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I think the new CA upzoning law would increase the value of single family developments built in the 1950's and 1960's and earlier were they typically had large lots and small houses.
Q: What do you call someone who ignores the federal government nationalizing private corporations when they provide billions of dollars for the federal fisc to fund their pet projects over and above the funds allocated by the Congress?
A: the President of the United States!
Trump used it for the wall, BO for Obamacare...
That's right you live in the windy city, I am just shocked that BO never got caught up in the political corruption machine that dominated Chicago politics! I'm sure Michelle was thrilled when her new husband who graduated 1st in his class at Harvard Law decided to go knock on inner city doors and campaign for a city council seat instead of cashing in with a 7 figure salary at a prominent law or wall street firm.
Recall what was going on shortly before the net worth swipe was enacted. John Boehner and his gang in the House were fundamentally opposed to funding Obamacare and were threatening to not fund the federal government over it. BO could see the writing on the wall and killed 2 birds with 1 stone with the nws - punishing the evil banksters/evil hedge fund guys by nationalizing the gses and sending over $100B into the federal fisc in a 1 year period for extra general operating funds to help pay for all these social programs that the House was opposed to.
So yes, BO did bypass the US Constitution which gives the power EXCLUSIVELY TO THE US CONGRESS NOT THE POTUS! Wasn't he a Constitutional Law professor at University of Chicago Law school?
Why couldn't BO's billion buddies spare a couple million from the $500 million Barack Obama presidential library to take care of these displaced lifelong residents who happen to be low and moderate income?
You've got some good restaurants there in Chicago and I think it's the 3rd largest city in the US...
I think that's what may end up happening or after several more years of litigation the federal government may decide to get out of the mortgage business, cash out and closely regulate the twins.
He's always looking out for the little guy, except when it effects him !
The ability to split your single family home lot into 4 total housing units should be quite lucrative for those thinking about doing the change, you know many of the neighbors will be quite upset about it but the homeownership rate in the 5th largest economy in the world is around 50% which is about 20% below the national average. The golden state indeed.
You'll love this, after implementing the net worth swipe (to override Congress to fund Obamacare and other pet projects) and hobbling the gses ability to provide needed financing for affordable housing for Americans, his new 19 acre presidential library is displacing life time low and moderate income Americans from their homes: “It’s sad that the place that I’ve lived my whole life I can’t stay in anymore," she said. "And once I leave, it will be impossible to ever come back. It's the same story with so many people in this community."
https://www.nbcnews.com/news/us-news/how-can-we-benefit-it-if-we-re-not-there-n1280875
"Cause that's what we do!"
The future of housing in California in a 1957 single family neighborhood (is your state next?): from nyt: "In June, as Ms. Coats told me about the house and the neighborhood from the doorstep of her bungalow, she gazed toward a fresh foundation that had entombed the back half of Lot 118 in concrete. Over the next few weeks, a construction crew erected a two-story building that filled in a green rectangle from the Clairemont Villas brochure. A few feet away, the original four-bedroom house was loudly gut-renovated into a pair of apartments.
When the workers head to their next job this month, they will leave what amounts to a triplex rental complex on the type of lot that in the seven decades since Ms. Coats's family moved in had been reserved for single-family houses. It's part of a push across California and the nation to encourage density in suburban neighborhoods by allowing people to subdivide single-family houses and build new units in their backyards.
Dan Logue, 60, a teacher who lives on Baxter Street, said he was excited about the project, and backyard houses generally, because they allowed homeowners to develop their own land. ("Neighborhoods change as people die off, and that's just reality.") Ms. Coats was so-so. She said she was worried about less parking but also about San Diego's housing problem and hoped the new units would do some good. ("I'm not going to go down to the City Council and beat my head against the wall and say, 'No, no, no."')
Cary Gross, 63, who owns a tile company and lives next to Ms. Coats, is against it. He invested on a single-family block 25 years ago with the expectation that it would stay that way. "They say they're doing this so everyone can have the American dream," he said. "But what about the American dream of living in a single-family neighborhood?"
When Ms. Coats moved into the Baxter Street house, a family needed right around the area's median income to afford the $82 monthly mortgage payment -- the definition of middle class. Today a typical Clairemont home costs $850,000, up 30 percent from 2019. A family would need to make about double San Diego's median income to afford one, according to Redfin, the real estate brokerage. And it wouldn't be a new place.
