|Trump Adviser Calls for Firing of CFPB Chief
An adviser to President Trump has called for the firing of Consumer Financial Protection Bureau director Richard Cordray.
Corey Lewandowski, Trump’s former campaign manager who still speaks regularly to the president, criticized a CFPB rule that would make it easier for consumers to sue financial companies. Currently, many consumers are required to settle disputes related to credit cards and other banking products through mandatory arbitration.
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“It’s my recommendation to the president of the United States to fire Richard Cordray,” Lewandowski told NBC’s “Meet the Press.”
“CFPB reform is far easier to achieve than tax reform or replacing Obamacare,” says The Collingwood Group Chairman Tim Rood. “Using the pretense of consumer protection, the CFPB has often been accused as acting on the assumption that individuals aren’t intelligent enough to make financial decisions for themselves. Moreover, lending and servicing communities feel like they have been cast as villains that prey on consumers leading up to and post the financial crisis.”
Collingwood’s Rood sees better times ahead: “The pro-business message coming from Washington is a welcomed change for lenders and mortgage servicers who are desperate for impartial and balanced regulations and enforcement actions.”
The CFPB was created under the 2010 Dodd-Frank Wall Street reform law, and the bureau is charged with protecting consumers from predatory lending practices that were commonplace during the financial crisis.
Under current law, the president can fire Cordray only for cause. The legal burden to show cause is high, and Cordray’s term does not expire until July 2018.
Cordray is widely expected to run for governor in Ohio, though he has not announced any plans to do so.
CRE Weak in July
Let’s hope for a better August!
CRE property pricing remained weak in July, according to the Ten-X Nowcast. This monthly pricing index, which combines Google Trends data, Ten-X Commercial’s proprietary transaction data and investor survey data provided by Situs RERC, indicates CRE pricing trends in real time.
The Ten-X All Property Nowcast was down 0.3% in July, the third consecutive monthly decline, and it brought the annual growth index back down to where it was at the start of the year. Ten-X Research uses a combination of Google search trends, the world’s largest set of transaction data, from the Ten-X platform for buying and selling real estate, and survey data provided by Situs RERC to gauge pricing trends as they are occurring. July’s results show the market remains in the doldrums, not surprising given the continued political climate in Washington and the adjustment to higher interest rates.
Once again, the situation was mixed across property segments and regions. July’s biggest news was weakness in the apartment segment, which has been posting the strongest pricing gains by far in this cycle and through the first half of this year.
The Ten-X Apartment Nowcast fell 1.4% in July, its first monthly decline since late 2015. The drop brought the year-over-year apartment Nowcast growth down to 12.3%. Many had been surprised by the resilience of apartment pricing this year. While other segments responded to the uncertain macroeconomic environment, higher rates and fundamentals were shifting gears as supply picked up — especially as vacancies have ticked modestly higher and rent growth, while still positive, has cooled. One month does not define a trend, but July’s results suggest that this segment is vulnerable to these market forces. The Midwest was particularly weak in July, with the Nowcast for that region falling 4.3%. This could reflect the relative strength of the single-family segment in that region, where homes remain mostly very affordable and competitive with renting. The Southeast was the only region where the apartment Nowcast increased in July, rising 0.5%.
The Ten-X Industrial Nowcast dipped 0.2% in July, continuing a saw-toothed trend in place all year. Despite the monthly drop, industrial prices were up a stronger 7.1% year over year in July owing to a weak comparison month in 2016. Surprisingly, the only region that posted a gain in July was the Southwest, where the Nowcast increased 1.5%. Given the renewed weakness in oil prices, we would have expected investors to react unfavorably there.
The hotel, office and retail segments continue to drift, all showing marginal monthly increases in July. The national Ten-X Office Nowcast edged up 0.1% in July. However, this reflected a strong 4% jump in the Northeast, while all other regions declined. The news on office fundamentals remains grim, with no improvement in fundamentals in the second quarter and limited rent increases. The hotter markets are seeing demand pick up, while the weaker markets continue to drift amid limited economic drivers.
Retail eked out a second consecutive monthly Nowcast increase, a rare event for this beleaguered segment. Despite this, the Ten-X Retail Nowcast is up just 6.2% year over year, remaining in the doldrums it has been in this year. Regional patterns were mixed for retail, with the West and Southeast weaker.
Pending Home Sales Rebound
Contracts to buy previously owned homes rebounded in June after three straight monthly declines, but the housing market remained constrained by a shortage of properties available for sale.
The National Association of Realtors Pending Home Sales Index, based on contracts signed last month, jumped 1.5 percent, more than double economists’ expectations for a 0.7 percent increase. The rise, however, only partially unwound the prior three months’ declines.
Pending home contracts become sales after a month or two. The NAR reported last week that existing home sales, which generally have been running ahead of the signed contracts, fell 1.8 percent in June.
The housing market has been stymied by a dearth of properties, which has pushed up prices and sidelined first-time homebuyers.
Housing contracted in the second quarter at its fastest pace in nearly seven years and was a drag on economic growth. Homebuilders have been unable to bridge the housing inventory gap, citing rising lumber costs and shortages of land and labor.
New Documents Give Hope to Fannie, Freddie Shareholders
Shareholders of Fannie Mae and Freddie Mac say a trove of documents they have obtained bolsters their case that the government lied when it decided to take all of the mortgage companies’ profits.
