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"Not only are builders still experiencing supply chain disruptions and a massive labor shortage, they also can’t find enough land on which to build.
“Lot availability is at multi-decade lows and the construction industry currently has more than 330,000 open positions,” said NAHB Chief Economist Robert Dietz, who called on policymakers to focus on resolving these issues."
https://www.cnbc.com/2021/11/16/homebuilder-confidence-surges-past-expectations-as-buyer-demand-remains-high.html
Housing 335 million Americans is always important, however subsidizing marginal home borrowers while trying to rebuild capital after the "Conservator" swept over 28 quarters of retained earnings to itself is a further abuse of governmental power.
If the current administration wants to hand out freebies and subsidized mortgage products to its targeted voter base they should do it through HUD, whose mip is way over funded.
Let's see if they get $350B or $150B from their BBB legislation. If they do, it will take the pressure off of raiding the very limited assets of the gses. If they don't, look out because they could try to kill the twins again, this time by successfully loading the gses up with subsidized high risk loans (e.g., high ltv/low Fico mortgages) coupled with a housing downturn.
Pretty sure that Mel Watt, Senators Warren, Brown, and Warner and a host of other important decision makers inside the current administration would rather see these companies as totally government owned. Why? To use them as tools to hand out benefits to low and moderate income Americans.
https://www.housingwire.com/articles/opinion-rethinking-the-fha-mortgage-insurance-premium/
https://www.cnbc.com/amp/2021/11/16/home-depot-hd-q3-2021-earnings.html
A strong housing market has helped Home Depot and rival Lowe's. Consumers have been investing more as home prices climb, increasing nearly 20% compared with a year ago. Demand for materials has been rising from home professionals, helping to offset lower demand from do-it-yourself projects. Home Depot holds a larger share of the professional market, although Lowe's is trying to win more of that business.
Home Depot executives told analysts that professionals are still working through backlogs of projects as consumers feel comfortable having electricians, plumbers and contractors in their homes again. The retailer also recently relaunched its loyalty program for professionals, drawing more traffic to its mobile app in the hopes of convincing them to shop at Home Depot for all of their jobs.
https://www.cnbc.com/2021/11/16/homebuilder-confidence-surges-past-expectations-as-buyer-demand-remains-high.html
Page 14 of yesterday's report: Strategic Objective 1.3: Responsibly end the conservatorships of the Enterprises
Let's see if it's still there when Sandra or whomever decides which direction the gses will go.
Sounds like the current administration is more concerned about helping their targeted voter base and social and economic equity than expeditiously ending the 14th year of CONservatorship. What do you think?
This could be a problem, whereas MC had one of his strategic sub goals as "ending the conservatorship", we will have to wait until next year to see if Sandra wants to have that as one of her strategic goals to guide the FHFA:
"As such, during the approximately three
months of my tenure that are included in this report, I focused on meeting the existing goals, while
also beginning to transition the Agency and its regulated entities toward new goals that I believe are
necessary to enable FHFA to fulfill its statutory responsibilities. We will release a new FHFA Strategic
Plan in calendar year 2022 that will reflect and advance these new priorities:
1) Ensuring all Americans, especially those in underserved communities, have access to a fair,
equitable, and sustainable housing finance system that supports safe, decent, and affordable
homeownership and rental housing opportunities;
2) Strengthening the safety and soundness of Fannie Mae, Freddie Mac, and the Federal Home Loan
Banks to protect the housing finance system throughout the economic cycle; and
3) Protecting FHFA’s infrastructure by cultivating a diverse and talented workforce that respects and
values differences, by defending against cybersecurity threats, and by managing taxpayer resources
prudently."
They forgot one: Create a growing 4th branch of government to annihilate private property rights and lord over the governed into perpetuity.
That's interesting, do you know if Lamberth is just talking about all classes of jps or jps and common?
