Trump Administration’s Housing Conundrum

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Everything YOU Need to Know to Stay Ahead of Your Competitors
April 6, 2017

Trump Administration’s Housing Conundrum

“The Trump administration has its work cut out for it. While the Republicans control the White House and both chambers of Congress, never before has a majority felt so unpredictable.“….the Collingwood Group Chairman Tim Rood’s view as he spoke and led discussions at the Eighth Annual Five Star Government Forum at the Newseum in  Washington, DC.

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“You don’t have to look much further than the recent attempt at rolling back Obamacare to appreciate how tenuous the republican majority in Congress truly is,” says Collingwood’s Rood. “Sustainable and affordable homeownership is a bipartisan issue and it’s clearly important to this administration.”

“There are a number of things on the housing policy front for the Trump administration to address and none of them are trivial,” says Rood. 

Collingwood Group Chairman Tim Rood’s list of top housing priorities for the White House and Congress:

  • The role of government in the housing market
  • Fannie Mae, Freddie Mac reform
  • FHA and GNMA reform
  • Constitutionality of the CFPB’s structure
  • Overly punitive and contentious compliance and enforcement posture of state and federal agencies
  • Labor and regulatory restraints on the home building industry
  • Monetary and fiscal policy

Rood warns, “At the end of the day – if the growth and prosperity agenda of the Trump administration is unsuccessful in creating more jobs, higher incomes, and more investment incentives – then even the most well thought out and constructed housing policy reform will not keep the housing and mortgage markets afloat.

Mortgage Loan Size Hits Record High

The average size of mortgage loans for purchase applications has reached a new high of $318,200.

This, as the Mortgage Bankers Association reports mortgage applications  decreased 1.6% last week from one week earlier. And broken up, the Refinance Index decreased 4% from the previous week, while the seasonally adjusted Purchase Index increased 1% from one week earlier

  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to 4.34% from 4.33%.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) decreased to 4.24% from 4.26%.
  • Similarly, the average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.15% from 4.24%.
  • The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 3.57%, and the average contract interest rate for 5/1 ARMs increased to 3.33% from 3.30%.

Mortgage rates are higher than they were before the election, but they really haven’t moved much in the past few weeks.

Jamie Dimon Calls for Sensible Banking Regulations

JPMorgan Chase Chief Executive Jamie Dimon on Tuesday called for more flexible banking regulations — like having financial institutions be required to hold smaller capital cushions.

In his annual letter to shareholders — one that was more focused on public policy than his bank — Dimon seemed to reach all the way to Washington in an attempt to effect change in a very pro-business administration.

Dimon, 61, said easing off on some regulation would spur lending.

Over 45 pages, Dimon said the banking sector could survive more sensible regulation because it is “safer and stronger today” — because of many of the provisions in the Dodd-Frank financial laws, including higher capital requirements.

“We are not looking to throw out the entirety of Dodd-Frank or other rules,” he wrote, adding that he wants to “open up the rulebook in the light of day” to scrap some rules.

 Dimon said that while US was still the greatest country in the world, there is “something wrong” within its borders.

“Our problems are significant, and they are not the singular purview of either political party,” the executive wrote. “We need coherent, consistent, comprehensive and coordinated policies that help fix these problems.”

read more: NY Post 


Fed Minutes Show Most Officials Saw Reduced Balance Sheet ‘Later This Year’

Federal Reserve officials agreed at their March policy meeting that they would likely begin shrinking a $4.5 trillion portfolio of Treasury and mortgage securities later this year, though they remained undecided on some important tactical questions, such as how quickly to reduce the holdings and to what level, according to minutes of the meeting released Wednesday.

The minutes of the March 14-15 meeting help to answer a question hanging over markets in recent months. The central bank has been telegraphing interest-rate increases for years but has been noncommittal on how it will handle the sizable securities holdings it acquired through asset-purchase programs during and after the 2007-09 recession. Those programs were meant to hold down long-term interest rates and boost economic growth.

read more: Wall St Journal

CFPB Chief Grilled on the Hill

The chairman of a powerful House committee welcomed the nation’s top consumer financial watchdog to a hearing Wednesday by expressing surprise he showed up, and hoped he never does so again.

The more than three hours of questioning that followed marked a new level of hostility in the sharply partisan battle over a controversial agency.

“I believe the president is clearly justified in dismissing you and I call upon the president … to do just that, and to do it immediately,” Rep. Jeb Hensarling (R-Texas) told Richard Cordray, director of the Consumer Financial Protection Bureau.

Republicans on the House Financial Services Committee addressed Cordray like prosecutors as they targeted the head of an independent agency they have opposed since its creation in 2010 and which played a key role in sanctioning Wells Fargo & Co. for its fake accounts scandal.

Part of the GOP attack focused on the Wells Fargo case as they argued the watchdog agency “was asleep at the wheel” in identifying that the bank was creating unauthorized accounts and only got involved after the Los Angeles Times and Los Angeles City Atty Feuer had uncovered the problems.

Cordray, one of the highest-profile remaining appointees by President Obama, faced a withering attack in his first congressional appearance since President Trump’s inauguration.

Cordray reiterated past statements that the bureau was tipped off by whistle-blower tips in mid-2013, before The Times article appeared, “although I would say that was a splendid piece of investigative reporting.”

“They don’t want to give us any credit for anything we do,” Cordray told Capuano about the bureau’s critics.

read more:LA Times

Most Affordable Housing for Millennials 

Home prices have hit a 31-month high, according to the latest data from S&P/Case Shiller. And in three cities — Seattle, Portland and Denver — they’ve hit all-time highs. This is bossting the average age of first-time homebuyers to their mid-30s.

Some relief comes in a study  by financial firm SmartAsset, which looked at every U.S. market with at least 300,000 people and rated them based on how affordable the houses were, how stable the market was (so you’re less likely to lose your investment) and the availability of conventional mortgage loans.

Here are SmartAsset’s top cities for first-time homebuyers:



Watch This:

Today- Countdown to Jobs Report:

  • Challenger Job-Cut Report 7:30 AM ET
  • Jobless Claims 8:30 AM ET
  • Chain Store Sales

Tomorrow – The Big Kahuna!

  • Jobs Report Employment Situation 8:30 AM ET

Have a prosperous day ahead.

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