What Banks Have to Fear from Crises in Greece and China


Unless you are a Citigroup or JPMorgan Chase, your bank is pretty safe from the turmoil in Greece and China, right?

Think again.

The threat of a Greek default and the Chinese stock market plunge will exert downward pressure on interest rates, and global insecurity could encourage the Federal Reserve to delay a rate hike, experts say. That could translate into even tighter margins and delay relief for the many banks starved for revenue growth.

Yes, investors likely will react by demanding safe assets that U.S. banks hold and trade, which could be a small silver lining. But there are doubts that flight to quality would spur a boomlet in mortgage refinancings as optimists might hope.

Perhaps the biggest problem is that it adds uncertainty at a point in the year — and the long recovery from the financial crisis — when banks thought things would be getting better.

Instability from […]

Interest-Only Mortgages Are Coming Back, But With Safety in Mind


The second-largest provider of U.S. mortgages through brokers is bringing back a debt type that that’s almost disappeared since the financial crisis: Interest-only loans.

United Wholesale Mortgage plans next month to expand access to the mortgages to borrowers beyond the wealthiest Americans who use so-called jumbo loans. Interest-only mortgages carry higher risks because they can leave homeowners facing a jump in their bills down the road.

The move by the family-owned lender, which grew more than 40-fold after the crash by working with brokers as banks such as JPMorgan Chase & Co. abandoned them, is the latest sign of how lending standards are expanding in the wake of the crisis.

Mat Ishbia, the Troy, Mich.-based company’s chief executive officer, said he isn’t embracing a return to misguided practices.

“It’s for a savvy borrower who can afford the higher […]

What Gay Marriage Ruling Means for Mortgages

The Supreme Court decision making same-sex marriage legal nationwide could boost mortgage demand as it provides gay and lesbian couples with more financing opportunities and stronger joint property rights.
“In the short run, it will increase demand for loans because more couples are going to get married,” said Shoshana Grossbard, an economics professor at San Diego State University who has authored research on gay and lesbian couples.
Married couples find mortgage credit more accessible than single people, she said. “It’s much easier for a married couple to buy property and get a mortgage than two singles,” Grossbard said.
In a survey of lesbian, gay, bisexual and transgender consumers published in May by the National Association of Gay and Lesbian Real Estate Professionals, 81% of respondents said a Supreme Court ruling for marriage equality would make them feel “more fiscally protected and confident,” which the trade group identifies as […]

Sales of Existing Homes Rose in May to Highest Since 2009


Previously owned homes sold in May at the fastest pace since November 2009, driven by first-time buyers and indicating budding momentum in the residential real estate market.

Closings on existing properties, which usually occur a month or two after a contract is signed, rose 5.1% to a 5.35 million annualized rate, the National Association of Realtors reported Monday in Washington. The median forecast in a Bloomberg survey called for a 5.26 million pace. The share of first-time buyers matched the highest level since September 2012.

Employment gains, rising incomes and still-cheap borrowing costs are combining to propel sales after a period of uneven demand from late 2014 through early this year. The prospect of higher interest rates as the Federal Reserve considers tighter monetary policy may be encouraging more Americans to take the homeownership plunge.

“Given the combination of rates being low but expected […]

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