Inside @realDonaldTrump Economic Team Meeting

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December 8, 2016

Inside @realDonaldTrump Economic Team Meeting

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Collingwood Group Chairman Tim Rood met in New York with President Trump and his economic team including Treausry Secretary-designate Steven Mnuchin and Chief of Staff Reince Preibus.  Rood came away from the meeting impressed that the team wants to cut through red-tape and regulation to help fix housing and mortgage industry problems.  There was also talk of the future for Fannie Mae and Freddie Mac, public housing and more.

Many important business leaders were also in attendance  including that “My Pillow” guy.

 >CLICK HERE:   Collingwood’s Rood explained this and more in an appearance on CNBC Power Lunch 

…More on the Trump meeting from our friends at MReport:

President-Elect Trump Hosts Financial Transition Team, Business Leaders in NYC

At a breakfast event held in New York City on Wednesday hosted by the administration’s Transition Finance Committee, President-elect Donald J. Trump addressed an audience made up of a number of his cabinet appointees, transition team members, and prominent business leaders.

The two-hour gathering, which was held at Cipriani 42nd Street, was by invitation-only. Steven Mnuchin, Trump’s Treasury Secretary appointee, gave the opening remarks.

Mnuchin, who was the national finance chairman for Trump’s campaign, is a hedge fund manager and former Goldman Sachs Partner. If the Senate confirms Mnuchin, he could take his position as the 77th Secretary of the U.S. Department of the Treasury as early as January.

Mnuchin went on record early after his nomination that he would seek to address the role Fannie Mae and Freddie Mac hold in the marketplace, commenting that privatizing the GSEs is “right up there on the top-10 list of things we’re going to get done.”

Reince Preibus, former Republican National Committee Chairman and Trump’s new chief of staff,  followed Mnuchin and introduced Trump.

During his remarks, Trump recounted his journey to the presidency, and the history-making election-night that surprised many Americans, including some Trump supporters.  “[W]e ended up with 306 electoral votes, which is a big, big number. That’s a bigger number than anyone thought anybody could get . . . . So we ended up with 306, we ended up with an incredible victory, and now the work begins,” said Trump. “We’ve appointed some tremendous people like Steve Mnuchin and others in this room to different posts and we’re going to do a great job. The work really does begin,” he continued.

Throughout his campaign, Trump outlined that he would seek to decrease the scope of regulation on business, a point that he reiterated during today’s Transition Finance Committee event.

In order to encourage global corporations to move more of their operations to America, Trump said, “We’re going to be lowering taxes from 35 percent down to 15 percent. We’re going to be cutting regulations to a level you’ve never seen before.”

Decreasing business regulations is a point on which Mnuchin and Trump agree. Upon his appointment, Mnuchin outlined a number of his initiatives on CNBC’s Squawk Box, one of which is rolling back  the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Five Star Institute President and CEO Ed Delgado, who was in attendance for the event said, “It was honor to attend this important gathering. It’s encouraging to see that the President-elect has put people in place that will affect positive change in the financial sector. Mr. Trump is accurate in his assessment of the state of financial regulation and we look forward to working with his new administration to advocate on behalf of the mortgage industry and the American homeowner.”

Prior to joining  the Five Star, Delgado played an integral role in working closely with the Bush administration and the U.S. Department of the Treasury under the direction of then Secretary Henry Paulson on housing policy and programs designed to prevent foreclosure.

Tim Rood, Chairman and Co-founder of Washington, D.C. based business advisory firm The Collingwood Group, was also in attendance at the meeting. “Even a cynic would have a hard time walking away from that event not feeling that the country was better poised for growth and prosperity than it is today. The message of lower taxes, less regulation, and less government waste resonated with me and the crowd in a truly sincere way,” commented Rood to MReport.

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Secret Service Advertised as Hot, New Amenity at Trump Tower

The U.S. Secret Service is the hot, new ‘amenity’ in the Trump Tower, where desperate brokers are trying to lure well-heeled clients into the building on New York’s Fifth Avenue that has served as President-elect Donald Trump’s home as well as his campaign and transition headquarters. Less than a week after Trump was elected, prominent New York real estate agency Douglas Elliman blasted out an e-mail with the subject: ‘Fifth Avenue Buyers Interested in Secret Service Protection?’ to advertise a $2.1 million, 1,052-square-foot condo in the tower on 721 Fifth Avenue. … While there’s been a great deal of attention to how Trump plans to divest himself from his conflicts of interest, less attention has been applied to how business associates – including owners and marketers of his properties – may seek to profit from his new job in the White House.

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Wall Street as Landlord: Blackstone Going Public with a $10 Billion Bet on Foreclosed Homes

Jonathan Gray of Blackstone Group LP went on the biggest homebuying spree in history after the U.S. foreclosure crisis, purchasing repossessed properties from the courthouse steps and through online auctions.

