Mortgage applications fall as rates hit 2013 high: MBA

Home owners speak with Bank of America representatives as they try to get home loan modifications during the Neighborhood Assistance Corporation of America event in Phoenix, February 4, 2011.

Credit: Reuters/Joshua Lott

NEW YORK | Wed Aug 28, 2013 7:06am EDT

NEW YORK (Reuters) - Applications for U.S. home loans fell for a third straight week as average mortgage rates hit their highest level this year, although demand for purchase loans increased, data from an industry group showed on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 2.5 percent in the week ended August 23, after sliding 4.6 percent the prior week.

The decline came as 30-year mortgage rates rose 12 basis points to 4.80 percent, the highest they have been so far this year, according to MBA data.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

Borrowing costs have climbed by more than a percentage point since late May on the view that the Federal Reserve will soon reduce its monthly bond purchases, which have kept a ceiling on rates.

The Fed began the bond purchasing program nearly a year ago to boost a sluggish recovery in the U.S. economy.

Higher rates have dissuaded borrowers from refinancing existing home loans. The refinance index fell 5.4 percent last week, and the refinance share of total mortgage activity slid to 60 percent, the lowest since April of 2011.

The gauge of loan requests for home purchases, a leading indicator of home sales, held up better, rising 2.4 percent.

Housing has been a bright spot in the U.S. recovery, with prices rising steadily since early 2012. But economists expect the pace of that increase to slow as the year winds down.

A separate report last week showed sales of new single-family homes fell sharply in July to their lowest level in nine months.

That has injected some uncertainty into the debate about when the Fed will start slowing its stimulus. Markets largely expect the Fed to pull back next month, though many analysts say the U.S. central bank will think twice about higher long-term interest rates if there is evidence the rates are hurting housing.

Still, rates remain low by historical standards and most economists do not expect the higher costs to end the recovery altogether. In the short-term, it could also spur potential buyers to act before rates rise further.

(Reporting by Steven C. Johnson; Editing by Leslie Adler)

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U.S. agency proposes relaxed rules on mortgage risk, underwriting

A vacant Housing and Urban Development (HUD) home (R) is pictured in North Las Vegas, Nevada April 2, 2013.

Credit: Reuters/Steve Marcus

WASHINGTON | Wed Aug 28, 2013 11:30am EDT

WASHINGTON (Reuters) - U.S. regulators on Wednesday unveiled a reworked proposal to reduce risk in the mortgage market by requiring lenders to keep a stake in the loans they bundle and sell as securities.

The Federal Deposit Insurance Corp. approved a new version of the stricter 2011 proposal designed to limit the type of shoddy underwriting practices that fueled the housing bubble. The revised proposal would mainly require banks and bond issuers to retain a portion of mortgages when borrowers are spending more than 43 percent of their monthly income to repay loan debt.

The original plan initially drew wide criticism. The revised plan loosens the definition of "qualified residential mortgages" that are exempted from the regulations. Regulators received more than 10,000 comments on the first proposal that sparked alarm across the housing industry and among consumer groups.

Regulators originally said banks and bond issuers would have to keep "skin in the game," or hold part of securitized loans on their books, unless the mortgage included a 20 percent down payment.

In the new proposal that is set for public comment, regulators eliminated the down payment requirement for qualified residential mortgages.

Those opposed to the original proposal with the 20 percent down payment had feared the rules could restrict access to credit for some low-income borrowers.

Instead, mortgages that meet a minimum standard already approved by another regulatory agency will be considered exempt from the risk retention rules.

(Reporting By Margaret Chadbourn and Emily Stephenson; Editing by Chizu Nomiyama and Kenneth Barry)

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Fed should focus on mortgage buys, sell Treasuries: study

An eagle tops the U.S. Federal Reserve building's facade in Washington, July 31, 2013.

Credit: Reuters/Jonathan Ernst

By Pedro Nicolaci da Costa

JACKSON HOLE, Wyoming | Fri Aug 23, 2013 3:00pm EDT

JACKSON HOLE, Wyoming (Reuters) - The Federal Reserve should concentrate its unconventional monetary stimulus on mortgage asset purchases, according to a new study released on Friday, ditching Treasury bond buys which the authors say have not had much of an effect.

