Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
It's your favorite party that created Fannie Mae and Freddie Mac, first Fannie Mae as a federal government agency and then in 1968 as a private corporation.
When I worked at Fannie Mae between 1988-93, the average Guarantee Fee on a MBS Pool of mortgages was 20-25 basis points.
Today, with the 10 basis points Infrastructure Act add on its about 65-75 basis points.
It now costs American Families $2,000 more per year on a $400,000 mortgage and $4,000 per year on a $800,000 mortgage.
Having the government run the GSES is a mistake.
The MBA loves the elevated surcharges to hard working American Families though! !
Let's face it, some American Families are better at managing their limited resources than others. Why should an Unelected Bureaucrat in a federal agency decide which groups will be rewarded at the expense of others?
I'm pretty sure TH said the other day that Fannie Mae and Freddie Mac management has said that the new book of business is not profitable enough to meet capital requirements.
Wasn't it giving mortgages to unqualified borrowers that helped usher in the Great Financial Crisis?
------------
Here, you'll love this quote:
"The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little." -- FDR, Inaugural Address, January 20, 1937.
FDR lived a life of abundance off the generosity of his Domineering Mom, William Randolph Hearst used his family's wealth to create businesses for the benefit of society:
https://www.pbs.org/wgbh/americanexperience/films/citizen-hearst/
You and your family, your children, and grandchildren will now pay almost 50 basis points MORE PER YEAR to access the federal government implicit mortgage guarantee, compared to 2008.
That's $2,000 per year per family in the USA, on a $400,000 home loan.
20% of the 50 basis points (i.e., 10 bps) is due to the Payroll Reduction Act and the Infrastructure Act.
It'd be interesting to see if the States Attorney Generals' challenge it.
Standing could be an issue, the Student loan forgiveness case may shed some light on Standing.
"That’s why I was honored to join a coalition of 34 state financial officers from around the country, led by Pennsylvania Treasurer Stacy Garrity, in signing a letter to the Biden administration voicing opposition."
This penalizing or tax on hard working good credit American Families to subsidize those hard working credit challenged American Families is another great example of the NECESSITY TO GET FANNIE MAE AND FREDDIE MAC OUT OF THE 14.75 YEAR CONSERVATORSHIPS.
Holding 2 of the worlds largest financial intermediaries in perpetual hostage by our own federal government is outrageous!
"Behaving in a financially responsible way isn’t always fun in the moment – but it’s well worth it when you get to reap the rewards of your good decisions later on, as you’re able to enjoy more and more of the things you want and need.
It’s one of the most fundamental principles of our society, and it’s also rooted in one of the basic realities of human nature: Incentivize good behavior, and you’ll get more of it.
But what happens when the incentive structure becomes inverted? We’re about to find out, because that’s what’s going to occur thanks to a new Biden administration policy that took effect on May 1."
"But this new policy is more than simply unfair. It’s also deeply reckless."
"The administration also anticipates some political gain through what is merely the latest of its many wealth redistribution schemes."
It's just simply a possible prelude to oral arguments this Fall in the CFPB case.
If the 5th Circuit CFPB case stands (we'll know next Summer), then we could possibly see challenges to the funding mechanism of mine and yours most favorite federal agency, the Federal Housing Finance Agency !
We'll see what happens!
Nice analysis, thanks again, Clarence! I haven't studied Calcutt, but it does seem as if the lower courts are having a difficult time understanding exactly how Collins should be implemented to prospective litigants looking for relief from SOP violations.
Perhaps the SCOTUS will give us some clarity if they decide to take it.
What do you think about this 5th Circuit CFPB case, you know, the CFPB case and the double insulated power of the purse issue to be heard this Fall?
I am reading Professor Adam Levitin's Amicus Brief now and he says that the funding mechanism is misunderstood by the 5th Circuit.
https://www.creditslips.org/creditslips/2023/05/community-financial-services-of-america-v-cfpb-amicus-brief.html#comments
Oh btw, the Pacific Legal Foundation case should come out soon, should be interesting, TALK ABOUT A SYMPATHETIC PLAINTIFF!
