e-Weekly
July 15, 2009
Dodd, Frank want regulators to fix loan modification problem
Senate and House financial heavyweights Sen. Chris Dodd (D-Conn.) and Rep. Barney Frank (D-Mass.) have asked federal regulators to look into possibly inflated valuations of some second mortgages that are being held on banks’ balance sheets to aid government-sponsored assistance for distressed homeowners.
According to a recent letter sent to the leaders of the National Credit Union Administration, the Federal Reserve, the Federal Deposit Insurance Corporation, and other federal regulatory entities, carrying mortgage loans at "potentially inflated values" could prevent loan servicers from negotiating "the disposition of these liens" and "may stand in the way" of "increasing participation" in the Obama administration's Hope for Homeowners (H4H) mortgage adjustment program.
Another issue facing the H4H program is the "unwillingness of subordinate lien holders to extinguish their liens" in order to participate in the program.
H4H allows eligible homeowners to refinance their subprime mortgage loans into fixed-rate, FHA-backed loans. The H4H program also allows the subordinated lien holders to share in any future appreciation of the property as a means to encourage them to participate in the program.
In the letter, Dodd and Frank expressed concern that "significant volumes" of "closed-end second mortgages or home equity lines of credit" are being held on the balance sheets of large mortgage servicers, adding that the "loss allowances associated with these subordinated liens may be insufficient to realistically and accurately reflect their value... in light of the historically poor performance of first lien mortgages" and the "diminished values of the underlying collateral."
The legislators urged federal authorities to look into this issue "as expeditiously as possible."
More credit unions, more members worldwide--WOCCU stats
Credit unions worldwide are expanding at a steady pace, with more members being served by more credit unions in 2008 than in the previous year, according to the just-released World Council of Credit Unions' (WOCCU) 2008 Statistical Report.
Survey respondents from 97 countries reported that 53,689 credit unions served nearly 186 million members last year. In 2007, roughly 49,134 responding credit unions reported serving roughly 177 million members in the same number of countries.
The number of credit unions responding to the survey grew 9% for 2008, while the number of members of those credit unions jumped by 5% compared with 2007 results published last year. First-time responses from Ethiopia and Haiti helped drive credit union and member growth in Africa and the Caribbean. Other areas of the world showed modest growth or slight declines in the number of credit unions.
Global credit union assets in 2008 totaled $1.19 trillion, up from 2007 total of $1.18 trillion. Credit union savings worldwide last year reached $995.7 billion, also an increase from $987.9 billion in 2007. Loans worldwide dipped slightly to $847 billion in 2008 from $847.9 billion the previous year.
"The 2008 results show us that credit unions worldwide are effectively weathering an economic storm that has had disastrous effects on some other financial sectors," said Pete Crear, WOCCU president/CEO.
"Currency valuation changes in countries around the world may have tempered aggregate financial progress as reported in U.S. dollars, but growth in the number of institutions responding this year tells us credit unions are alive and well, and on the path to serving an ever-increasing number of members," Crear said.
WOCCU has collected annual statistics on the international credit union movement for the past 36 years to produce its annual Statistical Report. Click here to view that report: WOCCU Statistical Report
Feds Launch I-9 Audits at Hundreds of Employers
The U.S. Immigration and Customs Enforcement (ICE) recently launched a new audit initiative by notifying 652 employers across the country that the governmental agency will be investigating their hiring records.
The notices alert business owners that Immigration and Customs Enforcement will be inspecting their hiring records to determine whether they are complying with employment eligibility verification laws and regulations. The agency says the new initiative illustrates its increased focus on holding employers accountable for their hiring practices and efforts to ensure a legal workforce.
Employers are required to complete and retain a Form I-9 for each individual they hire for employment in the United States. This form requires employers to review and record the individual's identity document(s) and determine whether the document(s) reasonably appear to be genuine and related to the individual. I-9 forms must be retained for 3 years after the worker is hired or for one year after termination, whichever is longer.
The agency says the 652 businesses that received a Notice of Inspection for a Form I-9 audit have been selected as a result of leads and information obtained through other investigative means. The agency says that because of the ongoing, law enforcement sensitive nature of the audits, the names and locations of the businesses weren't released.
These I-9 forms have recently been updated by ICE. To obtain an up-to-date I-9 form for your credit union, go to: www.uscis.gov/i-9.
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