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IN THE NEWS Delaware rank: 18 90+ Day Delinquency Rate Foreclosure Rate June 2013 3.6% Unemployment Rate 2.9% 7.3% year ago 3.9% 3.2% 7.2% year-over-year change -7.8% -8.8% 1.4% Top County KenT CounTy 90+ Day Delinquency Rate Foreclosure Rate June 2013 5.1% 3.8% year ago 5.4% 3.9% year-over-year change -5.6% -4.9% Top Core-Based Statistical Area Dover, De 90+ Day Delinquency Rate Foreclosure Rate June 2013 5.1% 3.8% year ago 5.4% 3.9% year-over-year change -5.6% -4.9% note: The 90+ day delinquecy rate is the percentage of outstanding mortgage loans that are seriously delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the June 2013 foreclosure rate. All figures are rounded to the nearest decimal. The unemployment rate reflects preliminary June 2013 figures released by the Bureau of Labor Statistics. All other data courtesy of LPS Applied Analytics. District of Columbia rank: 20 90+ Day Delinquency Rate 2.9% Foreclosure Rate June 2013 Unemployment Rate 2.4% 8.5% year ago 3.3% 2.7% 9.1% year-over-year change -12.2% -8.4% -6.6% Top County DisTriCT of Columbia 90+ Day Foreclosure Delinquency Rate Rate June 2013 2.9% 2.4% year ago 3.3% 2.7% year-over-year change -12.2% -8.4% Top Core-based statistical area WashingTon-arlingTon-alexanDria, DC-Va-mD-WV 90+ Day Foreclosure Delinquency Rate Rate June 2013 2.6% 2.1% year ago 3.3% 2.7% year-over-year change -21.9% -21.9% note: The 90+ day delinquecy rate is the percentage of outstanding mortgage loans that are seriously delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the June 2013 foreclosure rate. All figures are rounded to the nearest decimal. The unemployment rate reflects preliminary June 2013 figures released by the Bureau of Labor Statistics. All other data courtesy of LPS Applied Analytics. 114 Fannie Mae's Mark Palim Examines Rising Rates' Impact on Housing With the sudden jump in mortgage rates, market spectators are wondering what the impact might be on the housing recovery. After analyzing previous instances when mortgage rates increased significantly, Mark Palim, VP of Fannie Mae's Economic and Strategic Research Group, determined history suggests rate increases won't stop the current recovery. Instead, a rapid rise in rates is "more likely to contribute to a decrease in home purchase volume and an increase in the market share of adjustable-rate mortgages (ARMs)," wrote Palim in recent commentary posted on the D.C-based GSE's website. Over a matter of nine weeks, Freddie Mac's survey showed the 30-year fixed mortgage rate spiked 116 basis points (bps), rising from 3.35 percent in early May to 4.51 percent the week ending July 12. Over the past 10 years, there have been two other instances when mortgage rates saw significant increases, according to Palim. From October 1993 to December 1994, rates increased 237 bps to 9.20 percent, and from October 1998 to May 2000, rates rose 180 bps to 8.51 percent. When rates rose from 1993 to 1994, existing home sales dropped, though the impact on home prices was more subdued. Home price appreciation did in fact slow, but annual gains were still in positive territory. The second time around, from 1998 to 2000, the housing market reacted in a more "muted" fashion over the longer period of time, according to Palim. He explained that home sales and home price appreciation "moved sideways" rather than reversing course. Meanwhile, borrowers' appetite for ARMs increased during both periods. Palim, however, does not expect the market share for ARMs to increase as substantially this time around. "Given the limitations on ARMs under the recently promulgated Qualified Mortgage rule and the fact that rates on fixed-rate mortgages remain relatively low in historical terms, we may see a more muted increase in the ARM share of the market than in prior periods of rising rates," he said. Lawsuit Challenges CFPB's Actions, Constitutionality The Consumer Financial Protection Bureau (CFPB) faces a lawsuit that not only challenges its authority to collect personal financial information from attorneys and their paraprofessionals, but also deems the agency itself unconstitutional. Morgan Drexen, Inc., a software provider that has among its clients several bankruptcy attorneys, and Kimberly Pisinski, an attorney who uses Morgan Drexen's services, filed the lawsuit in the U.S. District Court for the District of Columbia. The lawsuit comes after the CFPB demanded Morgan Drexen release personal information of bankruptcy clients, including names, addresses, attorney notes, and income information. Morgan Drexen and Pisinski argue this information is "not public record and is protected under the attorney-client privilege." In order to obtain this information, the CFPB has "used improper and coercive tactics against plaintiffs," according to the court filing. "Plaintiffs seek an order halting these tactics and declaring CFPB's structure to be unconstitutional, and declaring unconstitutional the provisions of the Dodd-Frank Act creating and empowering the CFPB," the filing continues. In response to the allegations, the CFPB told DS News, "We believe this work is within our authority and consistent with the ordinary course of a government investigation. Our goal is to determine whether companies are complying with the law and seek appropriate remedies where that's not the case." Morgan Drexen claims it has suffered financial strain due to the CFPB's demands and says it may suffer more if the CFPB obtains the requested information. Morgan Drexen says if it is forced to release the requested personal data to the CFPB, the company might lose business with attorneys turning elsewhere for services in order to protect their clients. Furthermore, the action might cost Pisinksi and other attorneys business if their clients cease working with them because they don't feel their personal information is protected, Morgan Drexen explained. Morgan Drexen also asserts it could face legal action for releasing the information under laws regarding attorney-client privilege,

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