Month: May 2021

Some Lawmakers Believe ‘Too Big to Fail’ Is Still Alive Seven Years After the Crisis

first_img Servicers Navigate the Post-Pandemic World 2 days ago Some Lawmakers Believe ‘Too Big to Fail’ Is Still Alive Seven Years After the Crisis Data Provider Black Knight to Acquire Top of Mind 2 days ago Subscribe August 17, 2015 1,095 Views Brian Honea’s writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master’s degree from Amberton University in Garland. Demand Propels Home Prices Upward 2 days ago Related Articles Sign up for DS News Daily The Best Markets For Residential Property Investors 2 days ago The Best Markets For Residential Property Investors 2 days ago Tagged with: Bailouts Senator David Vitter Senator Sherrod Brown Too Big to Fail Wall Street About Author: Brian Honea Demand Propels Home Prices Upward 2 days agocenter_img Data Provider Black Knight to Acquire Top of Mind 2 days ago Two years ago, U.S. Senators Sherrod Brown (D-Ohio) and David Vitter (R-Louisiana) introduced a bipartisan bill in an attempt to end taxpayer bailouts. In May 2015, Vitter and Senator Elizabeth Warren (D-Massachusetts) authored similar bipartisan legislation, the Bailout Prevention Act, aimed at ending “Too Big to Fail.”Three weeks after the Vitter-Warren bill was introduced in the Senate, Reps. Scott Garrett (R-New Jersey) and Mike Capuano (D-Massachusetts) introduced a similar bill in the House that would limit the Fed’s ability to bail out big banks in times of a crisis.Some lawmakers are skeptical that Too Big to Fail has ended seven years after the crisis despite claims from some high-level government officials such as Treasury Secretary Jacob Lew that it has ended. The Government Accountability Office (GAO) released the results of a comprehensive study in July 2014 indicating that the larger national banks have not only received assistance from government bailout programs, but they enjoy a taxpayer backstop that community and regional banks do not, and that advantage widens during an economic crisis. The report was requested by Vitter and Brown two years earlier.“(The GAO report) confirms that in times of crisis, the largest megabanks receive an advantage over Main Street financial institutions,” Vitter and Brown said in a joint statement. “Wall Street lobbyists may try to spin that the advantage has lessened. But if the Army Corps of Engineers came out with study that said a levee system works pretty well when it’s sunny – but couldn’t be trusted in a hurricane – we would take that as evidence we need to act. We can fix Too Big to Fail by passing our bipartisan legislation which would ensure that Wall Street megabanks – instead of taxpayers – have adequate capital to cover their losses in a crisis.”The GAO report suggested that under more normal credit conditions or if there was another financial crisis, investors would flock to the Too Big to Fail institutions. The report also confirmed that the large Wall Street banks enjoy roughly the same advantages as they did seven years ago, suggesting a lack of progress in ending Too Big to Fail.Despite the findings of the GAO study and recent claims by lawmakers, Department of Treasury Secretary Jacob Lew said in an address at the Brookings Institution in July 2015 that companies designated as “systemically important financial institutions” (SIFIs) are held to higher standards for taxpayer protection, and that the law ended Too Big to Fail.”To keep taxpayers from ever having to step in to save a financial firm again, Wall Street Reform ended ‘too big to fail’ as a matter of law,” Lew told the audience at the Brookings Institution. “In addition, regulators now have modern, commonsense tools to protect taxpayers.  For example, the FSOC can designate large institutions as ‘systematically important’ and hold them to higher standards. Also, in the event of a crisis or a bankruptcy, regulators can seize large financial institutions and wind them down in an orderly way.”In July 2015, the House Financial Services Financial Institutions and Consumer Credit Subcommittee held a hearing to discuss the criteria for designating a company as a SIFI, criticizing the $50 billion asset threshold required by Dodd-Frank. Some members of that Subcommittee said in the hearing they believe that Dodd-Frank is codifying Too Big to Fail by continuing to designate companies as SIFIs. Also in July, the Senate Subcommittee on Financial Institutions and Consumer Protection held a hearing, to discuss strategies that would end to end Too Big to Fail.”It’s no secret that too big to fail is still around. If another financial crisis happened tomorrow–and that’s still a real risk–nobody doubts that megabanks would be calling on the federal government to bail them out again,” Vitter said in May when the Bailout Prevention Act was introduced. “Our legislation makes common sense reforms to the Fed’s emergency lending powers to protect taxpayers the next time the megabanks lead us into another crisis.” in Daily Dose, Featured, Government, News Home / Daily Dose / Some Lawmakers Believe ‘Too Big to Fail’ Is Still Alive Seven Years After the Crisis The Week Ahead: Nearing the Forbearance Exit 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Bailouts Senator David Vitter Senator Sherrod Brown Too Big to Fail Wall Street 2015-08-17 Brian Honea Servicers Navigate the Post-Pandemic World 2 days ago Previous: Delinquency Rate Continues Rapid Decline Driven by Higher Quality Originations Next: ‘Foreclosure Predicament Persists’ in New York  Print This Post Share Save Governmental Measures Target Expanded Access to Affordable Housing 2 days agolast_img read more


