Economy

An expected rush of refinancings of Federal Housing Administration loans could force some mortgage servicers to take writedowns in the first and second quarters, but they have more incentive than ever to keep borrowers in the FHA program instead of letting rivals lure away their customers.

Ed DeMarco, the former chief regulator of Fannie Mae and Freddie Mac, warned that efforts under the Obama administration to expand access to credit could risk repeating mistakes that led up to the crisis.

The mobile wallet landscape has always been dynamic, and recent consolidation and upheaval have changed it once again. As older products fade or rethink their model, newcomers are bringing bold new ideas to market.

A recap of the informed opinions (and the discussions they generated) on BankThink this week, including the benefits of regulating banks by complexity rather than size and how to make the Fed's stress tests more effective.

Informing banks about the details of stress-test requirements in advance would help mitigate financial institutions' unnecessary costs. And conducting the tests on a quarterly basis would ensure that banks are unable to game the system.

Two foreign-owned banks — Santander and Deutsche Bank — failed the Fed's stress test. Two other foreign banks that failed last year, HSBC and RBS Citizens, passed this year.

Citigroup Chief Executive Michael Corbat will still have a job tomorrow (and probably several days after that). The bank's capital distribution plan was approved by the Federal Reserve on Wednesday, undoubtedly to the delight of shareholders who were surprised by last year's rejection.

JPMorgan Chase, Morgan Stanley and Goldman Sachs were each forced to resubmit their capital plans in order to pass the Fed's CCAR stress test, while Bank of America was publicly faulted for weaknesses in its capital planning process. While some saw that as a bad sign, others contended the banks appear more comfortable in pushing the limits of the stress testing process.

Policymakers should stop assuming that homeownership is always better than renting and recognize the economic circumstances that young people will live with for the foreseeable future.

Fannie Mae selected a chief internal auditor with an "inherent conflict of interest" and the mortgage giant's process for filling the position was faulty, according to a watchdog report to be released Wednesday.

The Subsidy Reserve Act would bring into the open the financial benefits of being "too big to fail" — benefits the big banks claim to be nonexistent.

Industry groups are urging the Pentagon to soften its proposed expansion of a rate cap on loans sold to service members, but banks face opposition from dozens of advocacy groups that favor tougher restrictions.

It is fitting that Apple CEO Tim Cook opened the Apple Watch presentation by showing off a Mickey Mouse watch face. The Apple Watch shares a lot more than its design sense with Disney's successful MagicBand wearables.

A recap of the informed opinions (and the discussions they generated) on BankThink this week, including the downside of public banking and the vulnerabilities unaddressed by global regulators' bail-in plan for megabanks.

Mobile technology has enabled financial services in a number of African countries, and MasterCard is working to expand this model by tying it directly to a national identity program in Egypt.

All 31 firms that took this year's Dodd-Frank Act Stress Test had enough capital to withstand the Fed's hypothetical severe economic scenario, but several of the largest banks were teetering on the edge of the leverage and risk-based capital requirements.

Michael Stegman, a top housing policy adviser, urged regulators on Thursday to bring more private capital into the market, even in the absence of legislative momentum.

The Federal Housing Finance Agency won't keep renewing initiatives like the Home Affordable Refinance Program in perpetuity, even if it is extended again before it expires in December, Director Mel Watt said Wednesday.

Some newcomers to mortgage servicing did not hedge because hedging would have increased costs. Had rates moved up, the strategy would have paid off handsomely. Instead, it worked against them.

Francisco Gonzalez, who has been warning for almost a decade of the technological transformation set to engulf the financial industry, said at the Mobile World Congress in Barcelona March 4 that his bank would define itself as a software company.