The root of all this is a decades-old housing shortage. Since the mid-1970s, when home prices began outpacing wages, planners and economists have argued that California's housing problems will persist as long as it remains one of the hardest places in America to build shelter. Nevertheless, city councils and the State Legislature more or less ignored this advice until a few years ago.
Faced with ballooning home costs that even a pandemic couldn't tame, politicians from both parties now routinely talk about the state's and nation's affordability problems in terms of a lack of homes. The debate is about where and how to build new ones.
When you add S.B. 9 to earlier rules for backyard units, California has paved the way for some 2.5 million new housing units -- about 25 years' worth at the state's current pace of building -- in existing single-family neighborhoods, according to an analysis by the Terner Center for Housing Innovation at the University of California, Berkeley.
"These laws have opened up entire communities that had been largely walled off," said Ben Metcalf, managing director of the Terner Center. "Even if it starts slow, we are solidly on a path to a very different California."
The whole story is fun for me, natural human weaknesses abound throughout the saga, the vengefully wagging his finger Obama, "never again", the overly idealistic Jim Parrot believing he will actually help American affordable housing by salting the earth with their carcasses, James Lockhart, ignoring HERA and thinking that the US Congress can reinvent the US secondary mortgage market, Mel Watt seeing no need to hold capital in a 1st Loss Position Position on OVER $5T in potential liabilities, MC's Libertarian attempt to shrink their footprint and make them uncompetitive.
All these powerful people unable to kill the twins!
Here's a crazy idea, WHY NOT FOLLOW HERA, PRESERVE AND CONSERVE THEIR ASSETS AND RELEASE THEM!
The 13+ year 'conservatorship' has turned OFHEO from an obscure branch of HUD to a sprawling 4th branch of government via the FHFA whose payroll increased 18% last year and seems to have no limit in site. Feels good knowing we are funding a lavish federal government agency at $600 million a year !
The warrants will have to be dealt with before asking institutional investors to fork over a record amount of their money as fresh capital in a twisted partnership that the government has just spent 13 years proving that shareholders returns WILL GET OBLITERATED IF TIMES GET DIFFICULT.
No institutional investor is going to invest a dime in new money until the warrants, LP, and the dust settles from all the litigation, that could take awhile considering the government usually doesn't act decisively unless faced with a crisis.
If by reorganization, you mean recapitalization, it will likely take years for the dust to settle from the current outstanding litigation and the gses will likely be rebuilding capital organically. The government can easily adjust the requirements for release. With the Secondary Mortgage Market running full steam on all cylinders with the ability to prevent another mortgage crisis (see March 2020) and the government currently enjoying the benefits of 100% control over the gses without booking $7+T in liabilities on their books, this recap could take awhile.
Latest effort by the financial establishment to try to pad their bottom line at the expense of the gses:
"Even if mortgage rates do rise, there are other ways to keep home buying and refinancing relatively affordable and sustain volumes for originators. Government-sponsored enterprises such as Fannie or Freddie could help. Part of what determines how much an originator can sell a mortgage for, and relatedly what rate to charge, is what it costs to guarantee the debt with the GSEs. The GSEs already are ending a pandemic fee meant to compensate for higher risk. The Biden administration might also seek other ways to reduce fees or other hurdles for certain borrowers as a way to promote housing affordability."
WSJ EDITORIAL BOARD
Such huge swings in the SAME day between issues almost like a big flashing warning sign.
I have noticed lately that the instant recap scenario (the twin of the dilution solution) has been losing steam since November 2020, almost as if it got flushed down the potty.
Okay, any idea what the total average daily volume on jps is roughly, I know fnma is about 5m post SCOTUS.
Well, I thought most troubling was their ignoring the 5th Circuits 16 judge EnBanc legal reasoning of why the Incidental Powers of HERA doesn't override the Primary Directive in HERA to do what every single conservator has done for 400+ years and CONSERVE AND PRESERVE THEIR WARDS ASSETS, NOT GIVE AWAY $308B FOR NOTHING!
The SCOTUS could have easily put this nationalization to an end but now the aggrieved shareholders have to use other legal principles like unconstitutional Takings, contract claims, etc. and given the federal judges extreme deference to the 'King can do no wrong', that seems like it could be a heavy lift as well.