Investors have filed dozens of lawsuits in courts across the country over a 2012 government decision to replace Fannie and Freddie’s 10 percent dividend to the U.S. Treasury with a new one equal to almost all of their profits. At the time, officials said the change was made to hasten the companies’ wind-down and avoid the need for bailout money to pay dividends, a process known as a “circular draw” or “death spiral.”
A victory in any of the cases could earn shareholders billions of dollars in profits and also influence the future of the housing-finance system, which has remained in limbo for nearly nine years. Congress and the Trump administration are working on what to do about the mortgage companies at the heart of the housing market, and shareholders have struggled to influence the debate.
The documents, which include emails and memos from the months preceding the government’s final decision, may be used in a suit filed by Fairholme Funds Inc. and other shareholders, said Pete Patterson, an attorney in that case. In one email, a Treasury official writes that Fannie and Freddie’s regulator told Treasury Secretary Timothy Geithner the companies “will be generating large revenues over the coming years, thereby enabling them to pay the 10% annual dividend well into the future.”
Fannie and Freddie rallied after the release of the documents, with common shares up about 4 percent and classes of some preferred shares up more than 10 percent. Patterson said on a call with investors and reporters the documents “show unequivocally” that the Federal Housing Finance Agency, which controls Fannie and Freddie, and Treasury “understood that there was no threat of a death spiral at the time the net worth sweep was adopted.” The rally was short-lived, with the shares declining on Thursday.
In interviews former Obama White House and Treasury officials also rejected the shareholders’ characterization of the material, standing behind their long-stated reasoning for the so-called “sweep” of the companies’ profits to the Treasury.
read more: Bloomberg
American Dream, Now American Nightmare?
Contrary to the longstanding alleged American dream, dramatically fewer Americans are owning their own home. Homeownership rates nationally peaked in 2007 at 73%. Today, they’ve plummeted to 63%, a dramatic shift involving many billions of dollars. This has occurred in all regions and income groups across the country.
Except among senior citizens. According to a new Gallup Poll, the percentage of seniors owning their own home in that crowd actually increased, to 82%. Many of them may be at or near the end of long-term mortgages or have downsized and paid cash for a smaller place. Some have also benefited from state and federal government support programs.
Additionally, changing work patterns have helped sustain senior home ownership. More Americans over 65 are working, either by choice or necessity, enabling monthly mortgage payments.
Gallup notes the percentage of older Americans with low incomes below $30,000 a year has dropped significantly in recent years from 46% in 2009 to just 33% today, while holding steady in other age cohorts.
Low- and middle income citizens, young people and those living in the West experienced above average drops in ownership. Even among those with incomes over $100,000 homeownership rates have dropped, now below 90%.
Homeownership among those in the age group 18 to 29 dropped from 36% to 26%, those aged 30 to 49 down from 73% to 63%, those 50 to 64 down from 84% to 77%. Reasons vary but among millennials, for instance, marriage is coming at a later age, also postponing accumulation of the joint financial income and wherewithal for life’s largest single investment.
These poll results were based on Gallup’s annual Economy and Personal Finance survey, conducted each April from 2001 to 2017 with a combined sample of 16,315 random adults including 7,110 interviews between 2001 and 2009 and 9,205 interviews between 2010 and 2017.
read more: HotAir
Here’s Where You Can Buy a Huge Home for $100,000 or Less
Home prices are soaring across the country. Data released from real estate analytics firm ATTOM Data Solutions found that median home prices across that nation are now above pre-recession levels — and the median home in the U.S. is now worth more than $200,000, according to Zillow. What’s more, in 44% of the 108 markets that ATTOM examined, home prices had hit an all-time high.
So, is now the time to sell? Maybe. ATTOM found that home seller profits have hit a 10-year high with the average seller raking in $51,000.
That $51,000 could literally pay for 50% of a huge house in some cities. Data released this week from personal finance site SmartAsset found that $100,000 can buy you a 2,000-plus-square-foot home in some cities. Here are five cities where your real estate dollar may stretch farthest:
- Detroit, Michigan
- Jackson, Mississippi
- Dayton, Ohio
- Cleveland, Ohio
- Birmingham, Alabama
read more: MoneyishThe Hamptons are Hot This Summer
There’s more than just the stock market that’s soaring this hot July.
Buyers in the Hamptons are taking some of their equity in stocks and plunking down more for homes along the South Fork resort towns.
The median sale price for a single-family Hamptons house has reached a record $1.07 million, up 7.5 percent from a year ago, according to a report late last week by appraiser Miller Samuel and brokerage Douglas Elliman Real Estate.
And the higher end seems to be flourishing as well, with 48 homes priced at $5 million or higher being sold in the three months leading up to the summer season — the most for any quarter since the end of 2015.
But that doesn’t mean the sky’s the limit.
Buyers still demanded a deal, however, with 86 percent of houses and condos bought in the quarter selling for less than what the seller sought, said Jonathan Miller, president of Miller Samuel. The average discount was 12 percent from the last asking price.
“Even when the numbers make sense, buyers will still say, ‘I don’t want to pay full ask,’ ” Raymond Lord, a local Douglas Elliman broker, told Bloomberg. “They always want to negotiate.”
read more: NY Times
Have a prosperous day and enjoy your Hamptons home or wherever the summer takes you.
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Senior Media Consultant