@realbenCarson Confirmation Hearing Day

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Everything YOU need to know to stay ahead of your competitors
January 12, 2017
Carson Confirmation Hearing Day

Confirmation hearings begin at 10 a.m. ET for Ben Carson as Housing and Urban Development Secretary.

Collingwood Group Chairman Tim Rood will provide his take on Carson and more this morning at 7:50am ET on FBN’s Maria in The Morning. 

Rood, stim carson.jpgpeaking a couple of weeks ago on Fox Business’s Cavuto said, “Dr Carson is an intelligent, impassioned, and empathetic individual.”

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


Collingwood Group Vice 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.”

Like a Phoenix, Rising

The Ten-X, Economic and Single-Family Housing Market Outlook Report for Phoenix,  reveals that the metro’s homeownership rate dropped slightly to 63 percent, just 0.4 percent down from Q2. Home sales also edged down slightly while home prices in the area continued to rise and inventories remained tight. “Like a number of other areas hit hard during the foreclosure crisis,


Phoenix is now one of the healthiest housing markets in the country,” said Ten-X Executive Vice President Rick Sharga. “Phoenix was ranked as the 12th strongest market in our Ten-X Winter single family housing report, due to the strength of the region’s underlying economy.”    Phoenix existing home sales dipped in the third quarter of 2016 to a seasonally adjusted annual rate (SAAR) of 114,000, a 1.3 percent year-over-year decrease. Though existing home sales cooled, they remained at a high level, just 16 percent below their bubble-peak, reflecting healthy demand for housing in the area. The inventory of homes for sale in Phoenix continued to be tight, hovering around 21,940 properties, down 0.3 percent from a year ago, while the average time a home for sale sat on the market remained at a seasonally adjusted 61 days. Though they continued to lag behind historical levels, both housing starts and permits picked up by 4.2 and 2.2 percent year-over-year respectively.

If You are in the Phoenix area listen for Rick Sharga on KTAR Radio news with more on this story. 

Mortgages as Political Footballs

While many in the mortgage and real estate industries are praising the Obama administration decision to lower FHA mortgage insurance premiums, the chairman of the House Financial Services Committee isn’t happy about the move.

The FHA is reducing its premiums from 0.85% to 0.60%. Congressman Jeb Hensarling (R-Texas) said that the move was “cynical” and put taxpayers at risk.

“It seems the Obama administration’s parting gift to hardworking taxpayers is to put them at greater risk of footing the bill for yet another bailout,” Hensarling said. “Just three years ago the taxpayers had to spend $1.7 billion to bail out the FHA.  Lowering premiums to below market rates now only puts the FHA in a more precarious financial condition.”

Mortgages Don’t Share in Trump-Election Bounce

Demand for mortgages fell substantially during the last three months of 2016 after rates spiked by more than half a percentage point in the wake of Donald Trump’s election. Total mortgage applications dropped 21% from the third quarter, led by demand for refinances which fell 31%, according to Mortgage Bankers Association data.

Mortgage application volume increased 5.8 percent on a seasonally adjusted basis last week from the previous week, but application volume is 25 percent below year-ago levels.

Applications to refinance a home loan, rose 4 percent for the week, but are 32 percent lower from the same week a year ago.

“Ten-year Treasury yields fell the week following New Year’s Day as markets continue to adjust their expectations about the incoming administration and Federal Reserve policy,” said Lynn Fisher, MBA vice president of research and economics.

The average 30-year mortgage decreased to 4.32 percent from 4.39 percent.

Mortgage applications to purchase a home rebounded a stronger 6 percent for the week. Purchase volume is still nearly 18 percent below where it was one year ago.

America’s Fastest-Growing Loan Category Has Eerie Echoes of Subprime Crisis

Deanna White told a contractor she couldn’t afford the $42,200 loan he recommended for improvements to her house in Inglewood, Calif. The contractor, she recalled, said she wouldn’t be on the hook because the loan was part of a “government program.” She applied and was approved.

Two years later, Ms. White is struggling to make payments on the loan, which was packaged with more than 10,000 similar loans into bonds and sold to investors. Under its terms, Ms. White’s five-bedroom house could be foreclosed on if she defaults.

Her loan is part of a booming corner of the lending industry called Property Assessed Clean Energy, or PACE. Such loans, set up by local governments across the U.S., are designed to encourage homeowners to buy energy-efficient solar panels, window insulation and air-conditioning units.

About $3.4 billion has been lent so far for residential projects, and industry executives predict the total will double within the next year. That would likely rank PACE loans as the fastest-growing type of financing in the U.S.

As the loans spread, so do problems that echo the subprime mortgage crisis. Plumbers and repairmen essentially function as loan brokers but have scant training and oversight. They often pitch PACE loans to help land contracting jobs and earn referral fees from lenders, according to loan documents and more than two dozen borrowers, industry executives and employees.

read more: http://www.wsj.com/articles/americas-fastest-growing-loan-category-has-eerie-echoes-of-subprime-crisis-1484060984

All In the Family

In mid-December, a parking lot was sold in Brooklyn’s Dumbo neighborhood for $345 million. It was no ordinary parking lot,the parcel came with 1.1 million square feet of development rights. One of its new owners, Jared Kushner, was planning to build something big there. Now Kushner might be looking to sell his stake sooner than expected, as he prepares to start his new job as senior adviser to his father-in-law, President-elect Donald Trump.