The oldest asset class of all still dominates modern wealth https://t.co/aCHHzvmioq
— Finance News (@ftfinancenews) November 14, 2021
"Revenue for FY 2021 was 7 percent greater than FY
2020 primarily due to higher assessments for legal and
financial services related to efforts to develop a plan to
end the conservatorships of the Enterprises."
Perfect!
I'm guessing fhlbb and/or investment income?
"How Does FHFA Generate Revenue?
In accordance with HERA, FHFA collected through
the semi-annual assessment process $335.2 million
during FY 2021, which included a $49.9 million
assessment for costs related to the operations of the
FHFA OIG. Regulated entity assessments account for
approximately 99.5 percent of Agency revenues."
https://www.fhfa.gov/mobile/Pages/public-affairs-detail.aspx?PageName=FHFA-Releases-FY-2021-Performance-and-Accountability-Report.aspx
It's small potatoes, but what about the $2B to $3B losses that the FHFA oig projected the gses would incur because of the current administrations decision to terminate the adverse market fee early?
The bigger point I was making is that if given a choice between expediting the gses release or subsidizing American homeowners through the dissipation of the gses assets which one is the obvious choice for the current administration?
I'm listening to JB right now and he hasn't mentioned the $21B tax on homeowners over the life of their loans over the next 10 years, do you think he or anyone from either party has even read the 3,000 page BIF?
Look up gerrymandering and see how politicians draw their districts every 10 years at both the state and federal levels and tell me which party prefers city and close in suburban voters?
People who live in cities and close in suburbs tend to live in multifamily housing more so than other districts don't they?
Hence, if the gses are paying for a benefit to multifamily users (i.e., renters) of the multifamily properties they loan money to which party tends to benefit?
How is that not disapating much needed corporate assets to throw a benefit to their voter base?
As "conservator" over the gses the federal government is making ALL THE BUSINESS decisions on behalf of their wards. Choosing to have the gses pay for multifamily landlords to send monthly payment reports of only on time renters to the credit reporting agencies is just one example of the federal government deciding to dissapate much needed capital to favor their constituents (renters tend to prefer their party at the polls).
I wouldn't complain so much if the UST hadn't implemented the taking of our property by implementation of the nws!
I think we are going to get death by a thousand cuts from the current administration. Why should they care about "evil hedge fund guys/mortgage banksters" when they can use their power to dole out the gses assets to the public it serves?
The contract IS important so long as Sandra is eyeing an eventual exit from this most bizarre 14th year of "conservatorship". So there's no way to find out if the "conservator" optioned year 2? I guess Sandra can just say, "None of your business, when the federal government acts as a conservator we don't have to tell ANYONE WHAT WE ARE DOING!".
Ohh, you want a list of the other shareholders? Sue me!
I mean what kind of country are we living in?
Why should the gses who have had 7 years of their capital swept to the UST in return for NOTHING and as a result are short of much needed capital have to foot the bill for 20+ months of mortgage forebearance? Congress appropriated $45B for renters to miss payments why not struggling mortgagors?
Let's hope that most of the important decision makers in the current administration believe in the private capital in a 1st Loss Position/government partnership. The real question here is when the heck are we going to get economic access to our private property rights?
I've been in the McLean VA Freddie Mac building when I was doing some consulting work for them back in the day, it was modern and sleek. One of the former CEOs bought two houses in McLean, scrapped them and built a MCmansion.
I recall that Fannie sold 3900 Wisconsin Avenue (there's a Wegmans there now; they were leasing 4000) and Mel Watt had the new sleek HQ built in the up and coming SW section via commiting Fannie Mae to a long term lease so the builder could get financing.
No I agree that the contract solicitation was prudent but if the current administration is not going to be as aggressive as the previous administration about exiting conservatorship then the one year expenditure was a dissipation of assets.
Do we even know where Sandra and the current administration even stand on the issue of exiting conservatorship? I don't think they have put many resources on it yet.
So far we have Sandra terminating the adverse market fee which according to the oig will result in a projected deficit of $2B to $3B to the twins. Sandra the other day said that the gses will give a credit to multifamily landlords who report on time renter payments, who pays for that?
