Obama Said to Cut FHA Mortgage Insurance Premiums #mortgage #broker #license


#obama mortgage

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Obama Said to Cut FHA Mortgage Insurance Premiums

In an effort to expand homeownership among lower-income buyers, President Barack Obama plans to cut mortgage-insurance premiums charged by a government agency.

The annual fees the Federal Housing Administration charges to guarantee mortgages will be cut by 0.5 percentage point, to 0.85 percent of the loan balance, Julian Castro, secretary of the Department of Housing and Urban Development, said today during a conference call with reporters. Under the new premium structure, FHA estimates that 2 million borrowers will be able to save an average of $900 annually over the next three years if they purchase or refinance homes.

Shares of private insurers that compete with the FHA fell on the news, which Obama plans to discuss during a visit to Phoenix tomorrow.

“We believe this is striking a very good balance between being fiscally responsible and also enhancing homeownership opportunities,” Castro said.

‘Locked Out of Market’

The FHA has been increasing premiums since 2011 to offset losses caused by defaults on mortgages it backed after the housing bubble burst. Housing industry participants say the increases in annual fees, which are now at 1.35 percent of the loan balance, are squeezing buyers with modest incomes out of the market.

“Lots of people have been locked out of the market, particularly lower-wealth borrowers and borrowers of color, by the high prices at FHA,” said Julia Gordon, director of housing finance and policy at the Center for American Progress, a group affiliated with Democrats. The premium cut “does put homeownership within the reach of more people.”

The FHA estimates that 250,000 first-time homebuyers will enter the market after the premium reductions.

In addition to its annual premiums, the FHA also charges borrowers an upfront fee, which is currently set at 1.75 percent of the loan balance and is not slated to change.

‘Broken FHA’

Democrats and housing groups say reducing FHA fees will help the agency’s bottom line because it will boost the volume of lending, which declined when homebuyers had to pay more to obtain loans. A December study by the Mortgage Bankers Association said the premium increases had reduced the value of the insurance fund by $4.4 billion as higher costs drove away creditworthy borrowers.

Republicans have said premium cuts should be off the table because the agency’s insurance fund remains below legally required levels. House Financial Services Committee Chairman Jeb Hensarling said last month that “a broke FHA is a broken FHA.”

“This sounds like a move in the wrong direction,” said Mark Calabria, director of financial regulation studies at the Cato Institute, which supports free markets. “FHA has a portfolio of poor quality loans. This will end up costing the taxpayer considerably.”

The agency is required to keep enough cash on hand to cover all projected losses in its $1.1 trillion portfolio. The insurance fund required a $1.7 billion draw from the Treasury Department last year. In fiscal 2014, the fund posted its first positive balance in two years.

Shares Slide

The fund must also maintain a cushion of 2 percent of its value, a level it isn’t projected to reach until fiscal 2016.

Castro, who is scheduled to accompany Obama to Phoenix, said the fee cut would have a “marginal” impact on the insurance fund.

Radian Group Inc. which sells insurance to homebuyers, slid 5.5 percent to $15.62 at 1:53 p.m. in New York trading. MGIC Investment Corp. slumped 4.7 percent percent and Essent Group Ltd. fell 9.4 percent.

Radian climbed 18 percent last year after more than doubling in both 2012 and 2013 and had said it benefited as private companies gained market share from the government.

Mortgage insurance helps cover losses when homeowners default and foreclosures fail to recoup costs. The coverage is typically required when borrowers’ down payments are less than 20 percent of a home’s price.

The FHA had a 30 percent share of the mortgage insurance market in the third quarter of last year, down from about 69 percent in 2009, according to data from Inside Mortgage Finance. Private firms wrote 42 percent of the coverage in last year’s third quarter, and a government program for veterans accounted for most of the remainder.

Some Ginnie Mae-guaranteed securities backed by FHA loans also declined on concern that more borrowers will find it worthwhile to refinance, repaying debt that’s trading at higher prices at face value. Bonds with 3 percent coupons fell by 0.15 cent on the dollar more than similar-duration Treasuries as of 11 a.m. in New York, according to data compiled by Bloomberg, after typically outperforming government debt when bond prices have dropped in recent months.

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President Barack Obama Announces Federal Housing Administration Mortgage Insurance Premium Cut #mortgage #costs


#obama mortgage plan

#

Obama Announces Cut in Federally Issued Mortgage Premiums

President Barack Obama announces a cut in mortgage insurance premiums for Federal Housing Administration loans Thursday in Phoenix. Ross D. Franklin/AP

President Barack Obama on Thursday announced plans to shave insurance premiums on some federally issued mortgages, potentially opening the housing sector to 250,000 new homebuyers.

