NAHB: Victory on bank rules keeps credit flowing

The Federal Reserve Board on July 2 approved a final rule covering most of the Basel III bank regulatory requirements, which will increase the amount of capital banks have to hold in their reserves.

In a victory for the HBA and Home Builders, the final rule contains major improvements over what was proposed last year related to home mortgages. NAHB had urged regulators to shield community banks from overly burdensome capital rules that would have restricted their ability to provide new-home production loans and small business loans. The Fed addressed many of these concerns in posting its final rule.

View a more detailed analysis at NAHB .org by clicking here.

NAHB CEO Jerry Howard speaks out on over regulation of banks and its impact on home building

NAHB CEO Jerry Howard went on the Fox Business Network on September 19 and spoke about the need for bank regulators to recognize that housing is not a national commodity, but a series of local markets.  Howard advocated for an appropriate level of regulation based on the housing market at the local level, not the so-called “national” housing market.

Click here to watch Jerry Howard on the Fox Business Network.

Bankers, business leaders say credit crunch is regulators’ fault

Testifying this week before the U.S. House Small Business Committee hearing, bankers and small business owners told lawmakers that a harsh regulatory environment is responsible for the tight business credit market.

“What we found is that the FDIC regulators are inconsistently applying regulations throughout the banking community,” Lynn Ozer, executive vice president of Susquehanna Bank, said in his testimony representing the National Association of Government Guaranteed Lenders.

The hearing focused on the contention from regulators and President Obama that the Federal government does not have any impact on banks’ ability to lend money. Witnesses argued that Federal government regulation is impeding banks’ ability to lend money to businesses.

Source: American Banker

House Appraisals Under Fire; Computerized Models Are Assailed as Inacurate

Home appraisals, which were blamed for being too generous during the housing boom, are now being criticized by some home owners for being too stingy, preventing them from refinancing or borrowing against their houses.

The criticism is being leveled at computerized real-estate appraisals, which depend on models that use prices from home sales and other data to determine the value of a house. Computerized appraisals calculate a home’s value by using an index derived from historical repeat-sales data, or sales records of homes with similar property characteristics, such as square footage and the number of bedrooms and baths.

In-person appraisals don’t incorporate as much transactional data as a computer model.

Yale economist Robert Shiller, who developed the first systems in the early 1990s, is among those who say that in some situations the models may be providing unrealistically low values, prompting lenders to reject loan applications or lend less money on particular properties. Some models weigh past sales of a particular property over time against a historical home-price index, and they are running into problems with properties that have been bought only once.

This is the situation in places such as Nevada and Southern California, where new subdivisions sprouted during the housing boom but many homes never sold or entered foreclosure before ever being sold in a non-distressed transaction.

Wall Street Journal (12/30/10); M.P. McQueen

Americans Still Lack Confidence in U.S. Banking Industry

Most Americans continue to lack confidence in the stability of the U.S. banking system, but they also remain unworried that they will lose their money due to a bank failure.

The latest Rasmussen Reports national telephone survey shows that 44% of Adults are at least somewhat confident in the stability of the U.S. banking industry, including 11% who are Very Confident. However, 52% say they are not confident in the industry’s stability, with 15% who are Not At All Confident.

Read the entire report a Rasmussen Reports by clicking here.