I think it's clear that the current administration is more concerned about helping their current target voter base by disapatting gse assets than exiting from the conservatorship.
I believe that many in the current administration would rather the gses become ACTUAL FEDERAL ENTITIES THAN THE PRIVATE/PUBLIC PARTNERSHIP THAT WAS CREATED IN THE LBJ ERA.
What do you think?
Thanks for taking the time to respond. Real estate cycles have been going on for a long time and the boom bust cycles are a persistent characteristic.
There's no question that real estate busts cause havoc but I think that the limited capital available on the books, coupled with average ltvs in the 50's, strong underwriting, the inevitable 80 to 90 percent of GSE borrowers who will continue paying on time, stronger counterparty risk sharing partners, and the inability of the housing market to keep up with the supply necessary each year for the last 10 years to meet demand from obsolescence and population growth is more likely than not to ride out the eventual downturn.
We'll just have to wait and see what happens in the next inevitable housing crash.
Punitive damages seems like a long shot given the courts tremendous latitude to government actors. But when a government actor says the intent of the net worth sweep was to "salt the Earth with their carcasses", I would imagine that would raise the eyebrows of even the most adamant pro government federal judge. We'll see what happens.
I'm sure that the Executive
Privilege is hiding some more smoking gun documentation. Currently, JB released some Jan 6 documents waiving Executive Privilege. DJT is currently challenging the Waiver of the Executive Privilege and the federal courts are currently trying to figure it out.
Does Obama have Executive Privilege over some potentially smoking gun documentation during his administration or could DJT have waived it? We know DJT never waived it.
The Executive and national security privilege is hard to get around and the federal gubmint gets alot of leeway from the federal judges. SCOTUS is deciding a case right now from US citizens who are demanding discovery in a case where the government is hiding behind the national security privilege. Government transparency is a joke and I believe that governments that hide behind secrecy imperial the liberty of their citizens.
It will be interesting to see what happens if our Takings Clause cases are adjudicated via a full blown trial.
The cumulative results of the fhfa giveaways of much needed capital to the financial establishment coupled with subsidies to the current administrations target voter base could be used to show a taking and disapation of the gses corporate assets. In essence the shareholder Plaintiffs would show a modus operandi or pattern of neglect in fhfa fulfilling their primary duty to preserve and conserve assets.
The fhfa will maintain that that the business judgment rule protects their poor business decisions.
I'm not sure if you can supplement any of the existing lawsuits with these new facts or if a new Takings lawsuit would be required.
Each of the two political parties have their own almost 180 degree agenda's and after this summer we know that POTUS ultimately calls the shots at FHFA.
Do you know for sure whether or not punitive damages are off the table in federal court on temporary or permanent unconstitutional taking cases were the federal government acts with malice?
Why don't they just do the death by a thousand cuts route and load the gses up with expenses associated with their social and equitable agenda under the guise of "the public it serves"?
If a federal court never orders them to stop, being 100% in control and loading them up with money losing social programs specifically aimed at their voter base could work for them while we wait for the federal courts to figure out what if anything they are going to do.
The FHFA Director will spend the shareholders money whenever she wants! How about the $2B to $3B in projected estimated losses from letting the adverse market fee end early? What about the credit on multifamily loans to entice landlords to report on time rental payments to the credit agencies?? The current administration has only just begun their extraction of the capital replishnment now available.
Which one of these choices will the current administration ALWAYS CHOOSE:
(1). Load up the gses with expenses to further our social and equitable agenda.
(2). Follow HERA's primary duty and conserve and preserve their assets over their Incidental Power of helping the public it serves?
HeeHee! Somehow I'm just shocked that you would not be more optimistic! Don't blame you though.
Each legal case has its own specific facts and changing just one aspect of a fact pattern can result in two separate legal opinions.
In Mozilla, the Plaintiff is a RI mortgagor trying to prevent Fannie Mae from foreclosing on his mortgage. In our fact pattern its the shareholders trying to prevent fhfa and ust from nationalizing our private property interests.