“We’re going to start this week laying out some of the agenda for the next year. And here in Phoenix, I want to talk about helping more families afford their piece of the American dream, and that is owning their own home,” Obama said during a visit to Arizona. “Buying a home’s always been about more than owning a roof and four walls. It’s about investing in savings and building a family and planting roots in a community.”

Obama spoke from Phoenix’s Central High School Thursday morning as part of a weeklong economy-focused tour across the country. The president announced Federal Housing Administration mortgage insurance premiums will be lowered by half a percentage point, from 1.35 percent to 0.85 percent.

The FHA provides mortgages largely to lower- and middle-income Americans. The White House on Thursday estimated more than 800,000 homeowners stand to save money on their monthly mortgage costs from the reduced premiums, which are expected to save new borrowers an average of $900 annually.

“This action will make homeownership more affordable for over 2 million Americans in the next three years,” Housing and Urban Development Secretary Julián Castro said in a statement regarding the policy change’s longer-term implications. “By bringing our premiums down, we’re helping folks lift themselves up so they can open new doors of opportunity and strengthen their financial futures.”

The lowered rates announced Thursday are still higher than they were in the immediate aftermath of the Great Recession; mortgage insurance premiums initially were increased from 0.55 percent in 2010 to help the FHA recover from losses suffered during the housing crisis. Yet even with the reduction, the White House says the FHA expects to increase its reserves by $7 to $10 billion annually as the housing market continues to recover.

The average sale price of a U.S. home in October 2014 was $199,000, according to real estate database RealtyTrac. That’s only a $900 difference from the average sale price in October 2013, but the number of homes sold increased year-over-year by 32 percent. So while average home values in the U.S. have been relatively stagnant, the number of sales increased demonstrably.

The number of “seriously underwater” homes – in which the combined loan amount taken out on the property is at least 25 percent higher than the property’s estimated market value – also decreased over the past year. A reported 8.1 million residential properties were “seriously underwater” in the U.S. at the end of 2014’s third quarter, according to the RealtyTrac U.S. Home Equity Underwater Report. That marked the fewest number of homes categorized as such since RealtyTrac began its quarterly reports in 2012.

The U.S. homeownership rate – the proportion of owner-occupied housing to the combination of owner-occupied and rented housing units – climbed to 69.2 percent in the fourth quarter of 2004 and was as high as 68.2 percent in the second quarter of 2007 before beginning a decline. The rate most recently sat at 64.4 percent to mark its lowest level since 1995, according to the Census Bureau. It has fallen in four consecutive quarters and is more than 2 percentage points lower than it was in the fourth quarter of 2010.

Ownership rates most recently were the lowest among African-Americans and Hispanics, as well as individuals younger than 35.

Despite the potential injection of hundreds of thousands of first-time homebuyers into a slowly improving housing market, Obama’s announcement was not met with unanimous approval.

“If President Obama follows through on today’s pledge, he will be increasing the likelihood that taxpayers will have to foot the bill for yet another bailout,” Rep. Jeb Hensarling, R-Tex, said in a statement Wednesday when news broke of the president’s impending action.

But Obama said Thursday he does not plan to lead the country “down the road again of financing folks buying things they can’t afford.” The FHA’s credit score floor and required underwritings for “higher-risk borrowers” are among a host of checks that will remain in place for federally issued mortgages.

Obama will travel to Tennessee on Friday to continue a week of economy-focused appearances ahead of his Jan. 20 State of the Union Address.


Obama Said to Cut FHA Mortgage Insurance Premiums #arm #rates


#obama mortgage

#

Obama Said to Cut FHA Mortgage Insurance Premiums

In an effort to expand homeownership among lower-income buyers, President Barack Obama plans to cut mortgage-insurance premiums charged by a government agency.

The annual fees the Federal Housing Administration charges to guarantee mortgages will be cut by 0.5 percentage point, to 0.85 percent of the loan balance, Julian Castro, secretary of the Department of Housing and Urban Development, said today during a conference call with reporters. Under the new premium structure, FHA estimates that 2 million borrowers will be able to save an average of $900 annually over the next three years if they purchase or refinance homes.

Shares of private insurers that compete with the FHA fell on the news, which Obama plans to discuss during a visit to Phoenix tomorrow.

