FHFA Could Reform Housing Finance if Congress Doesn’t
If Congress can’t get a housing finance reform bill passed by the midterm elections, the Trump administration and Federal Housing Finance Agency may chart a future for Fannie Mae and Freddie Mac without lawmakers’ input.
As conservator, FHFA Director Mel Watt has substantial leeway to remake the government-sponsored enterprises.
The Housing and Economic Reform Act of 2008 gives the FHFA “almost unlimited authority over what it can do to Fannie, Freddie, creditors and shareholders in extremis,” according to a report by Federal Financial Analytics.
The report details how the FHFA could move forward on GSE reform on its own. While Treasury would have input on the future state of the enterprise, significant authority resides with Watt, whose term expires in January 2019. That gives him added incentive to act before he can be replaced by the White House.
Karen Shaw Petrou, managing partner at Federal Financial Analytics, said in an interview that Watt and Treasury Secretary Steven Mnuchin have clear incentives to end the conservatorship of Fannie and Freddie if Congress doesn’t act.
read more: American Banker
Downsizing Expenses: What’s Triggering Inward Migration in the U.S.
The high cost of living in coastal metros such as Los Angeles, San Francisco, and New York is triggering an inland migration toward more affordable cities. That’s the conclusion of a new report by Redfin that looks at the rise of fast-growing non-coastal metros at the close of Q4 2017.
High property values and taxes in coastal metros are pushing migration inward, the report found. The five cities that saw the most outflow (in sheer volume) at the end of 2017 included San Francisco, New York, Los Angeles, Washington, D.C., and Chicago. According to Redfin, nearly 20 percent of San Franciscans using the company’s property search site were looking for homes elsewhere, with Sacramento, California, and Seattle, Washington proving the most popular destinations for fleeing residents of The Golden City.
Interestingly, “Seattle saw more users looking to leave than to move to the area for the first time since we began tracking this data at the beginning of 2017,” the report stated. At the same time, nine in 10 residents of Chicago, Boston, Washington, D.C., and Seattle who used Redfin were looking to stay within their respective cities.
A full third of New Yorkers using Redfin to search for new homes looked elsewhere. Redfin found that the favored destination for the more than 12,000 New Yorkers leaving is Boston. And while it lost only 83 people, Eugene, Oregon, saw a third of its Redfin users looking to move somewhere else.
read more: The MReport
U.S. Jobless Claims Drop to Near 45-Year Low
The number of Americans filing for unemployment benefits unexpectedly fell last week, dropping to its lowest level in nearly 45 years as the labor market tightened further, bolstering expectations of faster wage growth this year.
Initial claims for state unemployment benefits decreased 9,000 to a seasonally adjusted 221,000 for the week ended Feb. 3, the Labor Department said on Thursday. Claims fell to 216,000 in mid-January, which was the lowest level since January 1973.
Economists polled by Reuters had forecast claims rising to 232,000 in the latest week. Last week marked the 153rd straight week that claims remained below the 300,000 threshold, which is associated with a strong labor market. That is the longest such stretch since 1970, when the labor market was much smaller.
The labor market is near full employment, with the jobless rate at a 17-year low of 4.1 percent. The tighter labor market is starting to exert upward pressure on wage growth.
The Labor Department reported last week that average hourly earnings jumped 2.9 percent year-on-year in January, the largest gain since June 2009, after advancing 2.7 percent in December.
read more: Reuters
Crypto Boom Sends Washington Scrambling
Federal officials in Washington are scrambling to get a handle on the sudden boom in cryptocurrencies as questions swirl about their place in the financial system.
The two top U.S. federal agencies for regulating cryptocurrencies both say they want tighter oversight of the currencies, which have exploded in popularity and are increasingly used as an investment vehicle.
The heads of both the Securities and Exchange Commission (SEC) and Commodity Futures Trade Commission (CFTC) testified this week that they would like to work with each other, the Federal Reserve and state regulators on a “coordinated” strategy for bringing stability to the lightly regulated cryptocurrency market.
Their effort comes amid a larger push for increased regulation by both the U.S. government and governments around the world.
The sense of urgency has been heightened by wild swings in the value of cryptocurrencies over the past year.
read more: The Hill
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