Still Ahead


  • Ben Carson, HUD Secretary Confirmation hearings 10 a.m. ET


  • University of Michigan Consumer Sentiment Index for January 2017

The Trump Transition
Inside Word From @realDonaldTrump Economic Team Meeting
rood cnbc december-697494-edited.jpg

Collingwood Group Chairman Tim Rood met in New York with President Trump and his economic team including Treasury 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 

It’s Time for an Office of National Housing Policy

by Collingwood Vice Chairman Brian Montgomery, former FHA Commissioner 

B.Montgomery_-_Head_Shot.jpgOn Jan. 20, 2017, four military aides will accompany the sitting president and vice president (and their successors) on a one-way motorcade to the U.S. Capitol. After the Oath of Office has been administered, a seamless handover of military power will occur, and the combined military command will report to President Donald Trump. Americans can be comforted by the near-perfect transfer of the commander-in-chief role from the outgoing, to the incoming president.

To the detriment of the nation’s homebuyers, no such unified and detailed plan involving our nation’s housing finance system currently exists. The Executive Office of the President should create a new office, aptly named the Office of National Housing Policy, to be tasked with developing a unified and collaborative approach to our nation’s housing policy, including homeownership and subsidized rental housing.

The prevailing view within the mortgage industry is there is little collaboration within the federal government in relation to housing policy and rules promulgation.

Despite the government controlling 90% of the residential mortgage market (and almost the entire subsidized rental market), the next president will inherit a tangled web of agencies that provide market liquidity, offer mortgage insurance and ensure regulatory oversight.

Roles and responsibilities of the current, disparate housing-related agencies are distinct and exist in silo-based structures. No unified command in our housing sector exists; to the contrary, one portion of the government heaps new rules onto the lending community, while others wait in the wings ready to pounce and prove their enforcement prowess.

To address competitive overlap amongst government entities this country could use a Housing Policy Czar — a person (and office) charged with developing, disseminating and enforcing a coordinated, collaborative housing policy and finance strategy that considers the capabilities and strengths of each independent agency.

The creation of policy experts known as “czars” with a singular focus began as far back as the Woodrow Wilson administration, but was greatly expanded during World War II under President Franklin D. Roosevelt (and subsequent presidents).

The ever-expanding regulatory burden has resulted in notable market contraction — with fewer small, community-based banks and fewer borrowers served — a predictable outcome. The government’s fragmented approach to regulatory reform and consumer protection in the aftermath of the housing crisis has today resulted in homebuyers with higher credit scores, who have higher income and are disproportionately white.

Rather than a well-synchronized plan for active warfare, the mortgage market battle plan offers a variety of competing, overlapping entities. Perhaps developing a well-coordinated “plan of attack” could start with the obvious intersection between the Federal Housing Administration and the government-sponsored enterprises.

At some level, the GSEs and FHA compete for the same customers with the ultimate risk either borne through Ginnie Mae, Fannie Mae or Freddie Mac, and at some level the private mortgage insurers. Yet, alignment of the capital standards, which would appropriately establish more appropriate pricing levels for the distinct entities to best serve their target consumer markets, doesn’t occur.

Of primary concern is to determine the future role of the GSEs since conservatorship is not a permanent state. Of equal importance would be a review of the impact of regulatory compliance on mortgage lenders which has pushed the cost of originating a mortgage loan in 2015 to $7,046 (up from $4,500 in 2008).

Of equal concern is the use of the False Claim Act by the Justice Department to punish FHA lenders for what were often administrative errors. The overreach of the FCA by the Department of Justice has driven FHA’s top producing lenders such as JPMorgan Chase, Bank of America and Citi Mortgage largely out of the nation’s flagship home buying program.

A prudent reassessment of Dodd-Frank, the future of the GSEs, fair housing, increasing homeownership rates and addressing rental housing demand all warrant a comprehensive strategy and definitive performance metrics. An independent ombudsman-type approach to housing policy, specifically denationalizing housing finance and promoting risk-sharing with the private sector, is needed and long overdue.

The objective of this approach would be to monitor systemic risk, reduce uncertainty, end competitive overlap and eliminate the duplication of efforts among agencies. The existing disjointed structure is antiquated and has not worked well.

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

-Rood on the National Business Report  >CLICK HERE TO WATCH: https://youtu.be/nxQu7fxkyOg-Collingwood Group’ Chairm

-Collingwood’s Rood on Business First AM >CLICK HERE TO WATCH: https://youtu.be/6OKQyEQ-bpo

-Rood with the trifecta, a third television interview from the Chicago Board of Trade >CLICK HERE: https://www.youtube.com/watch?v=vU0MXC8vRRo


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Have a prosperous day!

Lou Giserman

Senior Media Consultant

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