May 31, 2021 0

Regulators Announce Steps to Reduce Regulatory Burden on Community Banks

first_img in Daily Dose, Featured, Government, News Demand Propels Home Prices Upward 2 days ago About Author: Brian Honea Community Banks Federal Financial Institutions Examination Council FFIEC Regulatory Burden 2015-09-08 Brian Honea Brian Honea’s writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master’s degree from Amberton University in Garland. The Best Markets For Residential Property Investors 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago The Federal Financial Institutions Examination Council (FFIEC) announced on Tuesday the steps regulators are taking to reduce the reporting burden for community banks by streamlining and simplifying the regulatory reporting process.The objectives of the initiative to reduce the regulatory burden on community banks are consistent with the feedback the FFIEC has received as part of the regulatory review conducted under the Economic Growth and Regulatory Paperwork Reduction Act (EGPRRA) of 1996, according to the FFIEC.The federal banking regulatory agencies are seeking comment on proposals they have made to eliminate or revise several data items on Consolidated Reports of Condition and Income (Call Reports) submitted quarterly by banks and savings associations. These reports include data regulators use to monitor each institution’s safety and soundness, performance, and risk profile and to target examination resources and support off-site examinations, according to FFIEC. Credit unions would not be affected by the proposed changes, which would simplify reporting requirements for banks and savings associations.The FFIEC is seeking to find a balance between reporting burden for community banks/savings associations against regulators’ need for reliable data to ensure that those institutions are meeting their communities’ needs and operating in a safe and sound manner.In addition to the proposed changes to the reporting requirements, the FFIEC is focusing on four other areas to reduce the burden for community banks and savings associations:A sooner review (required by law) of the continued appropriateness of the data items collected in the Call Report;Evaluating the feasibility and merits of creating a streamlined version of the quarterly Call Report for community institutions;Identifying additional opportunities to reduce reporting burden by revising or redefining Call Report data items, through continuing dialogue with community institutions;Explaining upcoming reporting changes and clarifying technical reporting requirements to banks and savings associations via teleconferences and webinarsComments on Tuesday’s proposed changes to data reporting requirements for banks and savings associations will be accepted within 60 days of the publication of the proposed changes in the Federal Register. The individual reporting changes are proposed to take effect with the Call Reports for December 2015 or March 2016, according to FFIEC.The FFIEC consists of five regulatory agencies: The Consumer Financial Protection Bureau, the Federal Deposit Insurance Corp., the Federal Reserve, the Office of the Comptroller of the Currency, and the National Credit Union Administration. Data Provider Black Knight to Acquire Top of Mind 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago  Print This Post Home / Daily Dose / Regulators Announce Steps to Reduce Regulatory Burden on Community Banks Data Provider Black Knight to Acquire Top of Mind 2 days agocenter_img Share Save Previous: Goldman Sachs Wins Class Action Lawsuit Filed by Investors Over Toxic MBS Next: DS News Webcast: Wednesday 9/9/2015 Regulators Announce Steps to Reduce Regulatory Burden on Community Banks Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Related Articles Demand Propels Home Prices Upward 2 days ago The Best Markets For Residential Property Investors 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Tagged with: Community Banks Federal Financial Institutions Examination Council FFIEC Regulatory Burden September 8, 2015 949 Views Sign up for DS News Daily Subscribelast_img read more


