Tuesday August 6 Housing and Economic stories

TOP STORIES:

Misfit Borrowers Attracting Lenders as Housing Revives - (www.bloomberg.com) SOUND FAMILIAR??  Raj Date helped write new rules for U.S. mortgage underwriting as deputy director of the Consumer Financial Protection Bureau. Now he’s building a company that will offer loans to borrowers blocked by the agency’s standards. Date, 42, left the CFPB in January to found Washington-based Fenway Summer LLC, which plans to provide loans, including interest-only financing, to borrowers he considers low risk even though they might carry debt that exceeds the agency’s threshold. He estimates that nonqualified mortgages make up as much as $1.5 trillion of the $10 trillion home-loan market. “There are plenty of borrowers who are eminently responsible people but fall outside of the bright-line boundaries,” Date said in a telephone interview. “And there’s a meaningful-sized business that can be quite good for borrowers and for lenders and investors to be able to satisfy that need.” Fenway joins a growing group of companies offering financing to consumers with irregular incomes, damaged credit or past foreclosures as the housing market recovers and rising interest rates drive down demand for refinancing, the industry’s biggest source of business since the 2008 credit crisis. That’s slowly bringing mortgage availability back to Americans shut out of homebuying after a real estate crash triggered by loose lending to subprime borrowers.

Crude Reaches 15-Month High as Jobless Claims Decline - (www.bloomberg.com) West Texas Intermediate rose to the highest level in almost 16 months as U.S. jobless claims declined and equities advanced. WTI’s discount to Brent narrowed to less than $1 for the first time since 2010. Prices climbed 1.5 percent after the Labor Department said jobless claims dropped last week to the fewest since early May. The Standard & Poor’s 500 Index (SPX) reached a record intraday high on better-than-forecast earnings. The Brent-WTI spread contracted to 93 cents as inventories decreased at Cushing, Oklahoma, a major U.S. hub. “The economy looks good,” said Jeff Grossman, president of New York-based BRG Brokerage and a New York Mercantile Exchange floor trader. “Crude is working its way higher in sympathy with the stock market. Everyone is buying and they can’t hold it back.” WTI for August delivery gained $1.56 to $108.04 a barrel on the New York Mercantile Exchange, the highest settlement level since March 19, 2012. 

Analysis: Bank of America's interest-rate exposure may be worse than rivals' - (www.reuters.com) Bank of America Corp's balance sheet suffered from rising bond yields in the second quarter, suggesting that the second-largest U.S. bank may be more exposed to interest-rate risk than some of its major rivals. The bank posted a profit for shareholders of $3.57 billion in the second quarter, but on its balance sheet the picture was not as good - its net worth fell by $6.26 billion as a result of investment losses. Rivals JPMorgan Chase & Co and Citigroup Inc. both managed to increase their net worth as measured by their book value.

Intel cuts 2013 revenue forecast as PC industry sags - (www.reuters.com) Intel Corp cut its full-year revenue forecast and said it is scaling back capital spending as it adjusts to a painful contraction of personal computer sales and economic weakness in China, one of its biggest markets. The forecast and cut in capital spending were announced on Wednesday in the company's quarterly earnings report, the first under new Chief Executive Brian Krzanich. The soft-spoken manufacturing guru, who took over as CEO in May and faces falling PC sales and a hyper-competitive mobile market, was quick to acknowledge Intel's past errors. He said the top chipmaker would aggressively speed up the rollout of new Atom mobile chips.

Greece May Need Billions More in Emergency EU Aid - (www.spiegel.de) The Greek recovery may be facing yet another hurdle. According to a report by German daily Süddeutsche Zeitung, the beleaguered country needs another massive influx of money if it is to avoid insolvency. The paper cites an unnamed official at the European Commission as saying that the "financial gap" could be as large as €10 billion. The news comes at a difficult time for Greece and its relations with Germany. German Finance Minister Wolfgang Schäuble is set to visit Athens this Thursday for consultations with his Greek counterpart Yannis Stournaras and with Prime Minister Antonis Samaras. Schäuble is highly unpopular in Greece for his consistent insistence on austerity. And with German elections looming in September, it seems unlikely that additional aid money for Athens will be forthcoming anytime soon.

OTHER STORIES:

Dollar Strengthens as Data Fuel Bets on Fed Tapering; Yen Slides - (www.bloomberg.com)

U.S. Stocks Rise as Jobless Claims Drop Before Bernanke - (www.bloomberg.com)
China Stocks Fall for Second Day as Property Developers Retreat - (www.bloomberg.com)

Emerging Stocks Snap Seven-Day Gain as Technology Shares Slump - (www.bloomberg.com)

Housing market impact of 25 years of falling mortgage interest rates - (www.ochousingnews.com)

Exclusive: China in $5 billion drive to develop disputed East China Sea gas - (www.reuters.com)

China’s Structural Shift in Economy Poses Risks, Jain Says - (www.bloomberg.com)