HeeeeHeeee, no 'evil hedge fund guys' there !
'Mr. Market' is approaching a 3 fer 1 conversion....
https://finance.yahoo.com/quotes/fmcc,fnma,fmckj,fmcki,fmccm,fmcck,fmcct,fmcci,fmckk,fmccg,fmcch,fmccl,fmccn,fmcco,fmccp,fmccj,fregp,fmckp,fmccs,fmcko,fmckm,fmckn,fmckl,fnmap,fnmao,fnmfo,fnmam,fnmag,fnman,fnmal,fnmak,fnmah,fnmai,fnmaj,fnmas,fnmat,fnmfm,fnmfn/view/v1?guccounter=1
"Under the logic of the court of appeals’ decision, other fed-
eral bank regulators would be subject to the same consti-
tutional claim."
"A. No federal bank regulator is funded through an-
nual appropriations.
Among federal bank regulators, the CFPB’s funding
mechanism is typical. Not one federal bank regulator is
funded by standard congressional appropriations."
"These other bank regulators, moreover, are funded
using similar mechanisms. The Office of the Comptroller
of the Currency (OCC) is funded through chartering and
examination fees assessed on national banks. See 12
U.S.C. 16. Similarly, the Federal Deposit Insurance Cor-
poration (FDIC), the National Credit Union Administra-
tion (NCUA), and the Farm Credit System Insurance
Corporation are funded with insurance premiums as-
sessed on the mutual insurance funds that those agencies administer. See Henry B. Hogue et al., Cong. Rsch. Serv.,
Independence of Federal Financial Regulators: Struc-
ture, Funding, and Other Issues 27 (Feb. 28, 2017),
https://perma.cc/XXM5-GH7N (Independence of Federal
Financial Regulators); Farm Credit Sys. Ins. Corp., Au-
dited Financial Statements for the Years Ended Decem-
ber 31, 2022 and 2021 F5 (2023), https://perma.cc/
VR2S-CTRM. The Farm Credit Administration is funded
by assessments on the banks and credit associations that
make up the Farm Credit System. See 12 U.S.C. 2002,
2250(a). And the Federal Housing Finance Agency is
funded by assessments on Fannie Mae, Freddie Mac, and
the Federal Home Loan Banks. 12 U.S.C. 4516."
"Although the CFPB regulates more entities than does
the Federal Housing Finance Agency, the latter regulates
entities that finance nearly all domestic residential mort-
gage lending. The Farm Credit Administration, moreo-
ver, regulates lenders that finance over 40% of the U.S.
agriculture industry. See Farm Credit Admin., History of
FCA, https://perma.cc/27ZV-F77B (updated Oct. 12,
2021). And while the FDIC, OCC, and NCUA supervise a
smaller group of entities, those agencies regulate both
consumer financing and, more broadly, “safety and sound-
ness.” See, e.g., 12 U.S.C. 93(b), 1786, 1818."
This is one of the main reasons the MBA, NAR, and NAHB are wary of the USSCT upholding the 5th Circuits ruling that the funding mechanism of the CFPB is Unconstitutional (It also helps explain why nothing has perpetual existence like a federal government agency):
"2. A recent CFPB safe-harbor rulemaking rein-
forces the potential for widespread economic
harm.
A recent CFPB rulemaking—which proposed only to
replace one safe harbor with another—documented the
potential for broader harm to the credit markets and
economy more generally. In 2020, the CFPB issued a pro-
posed rule concerning the sunset date of the GSE Patch,
a Qualified Mortgage safe harbor scheduled to expire on
January 10, 2021. See Qualified Mortgage Definition Un-
der the Truth in Lending Act (Regulation Z): Extension
of Sunset Date, 85 Fed. Reg. 41448 (proposed July 10,
2020). Although lenders liked the substance of the re-
placement, they warned that a rocky transition would dis-
rupt the market for residential mortgages.