May 31, 2021 0

Judge Seeks More on GSE Profit Sweep

first_img The Best Markets For Residential Property Investors 2 days ago Sign up for DS News Daily Brian Honea’s writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master’s degree from Amberton University in Garland. Home / Daily Dose / Judge Seeks More on GSE Profit Sweep Demand Propels Home Prices Upward 2 days ago About Author: Brian Honea  Print This Post Previous: Plywood vs. Clearboard: What is the Solution? Next: DS News Webcast: Tuesday 5/31/2016 Servicers Navigate the Post-Pandemic World 2 days ago Share Save Tagged with: GSE Profit Sweep Lawsuits Net Worth Sweep May 30, 2016 3,196 Views Data Provider Black Knight to Acquire Top of Mind 2 days ago GSE Profit Sweep Lawsuits Net Worth Sweep 2016-05-30 Brian Honeacenter_img Related Articles in Daily Dose, Featured, Government, News The Best Markets For Residential Property Investors 2 days ago Judge Seeks More on GSE Profit Sweep Demand Propels Home Prices Upward 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Depositions unsealed last month showed that key officials at the GSEs may have known they were about to be profitable in 2012. Now the judge wants to see more.A federal judge ordered the unsealing of seven previously sealed depositions related to the sweeping of GSE profits into Treasury (the Net Worth Sweep) with results that sparked an industry-wide discussion over whether the government knew that the GSEs were about to become profitable in 2012 at the time the Net Worth Sweep was enacted.Now Judge Margaret Sweeney in the U.S. Court of Federal Claims, who is presiding over Fairholme Funds’ lawsuit against the government over the Net Worth Sweep, has stated that she wants to review all the documents that the government has kept private to this point regarding any litigation over the government’s conservatorship of Fannie Mae and Freddie Mac, according to a blog post from Investors Unite is a coalition of private investors committed to the preservation of shareholder rights for all invested in the GSEs.Fairholme Funds, a Florida-based mutual fund that is one of the biggest GSE investors, sued the government in 2013 over the profit sweep, and the suit is still pending. Fairholme’s suit is one of approximately two dozen lawsuits filed against the government by shareholders of Fannie Mae and Freddie Mac over the Net Worth Sweep.“Judge Sweeney made clear in unsealing seven documents last month that sparing public servants from embarrassment is not a reason to hide the operations of government from the public,” the blog post on Investors United reads. “Indeed, these recent revelations go to more serious issues at the heart of litigation over the Sweep—the rule of law and transparency in government.”The question of whether or not the government was invoking executive privilege by keeping documents related to the Net Worth Sweep sealed was first brought up by U.S. Sen. Chuck Grassley (R-Iowa) in April 2015. The topic was recently revisited in a white paper by law professorSaikrishna Bangalore Prakash.“Indeed, these recent revelations go to more serious issues at the heart of litigation over the Sweep—the rule of law and transparency in government.”Investors UniteAccording to Investors Unite, the documents released in the last two weeks contain even more hints that government officials knew about the pending profitability of the GSEs when the bailout agreement was amended in August 2012. The blog post cites Jim Parrott, who in 2012 was a senior adviser in the White House on housing policy, sending an email to senior officials at Treasury the day the Net Worth Sweep was announced stating that diverting Fannie’s and Freddie’s profits would eliminate “the possibility that they ever go (pretend) private again.”Lawyers for the government have claimed that the GSEs were in the midst of a “death spiral” in the years immediately following their combined $187.5 bailout in 2008, and that the Net Worth Sweep was enacted in order to protect taxpayers. Investors Unite notes, however, that the newly unsealed documents point out that in 2012 just before the Net Worth Sweep began, Fannie Mae executives characterized the next eight years as the “the golden years of GSE profitability.”Indeed, 2012 was the first year of profitability for the GSEs after the bailout and they have remained profitable since (though Freddie Mac has taken a loss in two of the last three quarters). Under the pre-August 2012 terms of the bailout agreement, the GSEs were required to pay only a 10 percent dividend on their draw from Treasury.The documents that Sweeney has ordered unsealed in the last two weeks can be viewed by clicking here. Governmental Measures Target Expanded Access to Affordable Housing 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago Subscribelast_img read more


May 31, 2021 0

Harvey Survivors: HUD’s Top Priority

first_imgSign up for DS News Daily Data Provider Black Knight to Acquire Top of Mind 2 days ago Home / Daily Dose / Harvey Survivors: HUD’s Top Priority Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Subscribe The U.S. Department of Housing and Urban Development (HUD) released short, intermediate, and long-term efforts that are currently underway for Hurricane Harvey survivors.As HUD continues to keep the lives and safety of all those affected by the devastation as its first priority, the Federal Department Emergency Management Agency (FEMA) and other federal, state, local, and tribal partners are all beginning to direct efforts towards recovery.According to the release, “as part of FEMA’s comprehensive approach to meet the post-disaster intermediate housing needs caused by Hurricane Harvey, FEMA is considering all available housing options for survivors.”In addition to current services to aid disaster survivors, HUD is implementing several housing activities. The short term include providing immediate housing for those who are eligible for FEMA assistance, FEMA pays the hotels and motels directly for this.Faith-based agencies such as American Red Cross, AmeriCorps and other voluntary organizations are helping to clean out flood damage to homes, as well as providing emergency shelter to survivors. HUD is also immediately assisting those displaced from public housing and multifamily subsidized rental units. The FHA via Freddie Mac and Fannie Mae is providing a 90-day moratorium on foreclosures and forbearance on foreclosures.In the long term, HUD will provide FHA insurance to those affected by the immediate aftermath of Hurricane Harvey. Borrowers could receive up to 100 percent financing to rebuild or rebuy.You can read more about all the efforts HUD is taking to aid Harvey victims here. The Best Markets For Residential Property Investors 2 days ago in Daily Dose, Featured, Journal, News Tagged with: HOUSING HUD mortgage The Week Ahead: Nearing the Forbearance Exit 2 days ago September 5, 2017 2,907 Views About Author: Nicole Casperson Data Provider Black Knight to Acquire Top of Mind 2 days ago Previous: How Could Tax Reform Hurt the Housing Market? Next: Fischer Resignation Leaves Another Empty Seat at the Fedcenter_img The Best Markets For Residential Property Investors 2 days ago Related Articles Servicers Navigate the Post-Pandemic World 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago HOUSING HUD mortgage 2017-09-05 Nicole Casperson Demand Propels Home Prices Upward 2 days ago Harvey Survivors: HUD’s Top Priority Demand Propels Home Prices Upward 2 days ago Share Save Servicers Navigate the Post-Pandemic World 2 days ago  Print This Post Nicole Casperson is the Associate Editor of DS News and MReport. She graduated from Texas Tech University where she received her M.A. in Mass Communications and her B.A. in Journalism. Casperson previously worked as a graduate teaching instructor at Texas Tech’s College of Media and Communications. Her thesis will be published by the International Communication Association this fall. To contact Casperson, e-mail: [email protected] last_img read more


May 31, 2021 0

Housing Bubble 2.0?

