and services,” said CFPB Director Richard Cordray. “Not only have we achieved substantial relief for consumers, but hearing directly from consumers is fundamental to our mission. We can better protect all consumers because of what we learn from those who have submitted complaints and shared their experiences with us.”The CFPB began accepting complaints about credit cards when it opened its doors in July 2011. The Bureau later expanded its complaint handling to include other areas of finance; mortgages were added early in 2013. Other categories include credit cards, mortgages, bank accounts and services, private student loans, vehicle and other consumer loans, credit reporting, money transfers, debt collection, and payday loans.Once the most complained-about financial product to the CFPB, mortgages have since been surpassed by debt collection on the list. Nearly a quarter of complaints from consumers to the Bureau have been about mortgage products (244,008 out of the one million), second only to debt collection’s 264,123 complaints. Together, those two categories make up more than half of the one million complaints consumers have made to the Bureau in five years. Credit reporting was the third-most complained about financial product, logging 163,651 complaints.With a total of 4,310 complaints in August (a 10 percent increase from July), mortgages ranked third behind debt collection (9,746) and credit reporting (5,723) as the top complained-about categories for the month. Mortgages rank second on the list of average number of complaints received since the CFPB’s launch, with 4,206, behind only debt collection (6,871).The Bureau received a total of 28,651 complaints across all financial products in August, which is nearly double the agency’s monthly average of complaints received since its inception (15,845). Approximately 15 percent of complaints received by the CFPB in August 2015 were mortgage-related.Click here to view the CFPB’s complete report. CFPB Mortgage Complaints 2016-09-27 Kendall Baer Sign up for DS News Daily last_img read more

Technology Platform Announces Integration With Fannie Mae

first_imgHome / Featured / Technology Platform Announces Integration With Fannie Mae Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Plaid, a technology platform that enables applications to connect with users’ bank accounts, recently announced the launch of a pilot with Fannie Mae to automate the asset verification step of the mortgage lending process.Since its founding in 2012, Plaid has set out to enable innovation throughout financial services.Plaid’s technology infrastructure allows innovators to create new products and applications that connect consumer’s bank accounts with the financial applications they use to better theirfinancial lives.By working with Fannie Mae’s Desktop Underwriter (DU) validation service, Plaid will offer a more reliable way for mortgage lenders to verify borrowers’ assets, according to the announcement.With this integration, Plaid makes it possible for Fannie Mae’s lenders to connect with borrower bank accounts directly and in real-time. This approach replaces the need to manually collect and review documents for key parts of the mortgage process and also protects lenders from related buyback risk through Fannie Mae’s Day 1 Certainty TM program.”Automated asset verification is a big step forward for what’s historically been a paper-basedindustry. We’re excited to help simplify and streamline the mortgage application process,” saidZach Perret, CEO and Co-founder at Plaid. “Plaid is focused on enabling innovation andsimplifying the customer experience in financial services, and working with Fannie Mae on their Day 1 Certainty initiative is a great example of that.” in Featured, Headlines Nicole Casperson is the Associate Editor of DS News and MReport. She graduated from Texas Tech University where she received her M.A. in Mass Communications and her B.A. in Journalism. Casperson previously worked as a graduate teaching instructor at Texas Tech’s College of Media and Communications. Her thesis will be published by the International Communication Association this fall. To contact Casperson, e-mail: [email protected] The Best Markets For Residential Property Investors 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Share Save The Best Markets For Residential Property Investors 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago  Print This Post October 30, 2017 1,137 Views Demand Propels Home Prices Upward 2 days ago About Author: Nicole Casperson The Week Ahead: Nearing the Forbearance Exit 2 days ago Previous: Genworth Mortgage Insurance Announces New Technology Next: Venable LLP Announces New Partner 2017-10-30 Nicole Casperson Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Demand Propels Home Prices Upward 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Related Articles Technology Platform Announces Integration With Fannie Mae Sign up for DS News Daily Subscribelast_img read more

