Tag Archives: Consumer Financial Protection Bureau

New York Judge Rules Consumer Financial Protection Bureau An Unconstitutional Construct…

The CFPB was constructed by Elizabeth Warren and her progressive ideologues as an extra-constitutional government agency.  This was entirely by design.

https://theconservativetreehouse.files.wordpress.com/2017/11/leandra-english-nancy-pelosi-elizabeth-warren-and-chuck-schumer.jpg?w=621&h=466

The CFPB had two primary, albeit unspoken, functions.  First, it was structured as a holding center for fines and assessments against any financial organizations opposed by progressives.  Second, it was a distribution hub for the received funds to be transferred to political allies and groups supportive of progressive causes.

To pull off this scheme Elizabeth Warren et al ensured it was structured to allow no congressional oversight; however, it was also structured to have no executive branch oversight – and the funding mechanism for the CFPB budget was directly through the federal reserve.  The lack of any legislative or executive branch oversight made the entire scheme unconstitutional according to an earlier court decision.

The CFPB defenders then appealed the decision to a select appellate court in Washington DC to continue the construct.  The Warren crew won the appeal; but today, in an unrelated jurisdictional ruling a New York judge affirmed the minority opinion setting up a possible supreme court pathway to get a final decision.

NEW YORK (AP) – The U.S. government’s beleaguered consumer finance watchdog agency is unconstitutionally structured, a judge said Thursday as she disqualified the agency from serving as a plaintiff in a lawsuit.

U.S. District Judge Loretta A. Preska in Manhattan reached the conclusion about the Consumer Financial Protection Bureau in a written decision.

Her ruling related to a lawsuit brought against companies loaning money to former National Football League players awaiting payouts from the settlement of a concussion-related lawsuit and to individuals slated to receive money for injuries sustained when they helped in the World Trade Center site cleanup after the Sept. 11, 2001, terrorist attacks.

She let claims brought by the New York State attorney general proceed, but dismissed those that were brought by the CPFB, saying it “lacks authority to bring this enforcement action because its composition violates the Constitution’s separation of powers.”

In ruling, Preska sided with three judges who dissented from the six-judge majority in a January ruling by the U.S. Court of Appeals in Washington. The majority found that the agency director’s power is not excessive and that the president should not have freer rein to fire that person.  (read more)

CFPB Interim Director Mick Mulvaney has already said the CFPB needs to be disassembled.

Taking the agency down is perfectly ok with the Trump administration.

https://theconservativetreehouse.files.wordpress.com/2017/11/mulvaney-work.jpg?w=1024&h=1024

CFPB Ruled Unconstitutional Again – National Real Estate Post

By Sundance | The Conservative Tree House

Advertisements

A Raw Deal for Real-Estate Agents

Real estate can be risky for agents themselves. Fickle buyers, unforeseen structural issues, setbacks in financing can all scuttle a deal.

THE COMMITMENT-PHOBE Known for repeatedly pulling out of the purchase right before the contract is signed. Illustration: Laszlito Kovacs

By Nancy Keates | Wall Street Journal, Feb. 19, 2015

She saw a ghost. That was the excuse, anyway, for one buyer’s decision to back out at the last minute from closing on a $1.4 million house in San Francisco, losing a roughly $21,000 deposit in the process.

Her real-estate agent, Amanda Jones of Sotheby’s International Realty, estimates she spent about 250 hours over six months showing the prospective buyer about 130 houses in the Bay Area. In the end, she believes the woman just changed her mind. “It was horrible,” the agent says.

Few professions demand as much upfront time and legwork with the risk of zero return on the effort as real-estate sales. Fickle buyers, unforeseen structural issues, setbacks in financing can all scuttle a sale. Now, there’s another common deal breaker: an overheated housing market in which frenzied bidding wars lead to rash decisions—followed by buyers’ remorse.

“It’s such a fast-paced market right now. Buyers are expected to make offers after seeing a place once at a packed house, so they don’t have time to think things through,” says Kaitlin Adams, an agent with New York-based Compass.

THE NERVOUS NELLIE Spends countless hours to find the perfect home, but backs out at the last minute, saying it just doesn’t ‘feel right.