“We believe this is striking a very good balance between being fiscally responsible and also enhancing homeownership opportunities,” Castro said.

‘Locked Out of Market’

The FHA has been increasing premiums since 2011 to offset losses caused by defaults on mortgages it backed after the housing bubble burst. Housing industry participants say the increases in annual fees, which are now at 1.35 percent of the loan balance, are squeezing buyers with modest incomes out of the market.

“Lots of people have been locked out of the market, particularly lower-wealth borrowers and borrowers of color, by the high prices at FHA,” said Julia Gordon, director of housing finance and policy at the Center for American Progress, a group affiliated with Democrats. The premium cut “does put homeownership within the reach of more people.”

The FHA estimates that 250,000 first-time homebuyers will enter the market after the premium reductions.

In addition to its annual premiums, the FHA also charges borrowers an upfront fee, which is currently set at 1.75 percent of the loan balance and is not slated to change.

‘Broken FHA’

Democrats and housing groups say reducing FHA fees will help the agency’s bottom line because it will boost the volume of lending, which declined when homebuyers had to pay more to obtain loans. A December study by the Mortgage Bankers Association said the premium increases had reduced the value of the insurance fund by $4.4 billion as higher costs drove away creditworthy borrowers.

Republicans have said premium cuts should be off the table because the agency’s insurance fund remains below legally required levels. House Financial Services Committee Chairman Jeb Hensarling said last month that “a broke FHA is a broken FHA.”

“This sounds like a move in the wrong direction,” said Mark Calabria, director of financial regulation studies at the Cato Institute, which supports free markets. “FHA has a portfolio of poor quality loans. This will end up costing the taxpayer considerably.”

The agency is required to keep enough cash on hand to cover all projected losses in its $1.1 trillion portfolio. The insurance fund required a $1.7 billion draw from the Treasury Department last year. In fiscal 2014, the fund posted its first positive balance in two years.

Shares Slide

The fund must also maintain a cushion of 2 percent of its value, a level it isn’t projected to reach until fiscal 2016.

Castro, who is scheduled to accompany Obama to Phoenix, said the fee cut would have a “marginal” impact on the insurance fund.

Radian Group Inc. which sells insurance to homebuyers, slid 5.5 percent to $15.62 at 1:53 p.m. in New York trading. MGIC Investment Corp. slumped 4.7 percent percent and Essent Group Ltd. fell 9.4 percent.

Radian climbed 18 percent last year after more than doubling in both 2012 and 2013 and had said it benefited as private companies gained market share from the government.

Mortgage insurance helps cover losses when homeowners default and foreclosures fail to recoup costs. The coverage is typically required when borrowers’ down payments are less than 20 percent of a home’s price.

The FHA had a 30 percent share of the mortgage insurance market in the third quarter of last year, down from about 69 percent in 2009, according to data from Inside Mortgage Finance. Private firms wrote 42 percent of the coverage in last year’s third quarter, and a government program for veterans accounted for most of the remainder.

Some Ginnie Mae-guaranteed securities backed by FHA loans also declined on concern that more borrowers will find it worthwhile to refinance, repaying debt that’s trading at higher prices at face value. Bonds with 3 percent coupons fell by 0.15 cent on the dollar more than similar-duration Treasuries as of 11 a.m. in New York, according to data compiled by Bloomberg, after typically outperforming government debt when bond prices have dropped in recent months.

Before it’s here, it’s on the Bloomberg Terminal. LEARN MORE


What the Bank Rate cut means for your mortgage #mortgage #lead #generation


#bank rate mortgage

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What the Bank Rate cut means for your mortgage

10 August 2016 • 12:16pm

H undreds of thousands of homeowners have just had their monthly mortgage repayments reduced. The Bank of England cut official interest rates from 0.5pc to 0.25pc today, meaning that borrowers with tracker mortgages will see a cut in their costs straight away.

Last month, despite many forecasts from City investors and economists that interest rates would be cut, the MPC voted to leave the Bank Rate at 0.5pc by an eight-to-one majority.

Around 1.5 million borrowers have Bank Rate trackers and another 3.5 million have other types of variable-rate mortgage whose rates may move in line with Bank Rate, according to the Council of Mortgage Lenders.

With a tracker mortgage lenders are obliged to move rates in line with the Bank Rate, while variable mortgages are often affected by movements in interest rates this is at the lenders discretion.

