June 7, 2017
- Unexpected Inflation, Capital Structure, and Real Risk-Adjusted Firm Performance, Alcock and Steiner.
- Is the Rent Too High? Aggregate Implications of Local Land Use Regulations, Bunten.
- Land Share, Mortgage Default, and Loan-to-Value Ratio As a Macro-Prudential Policy Tool, Li and Yavas.
- Protecting the Benefit of a Seller’s Bargain in Real Estate Contracts, Ingber.
- The Securities and Exchange Commission (SEC) attempted to extend the statute of limitations. The SEC unsuccessfully asked the Supreme Court of the United States to allow the regulatory agency to file disgorgement suits at any time because disgorgement is not a part of the 28 U.S.C carve-outs code 2462.
- The Public and Affordable Housing Research Corporation (PAHRC), released a report examining the impact of federal housing on “poverty, economic mobility for low-income families, save money for communities, and stimulate economic growth.” Additionally, the report details various methods community leaders may use to provide low-income agencies with the agency realize their full potential.
June 5, 2017
The Consumer Financial Protection Bureau has issued a Request for Information Regarding Ability-to-Repay/Qualified Mortgage Rule Assessment. Dodd-Frank
requires the Bureau to conduct an assessment of each significant rule or order adopted by the Bureau under Federal consumer financial law. The Bureau must publish a report of the assessment not later than five years after the effective date of such rule or order. The assessment must address, among other relevant factors, the rule’s effectiveness in meeting the purposes and objectives of title X of the Dodd Frank Act and the specific goals stated by the Bureau. The assessment also must reflect available evidence and any data that the Bureau reasonably may collect. Before publishing a report of its assessment, the Bureau must invite public comment on recommendations for modifying, expanding, or eliminating the significant rule or order. (82 F.R. 25247)
The Bureau invites the public to submit the following:
- Comments on the feasibility and effectiveness of the assessment plan, the objectives of the ATR/QM Rule that the Bureau intends to emphasize in the assessment, and the outcomes, metrics, baselines, and analytical methods for assessing the effectiveness of the rule as described in part IV above;
- Data and other factual information that may be useful for executing the Bureau’s assessment plan, as described in part IV above;
- Recommendations to improve the assessment plan, as well as data, other factual information, and sources of data that would be useful and available to execute any recommended improvements to the assessment plan;
- Data and other factual information about the benefits and costs of the ATR/ QM Rule for consumers, creditors, and other stakeholders in the mortgage industry; and about the impacts of the rule on transparency, efficiency, access, and innovation in the mortgage market;
- Data and other factual information about the rule’s effectiveness in meeting the purposes and objectives of Title X of the Dodd-Frank Act (section 1021), which are listed in part IV above;
- Recommendations for modifying, expanding, or eliminating the ATR/QM Rule. (82 F.R. 25250)
As with the RESPA Assessment, this ATR/QM Assessment provides “consumers and their advocates, housing counselors, mortgage creditors and other industry representatives, industry analysts, and other interested persons” with the opportunity to help shape how the ATR/QM Rule should work going forward. (Id.)
Comments must be received on or before July 31, 2017.
- Three men in the San Francisco Bay were convicted by a California federal court. The three men participated in a three year bid rigging scheme that took place at foreclosure auctions. The three men attempted to suppress evidence by the government regarding their unauthorized use of the hidden microphones without a proper warrant.
- Connecticut residents are outraged at their home insurance companies. They claim companies such as AIG, Allstate, and State Farm, refused, in bad-faith, to approve their insurance claims. The state’s homeowners initially filed insurance claims with various insurance companies to mitigate the damage to the foundations in their home due to the use of defective concrete.
- A few investors of mortgage backed securities are suing HSBC Bank for their 3 billion dollar loss during the financial crisis in the early 2000s. The investors claim a breach of duty by the bank regarding sifting through dud mortgages.
June 2, 2017
Realtor.com quoted me in Former President Obama Finally Buys the DC Home He’s Renting: 6 Smart Reasons Why. It reads, in part,
Former President Barack Obama has decided that buying beats renting. The former first family have surprised many by purchasing the Washington, DC, house they’ve been leasing and living in since January, coughing up $8.1 million to call the place their own.
