By National Mortgage News
Sep 15, 2015
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By Jackie Stewart
Sep 23, 2015
The banking industry continues to sit on a mountain of problematic loans seven years after the onset of the financial crisis.
Credit quality, to be sure, is substantially better than it was during the peak of the crisis. But the amount of nonperforming assets on banks’ books is more than triple the levels reported in 2006.
Banks have been more reluctant to offload a number of credits in bulk sales, and loss-share agreements have also forced banks to keep sour loans on their books. Low interest rates, along with a lack of better reinvestment options, have also influenced executives’ decisions.
Still, the continued existence of troubled assets could prove problematic should the banking industry face another economic downturn, industry observers warn.
Continue reading at National Mortgage News.
March 05, 2015 00:01 ET
IRVINE, CA–(Marketwired – March 05, 2015) – RealtyTrac® (www.realtytrac.com), the nation’s leading source for comprehensive housing data, today released its first-ever U.S. HELOC Resetting Report, which found that 56 percent of the 3.3 million Home Equity Lines of Credit potentially resetting with higher, fully amortizing monthly payments from 2015 to 2018 are on properties that are seriously underwater.
For the report, RealtyTrac analyzed open HELOCs originated between 2005 and 2008 with the assumption that these loans will reset with fully amortizing monthly payments after a 10-year period of interest-only payments. RealtyTrac used average HELOC utilization rates from the New York Federal Reserve and the prime interest rate of 3.25 percent to calculate the outstanding balance of the loans and to calculate the interest-only and fully amortizing monthly payments. See full methodology below.
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By Kate Berry
Jan 22, 2014
A new report from Moody’s suggests that roughly a dozen regional banks are at risk of sustaining meaningful credit losses on home equity lines of credit that were originated in the boom years and are scheduled to reset over the next three years.
Analysts with Moody’s Investors Service are warning that banks face higher delinquencies and incremental losses on home equity lines because borrowers are susceptible to “payment shock,” when the loans start resetting after 10 years and the borrowers have to start paying both interest and principal. Continue reading at National Mortgage News.