As explained by the Mortgage Bankers Association,
suddenly terminating the safe harbor at the end of the
Government Sponsored Entities’ conservatorships could
lead to “severe market disruption.” Mortg. Bankers
Ass’n, Comment Letter on Extension of Sunset Date 6
(Aug. 10, 2020), tinyurl.com/y5n89czd (Mortgage Bankers
Comment). Creditors emphasized that they “cannot
simply ‘flip a switch’ to transition” from one safe harbor
to another. Iowa Bankers Ass’n, Comment Letter on Ex-
tension of Sunset Date 2 (Aug. 7, 2020), tinyurl.com/
4m5y5an2 (Iowa Bankers Comment). Indeed, a hasty
transition would give lenders “no choice but to cut back on
their lending,” because “rapid changes to the regulatory
scheme governing mortgage lending are sure to create
substantial compliance risk.” Ctr. for Cap. Mkts. Compet-
itiveness, Comment Letter on Extension of Sunset Date 2 (Sept. 16, 2019), https://tinyurl.com/52d7w57p (CCMC
Comment).
Dire as they were, these warnings assumed that one
CFPB rule would immediately replace another. An actual
gap between safe harbors would have multiplied these
risks, and the outlook would have been worse yet if the
safe harbor disappeared entirely. See Mortgage Bankers
Comment 4.
2 Because lenders have “little appetite for
[ability-to-repay] uncertainty,” failing to replace the GSE
Patch would prompt “a steep increase in the cost of credit,
or perhaps an inability for some borrowers to access
credit entirely.” Id. at 6. Even worse, there could be “sig-
nificant knock-on effects across the economy.” CCMC
Comment 3.
Lenders feared these significant economic effects if a
single CFPB safe harbor expired. A decision voiding all
CFPB rules would increase that harm exponentially.
Footnote 2:
2 See also, e.g., Am. Bankers Ass’n, Comment Letter on Extension
of Sunset Date 2 (Aug. 10, 2020), tinyurl.com/ycy695h3 (citing “risk of
market disruption”); Credit Union Nat’l Ass’n, Comment Letter on
Extension of Sunset Date 2 (Aug. 10, 2020), https://tinyurl.com/
zyx8wvfj (urging CFPB to “avoid gaps in QM coverage that would
disadvantage borrowers and create uncertainty in the nation’s eco-
nomically vital mortgage lending market”); Indep. Cmty. Bankers of
Am., Comment Letter on Extension of Sunset Date 3 (Aug. 10, 2020),
https://tinyurl.com/bd2bnupt (predicting “harmful effects on the
availability and cost of credit if the GSE Patch expires before the Bu-
reau amends the General QM requirements”); Real Est. Servs. Pro-
viders Council, Comment Letter on Extension of Sunset Date 1 (Aug.
6, 2020), https://tinyurl.com/yc895d73 (“We do not want consumers to
lose any access to credit because of uncertainty under any new rule.”)."
"These secondary markets finance at least 70% of
the current $13.4 trillion in outstanding home mortgages
and over $1.5 trillion in other outstanding consumer loans.
See Urban Institute, Housing Finance Policy Center,
Housing Finance at a Glance: A Monthly Chartbook 6
(Apr. 2023), https://perma.cc/KKV6-2WGH (Housing Fi-
nance at a Glance); SIFMA, US Asset Backed Securities
Statistics (May 4, 2023), https://perma.cc/2APC-S2HJ."
"Nonbank creditors, for example, dominate large portions
of the consumer-lending markets and finance more than
four in five new government-backed mortgages. See, e.g.,
Housing Finance at a Glance 11 (83% of all government-
backed originations in March 2023). Yet without second-
ary-market financing, they cannot afford to lend."
Elizabeth is not pleased: "Without a complete regulatory review, and at a cost of $13 billion to the Federal Deposit Insurance Fund, the nation's biggest bank — already too big to fail — got a bargain deal on a failing bank that made it even bigger," wrote Warren, D-Mass."
https://www.cnbc.com/amp/2023/05/18/elizabeth-warren-presses-regulators-on-first-republic-takeover.html
https://www.cnbc.com/2023/05/18/home-sales-fell-in-april-amid-high-prices-mortgage-rates.html
https://www.nar.realtor/infographics/existing-home-sales-housing-snapshot#:~:text=April%202023%20brought%204.28%20million,0.7%20months%20from%20April%202022.
https://www.nar.realtor/newsroom/existing-home-sales-faded-3-4-in-april
"That brings us to this week’s new business. The Supreme Court will be considering a total of 151 petitions and applications at Thursday’s conference. They will be reviewing only two of those petitions for the second time.
