September 03, 2014
Masthead 2

 
Contents:
Elimination of Post Payment Interest Charges
Mid-America Growth Ahead?
SEC Approves New Rules on Rating Agencies



BKD 2010





Celerit


Harland Clarke


ICBA Securities





Travelers



 
View all other ACB Products and Services

Looking for a service you can't find?  Let us know!  
 
Real Community Bank

Elimination of Post Payment Interest Charges  

The Federal Housing Administration (FHA) announced  that borrowers who prepay their FHA-insured mortgages will not have to make interest payments beyond the date their mortgage is paid in full.  FHA's rule, Handling Prepayments: Eliminating Post-Payment Interest Charges, applies for FHA-insured mortgages closed on or after January 21, 2015.   This rule  explicitly prohibits lenders from charging borrowers post settlement interest, which is broadly defined as a "prepayment penalty" by the Consumer Financial Protection Bureau (CFPB), for all FHA Single Family mortgage products and programs. 

 

In addition, FHA announced a new rule to ensure borrowers have early access to information when making decisions about their FHA mortgages.  Effective for FHA-insured Adjustable Rate Mortgages (ARMs) originated on or after January 10, 2015, this rule makes two revisions to FHA's ARM Program.  It requires lenders:

  • To provide borrowers of FHA-insured ARMs with at least a 60-day but no more than 120-day advance notice of an adjustment to their monthly payment.  FHA currently requires a 25-day advance notice.
  • To base an interest rate adjustment that results in a corresponding change to the borrower's monthly payment on the most recent index value available 45 days before the date of the rate adjustment (commonly referred to as a "look back period").  FHA currently requires a 30-day look-back period.
Mid-America Growth Ahead?
By The Associated Press 
A monthly economic survey index for nine Midwestern and Plains states, including Arkansas, rose slightly in August, suggesting growth is ahead. A survey report issued Tuesday said the overall Mid-America Business Conditions Index inched up to 57.2 last month from 57.0 in July. The index had reached a three-year high of 60.6 in June.

 

Looking six months ahead, the business confidence portion of the overall index climbed to 60.4 from 60.0 in July. It had hit 63.6 in June.

 

The survey results from supply managers are compiled into a collection of indexes ranging from zero to 100. Survey organizers at Creighton University say any score above 50 suggests economic growth, while a score below that suggests decline. The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

Earnings Up 
Community banks earned $4.9 billion in the second quarter of 2014, a 3.5 percent increase from a year ago, according to the FDIC's Quarterly Banking Profile.

The agency said loan balances at community banks grew at a faster pace than in the industry as a whole, asset-quality indicators continued to show improvement, and community banks again accounted for 45 percent of small loans to businesses. In the second quarter there were 6,163 community banks (93 percent of all FDIC-insured institutions) with assets of $2 trillion (13 percent of industry assets).

Overall, FDIC-insured financial institutions reported aggregate net income of $40.2 billion in the second quarter of 2014, a 5.3 percent increase from the previous year. The number of "problem banks" fell for the 13th consecutive quarter, with the number of banks on the FDIC's "Problem List" declining from 411 to 354.

The Deposit Insurance Fund rose to $51.1 billion as of June 30 from $48.9 billion at the end of March. Estimated insured deposits declined by 0.2 percent, and the DIF reserve ratio rose to 0.84 percent from 0.80 percent the previous quarter and 0.64 percent a year ago.
SEC Approves New Rules on Rating Agencies
The Securities and Exchange Commission adopted new requirements for credit rating agencies designed to improve credit rating quality and increase agency accountability.

The new rules and amendments, which implement Dodd-Frank Act provisions, require certifications that credit ratings are not influenced by other business activities. They also require annual certifications of internal controls.

The SEC also adopted revisions  to rules governing the disclosure, reporting and offering process for asset-backed securities. The new rules require loan-level disclosure for certain assets, such as residential and commercial mortgages, so investors are not overly reliant on credit ratings.
Monday, September 8, 2014                                

Managing Maturing HELOCs: New Interagency Guidance, Special Regulation Z Requirements & Compliance
 
Wednesday, September 17, 2014                                

Auditing Social Media: Planning & Risk Control Matrices