New Mortgage Rules Approved; JPMorgan's China Hiring

Receiving Wide Coverage ...

New Mortgage Rules: Two Republicans on the Securities and Exchange Commission objected to relaxed mortgage rules, but the SEC approved the new rules regardless on Wednesday, as did the Federal Reserve and the Department of Housing and Urban Development. "Today's rule-making takes the untenable housing policy that injected irrational exuberance into mortgage lending and, as a result, caused a catastrophic financial crisis and chisels that failed policy into the stone tablets of the code of federal regulations," SEC Commissioner Daniel Gallagher said in a statement. But banks want even looser restrictions, largely to reduce the risk of mortgage buybacks, the New York Times writes in an analysis piece.

Wall Street Journal

JPMorgan Chase's top executives were aware of the bank's hiring practices in China, and were warned of potential problems more than a year before U.S. government officials began investigating, the Journal reported, citing internal JPMorgan emails and documents. Executives in New York were told about complaints that had been filed against JPMorgan for its hiring of the children of prominent Chinese officials. JPMorgan executives discussed those complaints and dismissed them, and later made a proposal to change hiring practices in China. The Securities and Exchange Commission is continuing its investigation, while JPMorgan declined to comment on the Journal's latest report.

The three federal banking regulatory agencies will give more guidance to banks on the loans they make for private-equity deals, the paper reported, citing anonymous sources. The Fed, FDIC and OCC will publish a FAQ on regulations for leveraged loans. Some banks have said earlier guidance provided by the regulators was unclear. Regulators are trying to prevent banks from providing companies with too much debt. Credit Suisse recently received a letter demanding that it improve compliance in this area.

New York Times

Potential mortgage borrowers who were forced to sit on the sidelines for years are returning to the home-purchase market. So-called "boomerang buyers" are coming back, after being locked out of the market for years because of a foreclosure on their record, or a bankruptcy, or another event that dinged their credit scores. But, not all lenders are seeing the same pattern. For example, Bank of America said only about 1% of its approved loans and loan applications from January to September came from consumers with short sales or foreclosures on their credit histories.