First up is Calcutt v. FDIC, involving separation of powers and administrative law claims. Harry Calcutt was president, CEO, and chairman of the board of Northwestern Bank, a Michigan community bank. After a series of loans with the bank’s biggest customer group went sour, Calcutt was removed from his positions and barred from holding further banking positions by the Federal Deposit Insurance Corporation, whose board members are removable by the president only for cause. The FDIC board acted based on the recommendation of an administrative law judge who was removable by the federal Merit Systems Protection Board only for cause; the MSPB is in turn itself removable by the president only for cause. Critics have long argued that such removal restrictions impinge on the president’s ability to supervise the executive branch and ensure that the laws be faithfully executed.
Calcutt challenged the FDIC’s actions. The U.S. Court of Appeals for the 6th Circuit stayed the FDIC’s order pending appeal, but ultimately denied review. The court held that Calcutt wasn’t entitled to relief on his claims that the removal restrictions on the FDIC board members (and the administrative law judge) violated separation of powers, because under Collins v. Yellen, he had not shown that that the removal restrictions had any effect on his case. Then by a 2-1 vote, the court of appeals held that FDIC had erred in not applying a proximate causation standard in determining the harm Calcutt’s actions had caused, but held that remand was not warranted because substantial evidence still supported the FDIC’s finding that Calcutt had caused and would cause harm.
The majority rejected Calcutt’s invocation of SEC v. Chenery Corp., which held that an agency’s action can be reviewed based only on its own reasoning. The majority wrote that “[r]emand is unnecessary where an agency’s incorrect reasoning was confined to [a] discrete question of law and played no part in its discretionary determination, and [the agency] reaches a conclusion that it was bound to reach.”
Judge Eric Murphy dissented in part. He agreed that Calcutt had not shown that the removal restrictions had affected the FDIC’s past actions. But because the agency had applied the wrong causation standard, Murphy would have remanded for the FDIC to apply the correct causation rules in the first instance. He concluded that the majority had “run[] afoul of basic administrative-law principles” by affirming the FDIC’s decision based on proximate-cause determinations that the agency itself had not made.
The 6th Circuit denied rehearing, although the FDIC did not oppose it. Justice Brett Kavanaugh stayed the decision pending Supreme Court review; the FDIC opposed the stay on the issue of the removal restrictions, although not on the remand issue.
Calcutt now seeks Supreme Court review, supported by a whopping six amicus briefs. He argues that the 6th Circuit violated SEC v. Chenery Corp. by not remanding the case to the agency after determining that the agency had applied the wrong legal standards. He also argues that the 6th Circuit misapplied Collins v. Yellen, saying it does not require separation-of-powers challengers to offer concrete proof of prejudice as a prerequisite to courts resolving separation-of-powers challenges to removal restrictions on the merits. And he argues that the standard is different when a party challenges both past actions and future actions.
The FDIC concedes that summary reversal is warranted on the first issue because the court of appeals should have sent the case back to the FDIC board after it concluded that the board applied the wrong standard. But, the government argues, the court of appeals was correct that Calcutt was not entitled to relief on his separation-of-powers challenges, which does not conflict with any holding of either the Supreme Court or another court of appeals.
Calcutt argues in his reply that if the court summarily reverses on the remand issue, it should “kill two birds with one stone” by correcting its “impossible to satisfy” standard for showing a separation-of-powers error was not harmless. Although Calcutt seems to be pitching mainly for summary reversal, he urges the court to grant plenary review on both issues rather than simply reversing on the remand issue."
https://www.scotusblog.com/2023/05/separation-of-powers-and-mental-health-evidence-in-capital-sentencing/
"INTRODUCTION AND SUMMARY OF
ARGUMENT
If this Court rules for Respondents and strikes
down the Payday Lending Rule, 82 Fed. Reg. 54,472
(Nov. 17, 2017) (codified at 12 C.F.R. §§ 1041.7,
1041.8), it must be careful to ..."