Nationally, median home prices in 2014 rose to their highest level since 2007, while housing inventory continued to drop—falling 0.5% lower than a year ago, according to the National Association of Realtors. The percentage of buyers backing out of contracts has gone up by about 8%—to 19.1% in the third quarter of 2014 from 17.76% in the third quarter of 2012, according to Evercore ISI, an investment-banking advisory firm.

The war stories come mostly at the high end in select markets, where affluent buyers are less affected by the prospect of losing thousands in earnest money or down payments. Cormac O’Herlihy of Sotheby’s International Realty in Los Angeles recently had buyers he calls “nervous nellies” back out on a $6 million house. “They enjoy an overabundance of financial ability,” Mr. O’Herlihy says.

Julie Zelman, a New York-based agent with Engel & Völkers, spent the past year searching for an apartment for a recently divorced client in his 40s who said he wanted to move from Manhattan’s Upper East Side to a building downtown—preferably one populated by celebrities. Twice the client was about to close when he changed his mind: The first time was at a building called Soho Mews—he’d read it was the home of an Oscar-nominated actress and a Grammy-winning musician. The man offered $2.8 million for a two-bedroom unit but then backed out. Another time, he walked away after offering $3.1 million on a two-bedroom unit in 1 Morton Square, where a popular TV actress once lived.

“He was wasting everyone’s time. It was humiliating for me,” says Ms. Zelman, who thinks the client wasn’t mentally ready for such a big change. The client ended up renting an apartment on the Upper East Side.

THE FAULT FINDER Cites microscopic flaws to quash the deal—and get the earnest money back.

When buyers change their minds before signing a contract, they don’t lose any money. Nataly Rothschild, a New York-based broker, says she thought she had finally closed a deal after a couple’s yearlong house hunt. Because there were five other offers pending, her clients offered $200,000 over the almost $2 million asking price on the three-bedroom, three-bathroom listed for $1.8 million on Manhattan’s Upper East Side. Then Ms. Rothschild, an agent at Engel & Völkers, got a call from the couple’s attorney saying the buyer, who was nine months pregnant, had broken down in tears, saying she just couldn’t sign because it didn’t feel right. “I felt miserable for her,” says Ms. Rothschild. “But we were all shocked.”

Buyers who change their minds after signing a contract typically lose their earnest money, a deposit that shows the offer was made in good faith. That money is often held by the title company or in an escrow account and later applied to down payment and closing costs. If the deal falls through, whoever holds the deposit determines who gets the earnest money. In standard contracts, the earnest money goes to the seller. If, however, a contingency spelled out in the contract emerges—the buyer’s financing falls through, for example—the buyer usually gets the earnest money back.

Vivian Ducat, an agent with Halstead Property in New York, had a client lose $55,000 in earnest money after a change of heart on a $550,000 co-op. The woman, who was living in California, had wanted to buy a place in New York because one of her children was living there. At the last minute she balked, emailing that she “couldn’t handle the New York lifestyle.” She’d signed the contract and even filled out all the paperwork for the co-op board.

THE OVER BIDDER. Gets caught up in the frenzy of the bidding war, then realizes he didn’t mean to spend so much.

In rare instances, buyers can get their earnest money back through arbitration if they can prove a valid cause. Ms. Adams, the Compass agent, represented the sellers of a one-bedroom apartment in Brooklyn Heights that was listed for just under $600,000. When a bidding war with five offers ensued, the unit went for $70,000 above asking price to a couple from the West Coast who wanted to use it as a part-time residence. After the contract was signed, the building’s co-op board enacted a new rule that owners had to live in the building full time. As a result, the West Coast couple got their earnest money back, and the unit sold to another buyer at about $80,000 above the asking price.

Even if the real reason is simply buyer’s remorse, real-estate agents say buyers can get back earnest money as long as they can find some valid-sounding reason for dissatisfaction. Ms. Jones in San Francisco had clients withdraw an offer on a $1.1 million house. They’d been looking for two years and when the house came up the wife was traveling abroad; the husband said he was sure she would love it. Turns out the wife didn’t like it at all. The couple used the excuse of a leak found in the inspection process and got their $33,000 deposit back.