A cut in the Bank Rate to 0.25pc means a borrower with a tracker mortgage should see their monthly payment fall by £24.16 on a 25-year, £200,000 loan on a repayment basis, or £41.66 if it’s interest only.

The Bank Rate cut does not mean mortgage costs will fall for everyone

I t’s not a foregone conclusion that your mortgage rate will fall, said Andrew Montlake, a director of Coreco, the mortgage broker.

He said: “Some lenders have a ‘collar’ or floor below which they will not reduce rates further. Other lenders use their own version of base rate which, although it always has historically, does not have to mirror the Bank of England’s rate.

Borrowers should therefore check the small print of their mortgage carefully.

Those on variable-rate mortgages may expect their rates to fall, but there may be a delay from some lenders, said Rachel Springall of Moneyfacts, the data firm.

She said: “Anyone sitting on a variable-rate mortgage would expect their monthly mortgage repayments to fall. However, there is usually a slight delay for lenders to pass on any cuts.”

It may not help first-time buyers

While a cut in rates means that mortgages will become more affordable, it doesn’t necessarily mean that it will make it any easier for first-time buyers, Andrew Hagger of Moneycomms.co.uk, a research firm, said.

He said: “While mortgages become more affordable and the cut will help those already in their own homes, it does little for those looking to take a first step on the housing ladder as a shortage of properties and unaffordable prices are putting home ownership beyond reach for a growing number of people.”

Is your provider cutting rates?

Santander was the first bank to confirm that it is passing on the Bank Rate reduction to standard variable rate mortgages customers from September 1.

Other lenders, including Coventry Building Society and Virgin Money soon followed suit.

Meanwhile, lenders also announced changes to tracker mortgage rates – which are obliged to follow movements in interest rates – with some delaying passing on cuts until as late as October 1.

For full details of changes to mortgage rates, see the table below.


What the Bank Rate cut means for your mortgage #refinance #home #mortgage #rates


#bank rate mortgage

#

What the Bank Rate cut means for your mortgage

10 August 2016 • 12:16pm

H undreds of thousands of homeowners have just had their monthly mortgage repayments reduced. The Bank of England cut official interest rates from 0.5pc to 0.25pc today, meaning that borrowers with tracker mortgages will see a cut in their costs straight away.

Last month, despite many forecasts from City investors and economists that interest rates would be cut, the MPC voted to leave the Bank Rate at 0.5pc by an eight-to-one majority.

Around 1.5 million borrowers have Bank Rate trackers and another 3.5 million have other types of variable-rate mortgage whose rates may move in line with Bank Rate, according to the Council of Mortgage Lenders.

With a tracker mortgage lenders are obliged to move rates in line with the Bank Rate, while variable mortgages are often affected by movements in interest rates this is at the lenders discretion.

A cut in the Bank Rate to 0.25pc means a borrower with a tracker mortgage should see their monthly payment fall by £24.16 on a 25-year, £200,000 loan on a repayment basis, or £41.66 if it’s interest only.

The Bank Rate cut does not mean mortgage costs will fall for everyone

I t’s not a foregone conclusion that your mortgage rate will fall, said Andrew Montlake, a director of Coreco, the mortgage broker.

He said: “Some lenders have a ‘collar’ or floor below which they will not reduce rates further. Other lenders use their own version of base rate which, although it always has historically, does not have to mirror the Bank of England’s rate.

Borrowers should therefore check the small print of their mortgage carefully.

Those on variable-rate mortgages may expect their rates to fall, but there may be a delay from some lenders, said Rachel Springall of Moneyfacts, the data firm.

She said: “Anyone sitting on a variable-rate mortgage would expect their monthly mortgage repayments to fall. However, there is usually a slight delay for lenders to pass on any cuts.”

It may not help first-time buyers

While a cut in rates means that mortgages will become more affordable, it doesn’t necessarily mean that it will make it any easier for first-time buyers, Andrew Hagger of Moneycomms.co.uk, a research firm, said.

He said: “While mortgages become more affordable and the cut will help those already in their own homes, it does little for those looking to take a first step on the housing ladder as a shortage of properties and unaffordable prices are putting home ownership beyond reach for a growing number of people.”

Is your provider cutting rates?

Santander was the first bank to confirm that it is passing on the Bank Rate reduction to standard variable rate mortgages customers from September 1.

Other lenders, including Coventry Building Society and Virgin Money soon followed suit.

Meanwhile, lenders also announced changes to tracker mortgage rates – which are obliged to follow movements in interest rates – with some delaying passing on cuts until as late as October 1.