The Long-Term Impact of Redlining on Home Prices

first_img Related Articles The Week Ahead: Nearing the Forbearance Exit 2 days ago April 25, 2018 2,245 Views Fair Housing Act Home Owners’ Loan Corp Home Prices Redlining Zillow 2018-04-25 David Wharton Servicers Navigate the Post-Pandemic World 2 days ago Home / Daily Dose / The Long-Term Impact of Redlining on Home Prices Demand Propels Home Prices Upward 2 days ago Share Save Previous: Sen. Brown Calls for Mulvaney’s Resignation Next: Two Industry Veterans Hired to National General Lender Services About Author: David Wharton Tagged with: Fair Housing Act Home Owners’ Loan Corp Home Prices Redlining Zillow Sign up for DS News Daily Data Provider Black Knight to Acquire Top of Mind 2 days ago Demand Propels Home Prices Upward 2 days agocenter_img Governmental Measures Target Expanded Access to Affordable Housing 2 days ago The Best Markets For Residential Property Investors 2 days ago  Print This Post David Wharton, Managing Editor at the Five Star Institute, is a graduate of the University of Texas at Arlington, where he received his B.A. in English and minored in Journalism. Wharton has over 16 years’ experience in journalism and previously worked at Thomson Reuters, a multinational mass media and information firm, as Associate Content Editor, focusing on producing media content related to tax and accounting principles and government rules and regulations for accounting professionals. Wharton has an extensive and diversified portfolio of freelance material, with published contributions in both online and print media publications. Wharton and his family currently reside in Arlington, Texas. He can be reached at [email protected] Servicers Navigate the Post-Pandemic World 2 days ago The Long-Term Impact of Redlining on Home Prices in Daily Dose, Featured, Government, Journal, Market Studies, News Data Provider Black Knight to Acquire Top of Mind 2 days ago As the nation is celebrating the 50th anniversary of President Lyndon B. Johnson’s signing of the Fair Housing Act, Zillow Research has taken a look at the impact of the sort of policies the Fair Housing Act was intended to counter. Some eight decades after the federal government “redlined” certain neighborhoods as being hazardous for mortgage lenders, Zillow finds that home prices in those areas still lag behind those of unaffected neighborhoods.During the 1930s and 1940s, the federal government’s Home Owners’ Loan Corp. (HOLC) would classify neighborhoods with one of four ratings: best, still desirable, definitely declining, and hazardous. According to Zillow Research, the median home value in redlined neighborhoods “was 47.1 percent that of the areas rated ‘best’—and the gap has worsened since then.” During the intervening two decades, the median home value in those “best”-rated neighborhoods has risen 230.8 percent to $640,238. For the redlined neighborhoods? The same amount of time has witnessed an increase of only 203.1 percent, with median home values in those areas hitting $276,199.Unsurprisingly, neighborhoods classified as “hazardous” very often tended to be those occupied primarily by racial or ethnic minorities, and by the poor.Zillow found that these price discrepancies were particularly noticeable in Los Angeles, which is the second-largest metropolitan area in the country. Zillow’s report states, “The median home value in formerly redlined neighborhoods of Los Angeles is just 7.2 percent above its bubble-era peak, whereas the median in areas formerly ranked ‘best’ climbed 45.6 percent from its bubble-era peak, to $4.2 million in December 2017.”Zillow tracked 151 different metro areas for the study, and in only one of them were median home values in formerly redlined neighborhoods higher than formerly “best”-labeled neighborhoods from the same region. That standout metro? Haverhill, Massachusetts.To read Zillow’s full research report on the lingering effects of redlining, click here. The Best Markets For Residential Property Investors 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Subscribelast_img read more