Presented at the Kansas City Fed's annual Jackson Hole conference, the paper argues rather controversially that the central bank should begin its exit strategy by selling Treasuries, something that is hard to conceive given the recent speedy selloff in government bonds.

The absence of concrete guidance as to the goal of asset purchases, which has been vaguely defined as aimed toward substantial improvement in the outlook for the labor market, neutralizes their impact and complicates an eventual exit, according to the paper's authors, Arvind Krishnamurthy of Northwestern University and Annette Vissing-Jorgensen of University of California, Berkeley.

"Without such a framework, investors do not know the conditions under which (asset buys) will occur or be unwound, which undercuts the efficacy of policy targeted at long-term asset values," the authors write.

Minutes from the Fed's July meeting, released on Wednesday, suggested policymakers had already considered such a step but, for now, decided against it.

"The Committee also considered whether to add more information concerning the contingent outlook for asset purchases to the policy statement, but judged that doing so might prompt an unwarranted shift in market expectations regarding asset purchases," the minutes said.

The authors of the study say the effects of the U.S. central bank's asset purchases, which began after the Fed had already brought official interest rates down in late 2008, are much narrower than policymakers' had foreseen.

Predictably, current and former Fed officials took issue with the findings. James Bullard, president of the St. Louis Fed, said the authors' focus on market impact immediately following policy announcements was misleading.

"I just wanted to push back against this conclusion that you get an effect in one single market and then there's not that much (impact) over a variety of assets," Bullard said.

Donald Kohn, former Fed Vice Chair, was also skeptical.

"The findings do not comport very well with the experience of the last couple of months," said Kohn.

Another former Fed vice chair, Alan Blinder, was even more blunt regarding the idea that Treasury sales would not have a major market impact: "You don't want to retract that given what happened recently?

U.S. Treasury 10-year note yields have risen sharply in the last two months to two-year highs above 2.80 percent following hints from the central bank that it may begin winding down its asset-buying stimulus program, also known as quantitative easing.

NARROW IMPACT

In particular, Fed Chairman Ben Bernanke and others have argued that asset purchases work by taking safe assets out of the market and therefore forcing cautious investors to take more risk. In official parlance, this is known as the "portfolio balance effect," affecting rates in markets well beyond those targeted by the Fed.

The impact of asset buying is a lot narrower than Fed officials contend, according to the authors of the paper.

"It does not, as the Fed proposes, work through broad channels such as affecting the term premium on all long-term bonds," the paper finds.

Instead, mortgage-buying has been more effective because, by targeting a specific sector that was under duress, Fed officials have been able to create scarcity of supply in the mortgage market, leading prices - and therefore credit availability - to rise.

"We find that (mortgage purchases) are more economically beneficial than Treasury (buying)," the authors write.

Recently, Fed officials have worried excess risk-taking may have gone a step too far, potentially leading to dangerous asset bubbles - hence all the talk of a ‘tapering' in quantitative easing.

In response to the worst recession in generations, the Fed has left official rates effectively at zero for over four years, and is on track to buy over $3 trillion in assets in an effort to support still-weak growth.

The U.S. economy expanded at an annualized 1.7 percent rate in the second quarter, while the jobless rate remains at an elevated 7.4 percent.

(Editing by Chris Reese and Tim Dobbyn)

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Fed should focus on mortgage buys, sell Treasuries: study

An eagle tops the U.S. Federal Reserve building's facade in Washington, July 31, 2013.

Credit: Reuters/Jonathan Ernst

By Pedro Nicolaci da Costa

JACKSON HOLE, Wyoming | Fri Aug 23, 2013 3:00pm EDT

JACKSON HOLE, Wyoming (Reuters) - The Federal Reserve should concentrate its unconventional monetary stimulus on mortgage asset purchases, according to a new study released on Friday, ditching Treasury bond buys which the authors say have not had much of an effect.

Presented at the Kansas City Fed's annual Jackson Hole conference, the paper argues rather controversially that the central bank should begin its exit strategy by selling Treasuries, something that is hard to conceive given the recent speedy selloff in government bonds.

The absence of concrete guidance as to the goal of asset purchases, which has been vaguely defined as aimed toward substantial improvement in the outlook for the labor market, neutralizes their impact and complicates an eventual exit, according to the paper's authors, Arvind Krishnamurthy of Northwestern University and Annette Vissing-Jorgensen of University of California, Berkeley.