The MBA, NAR, and NAHB may have reason to worry, as Clarence, Neil, Samuel, Brett, and Ketanji were test driving Bulldozers at the local John Deere dealer the other day !
"Amici submit this brief
to highlight the potentially catastrophic consequences
that a decision drawing those rules into doubt could
have on the mortgage and real-estate markets. Thus,
this Court should take care not to call into question
current CFPB regulations, including those governing
the real-estate financing industry, which could lead to
immediate and intense disruption to the housing mar-
ket, harming both consumers and the broader econ-
omy."
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES ..................................... ii
INTEREST OF AMICI CURIAE.............................. 1
INTRODUCTION AND SUMMARY OF
ARGUMENT....................................................... 2
ARGUMENT ............................................................. 5
I. Ruling In A Manner That Calls Into
Question All Of The CFPB’s Rules Could
Destabilize The Mortgage Market..................... 5
II. If Ruling For Respondents, The Court
Should Take Steps To Limit The Scope
And The Adverse Consequences Of Such A
Ruling................................................................ 16
A. This Court should sever the offending
provisions from the funding statute........... 16
B. This Court also should grant de facto
validity to the CFPB’s past actions not
challenged here. .......................................... 19
CONCLUSION........................................................ 23
"In particular, Congress found a “hard learned
lesson” in the experience of the Office of Federal
Housing Enterprise Oversight (OFHEO). Id. at 163.
OFHEO was the regulator that was supposed to
ensure the financial safety and soundness of Fannie
Mae and Freddie Mac, but post-crisis analysis
concluded OFHEO’s effectiveness had been hindered
by needing to seek annual appropriations, rather than
having a steady stream of regular funding. Id.
For that reason, Congress had already chosen by
2008 to have OFHEO’s successor agency, the Federal
Housing Finance Agency, funded through
assessments on regulated entities—set at a level
determined by the Agency, with no cap—rather than
annual appropriations. Id.; Housing and Economic
Recovery Act of 2008, § 1106, Pub. L. No. 110-289, 122
Stat. 2653, 2669 (providing for agency to “collect from
the regulated entities annual assessments in an
amount not exceeding the amount sufficient to provide
for reasonable costs ... and expenses”)."
Skepi, now DON'T get your hopes up again that the Shareholders will one day (whilst we are still alive!) actually receive some Justice from the courts here !
Sherrod and Maxine file Amicus Brief in CFPB case today (along with 142 other US Senators and House and former House members including MELVIN WATT, ELIZABETH WARREN, RO KHANNA, AND MARK WARNER):
https://www.cnbc.com/2023/05/15/supreme-court-cfpb-case-democrats-file-amicus-brief.html
TABLE OF CONTENTS
INTEREST OF AMICI CURIAE................................. 1
INTRODUCTION AND SUMMARY OF
ARGUMENT ................................................................ 1
ARGUMENT ................................................................ 5
I. Congress Has Broad Authority To Shape
Appropriations To Best Fit The Program Or
Problem At Hand. ........................................................ 5
A. The Constitution Gives Congress Near-
Plenary Authority over Appropriations. ......... 5
B. Historic and Contemporary Practice
Confirms Congress’s Authority to Flexibly
Structure Appropriations. ............................... 9
1. The current appropriations process is a
relatively recent legislative choice. ............ 9
2. From the Early Republic to today,
Congress has often structured
appropriations in a wide variety of
ways beyond annual appropriations
acts. ............................................................ 14
II. Exercising Its Constitutional Flexibility,
Congress Chose To Fund The CFPB With A
Steady But Capped Appropriation To Avoid The
Regulatory Failings That Contributed To The
2008 Financial Crisis. ............................................... 18
III. Congress Exercises Robust Continued
Oversight Over The CFPB And Its Budget. ............. 21
CONCLUSION .......................................................... 29
APPENDIX ................................................................ 1a
I don't know, JB never called me up to ask about the banking crisis:
https://fortune.com/2023/03/19/warren-buffett-in-talks-with-biden-administration-on-regional-banking-crisis-possible-investment/
Todays WP: "Indeed, the new requirements could increase the amount of capital that banks are required to hold by 20 percent, representing the "most consequential change to US banking regulation" since passage of the Dodd-Frank legislation after the 2008 financial crisis, according to a new report by PwC, one of the big four accounting firms."