first_imgSubscribe Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Housing Bubble 2.0? Home / Daily Dose / Housing Bubble 2.0? Related Articles December 17, 2017 11,937 Views Sign up for DS News Daily Servicers Navigate the Post-Pandemic World 2 days ago Tagged with: Great Recession HOUSING Housing Bubble mortgage peter wallison Subprime Lending  Print This Post Nicole Casperson is the Associate Editor of DS News and MReport. She graduated from Texas Tech University where she received her M.A. in Mass Communications and her B.A. in Journalism. Casperson previously worked as a graduate teaching instructor at Texas Tech’s College of Media and Communications. Her thesis will be published by the International Communication Association this fall. To contact Casperson, e-mail: [email protected] Data Provider Black Knight to Acquire Top of Mind 2 days ago The Best Markets For Residential Property Investors 2 days ago Editor’s note: This story was originally featured in the December issue of DS News, out now. In 2008, the economy experienced the historical fall of the housing market and the resulting financial crisis—an epic phenomenon that some feared would grow to rival the Great Depression of the 1930s. Nearly a decade later, hindsight is an invaluable tool for examining what caused the housing bubble to burst, how it has affected the market in the years since, and whether conditions are ripe for another housing bubble.In an Insight blog post published in November, Freddie Mac laid out three primary warning signs that would precede a new housing bubble. One is skyrocketing home prices, a circumstance on display in markets across the country. However, Freddie insists that the central role of easy credit availability is the oxygen that keeps a bubble alive, and if that oxygen is cut off, the bubble ceases to exist. A second warning sign is a shortage of inventory, a problem currently affecting the industry. Freddie’s third warning sign seems obvious—the bubble actually bursts. “If it doesn’t burst, it wasn’t a bubble,” the report noted.With home prices rising, inventory shortages common, and CoreLogic estimating that nearly half of the nation’s largest 50 markets are overvalued, this is seemingly a time for the industry to mind the old adage about those that do not learn from history are doomed to repeat it. However, the housing market shows numbers that appear steady. Nor do economic conditions line up perfectly with 2008 when it comes to factors such as unemployment, credit availability, workforce numbers, or wages.Should the current housing setting ease everyone’s concerns, or does the U.S. economy need to proceed with caution? At what point in the future could the market face similar problems—assuming it will? The Beginning of the EndSubprime lending, along with irresponsible lending practices, is famous for being the reason for the housing bubble. In 2006, $600 billion of subprime loans were originated, most of which were securitized. That year, subprime lending accounted for 23.5 percent of all mortgage originations, according to the Financial Crisis Inquiry Commission report by Stanford Law School.However, to understand the full scope of the housing and economic collapse of 2008, one has to look back even further. While the crisis occurred in 2008, the dominoes for that collapse were set in place long before the bubble actually burst. In 1992, Congress and the President required government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, to meet a certain quota in purchasing mortgages from banks and nonbank lenders. This quota required that a certain percentage of the mortgages the GSEs bought had to be approved for borrowers who were at or below the median income in the places where they lived. Such mortgages were termed subprime mortgages. The GSEs’ quota was 30 percent at the beginning, but the Department of Housing and Urban Development (HUD) was eventually given authority to adjust that number, and over time, HUD increased it. By 2008, just before the financial crisis, 56 percent of the loans the GSEs bought had to be made to people who were at or below median income. However, it is difficult to find prime mortgages when buying mortgages that are made to people below median income.Due to these challenges, Fannie and Freddie had to make a change. Peter J. Wallison was former White House Counsel under President Ronald Reagan and served as General Counsel of the U.S. Treasury Department from 1981 to 1985. Currently an Arthur F. Burns Fellow in Financial Policy Studies at the American Enterprise Institute, Wallison explains that, under this quota, Fannie and Freddie had to reduce their underwriting standards. “In 1992, before these affordable housing goals were actually adopted, Fannie and Freddie were famous for one thing, and that is they only bought prime mortgages,” Wallison said. “But as the affordable housing goals increased over time, they had to start reducing their underwriting standards, and they did.” By the late 1990s, the enterprises were accepting mortgages with only 3 percent down payments, and by the year 2000, they were accepting mortgages with no down payment at all. When a borrower has a low down payment for a mortgage, a couple of things occur. First, the person buying the home doesn’t have to place much initial money in the home. Now what does that do? This pushes up home prices, because more money must be invested by lenders in their houses. This means for first-time homebuyers putting down a 5 percent down payment and borrowing more than is affordable, the situation becomes much riskier. But when prices in markets with traditionally lower median home prices rise, it forces prices up across the board. So, in the mid-1990s, the U.S. began to experience a housing price bubble. Housing prices were rising at a high rate, about 10 percent per year. According to Wallison, houses became exceedingly expensive, as more and more people, even those who could otherwise have bought homes with a prime mortgage, had to borrow much more in order to secure homes. Both those below and above median income were suddenly having to borrow more to buy these over inflated homes. In 2008, the market reached the point where housing prices were so expensive that homes were no longer affordable, no matter how much money a buyer could borrow. Due to the gradual deterioration in loan quality after 1992, more than half of all mortgages in the U.S. were subprime by 2008—at 31 million loans. Therefore, the price for homes flattened out. Homeowners who were having trouble meeting their mortgage obligations could no longer refinance their mortgage so they could make their payments. They had to default—and when the market tanked, those homes weren’t worth as much. “If you were to see a chart of what housing prices look like now, their increase over the last six months, compared to where we were in the mid-1990s, you’d see that the lines are just about conjoined,” Wallison said. “Housing prices are beginning to rise very fast for exactly the same reason.”Current Conditions Today, the continuous market narrative of tight inventory, high home prices, and low mortgage rates has economists debating the potential for a second housing bubble. While there is skepticism, are all the right elements present to form another national bubble? Economists have studied booms and busts from a historical perspective for many years, such as the Dutch tulip mania of the 17th century or Great Britain’s South Sea Bubble of the 18th century. The common denominator among these events is the disconnect between supply and demand, according to George Ratiu, the National Association of Realtors’ Managing Director of Housing and Commercial Research. “Looking at the housing markets of 2005-2006, we had a disconnect between the level of home price appreciation and the underlying financing of real estate, which led to the housing crash. In 2017, we are in a very different environment, both economically and from a market perspective,” said Ratiu. The economy has been advancing at a steady pace for several years; employment gains have boosted both wages and demand. Ratiu believes that current price appreciation trends are driven by strong demand being coupled by insufficient supply. On the financing side, the market is also in a different space, where lenders are much more stringent in underwriting mortgages compared to before. So what exactly are the ingredients to a potential bubble? According to Dr. Eddie Seiler, Chief Housing Economist at Summit Consulting, there are three characteristics to look out for.  “The first one was demand, which is more economics, but the other two are more related to psychology,” Seiler said. “In the past bubble, there was a belief that house prices would keep going up and up, and that led to a lot of very lax lending, so there was a lot of speculation. So, while we have a lot of demand at the moment, I think there’s less speculation and less exuberance.” Seiler said. According to Frank Nothaft, CoreLogic’s Chief Economist, today’s home prices are high relative to income and to rent in many markets, just as they were in 2006. However, that’s where he believes the similarity ends. “For one, interest rates, and capitalization rates, are much lower, so a given income, or rent stream, is consistent with somewhat higher prices,” Nothaft said. “Second, no- and low-doc lending, subprime, and no-down payment lending facilitated by second liens, all of which were common in 2006, have largely vanished from today’s market. Third, the speculative ‘flipping mania’ of 2006 is absent from most metro areas.”Tian Liu, Chief Economist of Genworth Mortgage Insurance, also recognizes similarities between the past and the present. Liu says the economy is at the mature stage of an economic expansion, just like during the 2005-2007 period. “The job market is at full employment, with the unemployment rate under 4.5 percent,” Liu said. “During the 2005-2007 period, the unemployment rate was at a similar level.  In the current cycle, the Federal Reserve began to tighten monetary policy in December 2016.  In the last cycle, it began to tighten in the middle of 2004.” The market has also been in the middle of a housing expansion over the past few years, just as in the crisis period. Home prices were gaining at 9 to 10 percent per year during 2004 and 2005, versus 5 to 6 percent in the last two years. In both cases, home-price gains accelerated. Homebuilding was then, and is now, also on the rise. In the mortgage-lending industry, lending standards have been loosening, although from very different starting points. Today, housing is undersupplied with new construction still well below historically normal levels. Home prices are back to the previous peak in nominal terms, but still below the previous peak after adjusting for inflation.  Current mortgage rates are around 200 basis points below their 2005-2007 levels, meaning that housing is more affordable today. Home sales and purchase origination levels are also well below previous peaks. Borrowers are well qualified, with average FICO scores of 745 for Fannie Mae versus fewer than 720 in 2006 to 2007. The nature of housing demand is different as well, with more potential homeowners and far fewer speculators in the housing market compared to the 2005-2007 period. Liu’s research suggests that first-time homebuyers represented 37 percent of sales in the single-family housing market in 2016 versus 30 percent between 2005-2007.Rick Sharga, EVP of Ten-X, believes that what caused the last housing bubble wasn’t an overheated economy—it was an overheated housing market, fueled by bad lending practices and exacerbated by an almost insatiable appetite for mortgage-backed securities and exotic derivative products on Wall Street. This enabled lenders to sell off entire portfolios of bad loans to institutional investors. Borrowers who should never have qualified or who simply weren’t financially ready for homeownership were given extremely risky loans—often with 100 percent financing, adjustable “teaser” rates, and even negative amortization—and sold overpriced homes.“When home appreciation stopped, interest rates went up, and loans adjusted, the whole house of cards came tumbling down,” Sharga said. According to Sharga, none of those conditions exist today in a market where lenders are taking on virtually no risk at all. Only the most perfectly qualified borrowers can even get a mortgage loan today, and the Ability-to-Repay and QM rules established by the Consumer Financial Protection Bureau have set guidelines designed to make loans much safer.While economists may not foresee a housing bubble on a national level, according to Nothaft, bubbles may occur in localized markets, as they have in the past, if the right elements are at play. “There are at least three features to look out for,” Nothaft said. “The first I would call the ‘affordability flag,’ that is, we should expect that the typical monthly mortgage payment, monthly rent, and monthly family income be ‘in balance’.” In other words, if home prices rose so high that the mortgage payment is much greater than rent and takes a much larger percentage of income than usual, it will be hard to sustain such elevated prices. Speculative market pressures also factor into the equation. For example, if there is a rise in investor purchases and sales, especially by short-term ‘flippers,’ then that’s a warning sign. Third, one should look for signs of increasing fraud risk, such as suspicious transactions or errors on loan applications.According to Liu, the city that stands out is Seattle, Washington, where prices are growing at 13 percent year-over-year. “It is the only city where home prices are growing at 10 percent or more,” Liu said. “That kind of home price growth will be hard to sustain, and it tells us that the city is experiencing growing pains.”Future of the Market: Proceeding with CautionGeorge Orwell, English author and journalist, wrote in his dystopian novel 1984, “Who controls the past controls the future.” That’s the way Americans must progress in response to current market trends. Despite the need for caution from what the industry has learned in the past, Seiler said he believes in “economic fortitude where people are being very cautious.”Seiler continued, “When I say people, I mean builders as well, are being cautious. From the time for them to acquire land to getting building permits, to actually building the property. Here, they can build single-family homes in six to twelve months, but I think there’s a lot of caution out there and not enough activity.”As prices increase, there’s a good opportunity for builders to make strong profits, so construction will enter the market. It takes time, and even if people overcome their memories of the Great Recession, it will take time to actually come back in and build.Philip Davis, Founder of financial investments company PhilStockWorld, says the most alarming aspect of the future involves the packed portion of home prices and high rising property taxes.“It’s gone out of control, and that’s really throwing everything off, because we always talk about affordability,” Davis said. Davis says that both rising tax rates and the increase in what people actually have to pay to be in a home are pricing people out of the market today.“It’s something someone said to me many years ago that was the truest thing I ever heard in real estate, [that] people don’t buy a home, they buy a mortgage,” Davis said. “But at the time, when he said that to me, taxes weren’t really an issue.” While the housing market looks good and the banks are pretty solid at the moment, it is easy to put aside fears of another housing bubble. However, the banks have more capital than they had before, and they are buying mortgages. “But they’re only buying very good mortgages,” Wallison said. “They’re not buying bad mortgages and holding them on their balance sheets. The bad mortgages are being sold to Fannie Mae, Freddie Mac, and the FHA.” That’s great news for those looking at the market from an economic point of view. But Wallison feels very strongly about the need for the government to implement better policies. “If we had good underwriting standards, we would have the same homeownership rate,” said Wallison, “and, we wouldn’t have the danger of a crisis.” Growth in the U.S. has averaged less than 2 percent, according to Wallison—representing the slowest recovery from a recession and a financial problem like the economy had in 2008, where that was followed by a severe recession. “But in the eight years after that, we usually have a very sharp recovery,” Wallison said. “We didn’t.”We may not be foreseeing a housing bubble 2.0 in the immediate future, but understanding the facts and proceeding with caution is crucial. Learning from the mistakes of the previous bubble and working to avoid those same missteps could prove key to creating a more stable future for the housing market and the U.S. economy. center_img Demand Propels Home Prices Upward 2 days ago Previous: House and Senate Republicans Release Joint Tax Legislation Next: The Week Ahead: What’s on the Horizon for Existing Home Sales? The Week Ahead: Nearing the Forbearance Exit 2 days ago About Author: Nicole Casperson Data Provider Black Knight to Acquire Top of Mind 2 days ago Demand Propels Home Prices Upward 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Share Save The Best Markets For Residential Property Investors 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Great Recession HOUSING Housing Bubble mortgage peter wallison Subprime Lending 2017-12-17 Nicole Casperson in Daily Dose, Featured, Market Studies, News, Print Featureslast_img read more