"Without such a framework, investors do not know the conditions under which (asset buys) will occur or be unwound, which undercuts the efficacy of policy targeted at long-term asset values," the authors write.

Minutes from the Fed's July meeting, released on Wednesday, suggested policymakers had already considered such a step but, for now, decided against it.

"The Committee also considered whether to add more information concerning the contingent outlook for asset purchases to the policy statement, but judged that doing so might prompt an unwarranted shift in market expectations regarding asset purchases," the minutes said.

The authors of the study say the effects of the U.S. central bank's asset purchases, which began after the Fed had already brought official interest rates down in late 2008, are much narrower than policymakers' had foreseen.

Predictably, current and former Fed officials took issue with the findings. James Bullard, president of the St. Louis Fed, said the authors' focus on market impact immediately following policy announcements was misleading.

"I just wanted to push back against this conclusion that you get an effect in one single market and then there's not that much (impact) over a variety of assets," Bullard said.

Donald Kohn, former Fed Vice Chair, was also skeptical.

"The findings do not comport very well with the experience of the last couple of months," said Kohn.

Another former Fed vice chair, Alan Blinder, was even more blunt regarding the idea that Treasury sales would not have a major market impact: "You don't want to retract that given what happened recently?

U.S. Treasury 10-year note yields have risen sharply in the last two months to two-year highs above 2.80 percent following hints from the central bank that it may begin winding down its asset-buying stimulus program, also known as quantitative easing.

NARROW IMPACT

In particular, Fed Chairman Ben Bernanke and others have argued that asset purchases work by taking safe assets out of the market and therefore forcing cautious investors to take more risk. In official parlance, this is known as the "portfolio balance effect," affecting rates in markets well beyond those targeted by the Fed.

The impact of asset buying is a lot narrower than Fed officials contend, according to the authors of the paper.

"It does not, as the Fed proposes, work through broad channels such as affecting the term premium on all long-term bonds," the paper finds.

Instead, mortgage-buying has been more effective because, by targeting a specific sector that was under duress, Fed officials have been able to create scarcity of supply in the mortgage market, leading prices - and therefore credit availability - to rise.

"We find that (mortgage purchases) are more economically beneficial than Treasury (buying)," the authors write.

Recently, Fed officials have worried excess risk-taking may have gone a step too far, potentially leading to dangerous asset bubbles - hence all the talk of a ‘tapering' in quantitative easing.

In response to the worst recession in generations, the Fed has left official rates effectively at zero for over four years, and is on track to buy over $3 trillion in assets in an effort to support still-weak growth.

The U.S. economy expanded at an annualized 1.7 percent rate in the second quarter, while the jobless rate remains at an elevated 7.4 percent.

(Editing by Chris Reese and Tim Dobbyn)

View the original article here

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Fed should focus on mortgage buys, sell Treasuries: study

An eagle tops the U.S. Federal Reserve building's facade in Washington, July 31, 2013.

Credit: Reuters/Jonathan Ernst

By Pedro Nicolaci da Costa

JACKSON HOLE, Wyoming | Fri Aug 23, 2013 3:00pm EDT

JACKSON HOLE, Wyoming (Reuters) - The Federal Reserve should concentrate its unconventional monetary stimulus on mortgage asset purchases, according to a new study released on Friday, ditching Treasury bond buys which the authors say have not had much of an effect.

Presented at the Kansas City Fed's annual Jackson Hole conference, the paper argues rather controversially that the central bank should begin its exit strategy by selling Treasuries, something that is hard to conceive given the recent speedy selloff in government bonds.

The absence of concrete guidance as to the goal of asset purchases, which has been vaguely defined as aimed toward substantial improvement in the outlook for the labor market, neutralizes their impact and complicates an eventual exit, according to the paper's authors, Arvind Krishnamurthy of Northwestern University and Annette Vissing-Jorgensen of University of California, Berkeley.

"Without such a framework, investors do not know the conditions under which (asset buys) will occur or be unwound, which undercuts the efficacy of policy targeted at long-term asset values," the authors write.

Minutes from the Fed's July meeting, released on Wednesday, suggested policymakers had already considered such a step but, for now, decided against it.

"The Committee also considered whether to add more information concerning the contingent outlook for asset purchases to the policy statement, but judged that doing so might prompt an unwarranted shift in market expectations regarding asset purchases," the minutes said.

