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House Members Oppose RESPA Rule
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A majority of members in the U.S. House of Representatives
signed a letter to the Secretary of the Department of Housing and Urban
Development urging the agency to withdraw a proposed rule to change the
Real Estate Settlement Procedures Act. The bipartisan letter, which had
232 signatures, urged HUD to work with the Federal Reserve Board to
produce more simple mortgage and real estate settlement cost disclosure
forms. The proposed rule would hinder, not help, the recovery of the
housing market, the letter states. The letter supplements efforts by
ICBA and other industry groups, which sent a separate letter to HUD opposing the
RESPA proposal.
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Fannie Mae Reports Large Quarterly
Loss
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Fannie Mae posted a $2.3 billion
quarterly loss and said it would cut its dividend by more than 85
percent. That compares to the mortgage-financing giant's $1.95 billion
profit a year earlier and its $2.51 billion loss in the first quarter
of 2008. Fannie Mae said it would stop buying Alt-A mortgages, which
require less proof of borrower income, by the end of the year and ramp
up defaulted-loan reviews to increase credit-loss recoveries.
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Existing-home Sales Increase
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Pending home sales rose in June over the prior month and
could continue to recover due to a housing-stimulus tax refund for
first-time homebuyers, according to a National Association of Realtors report. The index of
existing home sales rose 5.3 percent and reached its highest level
since October, though it was down 12.3 percent from June 2007. NAR said
a rise in contract activity is necessary for a housing recovery and
increases could be sustained due to a $7,500 first-time homebuyer tax
refund included in Congress' recently signed housing-stimulus package.
ICBA recommended the refund and was an advocate for the legislation.
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Freddie Mac Shows Big Quarterly Loss
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Freddie Mac reported an $821 million
second-quarter loss and said it plans to cut its dividend by 80
percent. Over the same period a year ago, the government-sponsored
entity reported a $729 million profit. Freddie said it is committed to
raising $5.5 billion of new core capital and is considering issuing stock
that could be "substantial and materially dilutive to its existing
shareholders." Fitch Ratings downgraded Freddie's preferred stock
to A from A+.
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Study: Community Banks are Safe Lenders
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Large national and regional banks were responsible for the
overwhelming majority of Wisconsin foreclosure filings in the first
half of 2008, according to a Community Bankers of Wisconsin study. The
top 12 foreclosure filers in Wisconsin-led by Wells Fargo, US Bank and
Deutsche Bank-were headquartered outside of the state and accounted for
more than two-thirds of Badger State foreclosures. Wisconsin's 281
community banks accounted for just 4.8 percent of all
filings-approximately two per bank.
A separate study by the Maine Bureau of
Financial Institutions found low foreclosure numbers at state-chartered
financial institutions. Out of 88,000 mortgage loans, 166 were in the
process of foreclosure, or one foreclosure for every 528 mortgages.
The study supports ICBA efforts to assure consumers there is no
mortgage-lending crisis for community banks. ICBA offers communications materials to
help community banks spread the word that they are common-sense
lenders. The association has also led efforts to promote the safety and
security of community banks through its Safety of Community Bank
Deposits online resource center.
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