For full details of changes to mortgage rates, see the table below.


Stainless Steel Plate and Nickel Alloy Plate Products – Sandmeyer Steel Company #sandmeyer #steel #company


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We approach each day with the goal of shipping 100% on-time to fulfill the promises we have made. Close collaboration between our sales and manufacturing teams ensures customer expectations are met every day.

Once material is shipped, an email is sent with the shipping details and tracking information. Every shipment is custom-packaged for optimal protection and sent with the industry’s top-ranked documentation.

Our loyal customers know that our commitment to meeting customer deadlines makes Sandmeyer Steel Company a partner on which you can rely.

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Sandmeyer Steel Company Now Offering Quickmill Annihilator Cutting Services

Sandmeyer Steel Company has expanded its extensive processing capabilities with a new Quickmill Annihilator Machining Center. The new machine can handle stacked drilling through 8.0 (203.2mm). With the expansion of its processing capabilities, Sandmeyer bolsters its ability to deliver near-net shapes in hard-to-find grades at unmatched speed. See below to watch the machine in action. Continue reading Sandmeyer Steel Company Now Offering Quickmill Annihilator Cutting Services

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  • Canada – s big banks cut prime rate after BoC move – The Globe and


    #prime interest rate today

    #

    Canada s big banks cut prime rate after BoC move Add to.

    Canada’s big banks followed the Bank of Canada’s interest rate cut, lowering their prime lending rates in a series of moves that nonetheless reinforce the reluctance of lenders to follow the central bank in lockstep.

    Toronto-Dominion Bank initially decreased its prime rate – the benchmark for creditworthy borrowers – to 2.75 per cent, down 0.10 percentage points. Royal Bank of Canada, Bank of Montreal, Bank of Nova Scotia and Canadian Imperial Bank of Commerce responded on Wednesday evening, reducing theirs by 0.15 points to 2.70 per cent from 2.85 per cent. That’s a shallower reduction than the central bank’s 0.25-point cut. TD then matched the lower prime rates with an additional cut.

    ECONOMY

    The Canadian dollar took a nosedive after The Bank of Canada cut its key overnight lending rate by 25 basis points to 0.50 percent saying Canada’s weakening economy is in ‘significant and complex adjustment.’ BNN Video

    Economy
    ECONOMY

    This marks the second time this year that Bay Street has taken a more cautious approach to their lending rates after the central bank has slashed its benchmark in response to disappointing economic activity.

    Overall, banks have lowered their prime rates by a total of 0.3 percentage points this year, or nearly half the Bank of Canada’s total reduction of 0.50 points over the same period.

    Bank of Canada Governor Stephen Poloz appeared unconcerned by the banks’ response, noting that lending rates can be affected by many factors beyond official monetary policy.

    “That’s how financial markets work,” Mr. Poloz said at a press conference. “All we’re trying to do is have an influence on [the lending rate], as opposed to determine it.”

    After the Bank of Canada cut its key rate in January, also by a quarter point, the big banks were slow in responding to the surprise move.

    When they did react, they took a public drubbing over their refusal to respond with an equal reduction in their prime rates, decreasing them by just 0.15 points.

    However, some observers have pointed out that the Bank of Canada may not mind the muted response from the banks.

    House prices have soared as borrowing costs have fallen, raising concerns that prices may be overvalued by as much as 30 per cent, according to Bank of Canada estimates. As well, Canadian indebtedness has risen to new heights, making consumers vulnerable to rising unemployment levels or an eventual ramp-up in borrowing costs.

    For the banks themselves, the response to the Bank of Canada comes as they attempt to shore up profits driven by their lending activities.

    Since the banks make money by lending at higher rates than their own borrowing costs, substantially lower prime rates can compress the spread, or net interest margins.

    “We are in such an unusually low-interest-rate environment that the traditional rules of one-for-one [reductions in the prime rate and the Bank of Canada’s key interest rate] don’t work,” Peter Routledge, an analyst at National Bank Financial, said in an interview.

    He pointed out that the net interest margin for the Canadian personal and commercial banking operations of the Big Six banks have declined to a weighted average of just 2.48 per cent from 2.73 per cent in 2010. Less than a decade ago, the margin was a far more robust 3 per cent.

    Although Canadian banks have increased their overall profits over this period, their share prices have recently been struggling to keep up with the broader market, reflecting investor concerns that earnings growth is being challenged.