These ongoing legal proceedings may put a damper on any FHFA/UST plans to immediately recap and in the meantime the gses will retain earnings. But you can see just how long these legal proceedings can last, the appeals process from the 5th Circuit Collins case lasted about 5 years (including 3 or 4 appellate level decisions from the initial lower court ruling-the lawyers made some bank!) and that was just to resolve pretrial motions....
It is difficult to figure out how exactly how this snafu ultimately ends, but I hope we all do well in the end as nationalizing private corporations is horrible public policy, especially of all governments, by the US Government!
With the exception of par value and yield calculations all the jps shares are identical, it seems unusual that their returns would bounce around intraday and inter day they show quite a bit of volatility. Not really sure why and it seems to be a post SCOTUS phenomena doesn't it?
I guess another thing that keeps me from jps is that after our 'conservator' decided to transfer $308B to UST for NOTHING, I don't see much happening here for possibly years as much needed retained earnings is put in a 1st Loss Position ahead of all other priorities.
Okay, so once again peddling the dilution solution but where is the instant recap scenario, you forgot that one ! What is it about the 'fulcrum security' that you find most attractive, nonvoting, noncumulative, or non-convertible?
Who ever heard of a conservator self dealing in 400+ years of Conservatorship Law! Talk about letting the tail wag the dog! The most strained legal ruling and so the drama continues. How many investments do you know that come with such a twisted drama with all the various stakeholders? It's been frustrating yet entertaining for me....
GB appreciate you sharing your knowledge on this drama throughout the years. I've been looking at the daily volatility of the jps for the last 3 days at least and it's been 16%, 12%, and 11%. You said in one of your articles that you thought it was likely attributable to the illiquid nature of the $33B par value, jps outstanding.
Can you recall if this was always the case or a post SCOTUS phenomena?
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
3Q21 earnings are going to be juicy and the twins desperately need capital after forking over $308B to the UST FOR NOTHING!
I would imagine that at least a few of the 5th Circuit 16 judge panel MAY be a tiny bit miffed that the ussct didn't even bother to consider their well reasoned legal analysis and since the ussct gave the plaintiffs a possibility for some relief may feel inclined to deliver some kind of small justice against the government overreach.
That said, I'm not counting on it and we could just as likely see the case stop dead in its tracks.
Maxine's pissed: https://www.politico.com/amp/news/2021/10/07/housing-aid-cuts-battle-515588
"Waters, who proposed the funding as chair of the House Financial Services Committee, said in an interview that "I’m going to fight as hard as I can to keep as much housing as I can in the reconciliation bill." The cuts represented a major threat to a signature proposal from the California Democrat, who has prioritized affordable housing and homelessness throughout her time in office. Housing lobbyists were also mobilizing to shield their priorities in the sweeping plan.
“It’s going to be rough," Waters said."
“My wish, if we have to cut, is that we’re all going to take about the same percentage cut across the board, and then [committee chairs] can figure out where we want to make those reductions” within each section, Waters said.
Industry lobbyists and housing advocates are also rushing to protect favored provisions. Civil rights groups are warning the White House that excluding housing investments from the bill amounts to dropping racial equity from the biggest social spending measure in a generation.
“We have all these coalitions of industry groups, housing groups, civil rights groups who are beating down the door of the White House to make sure that they keep housing provisions in the reconciliation bill,” said Lisa Rice, president and CEO of the National Fair Housing Alliance. “If you don’t address housing, you’re not going to be able to address anything else that you’re trying to get done from an equity standpoint.”
“Housing is the single biggest way for people to start on the ladder of economic opportunity in America,” said James Tobin, chief lobbyist at the National Association of Home Builders. “If this package is about bringing economic and social justice to people as the president has said, then housing needs to be a part of it.”
No one knows exactly how this plays out, but right now it seems there is a lot of negative outcomes baked into the sp of both common and jps. GLTU! And we all will have to be very patient as the next phases of this most unusual business American drama unfolds.
I think most federal judges want to give litigants an opportunity to bring their legitimate claims to trial. Here, the government has the documents and communications in their exclusive possession and will try to hide behind Executive Privilege and national security privilege exceptions to discovery. So if the Plaintiffs can survive SJ, the litigation will continue (why do the lawyers ALWAYS win in protracted litigation ! ) and this will likely color the title to any quick recap and release.
