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84 | TH E M R EP O RT 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 GOVERNMENT Mortgages Moving Up Interest rates are on the rise across the board. A ccording to lat- est Mortgage Rate Index, released by the Federal Housing Finance Agency, the mortgage rate on previously occupied home purchases jumped 13 basis points between May and June, rising from 3.9 percent to 4 percent over the month. Rates on conventional 30-year fixed- rate mortgages for $424,100 or less also rose, ticking up 18 basis points—from 3.97 percent to 4.15 percent—for the same period. Overall, the average interest rate on all loans rose 10 basis points, going from 3.9 percent in May to 4 percent in June. The effective interest rate on all loans, which takes into account initial fees and total charges over the entire life of a mortgage loan, rose nine basis points from 4.02 percent to 4.11 percent. Rates on adjustable-rate mort- gages rose in June, jumping from 3.87 percent to 4 percent. Despite the uptick, ARM rates are still significantly lower than earlier this year; in January, they hit 4.27 percent, their highest point in the last year. The lowest point for ARM rates in the last 12 months was 3.61 percent, reached in October 2016. The average loan amount also increased between May and June, rising $3,400. Loans averaged $315,500 in May and $318,900 in June. The FHFA releases its Mortgage Rate Index on a monthly basis. It includes data on previously occupied home loans, convention loans, adjustable-rate mortgages, and all mortgage loans in general and is gathered from a sample of mortgage lenders during the last five business days of the month. It does not include FHA- or VA-backed loan data or data on multifamily properties. Fed Group Holds Confirmation Hearing The two financial-sector nominees met with tough criticism from Democrats. T he U.S. Senate Com- mittee on Banking, Housing, and Urban Affairs rolled out another confirmation hearing late July for two roles in the financial sector. Joseph Otting, former President and CEO of OneWest Bank—whose tenure at the bank also coincided with Secretary of the Treasury Stephen Mnuchin— was nominated for Comptroller of the Currency and the Hon. Randal Quarles was nominated to be a Member of the Board of Governors of the Federal Reserve System and Vice Chairman for the Supervision of the Board of Governors. As was expected, both men fielded inquiries regarding the rollback of Dodd-Frank Act rules and the overall loosening of finan- cial regulations. Such topics have been popular amongst the Senate committee as of late. Otting and Quarles received harsh questioning from Democrats, particularly from ranking member Sherrod Brown (D-Ohio), who didn't hesitate to voice his concerns in his opening remarks. "Mr. Otting's bank made money by kicking seniors out of their homes and then turned around and said the government made them do it," he said. "[And] many of [Mr. Quarles'] statements leading up to the crisis lead me to wonder whether he was asleep at the switch or willfully turning a blind eye to Wall Street abuses." Both men defended their past positions just before the crisis. Otting referenced a "false narra- tive" surrounding the actions of OneWest, while Quarles spoke of hindsight and unnamed political obstacles that forced caution when determining whether or not to push for regulatory reform. And while Otting's and Quarles' answers to the commit- tee's questions remained relatively ambiguous, citing need for further information or desire to sit down with the members and explore issues further due to the compli- cated nature of the subject, the two members agreed on numer- ous topics when pressed. First, both men thought that the bankruptcy code should be re- examined to ensure that govern- ment-backed financial institutions weren't bailed out by taxpayer dollars, as well as the fact that regulations should be simplified and more transparent with clearly defined rules. Quarles in particular voiced his opinion that the stress test should be relaxed and given to the banks prior to the exam. Neither of the nominees denied that regulations were necessary, however—only that they needed to be examined anew. "As recognized by the Treasury report, regulatory policies enacted since the financial crisis have improved the safety and soundness of the financial system," Quarles said. "But as with any complex undertaking, after the first wave of reform, and with the benefit of experience and reflection, some refinements will definitely be in order." Both men defended their past positions just before the crisis. Otting referenced a "false narrative" surrounding the actions of OneWest, while Quarles spoke of hindsight and unnamed political obstacles that forced caution when determining whether or not to push for regulatory reform.