The Week Ahead: Senate Sets Sights on Fannie, Freddie

first_img The Week Ahead: Nearing the Forbearance Exit 2 days ago  Print This Post Data Provider Black Knight to Acquire Top of Mind 2 days ago Share Save Servicers Navigate the Post-Pandemic World 2 days ago Home / Daily Dose / The Week Ahead: Senate Sets Sights on Fannie, Freddie Banking Committee Fannie Mae FHFA Freddie Mac 2019-06-21 Seth Welborn Servicers Navigate the Post-Pandemic World 2 days ago On Tuesday, the Senate Committee on Banking, Housing and Urban Affairs will hold a hearing to examine whether Fannie Mae and Freddie Mac should be designated as systematically important financial institutions.Currently, plans are being made to pull Fannie Mae and Freddie Mac out of conservatrship. In an interview with the Wall Street Journal, Federal Housing Finance Agency (FHFA) Director Mark Calabria stated that he wants to out the now-profitable GSEs back into private hands, something that has been tried and failed by lawmakers in the past.“I see my goal as setting a path to end the conservatorship” for the companies he said, adding, “they have to be stronger, healthier companies” compared to before the 2008 housing crisis.“My objective is to get us to a spot where we don’t have to worry about the system blowing itself up,” he added.Earlier this year, The Wall Street Journal reported that the Trump administration is putting the final touches on a plan to return Fannie Mae and Freddie Mac into private hands. The United States Treasury’s in-house process for drafting the plan is almost ready for sign-off from Treasury Secretary Steven Mnuchin, WSJ states, but it is not certain when the document is likely to be released to the public.The plan is being developed by the Treasury with consultation from the FHFA. Calabria told CNBC that he does not intend to wait for Congress to pull Fannie and Freddie out of conservatorship, also noting how the FHFA will need to look at other ways to build capital before pulling the GSEs, and what shareholders may or may not need to worry about in the near future.“If I can end the sweep, reach some changes to the share of Treasury, we can get them out of conservatorship, we can start to build capital, I can start to monitor loan quality, get them in a safe and sound fashion,” Calabria stated. “There’s a lot I can’t do: I can’t create competition, I can’t create a guarantee, those are going to be in the hands of Congress. I’m going to call for those things, but Congress has to play its part.”Here’s what else is happening in the Week Ahead.S&P CoreLogic Case Shiller HPI (June 25)FHFA House Price Index (June 25)Census Bureau New Residential Sales survey (June 25)NAR Pending Home Sales Index (June 27) Previous: Addressing Homeowner Flood Insurance Misconceptions Next: Cenlar Hires SVP of Default Operations About Author: Seth Welborn Tagged with: Banking Committee Fannie Mae FHFA Freddie Mac The Best Markets For Residential Property Investors 2 days ago Related Articlescenter_img Data Provider Black Knight to Acquire Top of Mind 2 days ago June 21, 2019 5,994 Views in Daily Dose, Featured, Government, News Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Demand Propels Home Prices Upward 2 days ago Demand Propels Home Prices Upward 2 days ago Sign up for DS News Daily Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer. The Best Markets For Residential Property Investors 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago The Week Ahead: Senate Sets Sights on Fannie, Freddie Subscribelast_img read more