Four years, $10 billion and roughly 50,000 homes later, he will find out if his gambit will pay off. Invitation Homes LP, the Dallas-based company Blackstone formed to maintain and rent those homes, has filed confidentially for an initial public offering that could come as soon as January.

Though Blackstone is unlikely to sell much or even any of its stake in an IPO, the stock market debut will test investors’ interest in the idea that the rental-home business can be institutionalized as apartments, shopping centers and office towers were before.

Blackstone and others investors believed that the housing collapse presented a rare opportunity to acquire homes for less than it cost to build them. Millions of foreclosures created a market large enough to justify investing in large systems to manage and maintain sprawling portfolios of rental homes.

Now, these new institutional landlords say the move toward rentals further supports their business model. They point to tight lending standards and a generation of renters who are outgrowing apartments but are too burdened by student debt to buy homes.

Historically, mom-and-pop investors and regional players have owned nearly all the single-family homes for rent. Blackstone and other investors that emerged from the foreclosure crisis face unique challenges in joining them, beyond the chore of maintaining thousands of far-flung homes.

To generate the revenue growth that shareholders will demand, they must pace rent hikes to avoid spooking tenants into becoming home buyers themselves. And now that foreclosure rates have returned to normal levels and prices have rebounded, they could find it difficult to add new houses at attractive prices.

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Home Construction Loan Volume Picks Up the Pace

The volume of U.S. home construction loans grew at the fastest rate in more than two years in the third quarter, according to federal data, a sign that tight postrecession lending conditions might be easing for home builders.

After the housing crash, banks that historically lent money for acquiring land and building new homes cut back significantly.

Access to capital has been especially difficult for small private builders, who are responsible for nearly two-thirds of single-family home construction across the country. Analysts often cite the credit challenges as a prime factor in holding back the supply of new homes.

A return of such lending could spark more home construction. Home prices have recovered from the housing crash and stood at record highs in September, according to the S&P CoreLogic Case-Shiller National Home Price Index. That is partly because the supply of homes is low, with construction about 25% below historical averages.

Financing is critical because builders typically move forward on construction after receiving a deposit from an approved buyer, and don’t see the full home payment until after the project is completed.

Plunge in Mortgage Applications Stalls

The bleeding in the mortgage business appears to have slowed, following a sharp rise in mortgage rates postelection.

Total mortgage application volume was essentially flat last week, compared with the previous week on a seasonally adjusted basis. It fell just 0.7 percent, according to the Mortgage Bankers Association, which included an adjustment for the Thanksgiving holiday.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to its highest level since October 2014, 4.27 percent, from 4.23 percent.

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Rising Prices in Oakland Push Artists Into Risky Housing

San Francisco is full of big dreams. Oakland is where people make them work.

The city of about 400,000 sits on the east side of San Francisco Bay and historically has served as a low-priced alternative to its more famous neighbor, a place where service workers could buy a home, young professionals could get an extra bedroom and artists lived in low-rent warehouses while sleeping beside their next installation.

But over the past few years, as prices have surged across the Bay Area, Oakland’s pricing advantages have mostly eroded. Rents have increased 70 percent in five years, more than in any other big city in the nation, according to Zillow, the online real estate pricing service. The city’s $2,899 median rent is now among the highest, and just short of median rents in Manhattan.

The conditions that led to the fire that killed at least 36 people on Friday night was a result of a dangerous mix of factors in which dozens of partygoers were invited to a warehouse that was dark, congested and mazelike, with flammable art and a jerry-built electrical system.

The victims died because they were trapped in a tinderbox. Yet the economic backdrop of the tragedy is also important because it shows how rising rents and fears of eviction can push vulnerable people in a desperate search for housing to unsafe spaces.

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This $8,000 a Month San Francisco Apartment has a Staff Robot

Jasper is a 40-story luxury high-rise steps away from the San Francisco offices of start-ups like Dropbox, Lyft and Silicon Valley shuttle stops ferrying workers to companies like Google and Facebook.

It seems to embody all that the city’s long-standing residents hate, and aims to offer everything its young tech and finance workers might crave. The building looks and feels like a luxury hotel during a perpetual spring break.

“The new jobs are all tech and finance and so we get a lot of those types of residents,” said Roman Speron, vice president at developer and owner Crescent Heights.

Rents in San Francisco are the highest in the nation, according to real estate tracking company Zumper. New buildings are required to include some affordable housing units, but developers can opt to pay into a fund instead, which is what Crescent Heights did.

An autonomous robot designed by Savioke will join the staff in the future, said Speron. Residents will be able to order items — like desert, champagne, toothpaste or toiletries — using an in-app menu. Staff place the requested item in the robot which will call the elevator, arrive at an apartment door, call the person inside and flip open its top to deliver the item, said Speron. (The robot is already being used in some hotels.)