Your coins in a glass jar analogy reminded me to go check one of my brokerage accounts and I decided to go ahead and convert some loose change to shares. Although I am quite sure that we will continue our downward descent, the idea that 100% of the existing commons outstanding are "on sale by Mr. Market" for $2.5B in total seems compelling given that it represents about 45 days combined retained earnings. Likewise at approximately 7.5% of par, the outstanding jps are priced at around $2.5B.
Might be a legitimate reason for the 5th or 8th Circuit to grant intra governmental discovery documents and communications to Plaintiffs.
Otting was all about mentioning there's a plan for release/exit from conservatorship and then the unconstitutionally insulated from POTUS MC comes in and does whatever he wants.
What do you think?
Also, what do you think about the 5th Circuit shifting the burden of proof to the defendant since the government has all the evidence involving intra governmental communications between DJT and MC?
https://www.housingwire.com/articles/heres-where-the-fhfa-is-headed-under-sandra-thompson/
Editor’s note: This piece was originally featured in the Oct/Nov magazine and has been updated to reflect the latest changes and announcements at the FHFA.
Nearly five years after the global financial crisis, lenders and the government-sponsored entities were still negotiating who would bear responsibility for defaulted loans.
The negotiations centered on the Federal Housing Finance Agency’s Representation and Warranty Framework, which gives lenders assurance, under certain conditions, that the GSEs would not make them buy back a loan. The Mortgage Bankers Association had already been in negotiations with the GSEs, but sources told HousingWire they had reached an impasse.
The stakes were high for the mortgage industry: The government-sponsored entities had just made lenders repurchase billions in such loans. In just the first quarter of 2012, Fannie Mae had $14.6 billion in outstanding repurchase requests. Many of the loans had deficiencies, such as lack of verification of income.
Hold the Red Star proudly high in hand, comrade Fence! Remember, Communism is simply the abolishment of private property rights. Smarter people than you and I can make the best decisions for the benefit of the group!
Couldn't that change with two signatures especially if they are serious about not running two of the worlds largest finance companies? Last time I checked the federal government was not in the profit maximization business and besides they extract plenty from American homeowners via the gses: 10 bps Payroll Tax Cut (soon to be Infrastructure); 4.3 bps Housing Trust fund;
Federal Corporate income and dividend tax, their 7,000+ employee income and payroll tax, etc.
Then of course there will likely be some kind of access to a UST line of credit fee.
Some day the federal government may realize that they can't attract the best available talent to run these enterprises and decide that mortgage banking is best done by market professionals and not through nationalization.
Latest from the Chair of the Senate Banking Committee: "If confirmed, the nominees before us today would play a significant role in protecting U.S. national security interests, expanding housing opportunities for millions of Americans, and supporting families searching for a safe and affordable place to live."
He was a little offended by certain comments floating around out there:
"Until yesterday, I thought we all recognized that McCarthyism has no place in our democratic society.
Any American citizen who fled communist repression – whether FDIC Chair Jelena McWilliams or OCC nominee Saule Omarova – should be lauded for her courage and her conviction.
Anyone who hears Professor Omarova’s story of life in the Soviet Union will understand how offensive the attacks on her character are.
I have faith that my colleagues, on both sides of the aisle, will reject these modern-day “red scare” tactics."
https://www.brown.senate.gov/newsroom/press/release/brown-nominees-strengthen-national-security-housing
If the federal government wants to promote 0 down payment mortgages I think HUD through their FHA program is the way to go. Sandra L Thompson keeps saying it's responsible affordable housing lending but if the buyer can't save for a down payment what's going to happen when there is a housing market downtown or they need to replace the roof and HVAC at the same time?
https://finance.yahoo.com/news/fannie-mae-announces-twenty-third-140000300.html
https://finance.yahoo.com/news/freddie-mac-multifamily-purchases-4-150000993.html
https://finance.yahoo.com/news/u-mortgage-rates-dip-slightly-140000085.html
https://finance.yahoo.com/news/high-home-prices-continue-weigh-123000389.html
I don't think jps holders have the ability to vote do they? Noncumulative, non-convertible, non voting, BUT NO DIVIDENDS CAN BE DECLARED ON COMMON UNTIL DIVIDENDS ON JPS ARE PAID and they are next in line behind bondholders in the event a corporation is liquidated.
I don't think the gses will be liquidated. And I don't see the dividends being turned on anytime soon, especially after the 7 years of transferring $308B from the corporations to the UST.
The beatings will continue until morale improves! 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