Supreme Court Looks at Applicability of Contempt Sanctions in Bankruptcy

first_imgHome / Daily Dose / Supreme Court Looks at Applicability of Contempt Sanctions in Bankruptcy in Daily Dose, Featured, News, Print Features Supreme Court Looks at Applicability of Contempt Sanctions in Bankruptcy About Author: Rose Marie Brook Fabrizio & Brook, P.C January 6, 2020 1,804 Views 2020-01-06 Seth Welborn Share Save Servicers Navigate the Post-Pandemic World 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago An order for discharge in bankruptcy acts as an injunction against any act to collect, recover, or offset a discharged debt. This includes the commencement or continuation of a lawsuit for same. The United States Code sections 524 and 105 authorize a court to impose civil contempt sanctions when a discharge order is breached and, as we know, for the most part, this has been strictly enforced.The majority of courts treat violation of a discharge order close to strict liability. As long as a creditor acted deliberately, with knowledge of the bankruptcy case, civil sanctions may be appropriate. A subjective belief that an action was in compliance, or otherwise exempt from the bankruptcy discharge, would not insulate a creditor from civil contempt.A minority of circuits have followed a more lenient, subjective standard wherein a creditor would not be held in civil contempt simply by establishing that it had a good faith belief that the discharge order did not apply to its claim, even if this belief was unreasonable.The Supreme Court issued a unanimous decision this past June, establishing a new standard for holding a creditor in contempt for violation of a discharge injunction [In re Taggart, 139 S Ct 1795 (2019)]. The court created a standard based on “objective reasonableness.” In other words, the court should not impose contempt sanctions where there is a fair ground of doubt as to the wrongfulness of the defendant’s conduct.In Taggart a prepetition lawsuit for injunctive relief resumed after the debtor’s chapter 7 bankruptcy discharge had entered. The plaintiff was successful in the lawsuit and proceeded to file an action to recover its post-petition attorney fees. The state court held that the discharge injunction did not apply to this debt and granted plaintiff’s post-petition attorney fees. The defendant reopened the bankruptcy action and filed a motion for contempt for violation of the discharge order. The bankruptcy court entered an order for contempt and sanctions for violation of discharge despite the state court’s finding that the discharge did not apply to this debt. After several appeals, the Ninth Circuit, applying a subjective standard of review, ultimately reversed the ruling for contempt and sanctions against plaintiff. The defendant, Taggart, appealed to the Supreme Court and was granted certiorari.Taggart argued that the plaintiff was in violation of the discharge injunction because it was “aware of the discharge” and “intended the action.” This is the strict liability standard applied in the majority of circuits. The Ninth Circuit disagreed because plaintiff was advised by the state court that the discharge did not apply to collection of these post-petition attorney fees and therefore had a “good faith belief” that the discharge injunction did not apply to its action. The Ninth Circuit relied on a subjective standard used in a minority of circuits.Both standards were problematic in that the strict liability standard could lead to sanctions in cases even with a cautious creditor with a reasonable belief that the discharge was not applicable (i.e. a lower court opinion). Alternately, the subjective standard would rely too heavily on “difficult to prove states of mind” leading to costly litigation for both creditors and debtors. In an attempt to create something in between the majority strict liability standard and the less common, subjective standard, the Supreme Court created what may be referred to as an “objective reasonableness” standard. Using this standard, a bankruptcy court may only impose civil contempt sanctions for violating discharge “if there is no fair ground of doubt as to whether the order barred the creditor’s conduct … when there is no objectively reasonable basis for concluding that the creditor’s conduct might be lawful under the discharge order.”The Supreme Court created an objective standard that takes into account reasonableness and good faith. This allows creditors to be somewhat less risk averse in servicing mortgage loans after a bankruptcy discharge. A less strict standard for sanctions is not only beneficial to creditors but could also be beneficial to debtors seeking information about their loans or post-bankruptcy loss mitigation options. It also minimizes some of the conflict creditors face in complying with financial protection rules requiring disclosure such as the FDCPA and FCRA with less threat of sanctions for conflicting with bankruptcy regulations. Servicers Navigate the Post-Pandemic World 2 days ago Demand Propels Home Prices Upward 2 days ago Sign up for DS News Daily The Best Markets For Residential Property Investors 2 days ago  Print This Post Governmental Measures Target Expanded Access to Affordable Housing 2 days ago The Best Markets For Residential Property Investors 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Related Articles Demand Propels Home Prices Upward 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago Subscribe Previous: Fitch Identifies High Diligence in RMBS Next: Which Cities are Prepared for Recession?last_img read more