May 31, 2021 0

HUD’s Carson: “We Simply Need to Do Better.”

first_img March 15, 2018 3,077 Views Tagged with: Ben Carson Department of Housing and Urban Development HUD Irving Dennis David Wharton, Managing Editor at the Five Star Institute, is a graduate of the University of Texas at Arlington, where he received his B.A. in English and minored in Journalism. Wharton has over 16 years’ experience in journalism and previously worked at Thomson Reuters, a multinational mass media and information firm, as Associate Content Editor, focusing on producing media content related to tax and accounting principles and government rules and regulations for accounting professionals. Wharton has an extensive and diversified portfolio of freelance material, with published contributions in both online and print media publications. Wharton and his family currently reside in Arlington, Texas. He can be reached at [email protected] The Best Markets For Residential Property Investors 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago On Thursday, HUD Secretary Dr. Ben Carson announced new measures to protect the financial integrity of the department.”We simply need to do better. An updated system of internal controls will provide our agency with greater certainty that the dollars we spend are spent in a manner that satisfies all laws and regulations, and most importantly, the American people. We will approach this as any business would by increasing transparency and accountability. In the end, we will also support a culture that respects the fact that HUD funds belong to the public,” said Carson.According to Carson, these changes will work toward correcting lax internal processes and controls and the Department. Carson tasked HUD’s newly appointed CFO, Irving Dennis, to put together a plan and an internal task force focused on combating waste, fraud, and abuse.A former partner at Ernst & Young, Dennis said, “I’m excited to apply a business acumen to a task that is necessary for us as an agency. These new internal controls and management practices must be embedded into our organization to help prevent misuse and misappropriation of assets. The goal is to create more robust processes and systems of checks and balances to ensure our expenditures not only meet all of our requirements but pass a common sense ‘smell test.’”HUD’s media statement breaks down the proposed changes into four areas of focus:Agency-wide Governance: Implementing an Agency-wide governance structure that allows for more oversight, transparency, monitoring, and accountability;Finance Transformation: Developing a plan to restore discipline and accountability in the financial and reporting systems across the Agency.Grant Modernization: Developing a holistic grant modernization plan to improve grant processes and reporting, including improved IT systems.Process Improvement: Promoting a HUD culture focused on documented and repeatable process with a focus on transparency and cost reasonableness.HUD’s media statement also notes that the Office of the CFO is working with HUD’s  Office of the General Counsel to review processes throughout the department “to ensure HUD is within all guidelines and utilizing resources effectively.” Demand Propels Home Prices Upward 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago HUD’s Carson: “We Simply Need to Do Better.” Previous: Delinquencies on the Decline Next: Facilitating Growth in a Changing Industry Landscape in Daily Dose, Featured, Government, Journal, News  Print This Post Sign up for DS News Daily Ben Carson Department of Housing and Urban Development HUD Irving Dennis 2018-03-15 David Whartoncenter_img Servicers Navigate the Post-Pandemic World 2 days ago The Best Markets For Residential Property Investors 2 days ago Related Articles Servicers Navigate the Post-Pandemic World 2 days ago Share Save Demand Propels Home Prices Upward 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Subscribe About Author: David Wharton Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Home / Daily Dose / HUD’s Carson: “We Simply Need to Do Better.” Governmental Measures Target Expanded Access to Affordable Housing 2 days agolast_img read more