https://www.wsj.com/articles/pacwest-stock-decline-indicates-bank-fears-persist-4569556b
Today, Sandra backed down from making Primary Mortgage Lenders delivering mortgages with Debt to Income ratio borrowers above 40% pay more to deliver the mortgages to Fannie Mae and Freddie Mac. Earlier in the year she delayed implementation until 2024.
That's a 'yuge' win for the MBA and they are pleased.
The Cross Subsidization of High Risk borrowers by Lower Risk borrowers has been in effect since January 2023, with payments for them coming due May 01, 2023.
So, YES, HARD WORKING, LESS CREDIT RISK AMERICAN FAMILIES ARE SUBSIDIZING HARD WORKING, HIGHER CREDIT RISK AMERICAN FAMILIES.
He makes some solid points. Having Major Economic Questions affecting the backbone of the US Housing and Secondary Mortgage Market decided by one DC Bureaucrat at FHFA (controlled by the POTUS) with ZERO public hearings and accountability coupled with the political policies of whatever regime is in power, is a recipe that does not bode well for Americans generally and the Mortgage Finance Industry in particular.
Especially when Administrative political policies are contra to fundamental mortgage underwriting principles.
Shouldn't HUD and FHA be funding these Higher credit risks instead of making hard working American Families with better credit scores and down payments pay the costs?
WB was answering a question right after the lunch break on Saturday about the current woes in banking.
He was making a point about just how messed up and ill aligned the banking regulators are.
In Navy's video clip, Warren said that he and Charlie could have done the work of 150 people or so at the Federal Housing Finance Agency.
I think the dti llpa fees were for mortgagors whose Debt to Income ratio exceeded a certain threshold (e.g., 43%).
It's classic mortgage underwriting, higher dti's result in higher default rates.
Sandra's announcement today was about not adding those extra llpa fees for lenders.
It's just another gift from Sandra to Bob B. over at the MBA, likely for Bob's public news commentary about how the new cross subsidization of higher risk borrowers by lower risk borrowers, "has been wrongly mischaracterized".
The cross subsidization pricing fees were implemented in January 2023 and are to be paid May 01, 2023.
Congress would never allow this, as evidenced by Tim Scott and Pat McHenry.
One could argue to a federal court that the MQD has been violated as it is a Major Economic and Political Importance Question affecting the nations mortgage market.
Standing could be a hurdle, but let's see if the Supremes give us anymore clarity in the student loan forgiveness case, coming out shortly.
https://www.yahoo.com/lifestyle/beloved-costco-food-court-item-160000347.html
"For the uninitiated, it may not seem like a big deal. Onions? For a hot dog? That's it? But real devotees know that Costco shoppers were devastated when the onion dispensers disappeared from food courts during the COVID-19 pandemic. The condiment was so missed that it even became a punchline to many a viral tweet."
5/10/2023
FHFA Announces Rescission of Enterprise Upfront Fees Based on Debt-To-Income (DTI) Ratio
Washington, D.C. – The Federal Housing Finance Agency (FHFA) today announced that it has rescinded the upfront fees based on borrowers' DTI ratios for loans acquired by Fannie Mae and Freddie Mac (the Enterprises). FHFA announced in March it would delay implementation in order to engage with industry stakeholders and better understand their concerns.
"I appreciate the feedback FHFA has received from the mortgage industry and other market participants about the challenges of implementing the DTI ratio-based fee," said Director Sandra L. Thompson. "To continue this valuable dialogue, FHFA will provide additional transparency on the process for setting the Enterprises' single-family guarantee fees and will request public input on this issue."
