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WSFLASH y OCTOBER 2016 y NMP NEWSFLASH y OCTOBER 2016 y NMP NEWSFLASH y OCTOB Yellen on Capitol Hill: No Timetable on Rate Hikes OCTOBER 2016 n National Mortgage Professional Magazine n NationalMortgageProfessional.com 14 Janet Yellen has assured Congress that the Federal Reserve is not operating on a "fixed timetable" when it comes to determining when to initiate rate hikes. According to a CNBC report covering the Federal Reserve chairwoman's testimony before Congress today, Yellen admitted that some of the central bank's highest ranking officers advocated for rate hikes if no new economic risks were to occur. But she noted that the economy would overheat if job creation acceleration, which would force the Fed to raise rates at a speed that would create discomfort with some Fed officials. Yellen also waded into presidential politics by insisting that she was unaware of contacts between Democratic nominee Hillary Clinton and Fed Governor Lael Brainard. Republican presidential nominee Donald Trump has accused Yellen and her colleagues of maintaining an artificially low rate level in order to preserve President Obama's economic legacy, and during this week's debate with Clinton warned that the historically low rates were contributing to the rise of a new economic bubble. In prepared remarks delivered prior to her question-and-answer session with members of Congress, Yellen detailed efforts to ensure proper capitalization of U.S. banks through the Fed's Comprehensive Capital Analysis and Review (CCAR) program. "We are also considering making certain changes to the stress test assumptions used in CCAR," she said. "For example, under the current CCAR program, a firm's capital adequacy is assessed by assuming that the firm continues to make its baseline capital distributions over the stress test's two-year planning horizon. We are considering changing this conservative assumption, in significant part because of the advent of the capital conservation buffer in the regulatory capital rules, which limits the ability of a firm to make capital distributions when its capital ratios are lower than the buffer requirement. Instead, we are proposing that firms simply add one year of planned dividends to their stress capital buffer requirement in recognition of the fact that firms generally are more reluctant to reduce dividends than share buybacks." Distressed Sales Continue to Decline Distressed sales accounted for 7.8 percent of total home sales nationally in June, according to new data from CoreLogic. This represents a 0.8 percent decline from May and a 2.2 percent drop from June 2015. Within the distressed category, real estate-owned (REO) sales accounted for 4.9 percent, a 1.9 percent yearover-year slide and the lowest level since September 2007. Short sales accounted for 2.9 percent of total home sales in June, slight lower than May's three percent level. Eight states recorded yearover-year increases in their distressed sales shares in June, most notably Maryland (19.4 percent), Connecticut (18.4 percent), Michigan (17.6 percent), Illinois (15.8 percent) and New Jersey (15.3 percent). North Dakota had the smallest distressed sales share at 2.5 percent, while Florida's 5.8 percentage point drop in its distressed sales share from a year earlier was the largest decline of any state. On a metro basis, Maryland's Baltimore-Columbia-Towson market had the largest share of distressed sales at 19.1 percent, followed by Illinois' ChicagoNaperville-Arlington Heights market (17.7 percent), the Florida metros Tampa-St. Petersburg-Clearwater (16.6 percent) and OrlandoKissimmee-Sanford (15.4 percent) and St Louis (13.2 percent). Denver-AuroraLakewood, Colo. had the smallest distressed sales share at 2.4 percent. MBA Task Force Proposes New Loan Mod Program The Mortgage Bankers Association (MBA) has launched One Mod: Principles for PostHAMP Loan Modifications, which is a proposed successor program to the Home Affordable Modification Program (HAMP). One Mod draws upon the experiences of lenders familiar with HAMP to formulate universal principles that should be applied to a future program. One Mod was developed by The Future of Loss Mitigation Task Force, a diverse MBA working group consisting of representatives from 20 member companies. The program offers at least a 20 percent payment reduction for eligible borrowers while minimizing the excessive documentation requirements that have caused hardship for HAMP applicants. The Task Force is cochaired by Alex McGillis of Quicken Loans and Erik Schmitt of JP Morgan Chase. "MBA's task force recognizes that the industry, borrowers and investors need a successor to HAMP that is consistent and can be widely scaled," said Pete Mills, senior vice president of Residential Policy & Member Services at the Mortgage Bankers Association. "Application of the Task Force's principles and the 'One Modification' or 'One Mod,' will go a long way towards offering deep payment relief for struggling homeowners and a http://www.NationalMortgageProfessional.com

Table of Contents for the Digital Edition of NMP - October 2016

Table of Contents
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NMP - October 2016 - 1
NMP - October 2016 - Table of Contents
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