And about that ghost. A buyer who put down $43,000 in earnest money pulled out after a neighbor told them the previous owner had died in the home, among other things. The matter went into arbitration, and the potential buyer got the entire deposit back.

Ever since then, Ms. Jones says she has sellers disclose in their contracts the possibility that there might be a ghost. “You have to prepare for anything,” she says.

Increasing Rent Costs Present a Challenge to Aspiring Homeowners

https://i2.wp.com/dsnews.com/wp-content/uploads/sites/25/2013/12/rising-arrows-two.jpgby Tory Barringer

Fast-rising rents have made it difficult for many Americans to save up a down payment for a home purchase—and experts say that problem is unlikely to go away any time soon.

Late last year, real estate firm Zillow reported that renters living in the United States paid a cumulative $441 billion in rents throughout 2014, a nearly 5 percent annual increase spurred by rising numbers of renters and climbing prices. Last month, the company said that its own Rent Index increased 3.3 percent year-over-year, accelerating from 2013 even as home price growth slows down.

Results from a more recent survey conducted by Zillow and Pulsenomics suggest that rent prices will continue to be a problem for the aspiring homeowner for years to come.

Out of more than 100 real estate experts surveyed, 51 percent said they expect rental affordability won’t improve for at least another two years, Zillow reported Friday. Another 33 percent were a little more optimistic, calling for a deceleration in rental price increases sometime in the next one to two years.

Only five percent said they expect affordability conditions to improve for renters within the next year.

Despite the challenge that rising rents presents to home ownership throughout the country, more than half—52 percent of respondents—said the market should be allowed to correct the problem on its own, without government intervention.

“Solving the rental affordability crisis in this country will require a lot of innovative thinking and hard work, and that has to start at the local level, not the federal level,” said Zillow’s chief economist, Stan Humphries. “Housing markets in general and rental dynamics in particular are uniquely local and demand local, market-driven policies. Uncle Sam can certainly do a lot, but I worry we’ve become too accustomed to automatically seeking federal assistance for housing issues big and small, instead of trusting markets to correct themselves and without waiting to see the impact of decisions made at a broader local level.”

On the topic of government involvement in housing matters: The survey also asked respondents about last month’s reduction in annual mortgage insurance premiums for loans backed by the Federal Housing Administration (FHA). The Obama administration has projected that the cuts will help as many as 250,000 new homeowners make their first purchase.

The panelists were lukewarm on the change: While two-thirds of those with an opinion said they think the changes could be “somewhat effective in making homeownership more accessible and affordable,” just less than half said the new initiatives are unwise and potentially risky to taxpayers.

Finally, the survey polled panelists on their predictions for U.S. home values this year. As a whole, the group predicted values will rise 4.4 percent in 2015 to a median value of $187,040, with projections ranging from a low of 3.1 percent to a high of 5.5 percent.

“During the past year, expectations for annual home value appreciation over the long run have remained flat, despite lower mortgage rates,” said Terry Loebs, founder of Pulsenomics. “Regarding the near-term outlook, there is a clear consensus among the experts that the positive momentum in U.S. home prices will continue to slow this year.”

On average, panelists said they expect median home values will pass their precession peak ($196,400) by May 2017.

CFPB Tells Lenders: Don’t Scrutinize Disability Recipients Applying For Home Loans

https://i0.wp.com/www.creditcardguide.com/credit-cards/wp-content/uploads/2012/07/cfpb-badge.jpgby IBD editorial

Disparate Impact: The president’s new credit watchdog agency is warning lenders they could be investigated for discrimination if they scrutinize welfare recipients applying for home loans. Here we go again.

In an agency bulletin, the Consumer Financial Protection Bureau specifically advised mortgage lenders not to verify the income of people receiving Social Security Disability Insurance benefits.

SSDI enrollment has exploded under Obama, and fraud is rampant in the program. A recent probe by Congress found doctors rubber-stamping claims for the generous benefits. A random review found more than 1-in-4 cases failed to provide evidence to support claims.

No wonder mortgage lenders are asking for verification.