May 31, 2021 0

Sen. Schumer Calls for Flood Insurance Reform

first_img Chuck Schumer FEMA Flood Insurance floods hurricanes National Flood Insurance Program Natural Disasters nfip 2018-05-21 David Wharton  Print This Post May 21, 2018 3,399 Views in Daily Dose, Featured, Government, Journal, Loss Mitigation, News, Servicing Previous: Homeowners and Buyers More in Sync Next: Mortgage and LGBT Leaders Collaborate for Diversity in Miami Demand Propels Home Prices Upward 2 days ago Home / Daily Dose / Sen. Schumer Calls for Flood Insurance Reform The Best Markets For Residential Property Investors 2 days ago With the beginning of hurricane season mere weeks away, Senate Minority Leader Chuck Schumer has announced an “all-out push” to convince Congress to extend and reform the nation’s flood insurance program.Schumer shone a spotlight on the issue Monday during a news conference in the Long Island village of Lindenhurst. “Flood insurance is vital to over 150,000 Long Islanders,” Schumer told the crowd, “so, A, we need to renew it and, B, we need to straighten it out so the insurance companies and the federal government doesn’t take advantage of these homeowners.”The National Flood Insurance Program (NFIP), which provides flood coverage for more than 22,000 American communities, was originally set to expire last fall. Although the House of Representatives passed a reform bill entitled the 21st Century Flood Reform Act, reform for the program then stalled in the Senate. Since then, the Senate has okayed a series of extensions for the program. The most recent extension came on March 23, included as part of the $1.3 trillion omnibus spending bill signed by President Trump. That reauthorized the program through July 31, 2018.Following the devastating effects of Hurricanes Harvey, Irma, Jose, and Maria, the NFIP was—and still is—deeply in debt. Congress has already agreed to forgive $16 billion in debt from the program.As reported by Newsday, Sen. Schumer (D-New York) told the Long Island crowd he was working on NFIP reforms alongside Senate Committee on Banking, Housing, and Urban Affairs Chairman Mike Crapo (R-Idaho) and Ranking Member Sherrod Brown (D-Ohio). Schumer said that the proposed reforms should include items such as updated flood maps and stabilized insurance rates for homeowners. An August 2017 CoreLogic study determined that more than half of the Houston properties at High or Moderate risk of flooding were not in designated flood zones.According to the National Centers for Environmental Information (NCEI), natural disasters caused more than $300 billion in damages during 2017, a year that encompassed several damaging hurricanes, as well as wildfires and mudslides in California. The $309.5 billion total for 2017 set a new record, easily surpassing the previous U.S. annual record cost of $219.2 billion from 2005, which included Hurricanes Dennis, Katrina, Rita, and Wilma. Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Related Articles Governmental Measures Target Expanded Access to Affordable Housing 2 days ago About Author: David Wharton Share Savecenter_img Data Provider Black Knight to Acquire Top of Mind 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago David Wharton, Managing Editor at the Five Star Institute, is a graduate of the University of Texas at Arlington, where he received his B.A. in English and minored in Journalism. Wharton has over 16 years’ experience in journalism and previously worked at Thomson Reuters, a multinational mass media and information firm, as Associate Content Editor, focusing on producing media content related to tax and accounting principles and government rules and regulations for accounting professionals. Wharton has an extensive and diversified portfolio of freelance material, with published contributions in both online and print media publications. Wharton and his family currently reside in Arlington, Texas. He can be reached at [email protected] Tagged with: Chuck Schumer FEMA Flood Insurance floods hurricanes National Flood Insurance Program Natural Disasters nfip The Best Markets For Residential Property Investors 2 days ago Demand Propels Home Prices Upward 2 days ago Sign up for DS News Daily Sen. Schumer Calls for Flood Insurance Reform The Week Ahead: Nearing the Forbearance Exit 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Subscribelast_img read more


