MReport February 2020

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52 | M REPORT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Data Solutions. Several higher- priced markets were among those that posted price declines. For example, prices in Bridgeport, Connecticut, dropped 4.8% over the year in Q 3 2019, while prices in San Jose, California, dropped 3.2%. The nation is beginning to see new migration patterns that fol- low affordability. Already, some expensive markets, especially along the west coast, are experi- encing new migration trends as residents leave to pursue more affordable housing elsewhere. On the other hand, markets in Arizona, Nevada, and Texas are experiencing an influx of residents leaving expensive markets in California, according to Realtor. com. At the same time, residents from expensive markets in the Northeast are seeking affordable options in the Carolinas, Georgia, and Florida. "The move to affordability trend will continue in 2020, fu- eled by the twin forces of baby boomers retiring and seeking sunnier weather, lower taxes and lower cost of living, and millen- nials searching for family-friendly lifestyles and affordable housing," according to While slowing and depreciat- ing home prices may help bring affordability to some markets, Blomquist also pointed out some negative effects, including lower home equity and a potential for an uptick in home loan defaults. He pointed out that homeown- ers often rely on home equity as a "safety net" in the case of a loan default. Particularly, recent home- buyers with loans backed by the Federal Housing Administration may be vulnerable as they have little or no equity at their disposal. Total "tappable equity" is now on the decline, falling 1% in Q 3 2019. However, it was still up 5% from a year earlier, according to data from Black Knight. Another recent market develop- ment that can make the market vulnerable is the large sales of non-performing loans. About 42% of former GSE loans sold in NPL sales have fallen into foreclosure, and another 24% remain unresolved. Bank of America: Residential Activity Driving Growth Loan activity increases $21 billion year-over-year. B ank of America reported $22.3 billion in revenue in Q 4 2019 along with increased loan activity. Residential mortgages drove Bank of America's $21 billion year-over- year increase in loan activity, up to $311 billion in Q 4 2019. "In a steadily growing economy marked by solid client activity, our teammates produced another strong quarter and year, allowing us to increase investments in our customers, communities, and employees, while keeping a close eye on expenses," said Bank of America Chairman and CEO Brian Moynihan in a statement. "We also delivered for shareholders in 2019 by returning a record $34 billion in excess capital through dividends and share repurchases. As evidenced by a quarter in which our customer deposits surpassed $1.4 trillion and client balances in our wealth management business topped $3 trillion, we enter 2020 with momentum." Bank of America's total volume of nonperforming loans, leases, and foreclosed properties decreased year-over-year. As of December 31, 2019, the bank holds $3.837 billion in nonperforming loans, leases, and foreclosed properties, down from 2018's $5.2 billion. In Q 4 2018, nonperforming loans, leases, and foreclosed properties made up 0.56% of Bank of America's total loans, leases, and foreclosed properties. That percentage dropped to 0.39% as of Q 4 2019. "The company managed well through a period of transition from rising rates to lower rates over a short period of time," Bank of America CFO Paul Donofrio said. "Solid client activity in growing loans and gathering deposits helped us offset spread compression. We also are aided by diverse lines of business and operations, with noninterest income comprising nearly half of our revenue." Bank of America was recently granted a no-action letter (NAL) by the Consumer Financial Protection Bureau regarding the bank's funding arrangements with housing counseling agencies (HCAs) certified by the U.S. Department of Housing and Urban Development.

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