Last year, the number of Americans receiving payments skyrocketed to a record 15 million-plus. A disproportionate share of enrollees are African-American — blacks make up 12% of the population, but over 17% of all SSDI recipients — and black groups have complained to regulators that mortgage underwriters are making unreasonable demands for income verification.

The NAACP argues disability payments are a “critical source of financial support” for blacks, noting their average monthly benefit is almost $1,000.

“The program’s benefits provide a significant income boost to lower-earning African-Americans,” NAACP asserted, noting the share of blacks on federal disability is more than double that for whites.

In response, CFPB has issued a five-page edict warning mortgage lenders they could face “disparate impact” liability if they question whether “all or part” of a minority applicant’s income “derives from a public assistance program.”

If they know what’s good for them, they’ll “avoid unnecessary documentation requests and increase access to credit for persons receiving Social Security disability income.”

In a separate warning, HUD was more forceful: “A lender shouldn’t ask a consumer for documentation or about the nature of his or her disability under any circumstances.”

We can’t say we’re shocked. As we’ve reported — contrary to other media reporting — CFPB’s new Qualified Mortgage rule mandates payments from “government assistance programs are acceptable” forms of income for home loan qualification. (It’s in the 804-page regulation, if financial journalists would just take the time to read it.)

More, the Justice Department has ordered the biggest mortgage lenders in the country, including Wells Fargo and Bank of America, to offer loans to people on “public assistance.” They’re even required to post branch notices promoting the risky welfare acceptance policy.

The administration is actually forcing banks to target high-risk borrowers for 30-year debt under threat of prosecution.

Though President Obama’s worried about a plunge in new-home buying among jobless minorities, he’s just setting them up for failure all over again. A mortgage requires a stable job and income to avoid defaults and foreclosures.

Failure to require income documentation contributed to the mortgage crisis and was something CFPB was created to stop.

Exempting public-assistance income from the rules exposes the bogus nature of Obama’s financial “reforms.”

The Next Housing Crisis May Be Sooner Than You Think

How we could fall into another housing crisis before we’ve fully pulled out of the 2008 one.

https://i0.wp.com/cdn.citylab.com/media/img/citylab/2014/11/RTR2LDPC/lead_large.jpgby Richard Florida

When it comes to housing, sometimes it seems we never learn. Just when America appeared to be recovering from the last housing crisis—the trigger, in many ways, for 2008’s grand financial meltdown and the beginning of a three-year recession—another one may be looming on the horizon.

There are at several big red flags.

For one, the housing market never truly recovered from the recession. Trulia Chief Economist Jed Kolko points out that, while the third quarter of 2014 saw improvement in a number of housing key barometers, none have returned to normal, pre-recession levels. Existing home sales are now 80 percent of the way back to normal, while home prices are stuck at 75 percent back, remaining undervalued by 3.4 percent. More troubling, new construction is less than halfway (49 percent) back to normal. Kolko also notes that the fundamental building blocks of the economy, including employment levels, income and household formation, have also been slow to improve. “In this recovery, jobs and housing can’t get what they need from each other,” he writes.

Americans are spending more than 33 percent of their income on housing.

Second, Americans continue to overspend on housing. Even as the economy drags itself out of its recession, a spate of reports show that families are having a harder and harder time paying for housing. Part of the problem is that Americans continue to want more space in bigger homes, and not just in the suburbs but in urban areas, as well. Americans more than 33 percent of their income on housing in 2013, up nearly 13 percent from two decades ago, according to newly released data from the Bureau of Labor Statistics (BLS). The graph below plots the trend by age.

Over-spending on housing is far worse in some places than others; the housing market and its recovery remain highly uneven. Another BLS report released last month showed that households in Washington, D.C., spent nearly twice as much on housing ($17,603) as those in Cleveland, Ohio ($9,061). The chart below, from the BLS report, shows average annual expenses on housing related items:

(Bureau of Labor Statistics)

The result, of course, is that more and more American households, especially middle- and working-class people, are having a harder time affording housing. This is particularly the case in reviving urban centers, as more affluent, highly educated and creative-class workers snap up the best spaces, particularly those along convenient transit, pushing the service and working class further out.