Where Delinquency Rates Are Headed

first_img Demand Propels Home Prices Upward 2 days ago in Daily Dose, Featured, News Servicers Navigate the Post-Pandemic World 2 days ago About Author: Chuck Green Data Provider Black Knight to Acquire Top of Mind 2 days ago In May, 7.3% of mortgages were at least 30 days late, according to CoreLogic. The cause? Reverberations of the recession on loan performance.CoreLogic’s latest Loan Performance Insights Report reveals that, compared to the same point last year, that 7.3% represents an increase of 3.7% in the overall delinquency rate.U.S. mortgage performance was showing signs of sustained improvement in the months preceding the pandemic. In February, the national unemployment rate matched a 50-year floor. Meantime, the delinquency rate had experienced a 27 -month drop overall.  That’s when things took a turn. When COVID-19 spawned into a global pandemic by May, U.S. unemployment raced past 13%. More than 4 million homeowners—accounting for more than 8% of all mortgages—were left with little choice other than to enter into a COVID-19 mortgage forbearance plan.As 2021 winds down, CoreLogic forecasts the U.S. serious delinquency rate to quadruple. That would propel 3 million homeowners into serious delinquency without additional government programs and support.From the previous year, each state experienced upticks in overall delinquency rates. With 6.4% bump in increases each in May, New Jersey and Nevada—both of which remain virus hotspots—had the largest overall increase.Almost every U.S. metro area saw a minimum of a small annual hike in its overall mortgage rate. Reflecting two of the largest increases, Miami rose 9.2% and Kahului, Hawaii hit 8.8%. Odessa, Texas, with a local economy tied securely to the oil industry, registered a 9% boost.More than 75% of all metro areas saw at least a small uptick in serious delinquency rate. Tying for the biggest bump with increases over 1.1% each were Odessa and Laredo, Texas, with McAllen and Midland, Texas, and Hattiesburg, Mississippi, each coming in with 0.7% gains. Meanwhile, over 75% of all metro areas logged at least a small increase in their serious delinquency rate. Odessa, Texas, and Laredo, Texas, tied for largest increase with gains of 1.1 percentage points each. McAllen, Texas; Midland, Texas; and Hattiesburg, Mississippi all followed with gains of 0.7 percentage points each.For May, the overall delinquency rate in the nation hit its zenith since February 2014. The rate for early-stage delinquencies; which is 30–59 days past due, was 3% in May 2020. That ballooned from 1.7% in May of last year. In May, while 44 states saw an increase in Serious Delinquency Rate, Maine (-0.2%) was the only one to experience a small decrease in serious delinquencies.As of May, the foreclosure inventory was 0.3%, down from 0.4% in May of last year—since at least January 1999, the lowest foreclosure rate for any month.A total of 3.4% of mortgages transitioned from current to 30 days past due in April. That outpaced the 2% high recorded in late 2008.“Despite the scale and suddenness of the pandemic, mortgage delinquency has yet to emerge as a major issue, thanks to government COVID-19 relief programs and other housing finance industry efforts,” said Frank Martell, President and CEO of CoreLogic.”As the true impact of the economic shutdown during the second quarter of 2020 becomes clearer, we can expect to see a rise in delinquencies in the next 12-18 months—especially as forbearance periods under the CARES Act come to a close,” he said.  Data Provider Black Knight to Acquire Top of Mind 2 days ago CoreLogic COVID-19 late payments 2020-08-11 Christina Hughes Babb Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Where Delinquency Rates Are Headed The Best Markets For Residential Property Investors 2 days ago Tagged with: CoreLogic COVID-19 late payments Subscribe Chuck Green has contributed to the Wall Street Journal, Washington Post, Los Angeles Times, San Francisco Chronicle, Chicago Tribune and others covering various industries, including real estate, business and banking, technology, and sports. center_img Demand Propels Home Prices Upward 2 days ago August 11, 2020 2,010 Views The Week Ahead: Nearing the Forbearance Exit 2 days ago Related Articles Share Save Home / Daily Dose / Where Delinquency Rates Are Headed Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago The Best Markets For Residential Property Investors 2 days ago  Print This Post Sign up for DS News Daily Previous: Record-Breaking Month for Mortgage-Backed Securities at Ginnie Mae Next: How Many Americans Are Struggling to Pay for Housing?last_img read more

Council Budget passed without a vote

first_img Pinterest By admin – November 18, 2015 Council Budget passed without a vote Google+ Twitter WhatsApp Nine Til Noon Show – Listen back to Wednesday’s Programme Pinterest Three factors driving Donegal housing market – Robinson Google+ Twitter The local authorities revenue budget for 2016 has been passed without a vote.Donegal County Council will spend almost €133 milion in 2016, almost €1.6 million more than last year.The biggest single area of expenditure will be payroll and staff costs of over €52 million, 39% of the total. A further €9 million will be spent on pensions.There was a general agreement between the groupings but a few opposed, one being Cllr Micheal Cholm MacGiolla Easbuig:Audio Playerhttp://www.highlandradio.com/wp-content/uploads/2015/11/Michael5.mp300:0000:0000:00Use Up/Down Arrow keys to increase or decrease volume.center_img WhatsApp 448 new cases of Covid 19 reported today RELATED ARTICLESMORE FROM AUTHOR Homepage BannerNews Facebook News, Sport and Obituaries on Wednesday May 26th Previous articleRoad traffic crash on main Letterkenny – Derry roadNext articleJamie Foxx’s daughter, Corinne, named Miss Golden Globe admin Help sought in search for missing 27 year old in Letterkenny Facebook NPHET ‘positive’ on easing restrictions – Donnelly last_img read more