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US proposes new mortgage lending rules

18.05.12

WASHINGTON -- The federal government proposed new rules on Tuesday that would give homeowners more ways to avoid foreclosure and get an accurate accounting of their monthly mortgage payments.

Congress mandated changes in the rules covering the mortgage servicing industry in the wake of the 2008 financial crisis.

The Consumer Financial Protection Bureau 's proposed rules would require mortgage servicers to give all borrowers standardized monthly statements and warn borrowers about interest rate or insurance change.

The mortgage servicers would also be required to make "good-faith efforts" to contact borrowers at risk of foreclosure and give them options to avoid losing their homes. There are also stipulations for improving record-keeping and providing foreclosure counseling to those who need it.

The agency said it will formally propose the rules this summer and finalize them by January 2013.

"By fixing these root causes of mortgage servicing problems -- and securing transparency and accountability for borrowers -- consumers would have clearer information about their options to keep their homes and would be in a better position to hold servicers accountable for their decisions," Richard Cordray , the agency's director, said during a speech in Washington on Tuesday.

Source: Ct Post

Wall Street Picks Sides in Maiden Lane Contest

18.05.12

Barclays Plc and Deutsche Bank AG teamed up to win the bidding for $7.5 billion of debt held by the Federal Reserve Bank of New York since the credit crisis in the largest trade ever in the commercial-mortgage bond market.

The U.K. and German lenders, which created the securities starting in 2007, beat two other teams of Wall Street banks pursuing the assets held in the New York Fed’s Maiden Lane III portfolio. Citigroup Inc., Credit Suisse Group AG and Goldman Sachs Group Inc. joined forces, as had Bank of America Corp., Morgan Stanley and Nomura Holdings Inc. to submit bids.

The market for bonds backed by loans on everything from skyscrapers to shopping malls had been on hold pending the sale of two collateralized debt obligations assumed by the New York Fed in the 2008 rescue of American International Group Inc. as investors await the results to see what banks will do with the securities and how they’re valued.

“Regardless of what form it ultimately takes, it’s going to have longer-term implications for the market,” Richard Hill, a debt strategist at Royal Bank of Scotland Group Plc in Stamford, Connecticut, said in a telephone interview. “Investors are focused on the timing and magnitude of the supply coming to market.”

Source: BusinessWeek