Last but certainly not least, the rate of home ownership continues to fall, and dramatically. Home ownership has reached its lowest level in two decades—64.4 percent (as of the third quarter of 2014). Here’s the data, from the U.S. Census Bureau:

(Data from U.S. Census Bureau)

Home ownership currently hovers from the mid-50 to low-60 percent range in some of the most highly productive and innovative metros in this country—places like San Francisco, New York, and Los Angeles. This range seems “to provide the flexibility of rental and ownership options required for a fast-paced, rapidly changing knowledge economy. Widespread home ownership is no longer the key to a thriving economy,” I’ve written.

What we are going through is much more than a generational shift or simple lifestyle change. It’s a deep economic shift—I’ve called it the Great Reset. It entails a shift away from the economic system, population patterns and geographic layout of the old suburban growth model, which was deeply connected to old industrial economy, toward a new kind of denser, more urban growth more in line with today’s knowledge economy. We remain in the early stages of this reset. If history is any guide, the complete shift will take a generation or so.

It’s time to impose stricter underwriting standards and encourage the dense, mixed-use, more flexible housing options that the knowledge economy requires.

The upshot, as the Nobel Prize winner Edmund Phelps has written, is that it is time for Americans to get over their house passion. The new knowledge economy requires we spend less on housing and cars, and more on education, human capital and innovation—exactly those inputs that fuel the new economic and social system.

But we’re not moving in that direction; in fact, we appear to be going the other way. This past weekend, Peter J. Wallison pointed out in a New York Times op-ed that federal regulators moved back off tougher mortgage-underwriting standards brought on by 2010’s Dodd-Frank Act and instead relaxed them. Regulators are hoping to encourage more home ownership, but they’re essentially recreating the conditions that led to 2008’s crash.

Wallison notes that this amounts to “underwriting the next housing crisis.” He’s right: It’s time to impose stricter underwriting standards and encourage the dense, mixed-use, more flexible housing options that the knowledge economy requires.

During the depression and after World War II, this country’s leaders pioneered a series of purposeful and ultimately game-changing polices that set in motion the old suburban growth model, helping propel the industrial economy and creating a middle class of workers and owners. Now that our economy has changed again, we need to do the same for the denser urban growth model, creating more flexible housing system that can help bolster today’s economy.

https://i0.wp.com/www.thefifthestate.com.au/wp-content/uploads/2012/10/High_Density_Housing_____20120101_800x600.jpg
Dream housing for new economy workers
?

Energy Workforce Projected To Grow 39% Through 2022

The dramatic resurgence of the oil industry over the past few years has been a notable factor in the national economic recovery. Production levels have reached totals not seen since the late 1980s and continue to increase, and rig counts are in the 1,900 range. While prices have dipped recently, it will take more than that to markedly slow the level of activity. Cycles are inevitable, but activity is forecast to remain at relatively high levels.  

An outgrowth of oil and gas activity strength is a need for additional workers. At the same time, the industry workforce is aging, and shortages are likely to emerge in key fields ranging from petroleum engineers to experienced drilling crews. I was recently asked to comment on the topic at a gathering of energy workforce professionals. Because the industry is so important to many parts of Texas, it’s an issue with relevance to future prosperity.  

 

Although direct employment in the energy industry is a small percentage of total jobs in the state, the work is often well paying. Moreover, the ripple effects through the economy of this high value-added industry are large, especially in areas which have a substantial concentration of support services.  

Petroleum Engineer

Employment in oil and gas extraction has expanded rapidly, up from 119,800 in January 2004 to 213,500 in September 2014. Strong demand for key occupations is evidenced by the high salaries; for example, median pay was $130,280 for petroleum engineers in 2012 according to the Bureau of Labor Statistics (BLS).  

Due to expansion in the industry alone, the BLS estimates employment growth of 39 percent through 2022 for petroleum engineers, which comprised 11 percent of total employment in oil and gas extraction in 2012. Other key categories (such as geoscientists, wellhead pumpers, and roustabouts) are also expected to see employment gains exceeding 15 percent. In high-activity regions, shortages are emerging in secondary fields such as welders, electricians, and truck drivers.  