“We have had parties where the robots delivered water to our guests and it’s pretty funny and outrageous and people are amazed,” he said.

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The Trump Transition
Carson Conundrum

Reaction flooding in to President Elect Donald Trump’s choice, tapping Ben Carson as his nominee for Housing Secretary.

Collingwood Group Chairman Tim Rood on Fox Business’s Cavuto said, “Dr Carson is an intelligent, impassioned, and empathetic individual.”

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As for his lack of experience in the housing arena that may be a positive, Collingwood’s Rood says, “Sometimes the very best policy makers are those who listen; and sometimes, good leaders who are not steeped in the subject matter are better listeners than those who believe they have all the answers.”

>Click Here for Collingwood Chairman Tim Rood’s full interview on FBN’s Cavuto

B.Montgomery_-_Head_Shot.jpgCollingwood Group Deputy Chairman Brian Montgomery tells Westwood One’s First Light radio show, “There is little doubt President-elect Trump greatly admires and respects Dr. Ben Carson and felt strongly about him joining his Cabinet.

Having spent almost eight years in the Executive Office of the President, I speak from experience in saying a Cabinet Secretary who has the ear of the President is a positive for that agency and individual.  In this instance, I think Dr. Carson will be able to “elevate” the issue of Housing within the Trump Administration.  The fact Dr. Carson is a household name I believe will provide him a larger platform to articulate his vision for how best to help tackle any number of issues within the housing arena: shortage of affordable rental housing, the impact of new regulations which have constricted the mortgage market, and the growing senior population and how best to address their housing need.,”

sharga tv.jpg“Dr. Carson’s nomination is an indication of the tremendous respect that President-Elect Trump has developed for his former rival,” says Ten-X EVP Rick Sharga.Sharga adds “Dr. Carson has spoken out in the past about the need to revitalize many of the country’s urban areas, so it wouldn’t be a surprise if he focuses on doing that, and trying to find solutions to the growing problem of affordable housing. Since Dr. Carson has also discussed the unintended consequences of over-reaching government regulations, it’s possible we may also see some streamlining, or regulatory relief as well.”

By the way, Fannies’ stock price ended the day down 5 percent, Freddie’s is down 6 percent, and both were going even lower in after-hours trading

-“The Trump Effect” on Housing, The Collingwood Group Chairman Tim Rood on Fox Business’s Cavuto: chicago.jpg?v=TqPcoYyJuo

-Rood on the National Business Report  >CLICK HERE TO WATCH: Group’ Chairm

-Collingwood’s Rood on Business First AM >CLICK HERE TO WATCH:

-Rood with the trifecta, a third television interview from the Chicago Board of Trade >CLICK HERE:

Will Trump Tackle Housing Finance Reform?

Housing was the talk of the campaign two presidential elections ago, but it stayed under the radar in the 2016 race, leaving plenty of room to speculate about President-elect Donald Trump’s likely mortgage policy for the next four years.

On the one hand, without a crisis, observers said there is little incentive for him to move quickly on the issue.

But the unresolved question of what to do with Fannie Mae and Freddie Mac – both in conservatorship since before Barack Obama’s election – will loom large over the future Trump administration.

Exactly how Trump would address the issue is a complete mystery. The issue was never raised on the campaign trail.

“If you read the republican party platform, it is pretty obvious the Republicans are for less government in housing,” said Brian Montgomery, vice chairman of The Collingwood Group and a former Federal Housing Administration commissioner.

But no one expects sweeping action because other issues are higher priority, such as health care reform.

“If you ask most lenders, the market works today,” says Patrick Sinks, the chief executive of MGIC Investment Corp. and the chairman of U.S. Mortgage Insurers, a trade group for the private mortgage insurance industry.”A lender wants to originate a loan, insure that loan and turn around and sell that loan to the GSEs and replenish their capital and start the process over again. That works. And it keeps humming along.”

As long as that remains true, the incentive to make big chances won’t be there.

“The bigger issue is what the right role for government in housing is,” Sinks said. “That’s going to take legislative action and [lawmakers in either party] just don’t seem to be in a hurry to resolve it.”

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Industry Insight: The Opportunity for Change in Housing Policy

DS News covered what the future of loss mitigation will look like after the expiration of HAMP on December 31, 2016. To explore the topic further, DS News sat down with Meg Burns, Managing Director of The Collingwood Group, to discuss the opportunities that come from pairing a new administration with housing policies such as loss mitigation, regulatory compliance, and more.


