4 minute readA look at the stories on HousingWire’s weekend desk…with more coverage to come on bigger issues. A number of supporters called for the formation of the proposed Consumer Financial Protection Agency (CFPA), on the heels of comments from President Obama Friday. From his remarks:
“In a financial system that’s never been more complicated, it has never been more important to have a watchdog function like the one we’ve proposed. In the past, a lack of clear rules led to innovation of the wrong kind: The firms that did best were the ones who did the best job of hiding the real cost to consumers. We don’t want them competing by figuring out how much they can fool ordinary Americans.”
The National Black Caucus of State Legislators (NBCSL) issued a statement in support of the agency, saying its formation will be crucial to restoring integrity in the nation’s financial markets. NBCSL president Calvin Smyre had this to say:
“Local and community-based banks will benefit from the CFPA because it will level the playing field between banks and non-banking financial entities such as mortgage finance companies which are largely immune to federal regulation. The current system puts local community banks at a competitive disadvantage because they must deal with higher regulatory standards in comparison to financial institutions. Consumers, the backbone of the American economy, will also benefit from the CFPA because it provides them with stronger protection through better enforcement and simplified disclosures to help avoid costly penalties.”
Operation Hope, a non-profit “social investment banking and financial literacy empowerment” organization, also called for the formation of the agency. Chairman and CEO John Hope Bryant had the following to say:
“We believe that consumer protection ultimately needs to address the issue that helped to cause the crisis — regulating the largely unregulated financial service space, including unregulated and under-regulated mortgage bankers, mortgage brokers and other alternative financial service providers, as well as mainstream institutions. We believe that the ultimate answer should support consumer protection, a new and serious focus on financial literacy, encourage fair and reasonable access to capital, and help to support what we call ‘good capitalism’ — or a free enterprise and capitalism that uplifts, includes and empowers the poor and the under-served.”
Sterling Home Retention Services, an Orlando-based loss mitigation fulfillment firm, said its successfully offered Making Home Affordable Modification Program (HAMP) workout plans for 60% of eligible borrowers, above the US Treasury’s average of 9% for all HAMP servicers. From CEO Ron Morgan’s statement:
“It takes much more than sending a letter informing borrowers of the HAMP program. We’ve found that it takes a persistent, proactive and highly personal approach to find the right contacts and communicate the HAMP message effectively. It takes trained people, lots of them, and nationwide there just aren’t enough of them to address the problem. So we created a technology platform that enables fewer people to perform the work of many.”
Casino developer Wynn Resorts announced the pricing of $500m of aggregate principal amount of new 7.875% first mortgage notes, due 2017. The notes will be issued at a discount of 97.823% of par, the company said. Wynn Las Vegas said it will use the net proceeds of the offering to repay outstanding amounts of its revolving credit facilities and term loan facility. The new notes will rank “pari passu” — or on equal footing — in right of payment with outstanding 6.625% first mortgage notes due 2014 and will be senior secured obligations of the issuers. The number of Federal Deposit Insurance Corp. (FDIC)-insured institutions closed this year held at 98 Friday, as no banks were shut down this weekend. It’s the first week since June 12 that the FDIC hasn’t announced a weekly round of closings. More than six of 10 households that opened checking accounts as part of a promotion to obtain a reduced rate on a loan keep the account open and active, according to research released in Raddon Financial Group’s “Raddon Report.” Raddon, a Lombard, Ill.-based financial research firm, survey 1,155 households and responses were weighted to reflect the nation’s demographic composition. About 23% reported the account was open but dormant and 17% said the account was closed. HousingWire takes a deeper look into the credit union industry’s push into the mortgage origination space in the November issue. Among many strategies, credit unions are recruiting customer-members by offering low-interest loans tied to new checking accounts. Write to Austin Kilgore.