The fhfa is having a very hard time attracting AND KEEPING Executive talent to run these financial behemoths. Who really wants to be ceo or a senior executive when Uncle Suggy is 100% in control, ZERO STOCK OPTIONS, AND A DEFACTO NATIONALIZATION HAS OCCURRED FOR THE LAST 13 YEARS WITH NO IMMEDIATE END IN SIGHT?
Did I mention that the current administration is more concerned with handing out gse assets to others than exiting the CONservatorship?
You can fool some of the people some of the time but you can't fool all the people all of the time.
Was the intraday volatility before SCOTUS between jps issues with similar characteristics the same as post SCOTUS? Are you sure tax loss harvesting is the answer? Pay no attention to the man behind the curtain that controls up to 5% of a particular jps series?
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
Why is fmcck up 10% and fmckk is down 10%?
Some highlights of the demographics surrounding home buyers from nar:
https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers
Characteristics of Home Buyers
First-time buyers made up 34% of all home buyers, an increase from last year's 31%.
The typical first-time buyer was 33 years old this year, while the typical repeat-buyer age rose to an all-time high of 56 years old.
11% of home buyers purchased a multi-generational home, to take care of aging parents, because of children over the age of 18 moving back home, and for cost-saving.
14% of recent home buyers were veterans and 3% were active-duty service members.
Characteristics of Homes Purchased
Most recent buyers who purchased new homes were looking to avoid renovations and problems with plumbing or electricity at 36%. Buyers who purchased previously-owned homes were most often considering a better overall value at 38%.
Buyers typically purchased their homes for 100% of the asking price, with 29% purchasing for more than the asking price.
The typical home that was recently purchased was 1,900 square feet, had three bedrooms and two bathrooms, and was built in 1993.
Convenience to family and friends was the second most important factor in influencing neighborhood choice after quality of the neighborhood, surpassing convenience to jobs and affordability, which were more important last year.
The Home Search Process
For 41% of recent buyers, the ?rst step that they took in the home buying process was to look online at properties for sale, while 19% of buyers ?rst contacted a real estate agent.
Buyers typically searched for 8 weeks, looked at a median of 8 homes and viewed 3 of these homes only online.
Nearly all buyers used online tools in the search process at 95%.
94% of recent buyers were at least somewhat satisfied with their recent home buying process.
Home Buying and Real Estate Professionals
87% of buyers recently purchased their home through a real estate agent or broker, and 7% purchased directly from a builder or builder’s agent.
Having an agent to help them ?nd the right home was what buyers wanted most when choosing an agent at 52%.
73% of buyers interviewed only one real estate agent during their home search.
90% of buyers would use their agent again or recommend their agent to others.
Financing the Home Purchase
87% of recent buyers ?nanced their home purchase.
First-time buyers who ?nanced their home typically ?nanced 93% of their home compared to repeat buyers at 83%.
For 61% of buyers, the source of the downpayment came from their savings. 56% of buyers cited using the proceeds from the sale of a primary residence, while 28% of first-time buyers used a gift or loan from friends or family for the downpayment.
Home Sellers and Their Selling Experience
For all sellers, the most commonly cited reason for selling their home was the desire to move closer to friends and family (18%), that it was too small (17%), and the neighborhood had become less desirable (11%).
90% of home sellers worked with a real estate agent to sell their home.
For recently sold homes, the ?nal sales price was a median of 100% of the ?nal listing price.
Only 26% of all sellers offered incentives to attract buyers, a drop from 46% of all sellers last year.
Is Pags manipulating the intraday volatility on the thinly traded jps? He told us some time ago (I think post SCOTUS) that he was going to be actively trading the jps. I've seen days with 25% intraday volatility, today it was only 15%.
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
Exactly, what Fortune 500 Executive wants to work for a government boss, pay and benefits?
As the 14th YEAR of Nationalization continues it will be more and more difficult for the federal government to attract the necessary talent, eventually turning into HUD.