The authors of the study say the effects of the U.S. central bank's asset purchases, which began after the Fed had already brought official interest rates down in late 2008, are much narrower than policymakers' had foreseen.

Predictably, current and former Fed officials took issue with the findings. James Bullard, president of the St. Louis Fed, said the authors' focus on market impact immediately following policy announcements was misleading.

"I just wanted to push back against this conclusion that you get an effect in one single market and then there's not that much (impact) over a variety of assets," Bullard said.

Donald Kohn, former Fed Vice Chair, was also skeptical.

"The findings do not comport very well with the experience of the last couple of months," said Kohn.

Another former Fed vice chair, Alan Blinder, was even more blunt regarding the idea that Treasury sales would not have a major market impact: "You don't want to retract that given what happened recently?

U.S. Treasury 10-year note yields have risen sharply in the last two months to two-year highs above 2.80 percent following hints from the central bank that it may begin winding down its asset-buying stimulus program, also known as quantitative easing.

NARROW IMPACT

In particular, Fed Chairman Ben Bernanke and others have argued that asset purchases work by taking safe assets out of the market and therefore forcing cautious investors to take more risk. In official parlance, this is known as the "portfolio balance effect," affecting rates in markets well beyond those targeted by the Fed.

The impact of asset buying is a lot narrower than Fed officials contend, according to the authors of the paper.

"It does not, as the Fed proposes, work through broad channels such as affecting the term premium on all long-term bonds," the paper finds.

Instead, mortgage-buying has been more effective because, by targeting a specific sector that was under duress, Fed officials have been able to create scarcity of supply in the mortgage market, leading prices - and therefore credit availability - to rise.

"We find that (mortgage purchases) are more economically beneficial than Treasury (buying)," the authors write.

Recently, Fed officials have worried excess risk-taking may have gone a step too far, potentially leading to dangerous asset bubbles - hence all the talk of a ‘tapering' in quantitative easing.

In response to the worst recession in generations, the Fed has left official rates effectively at zero for over four years, and is on track to buy over $3 trillion in assets in an effort to support still-weak growth.

The U.S. economy expanded at an annualized 1.7 percent rate in the second quarter, while the jobless rate remains at an elevated 7.4 percent.

(Editing by Chris Reese and Tim Dobbyn)

View the original article here

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Fed should focus on mortgage buys, sell Treasuries: study

JACKSON HOLE, Wyoming | Fri Aug 23, 2013 11:02am EDT

JACKSON HOLE, Wyoming (Reuters) - The Federal Reserve should concentrate its unconventional monetary stimulus on mortgage asset purchases, according to a new study released on Friday, ditching Treasury bond buys which the authors say have not had much of an effect.

Presented at the Kansas City Fed's annual Jackson Hole conference, the paper argues rather controversially that the central bank should begin its exit strategy by selling Treasuries, something that is hard to conceive given the recent speedy selloff in government bonds.

The absence of concrete guidance as to the goal of asset purchases, which has been vaguely defined as aimed toward substantial improvement in the outlook for the labor market, neutralizes their impact and complicates an eventual exit, according to the paper's authors, Arvind Krishnamurthy of Northwestern and Annette Vissing-Jorgensen of Berkeley.

"Without such a framework, investors do not know the conditions under which (asset buys) will occur or be unwound, which undercuts the efficacy of policy targeted at long-term asset values," the authors write.

Minutes from the Fed's July meeting, released on Wednesday, suggested policymakers had already considered such a step but, for now, decided against it.

"The Committee also considered whether to add more information concerning the contingent outlook for asset purchases to the policy statement, but judged that doing so might prompt an unwarranted shift in market expectations regarding asset purchases," the minutes said.

The effects of the U.S. central bank's asset purchases, which began after the Fed had already brought official interest rates down in late 2008, are much narrower than policymakers' had foreseen, they say.

In particular, Fed Chairman Ben Bernanke and others have argued that asset purchases work by taking safe assets out of the market and therefore forcing cautious investors to take more risk. In official parlance, this is known as the "portfolio balance effect," affecting rates in markets well beyond those targeted by the Fed.

The impact of asset buying is a lot narrower than Fed officials contend, according to the authors of the paper.

