Summary:
CNN Money reports Bank of America posts a profit in the 3rd quarter, relieving investors after breaking even last year. Housing Wire shares that Fannie Mae is working on a risk-sharing transaction for next year, FHFA refinance activity slows, mortgage applications barely changed this week, National Mortgage Settlement is closer to meeting consumer-relief mandates and 67,000 home loan modifications have been finalized in August. Bloomberg states that U.S. Bancorp’s profit was little changed on lower bad loan provisions and homebuilder confidence has dropped more than it has in the past four months. Market Watch reports a 12% profit growth for PNC Financial. NY Times posts a profit for Blackrock. Reuters shares mortgage insurer MGIC profit. CNBC reports that Fitch Ratings put the government’s “AAA credit rating on ‘rating watch negative.’” Dr. Housing Bubble shares a wealth of data in his blog post titled “The inefficient and fragile housing market: How trying to increase homeownership can backfire and add costs to regular home buyers.”
Bank of America swings to a profit
“Bank of America swung to a profit in the third quarter after breaking even last year. And investors breathed a sigh of relief.”
Fannie Mae plans next risk-sharing deal
“Mortgage giant Fannie Mae is working on another risk-sharing transaction for 2014, keeping in line with the firm’s plan to bring private capital back to the mortgage market.”
FHFA refinance activity declines
“Refinance volumes continued to decline in August as mortgage rates inched up from July levels.”
National Mortgage Settlement progress report: Big banks closer to finalizing consumer relief
“The mega lenders subjected to the National Mortgage Settlement are closer to meeting the consumer-relief mandates rolled out as part of a nationwide initiative to compensate borrowers for past servicing issues.”
67,000 home loan mods finalized in August
“Mortgage servicers modified 67,000 home loans in August, up 8% month-over-month, bringing the total amount of loans modified since 2007 to 5.4 million, Hope Now said Wednesday.”
U.S. Bancorp Profit Little Changed on Lower Bad Loan Provisions
“U.S. Bancorp, the nation’s biggest regional lender, said third-quarter net income was little changed as revenue fell and the bank set aside less for bad loans.”
PNC Financial’s profit up 12% on loan growth
“PNC Financial Services Group Inc.’s PNC +1.74% third-quarter earnings rose 12% as the regional lender’s results were helped by loan growth and improved credit quality, though net interest margin, a key measure of lending profitability slipped.”
BlackRock’s Profit Rose 14% in Third Quarter
“The giant money management firm BlackRock is now managing a record $4 trillion after customers put more money into its stock mutual funds and exchange traded funds.”
UPDATE 1-Mortgage insurer MGIC posts profit as housing market recovers
“Oct 16 (Reuters) – Mortgage insurer MGIC Investment Corp posted its second straight quarterly profit, after six years of losses, as a recovery in the U.S. housing market lowered the number of defaulters.”
Mortgage applications barely shift
“Mortgage applications barely changed during the week ending Oct. 11, rising only 0.3% from a week earlier, the Mortgage Bankers Association said Wednesday.”
Fitch puts US AAA rating on rating watch negative
“Fitch Ratings put the US government’s “AAA” credit rating on ‘rating watch negative’ Tuesday, saying that the standstill on the U.S. debt ceiling negotiations risks undermining the effectiveness of the country’s government and political institutions.”
The inefficient and fragile housing market: How trying to increase homeownership can backfire and add costs to regular home buyers.
“It was interesting to see that this week, the Nobel Prize, the biggest prize in economics went to three US economists, one being “irrational exuberance” Robert Shiller. Markets for the most part are presumed to be efficient and what Shiller points out is the weaknesses inherent with this model. The housing market is a perfect example. The market is extremely inefficient when it comes to housing. We massively subsidize this sector of the economy with the outward notion of helping regular buyers but do the opposite. For example, the Fed’s QE initiatives have caused asymmetrical bets from financial institutions into residential real estate. Largely because of this financial structure we went from a real estate market in free fall to one highly subsidized by low rates causing investors to crowd out regular buyers. Prices now surge while the homeownership rate falls. Of course how can the market be called efficient when the Fed provides this below market interest rate to a select group of people? Is the public privy to this? What use is a low rate when a bigger player comes in with all cash?”
Homebuilder Confidence in U.S. Declines to Lowest in Four Months
“Confidence among U.S. homebuilders fell more than forecast in October to a four-month low as rising interest rates and the budget battle in Washington stifled progress in the housing market.”