Burns joined The Collingwood Group in 2014, and as Managing Director, supports the firm’s Business Advisory and Business Development practices. Prior to Collingwood, Burns served as the Senior Associate Director of the Office of Housing and Regulatory Policy at the Federal Housing Finance Agency (FHFA). There, she managed various policy and regulatory initiatives involving single-family and multifamily finance and loss mitigation strategies, as well as insurance-related activities of the government-sponsored enterprises. As such, she was actively involved in industry-wide discussions regarding the role of the federal government in addressing the mortgage crisis.

With the end of HAMP drawing close, what is to come for loss mitigation?

The fact that the sunset of HAMP coincides with the arrival of a new leadership team in Washington is a great opportunity because there is a chance for a really fresh policy dialogue. The good news is that the industry has a lot of work that has been underway for quite sometime now to put forward a good plan for a new set of loss mitigation strategies including a particular set of modifications. It is a very cool time for HAMP to be expiring in some respects and I think that what we will see are some programs that really do reflect the lessons that have been learned. I also think that the reason a new leadership team in Washington is so helpful is because we can have really honest discussions and assessment of what those lessons learned are. It is often a lot easier for a new group of policy leaders to embrace the policy achievement of the team before them but also to acknowledge program flaws without feeling defensive or like they were integrally associated with them. At its core, what was reaffirmed through the HAMP experience was something that most good policymakers know very well which is that complicated program rules generally translate into fewer program beneficiaries. In the HAMP space there was an extended period where they were really striving for perfection and precision both in the data collection aspect and some of the calculations to determine who was eligible. One of the lessons learned in HAMP is that striving for that perfection and precision really rendered  fewer distressed borrowers eligible. I think that what we will see are the modifications that replace HAMP will be modifications that follow some basic rules rather than complex calculations.

Aside from HAMP, what other policy changes might be impacted by the entrance of a new administration?

I think there is tremendous opportunity across the board and I think that the new leadership team has certainly publicly acknowledged a concern with the heavy-handed nature of the regulatory framework in Washington D.C. today. If the new team begins their policy discussion from that perspective, there is a chance that we will see some of the very aggressive enforcement activity move into a space where those who are responsible for monitoring the leading communities activities will start to identify problems and issues but more for the purpose of addressing them and resolving them as opposed to taking very stringent enforcement actions. That type of enforcement outcome clearly has resulting in less lending activity and stifled access to credit. There is a huge opportunity for the Trump Administration to revisit the way rules have been enforced and to take a more relaxed approach not to identifying problems, but to how those problems get resolved. That should make a big difference for lending activity in the country and help more consumers.

Do you think that taking a relaxed approach will possibly improve homeownership?

I do. I think that the nature of the regulatory expansion over the past eight years has affected home sales. The cost in certain parts of this country to build homes has increased so substantially that it’s almost impossible in certain communities to construct starter and affordable homes. I think there is certainly a good opportunity for this new administration to take a look at ways to reduce some of that regulatory activity to the extent that the federal government has a role. This will also impact the lending space where there have been a lot of new regulations put in place as a result of Dodd-Frank in part. They have had a suffocating effect on the ability of lenders to reach the population of borrowers who are most in need of affordable financing options.

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Housing’sTrump Card

What might housing policy look like under the new Trump administration, and how will Trump work with Congress on housing policy?

In the limited moments that Trump has shared his thoughts on what he would do with the housing market, he stated that one of the big issues facing the housing industry is regulation.

In his speech at the National Association of Home Builders’ 2016 Midyear Board of Directors Meeting in Miami, Florida, Trump said, in particular, there is no group regulated harder than the housing industry. Trump said these regulations kill not just the small businesses but jobs in general. Trump shared that he plans to eliminate these regulations and instead implement a method of creating jobs without regulation.

Likewise, in an interview with Reuters in May, Trump said he plans to overhaul the controversial Dodd-Frank Wall Street Reform and Consumer Protection Act that was passed in 2010 in response to the crisis.

“Dodd-Frank has made it impossible for bankers to function,” said Trump. “It makes it very hard for bankers to loan money for people to create jobs, for people with businesses to create jobs. And that has to stop.”

A lack of priority for housing in Congress is something those in the industry hope to see change with this newly elected house.

“It’s amazing that something so vital as housing to the overall health of the American economy and the average American – is something Congress still can’t rally in support of resolving – especially when the risks associated with continued failure to do so are potentially so serious,” says Brian O’Reilly, The Collingwood Group President. “The facts are that housing is a critical component of overall economic health in the US. Thus, continued failure by Congress to address housing reform is reckless and irresponsible.”

Collingwood’s Montgomery adds that he hopes both sides will heed the words of Franklin Roosevelt, who on the eve of his re-election in 1936 while citing the amount of work to be done said, “we will keep our sleeves rolled up.”

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Have a productive day and a great week ahead!

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