May 31, 2021 0

Boston trip approved by council after adjournment

first_img Twitter Three factors driving Donegal housing market – Robinson Newsx Adverts Facebook Almost 10,000 appointments cancelled in Saolta Hospital Group this week Boston trip approved by council after adjournment Calls for maternity restrictions to be lifted at LUH WhatsApp RELATED ARTICLESMORE FROM AUTHOR Facebook Donegal County Council’s reconvened monthly meeting was adjourned for a time today after repeated interjections from Cllr Frank Mc Brearty. His comments centred on his opposition to the council paying for two members and the manager to attend a number of functions.During the County Manager’s report, it emerged that the Mayor of Donegal has been invited to Boston to be the keynote speaker at the Irish Echo Golden Bridges Award ceremony next month.In his report, Manager Seamus Neely said the awards are built around an initiative to promote ties between the US, Donegal and Derry. A business breakfast has also been arranged with Irish American Business Leaders, as have meetings with representitives from the the Massachusetts State House and the University of Massachusetts.Cllr Ciaran Brogan, seconded by Cllr Noel Mc Bride proposed that the Mayor Cllr Cora Harvey go, along with the manager and the County Development Board Chairperson Cllr Dessie Larkin.At this point, Cllr Frank Mc Brearty Jnr interjected, saying he would not be in favour of using tax payers money for such a trip. He then clashed with a number of members, raising Udaras na Gaeltachta expenses with Cllrs Padraig O’Dochairtaigh and Seamus O’Domhnaill. “The day of junkets and expenses is over” interjected Cllr Mc Brearty.When he refused to stop, Cllr Harvey adjoiurned the meeting for an hour.When the meeting reconvened, the trip was approved without debate or comment. LUH system challenged by however, work to reduce risk to patients ongoing – Dr Hamilton center_img Pinterest WhatsApp Google+ Pinterest Business Matters Ep 45 – Boyd Robinson, Annette Houston & Michael Margey Google+ Guidelines for reopening of hospitality sector published By News Highland – October 11, 2010 Previous articlePublic meeting to discuss mental health stigmaNext articleBoston trip will not be a junket – Mayor News Highland Twitterlast_img read more


May 27, 2021 0

Donegal Cllr calls for more Gardai on streets after spate of break-ins

first_img Man arrested in Derry on suspicion of drugs and criminal property offences released Almost 10,000 appointments cancelled in Saolta Hospital Group this week RELATED ARTICLESMORE FROM AUTHOR A Donegal County Cllr has raised concerns about policing along the border after there was a spate of break ins over the weekend.There were a number of incidents reported in and around Manorcunningham and Newtowncunningham.A number of vehicles and sheds were broken into along a stretch of road at Ballybegley. A handbag was stolen from a car, a number of bicycles were stolen, and one man had his jeep stolen.Local Cllr Paul Canning says a more visible Garda presence is needed:[podcast]http://www.highlandradio.com/wp-content/uploads/2013/11/pcann.mp3[/podcast] Donegal Cllr calls for more Gardai on streets after spate of break-ins Previous article15-year-old shot in both legs in ColeraineNext articleA West Donegal community activist is claiming huge support in run up to locals News Highland Dail hears questions over design, funding and operation of Mica redress scheme WhatsApp Facebook WhatsApp Twitter Twittercenter_img Google+ Minister McConalogue says he is working to improve fishing quota Pinterest 70% of Cllrs nationwide threatened, harassed and intimidated over past 3 years – Report Google+ Need for issues with Mica redress scheme to be addressed raised in Seanad also By News Highland – November 18, 2013 News Pinterest Facebooklast_img read more


May 27, 2021 0

Septic tank registration in Donegal joint lowest in the state

first_img Pinterest Septic tank registration in Donegal joint lowest in the state Minister McConalogue says he is working to improve fishing quota Google+ Google+ Need for issues with Mica redress scheme to be addressed raised in Seanad also News WhatsApp Dail hears questions over design, funding and operation of Mica redress scheme Twitter RELATED ARTICLESMORE FROM AUTHOR Facebookcenter_img WhatsApp Man arrested in Derry on suspicion of drugs and criminal property offences released Figures published this afternoon show that as of the start of this week, 68% of eligible households in Donegal still haven’t registered for septic tank charge.Nationlly, the figure is almost 40%.Figures from the Department of the Environment show 300,000 homes have been registered across the country. In Donegal, the figure is just over 10,000.According to the Department of the Environment, there are 32,955 on-site waste water systems in Donegal, based on returns from the 2011 census. That’s the third highest figure in the state, after Cork and Galway.Of these, 10,471 have been registered, leaving 22,484 outstanding.That represents a compliance rate of 32%, the joint lowest along with South Dublin.Nationally, the compliance rate is just over 60%.The government is stressing that households who register by February 1st will be eligible for financial support if they fail an inspection, with opponents hitting out at the fact that the EPA’s inspection criteria haven’t yet been published. Previous articleJustice Minister says Donegal is not a unique case despite spate of burglariesNext articleMEP Pat the Cope Gallagher reacts to Taoiseach’s address to the European Parliament News Highland Pinterest By News Highland – January 16, 2013 70% of Cllrs nationwide threatened, harassed and intimidated over past 3 years – Report Twitter Facebook Dail to vote later on extending emergency Covid powerslast_img read more


May 27, 2021 0