After vacating the White House, the Obamas had moved into the 6,441-square-foot, nine-bedroom, 8.5-bath mansion, located at 2446 Belmont Road NW in the tony neighborhood of Kalorama. The neighborhood has since become the place for the new political elite, with Jared Kushner and Ivanka Trump moving into a luxe rental a couple of blocks away, and Secretary of State Rex Tillerson snapping up a $5.6 million Colonial Revival down the street.
The reason the Obamas decided to stick around DC in the first place was so their younger daughter, Sasha, then a freshman at posh Sidwell Friends, could finish up high school there. With only three years to go, renting seemed to make sense so that the Obamas could easily pick up and move once she’s done.
But apparently, there’s been a big change of heart. Why?
On its surface, their decision seems a bit puzzling, given Sasha now has only two–and-a-half years to go. In real estate, the general rule is that it makes sense to buy a home only if you plan to stay put for five years, because this allows time for your house to appreciate, which helps you recoup hefty closing costs.
“People who sell after a year or two of ownership will often find that they have lost money on their purchase,” explains David Reiss, research director at the Center for Urban Business Entrepreneurship at Brooklyn Law School.
Nonetheless, real estate agents and other experts we spoke to say there could be plenty of reasons it’s smarter for the Obamas to buy rather than rent, even for this short span of time. Here are a few possibilities to ponder.
Reason No. 1: They’re making a commitment to DC
As presidential spokesman Kevin Lewis explained in a statement, “Given that President and Mrs. Obama will be in Washington for at least another two and a half years, it made sense for them to buy a home rather than continuing to rent property.”
Granted, you can read a whole lot into that “at least” if you want. After all, as Atlanta Realtor® Bruce Ailion explains, “Many buyers think they will only be in a property for two to three years and end up living there three to seven years. That is common.”
And it might be an indicator that our former commander in chief isn’t ready to shed the political life quite yet.
“Perhaps they want to keep a foothold in Washington, DC, for other reasons with regard to political advocacy and involvement,” says Florida Realtor Cara Ameer.
Reason No. 2: In certain markets, 2.5 years is long enough to make a profit
While 2.5 years might not be long enough to profit on a home in general, that rule varies widely by neighborhood, based on rent levels, home prices—and how quickly both are going up. And this is one hot neighborhood.
It isn’t known exactly what the Obamas were paying in monthly rent, but estimates hover at around $22,000. It’s entirely possible that the former first couple did the math and determined that buying made far more financial sense, and that mortgage payments would be less of a monthly nut. (To find out what’s best for you, you can crunch the numbers in an online rent vs. buy calculator.)
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Reason No. 5: This home will sell for a premium—he’s a former president, after all!
“It was always a little perplexing why the Obamas would ever rent if they planned to stay for anything longer than a year,” contends Washington, DC, real estate agent Rachel Valentino.
Her reason: “While they’re buying at market value, they can eventually financially benefit on the back end, where a buyer will pay significantly more for the celebrity factor. We aren’t Southern California, where every house has that star appeal. So, I can only imagine what a buyer will eventually pay to own a piece of history.”
Reason No. 6: Profits aren’t everything
“One lesson we can draw from this story is that buying a home should not always be seen as a financial transaction,” says Reiss. “Sometimes we buy a home because it’s best for our family at a particular time. Sometimes we buy a home because we fall in love with it. And sometimes those are the best reasons of all to buy a home, profits be damned.”
- The United States Housing and Urban Development Agency(HUD) recently published a report proposing adjustments to the method of calculation of fair market value rents. Additionally, HUD seeks the public’s input on the matter before determining a final decision.
- The Consumer Financial Protection Bureau (CFPB) released a report regarding elders and the effect of reverse mortgages. The CFPB has known about the reverse mortgage problems; however, the complaints from those age 62 in above is 10% higher than their younger counterparts. The chief complaints presented by elders are “difficulty in changing the loan terms” and “problems communicating with loan servicers.”
- The Federal Trade Commission (FTC) believes the state of Louisiana is in violation of federal law. The FTC alleges Louisiana’s Real Estate Appraisal Board’s regulatory practices violate federal antitrust laws. The Louisiana Real Estate Appraisal Board requires strict adherence of a “‘customary and reasonable’ appraisal fee schedule” which stifles competition.