Consistent with the Enterprise Regulatory Capital Framework finalized in 2020, appropriately capitalizing each Enterprise is critical to ensuring that they are well positioned to meet their mandate of providing liquidity and stability to the secondary mortgage market and supporting access to affordable mortgage credit throughout the nation.
Additional details about the upcoming Request for Input (RFI) on the single-family guarantee fee pricing framework will be released shortly.
https://finance.yahoo.com/news/just-miss-few-payments-screw-172747688.html?bcmt=1
"Schiff’s response was, “Just miss a few payments, screw up your credit score. That will help your mortgage rate.”
Schiff, who successfully predicted the financial crisis of 2008, pointed out the issues with this change.
“This new rule encourages people to make smaller down payments than they might otherwise have made,” he said. “Normally, if you make a big down payment, you get a better rate. But now, Biden wants the better rates to go to people that don’t make a big down payment.”
While the new rule could lead to more people becoming homeowners, it does not bode well for America’s banks, according to Schiff."
Todays NYT: "Under the new pricing structure, mortgage borrowers with higher credit scores — and down payments of about 15 percent to just under 20 percent — saw fees climb the most, while those with lower scores and down payments had the most significant declines."
"But the specifics will vary based on your circumstances. Consider a borrower with a 740 credit score and a down payment of 20 percent. On a $300,000 mortgage, her upfront fee will rise to $2,625, or 0.875 percent of the loan, from $1,500, or 0.5 percent."
This is the kind of political policies that having government run GSE'S will mean so long as the federal government has 100% control of these 2 corporations.
"They'll NEVER go PRETEND PRIVATE AGAIN !" Jim Parrot August 2012
https://thehill.com/business/3985465-do-new-mortgage-fees-penalize-borrowers-with-good-credit/amp/
“In other words, the policy will take money away from the people who played by the rules and did things right — including millions of hardworking, middle-class Americans who built a good credit score and saved enough to make a strong down payment,” the letter read. "
"Some criticism has also targeted down payments, specifically arguing FHFA is imposing higher fees are being imposed on more creditworthy applicants so they can undercharge those with risky loans. "
Thanks! Appreciate all your efforts here!
BA's latest Tweet calls for expansion of the FDIC program (I added bold):
https://twitter.com/BillAckman/status/
The regional banking system is at risk. SVB's depositors' bad weekend woke up uninsured depositors everywhere. The rapid rise in rates impaired assets and drained deposits. Zeroing out shareholders and bondholders massively increased the banks’ cost of capital. CRE losses loom. Meanwhile, higher-yield, more user- friendly alternatives beckon
@Apple
.
The
@FDICgov
failure to update and expand its insurance regime has hammered more nails in the coffin. FRB would not have failed if the FDIC temporarily guaranteed deposits while a new guarantee regime were created. Instead, we watch the dominoes fall at great systemic and economic cost.
Banking is a confidence game. At this rate, no regional bank can survive bad news or bad data as a stock price plunge inevitably follows, insured and uninsured deposits are withdrawn and 'pursuing strategic alternatives' means an FDIC shutdown over the coming weekend. And there is no incentive to bid until Sunday after the failure.
The GSIBs have an unfair competitive advantage as too big to fail means only their uninsured depositors can sleep soundly. Until the playing field is leveled, the regional banks are at grave risk.
Confidence in a financial institution is built over decades and destroyed in days. As each domino falls, the next weakest bank begins to wobble. Until investors are rewarded for betting on a wobbling bank, there will be no bid, and the best sale is the last price.
We are running out of time to fix this problem. How many more unnecessary bank failures do we need to watch before the FDIC,
@USTreasury
and our government wake up? We need a systemwide deposit guarantee regime now.
Nevertheless, a $1B+ hit to earnings is worthy of Disclosure by senior management isn't it?
Even if we win in Lamberth, the outcome will be appealled and that could take some time.
Here's a crazy idea, maybe FHFA could follow HERA'S primary statutory purpose and conserve and preserve the entities assets instead of giving them away to the government during the remainder of the CONservatorships.
Could be 'yuge' !