    “We anticipate that the market’s outlook for growth will moderate further in 2016, encapsulating an even greater slowdown in loan growth and incremental margin pressures,” John Aiken, an analyst at Barclays, said in a note.

    Mr. Routledge thinks the banks may also be maintaining higher prime rates, relative to the Bank of Canada’s key rate, out of concerns about credit risk.

    “If the economy is slowing so much that the Bank of Canada has cut its policy rate in half” – to 0.5 per cent from 1 per cent in January – “maybe households in particular are not as creditworthy as consensus believes,” he said.

    “If that’s the case, you want to put in a little more spread for taking credit risk.”

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    President Barack Obama Announces Federal Housing Administration Mortgage Insurance Premium Cut #mortgage #modification #program


    #obama mortgage plan

    #

    Obama Announces Cut in Federally Issued Mortgage Premiums

    President Barack Obama announces a cut in mortgage insurance premiums for Federal Housing Administration loans Thursday in Phoenix. Ross D. Franklin/AP

    President Barack Obama on Thursday announced plans to shave insurance premiums on some federally issued mortgages, potentially opening the housing sector to 250,000 new homebuyers.

    “We’re going to start this week laying out some of the agenda for the next year. And here in Phoenix, I want to talk about helping more families afford their piece of the American dream, and that is owning their own home,” Obama said during a visit to Arizona. “Buying a home’s always been about more than owning a roof and four walls. It’s about investing in savings and building a family and planting roots in a community.”

    Obama spoke from Phoenix’s Central High School Thursday morning as part of a weeklong economy-focused tour across the country. The president announced Federal Housing Administration mortgage insurance premiums will be lowered by half a percentage point, from 1.35 percent to 0.85 percent.

    The FHA provides mortgages largely to lower- and middle-income Americans. The White House on Thursday estimated more than 800,000 homeowners stand to save money on their monthly mortgage costs from the reduced premiums, which are expected to save new borrowers an average of $900 annually.

    “This action will make homeownership more affordable for over 2 million Americans in the next three years,” Housing and Urban Development Secretary Julián Castro said in a statement regarding the policy change’s longer-term implications. “By bringing our premiums down, we’re helping folks lift themselves up so they can open new doors of opportunity and strengthen their financial futures.”

    The lowered rates announced Thursday are still higher than they were in the immediate aftermath of the Great Recession; mortgage insurance premiums initially were increased from 0.55 percent in 2010 to help the FHA recover from losses suffered during the housing crisis. Yet even with the reduction, the White House says the FHA expects to increase its reserves by $7 to $10 billion annually as the housing market continues to recover.

    The average sale price of a U.S. home in October 2014 was $199,000, according to real estate database RealtyTrac. That’s only a $900 difference from the average sale price in October 2013, but the number of homes sold increased year-over-year by 32 percent. So while average home values in the U.S. have been relatively stagnant, the number of sales increased demonstrably.

    The number of “seriously underwater” homes – in which the combined loan amount taken out on the property is at least 25 percent higher than the property’s estimated market value – also decreased over the past year. A reported 8.1 million residential properties were “seriously underwater” in the U.S. at the end of 2014’s third quarter, according to the RealtyTrac U.S. Home Equity Underwater Report. That marked the fewest number of homes categorized as such since RealtyTrac began its quarterly reports in 2012.

    The U.S. homeownership rate – the proportion of owner-occupied housing to the combination of owner-occupied and rented housing units – climbed to 69.2 percent in the fourth quarter of 2004 and was as high as 68.2 percent in the second quarter of 2007 before beginning a decline. The rate most recently sat at 64.4 percent to mark its lowest level since 1995, according to the Census Bureau. It has fallen in four consecutive quarters and is more than 2 percentage points lower than it was in the fourth quarter of 2010.

    Ownership rates most recently were the lowest among African-Americans and Hispanics, as well as individuals younger than 35.

    Despite the potential injection of hundreds of thousands of first-time homebuyers into a slowly improving housing market, Obama’s announcement was not met with unanimous approval.

    “If President Obama follows through on today’s pledge, he will be increasing the likelihood that taxpayers will have to foot the bill for yet another bailout,” Rep. Jeb Hensarling, R-Tex, said in a statement Wednesday when news broke of the president’s impending action.

    But Obama said Thursday he does not plan to lead the country “down the road again of financing folks buying things they can’t afford.” The FHA’s credit score floor and required underwritings for “higher-risk borrowers” are among a host of checks that will remain in place for federally issued mortgages.