"It does not, as the Fed proposes, work through broad channels such as affecting the term premium on all long-term bonds," the paper finds.

Instead, mortgage-buying has been more effective because, by targeting a specific sector that was under duress, Fed officials have been able to create scarcity of supply in the mortgage market, leading prices - and therefore credit availability - to rise.

"We find that (mortgage purchases) are more economically beneficial than Treasury (buying)," the authors write.

Recently, Fed officials have worried excess risk-taking may have gone a step too far, potentially leading to dangerous asset bubbles - hence all the talk of a ‘tapering' in quantitative easing.

In response to the worst recession in generations, the Fed has left official rates effectively at zero for over four years, and is on track to buy over $3 trillion in assets in an effort to support still-weak growth.

The U.S. economy expanded at an annualized 1.7 percent rate in the second quarter, while the jobless rate remains at an elevated 7.4 percent.

(Reporting By Pedro Nicolaci da Costa; Editing by Chris Reese)

View the original article here

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U.S. mortgage applications fall as rates push higher: MBA

An empty post where a ''for sale'' sign used to hang is seen outside a home in Brentwood, New York February 10, 2012.

Credit: Reuters/Shannon Stapleton

NEW YORK | Wed Aug 21, 2013 7:04am EDT

NEW YORK (Reuters) - Applications for U.S. home loans fell for a second straight week and higher interest rates reduced refinancing activity, data from an industry group showed on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 4.6 percent in the week ended August 16.

The decline came as 30-year mortgage rates rose 12 basis points to 4.68 percent, matching the year's high first hit in July.

Interest rates spiked in late May after the Federal Reserve signaled it could begin scaling back its $85 billion in monthly bond purchases by the end of the year, with investors now betting it could happen as soon as September.

Prospects of the Fed tapering its stimulus has made financial markets jittery. This week, U.S. benchmark 10-year Treasury yields hit a two-year high of 2.9 percent, more than a percentage point above their level in May.

Demand to refinance existing loans has declined as rates have climbed. The refinance index shed 7.7 percent last week, its biggest weekly fall since late June, and is down 62.1 percent since peaking in the week ending May 3. The refinance share of total mortgage activity slipped to 62 percent from 63 percent the prior week.

Rates remain fairly low by historical standards, however, and the gauge of loan requests for home purchases, a leading indicator of home sales, rose 1.2 percent, after falling 5.4 percent the previous week.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

(Reporting By Steven C. Johnson)

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U.S. consumer bureau investigating mortgage servicing problems

WASHINGTON | Wed Aug 21, 2013 1:08pm EDT

WASHINGTON (Reuters) - The U.S. consumer watchdog said on Wednesday it has found problems with mortgage servicing at banks and other financial firms, and in some cases has launched investigations for possible enforcement actions.

Mortgage servicers have made mistakes including sloppy payment processing, poor communications with consumers and insufficient programs to ensure compliance with federal laws, the Consumer Financial Protection Bureau said in a report.

The CFPB did not name any specific firms.

When the bureau's examiners found problems, they alerted the companies and "when appropriate, opened CFPB investigations for potential enforcement actions," the bureau said in a statement.

The consumer bureau was created by the 2010 Dodd-Frank law and given oversight of consumer products including mortgages and credit cards.

Problems with servicing have been a focus for regulators since the 2007-2009 financial crisis, when poor communication with borrowers and such as "robo-signing" foreclosure documents contributed to millions of people losing their homes.

(Reporting by Emily Stephenson; Editing by David Gregorio)

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U.S. mortgage applications fall as rates push higher: MBA

An empty post where a ''for sale'' sign used to hang is seen outside a home in Brentwood, New York February 10, 2012.

Credit: Reuters/Shannon Stapleton

NEW YORK | Wed Aug 21, 2013 7:04am EDT

NEW YORK (Reuters) - Applications for U.S. home loans fell for a second straight week and higher interest rates reduced refinancing activity, data from an industry group showed on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 4.6 percent in the week ended August 16.

The decline came as 30-year mortgage rates rose 12 basis points to 4.68 percent, matching the year's high first hit in July.

Interest rates spiked in late May after the Federal Reserve signaled it could begin scaling back its $85 billion in monthly bond purchases by the end of the year, with investors now betting it could happen as soon as September.