The fact that the industry workforce is aging is widely recognized. The cyclical nature of the energy industry contributes to uneven entry into fields such as petroleum engineering and others which support oil and gas activity. For example, the current surge has pushed up wages, and enrollment in related fields has increased sharply. Past downturns, however, led to relatively low enrollments, and therefore relatively lower numbers of workers in some age cohorts. The loss of the large baby boom generation of experienced workers to retirement will affect all industries. This problem is compounded in the energy sector because of the long stagnation of the industry in the 1980s and 1990s resulting in a generation of workers with little incentive to enter the industry. As a result, the projected need for workers due to replacement is particularly high for key fields.

The BLS estimates that 9,800 petroleum engineers (25.5 percent of the total) working in 2012 will need to be replaced by 2022 because they retire or permanently leave the field. Replacement rates are also projected to be high for other crucial occupations including petroleum pump system operators, refinery operators, and gaugers (37.1 percent); derrick, rotary drill, and service unit operators, oil, gas, and mining (40.4 percent).  

http://jobdiagnosis.files.wordpress.com/2010/03/petroleum-engineer.jpg

Putting together the needs from industry expansion and replacement, most critical occupations will require new workers equal to 40 percent or more of the current employment levels. The total need for petroleum engineers is estimated to equal approximately 64.5 percent of the current workforce. Clearly, it will be a major challenge to deal with this rapid turnover.

Potential solutions which have been attempted or discussed present problems, and it will require cooperative efforts between the industry and higher education and training institutions to adequately deal with future workforce shortages. Universities have had problems filling open teaching positions, because private-sector jobs are more lucrative for qualified candidates. Given budget constraints and other considerations, it is not feasible for universities to compete on the basis of salary. Without additional teaching and research staff, it will be difficult to continue to expand enrollment while maintaining education quality. At the same time, high-paying jobs are enticing students into the workforce, and fewer are entering doctoral programs.  

Another option which has been suggested is for engineers who are experienced in the workplace to spend some of their time teaching. However, busy companies are naturally resistant to allowing employees to take time away from their regular duties. Innovative training and associate degree and certification programs blending classroom and hands-on experience show promise for helping deal with current and potential shortages in support occupations. Such programs can prepare students for well-paying technical jobs in the industry. Encouraging experienced professionals to work past retirement, using flexible hours and locations to appeal to Millennials, and other innovative approaches must be part of the mix, as well as encouraging the entry of females into the field (only 20 percent of the current workforce is female, but over 40 percent of the new entries).

Industry observers have long been aware of the coming “changing of the guard” in the oil and gas business. We are now approaching the crucial time period for ensuring the availability of the workers needed to fill future jobs. Cooperative efforts between the industry and higher education/training institutions will likely be required, and it’s time to act.

https://i2.wp.com/oilandcareers.com/wp-content/uploads/2013/04/Petroleum-Engineer.jpg

Today’s Hottest Trend In Residential Real Estate

The practice of multigenerational housing has been on the rise the past few years, and now experts are saying that it is adding value to properties.
by Lauren Mennenas

The practice of multigenerational housing has been on the rise the past few years, and now experts are saying that it is adding value to properties.

In a recent Wall Street Journal article, several couples across the country are quoted saying that instead of downsizing to a new home, they are choosing to live with their adult children.

This is what many families across the country are doing for both a “peace of mind” and for “higher property values.”

“For both domestic and foreign buyers, the hottest amenity in real estate these days is an in-law unit, an apartment carved out of an existing home or a stand-alone dwelling built on the homeowners’ property,” writes Katy McLaughlin of the WSJ. “While the adult children get the peace of mind of having mom and dad nearby, real-estate agents say the in-law accommodations are adding value to their homes.”

And how much more are these homes worth? In an analysis by Zillow, the homes with this type of living accommodations were priced about 60 percent higher than regular single-family homes.

Local builders are noticing the trend, too. Horsham based Toll Brothers are building more communities that include both large, single-family homes and smaller homes for empty nesters, the company’s chief marketing officer, Kira Sterling, told the WSJ.

https://i1.wp.com/media-cache-ec0.pinimg.com/736x/88/da/9b/88da9b983c6165c6ecfde072e1c7876f.jpg