    Obama will travel to Tennessee on Friday to continue a week of economy-focused appearances ahead of his Jan. 20 State of the Union Address.


    Canada – s big banks cut prime rate after BoC move – The Globe and


    #prime interest rate today

    #

    Canada s big banks cut prime rate after BoC move Add to.

    Canada’s big banks followed the Bank of Canada’s interest rate cut, lowering their prime lending rates in a series of moves that nonetheless reinforce the reluctance of lenders to follow the central bank in lockstep.

    Toronto-Dominion Bank initially decreased its prime rate – the benchmark for creditworthy borrowers – to 2.75 per cent, down 0.10 percentage points. Royal Bank of Canada, Bank of Montreal, Bank of Nova Scotia and Canadian Imperial Bank of Commerce responded on Wednesday evening, reducing theirs by 0.15 points to 2.70 per cent from 2.85 per cent. That’s a shallower reduction than the central bank’s 0.25-point cut. TD then matched the lower prime rates with an additional cut.

    ECONOMY

    The Canadian dollar took a nosedive after The Bank of Canada cut its key overnight lending rate by 25 basis points to 0.50 percent saying Canada’s weakening economy is in ‘significant and complex adjustment.’ BNN Video

    Economy
    ECONOMY

    This marks the second time this year that Bay Street has taken a more cautious approach to their lending rates after the central bank has slashed its benchmark in response to disappointing economic activity.

    Overall, banks have lowered their prime rates by a total of 0.3 percentage points this year, or nearly half the Bank of Canada’s total reduction of 0.50 points over the same period.

    Bank of Canada Governor Stephen Poloz appeared unconcerned by the banks’ response, noting that lending rates can be affected by many factors beyond official monetary policy.

    “That’s how financial markets work,” Mr. Poloz said at a press conference. “All we’re trying to do is have an influence on [the lending rate], as opposed to determine it.”

    After the Bank of Canada cut its key rate in January, also by a quarter point, the big banks were slow in responding to the surprise move.

    When they did react, they took a public drubbing over their refusal to respond with an equal reduction in their prime rates, decreasing them by just 0.15 points.

    However, some observers have pointed out that the Bank of Canada may not mind the muted response from the banks.

    House prices have soared as borrowing costs have fallen, raising concerns that prices may be overvalued by as much as 30 per cent, according to Bank of Canada estimates. As well, Canadian indebtedness has risen to new heights, making consumers vulnerable to rising unemployment levels or an eventual ramp-up in borrowing costs.

    For the banks themselves, the response to the Bank of Canada comes as they attempt to shore up profits driven by their lending activities.

    Since the banks make money by lending at higher rates than their own borrowing costs, substantially lower prime rates can compress the spread, or net interest margins.

    “We are in such an unusually low-interest-rate environment that the traditional rules of one-for-one [reductions in the prime rate and the Bank of Canada’s key interest rate] don’t work,” Peter Routledge, an analyst at National Bank Financial, said in an interview.

    He pointed out that the net interest margin for the Canadian personal and commercial banking operations of the Big Six banks have declined to a weighted average of just 2.48 per cent from 2.73 per cent in 2010. Less than a decade ago, the margin was a far more robust 3 per cent.

    Although Canadian banks have increased their overall profits over this period, their share prices have recently been struggling to keep up with the broader market, reflecting investor concerns that earnings growth is being challenged.

    “We anticipate that the market’s outlook for growth will moderate further in 2016, encapsulating an even greater slowdown in loan growth and incremental margin pressures,” John Aiken, an analyst at Barclays, said in a note.

    Mr. Routledge thinks the banks may also be maintaining higher prime rates, relative to the Bank of Canada’s key rate, out of concerns about credit risk.

    “If the economy is slowing so much that the Bank of Canada has cut its policy rate in half” – to 0.5 per cent from 1 per cent in January – “maybe households in particular are not as creditworthy as consensus believes,” he said.

    “If that’s the case, you want to put in a little more spread for taking credit risk.”

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    Thomson Reuters 2012.

    All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. Thomson Reuters is not liable for any errors or delays in Thomson Reuters content, or for any actions taken in reliance on such content. ‘Thomson Reuters’ and the Thomson Reuters logo are trademarks of Thomson Reuters and its affiliated companies.

    Selected data supplied by Thomson Reuters. Thomson Reuters Limited. Click for Restrictions .

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    Canada – s big banks cut prime rate after BoC move – The Globe and


    #prime interest rate today

    #

    Canada s big banks cut prime rate after BoC move Add to.