Prospects of the Fed tapering its stimulus has made financial markets jittery. This week, U.S. benchmark 10-year Treasury yields hit a two-year high of 2.9 percent, more than a percentage point above their level in May.

Demand to refinance existing loans has declined as rates have climbed. The refinance index shed 7.7 percent last week, its biggest weekly fall since late June, and is down 62.1 percent since peaking in the week ending May 3. The refinance share of total mortgage activity slipped to 62 percent from 63 percent the prior week.

Rates remain fairly low by historical standards, however, and the gauge of loan requests for home purchases, a leading indicator of home sales, rose 1.2 percent, after falling 5.4 percent the previous week.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

(Reporting By Steven C. Johnson)

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U.S. consumer bureau investigating mortgage servicing problems

WASHINGTON | Wed Aug 21, 2013 1:08pm EDT

WASHINGTON (Reuters) - The U.S. consumer watchdog said on Wednesday it has found problems with mortgage servicing at banks and other financial firms, and in some cases has launched investigations for possible enforcement actions.

Mortgage servicers have made mistakes including sloppy payment processing, poor communications with consumers and insufficient programs to ensure compliance with federal laws, the Consumer Financial Protection Bureau said in a report.

The CFPB did not name any specific firms.

When the bureau's examiners found problems, they alerted the companies and "when appropriate, opened CFPB investigations for potential enforcement actions," the bureau said in a statement.

The consumer bureau was created by the 2010 Dodd-Frank law and given oversight of consumer products including mortgages and credit cards.

Problems with servicing have been a focus for regulators since the 2007-2009 financial crisis, when poor communication with borrowers and such as "robo-signing" foreclosure documents contributed to millions of people losing their homes.

(Reporting by Emily Stephenson; Editing by David Gregorio)

View the original article here

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

U.S. mortgage applications fall as rates push higher: MBA

An empty post where a ''for sale'' sign used to hang is seen outside a home in Brentwood, New York February 10, 2012.

Credit: Reuters/Shannon Stapleton

NEW YORK | Wed Aug 21, 2013 7:04am EDT

NEW YORK (Reuters) - Applications for U.S. home loans fell for a second straight week and higher interest rates reduced refinancing activity, data from an industry group showed on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 4.6 percent in the week ended August 16.

The decline came as 30-year mortgage rates rose 12 basis points to 4.68 percent, matching the year's high first hit in July.

Interest rates spiked in late May after the Federal Reserve signaled it could begin scaling back its $85 billion in monthly bond purchases by the end of the year, with investors now betting it could happen as soon as September.

Prospects of the Fed tapering its stimulus has made financial markets jittery. This week, U.S. benchmark 10-year Treasury yields hit a two-year high of 2.9 percent, more than a percentage point above their level in May.

Demand to refinance existing loans has declined as rates have climbed. The refinance index shed 7.7 percent last week, its biggest weekly fall since late June, and is down 62.1 percent since peaking in the week ending May 3. The refinance share of total mortgage activity slipped to 62 percent from 63 percent the prior week.

Rates remain fairly low by historical standards, however, and the gauge of loan requests for home purchases, a leading indicator of home sales, rose 1.2 percent, after falling 5.4 percent the previous week.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

(Reporting By Steven C. Johnson)

View the original article here

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

U.S. consumer bureau investigating mortgage servicing problems

WASHINGTON | Wed Aug 21, 2013 1:08pm EDT

WASHINGTON (Reuters) - The U.S. consumer watchdog said on Wednesday it has found problems with mortgage servicing at banks and other financial firms, and in some cases has launched investigations for possible enforcement actions.

Mortgage servicers have made mistakes including sloppy payment processing, poor communications with consumers and insufficient programs to ensure compliance with federal laws, the Consumer Financial Protection Bureau said in a report.

The CFPB did not name any specific firms.

When the bureau's examiners found problems, they alerted the companies and "when appropriate, opened CFPB investigations for potential enforcement actions," the bureau said in a statement.

The consumer bureau was created by the 2010 Dodd-Frank law and given oversight of consumer products including mortgages and credit cards.

Problems with servicing have been a focus for regulators since the 2007-2009 financial crisis, when poor communication with borrowers and such as "robo-signing" foreclosure documents contributed to millions of people losing their homes.

(Reporting by Emily Stephenson; Editing by David Gregorio)

View the original article here

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