Financial Regulatory Forum

(Recasts with FHA announcement)

By Corbett B. Daly

WASHINGTON, Jan 19 (Reuters) – The U.S. Federal Housing Administration said on Tuesday it will raise the minimum down payment required to secure an FHA-backed mortgage for less creditworthy borrowers as part of a series of steps to shore up the agency’s finances.

The FHA said borrowers with credit rating scores below 580 would be required to make a down payment of at least 10 percent, while the rate for higher-ranked borrowers would stay at 3.5 percent.

It also said it would increase the up-front mortgage insurance premium, which is paid by the borrower when the loan is made, to 2.25 percent from 1.75 percent.

The moves will raise the cost of mortgages at a time the housing sector is trying to find its feet, but the agency said it was a prudent step to ensure its financial health and carry on its mission of supporting home ownership.

“Striking the right balance between managing the FHA’s risk, continuing to provide access to underserved communities, and supporting the nation’s economic recovery is critically important,” FHA Commissioner David Stevens said in a statement.

By David Dolan and Noriyuki Hirata
TOKYO, Sept 19 (Reuters) – Japan’s new banking minister said his plan to freeze the repayment of bank loans to help debt-burdened individuals and small companies would be a positive for the banks, even as investors have fled financial stocks.

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By Karey Wutkowski
WASHINGTON, Sept 16 (Reuters) – The Federal Deposit Insurance Corp has selected a Texas-based mortgage servicer as the first buyer in a test of its program aimed at cleansing toxic loans from banks’ balance sheets.
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WASHINGTON, Aug 5 (Reuters) – The Obama administration is considering splitting Fannie Mae and Freddie Mac and putting their troubled assets in a new federally backed corporation, The Washington Post reported on Wednesday, citing administration officials. (more…)

WASHINGTON, July 31 (Reuters) – The U.S. Federal Deposit Insurance Corp is launching the first test of its Legacy Loans Program to help banks rid their balance sheets of toxic assets so they can raise new capital and increase lending, the agency said on Friday.
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WASHINGTON, July 28 (Reuters) – Senior U.S. housing officials and leading mortgage companies met on Tuesday to set explicit goals for preventing evictions and helping struggling borrowers with their home loans.

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WASHINGTON, July 10 (Reuters) – The Obama administration is asking the largest mortgage finance companies to quicken the pace of modifying home loans and so help more troubled borrowers avoid foreclosure. The largest 25 mortgage servicers should appoint a special liaison officer to work directly with government officials who are overseeing the program meant to save as many as 4 million borrowers from foreclosure. (more…)

   By Patrick Lannin and Sven Nordenstam
   RIGA/STOCKHOLM, July 8 (Reuters) – Latvia wants banks to write off 10 percent of the debt of people who enter a planned scheme to restructure problem loans, the prime minister said on Wednesday, but banks said volumes concerned would be small. (more…)

   SEOUL, July 6 (Reuters) – South Korea will toughen mortgage lending by broadening tight loan ceilings to the whole of Seoul and surrounding cities from Tuesday, a regulator said on Monday, amid signs of possible asset price bubbles.
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