    Canada’s big banks followed the Bank of Canada’s interest rate cut, lowering their prime lending rates in a series of moves that nonetheless reinforce the reluctance of lenders to follow the central bank in lockstep.

    Toronto-Dominion Bank initially decreased its prime rate – the benchmark for creditworthy borrowers – to 2.75 per cent, down 0.10 percentage points. Royal Bank of Canada, Bank of Montreal, Bank of Nova Scotia and Canadian Imperial Bank of Commerce responded on Wednesday evening, reducing theirs by 0.15 points to 2.70 per cent from 2.85 per cent. That’s a shallower reduction than the central bank’s 0.25-point cut. TD then matched the lower prime rates with an additional cut.

    ECONOMY

    The Canadian dollar took a nosedive after The Bank of Canada cut its key overnight lending rate by 25 basis points to 0.50 percent saying Canada’s weakening economy is in ‘significant and complex adjustment.’ BNN Video

    Economy
    ECONOMY

    This marks the second time this year that Bay Street has taken a more cautious approach to their lending rates after the central bank has slashed its benchmark in response to disappointing economic activity.

    Overall, banks have lowered their prime rates by a total of 0.3 percentage points this year, or nearly half the Bank of Canada’s total reduction of 0.50 points over the same period.

    Bank of Canada Governor Stephen Poloz appeared unconcerned by the banks’ response, noting that lending rates can be affected by many factors beyond official monetary policy.

    “That’s how financial markets work,” Mr. Poloz said at a press conference. “All we’re trying to do is have an influence on [the lending rate], as opposed to determine it.”

    After the Bank of Canada cut its key rate in January, also by a quarter point, the big banks were slow in responding to the surprise move.

    When they did react, they took a public drubbing over their refusal to respond with an equal reduction in their prime rates, decreasing them by just 0.15 points.

    However, some observers have pointed out that the Bank of Canada may not mind the muted response from the banks.

    House prices have soared as borrowing costs have fallen, raising concerns that prices may be overvalued by as much as 30 per cent, according to Bank of Canada estimates. As well, Canadian indebtedness has risen to new heights, making consumers vulnerable to rising unemployment levels or an eventual ramp-up in borrowing costs.

    For the banks themselves, the response to the Bank of Canada comes as they attempt to shore up profits driven by their lending activities.

    Since the banks make money by lending at higher rates than their own borrowing costs, substantially lower prime rates can compress the spread, or net interest margins.

    “We are in such an unusually low-interest-rate environment that the traditional rules of one-for-one [reductions in the prime rate and the Bank of Canada’s key interest rate] don’t work,” Peter Routledge, an analyst at National Bank Financial, said in an interview.

    He pointed out that the net interest margin for the Canadian personal and commercial banking operations of the Big Six banks have declined to a weighted average of just 2.48 per cent from 2.73 per cent in 2010. Less than a decade ago, the margin was a far more robust 3 per cent.

    Although Canadian banks have increased their overall profits over this period, their share prices have recently been struggling to keep up with the broader market, reflecting investor concerns that earnings growth is being challenged.

    “We anticipate that the market’s outlook for growth will moderate further in 2016, encapsulating an even greater slowdown in loan growth and incremental margin pressures,” John Aiken, an analyst at Barclays, said in a note.

    Mr. Routledge thinks the banks may also be maintaining higher prime rates, relative to the Bank of Canada’s key rate, out of concerns about credit risk.

    “If the economy is slowing so much that the Bank of Canada has cut its policy rate in half” – to 0.5 per cent from 1 per cent in January – “maybe households in particular are not as creditworthy as consensus believes,” he said.

    “If that’s the case, you want to put in a little more spread for taking credit risk.”

    Restrictions

    Thomson Reuters 2012.

    All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. Thomson Reuters is not liable for any errors or delays in Thomson Reuters content, or for any actions taken in reliance on such content. ‘Thomson Reuters’ and the Thomson Reuters logo are trademarks of Thomson Reuters and its affiliated companies.

    Selected data supplied by Thomson Reuters. Thomson Reuters Limited. Click for Restrictions .

    Copyright 2016 The Globe and Mail Inc. All Rights Reserved.

    444 Front St. W. Toronto. ON Canada M5V 2S9
    Phillip Crawley, Publisher

    Add to Watchlist

    We’ve run into a glitch. Please try again later.

    We’ve run into a glitch. Please try again later.

    Customize your reading font