"...the 2024 CLL value for one-unit properties will be $766,550, an increase of $40,350 from 2023."
Would that buy 1/2 a house in SF or SD?
Although there is this....
For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit value, the applicable loan limit will be higher than the baseline loan limit. HERA establishes the high-cost area limit in those areas as a multiple of the area median home value, while setting the ceiling at 150 percent of the baseline limit. Median home values generally increased in high-cost areas in 2023, which increased their CLL values. The new ceiling loan limit for one-unit properties will be $1,149,825, which is 150 percent of $766,550."
Thanks buddy! For some reason I just really enjoy all this legal stuff, but I do want my damn money back !
Lost a great investor today:
As I recall in the 90's, Albert Lord, then CEO of Sallie Mae (it's now called Navient) wanted to get into the Direct Student Loan Lending Biz and shed itself of its GSE relationship. The US Congress decided to have the US Government Directly loan to Student Borrowers.
Today only about 7% of Student Loans are private https://www.usatoday.com/money/blueprint/student-loans/average-student-loan-debt-statistics/#:~:text=As%20of%20the%20third%20quarter,loans%2C%20according%20to%20Enterval%20Analytics. and I don't think any Student Loan Forgiveness is going to Students who borrowed money from private lenders but is for the 93% of Student Borrowers that borrowed directly from the Government.
Demarco (and Watt) decided against the Obama Administration's demands for mortgage forgiveness and on August 17, 2012 the Net Worth Sweep was implemented.
So, 20-30 years ago Student Loan Lending was largely taken over by the US Government and the Department of Education is looking for ways to ease the burden on Students through the IDR plan and the recently shot down by the US Supreme Court, $400B forgiveness plan.
Doesn't the US Government have more power over the $7.5T in home Mortgages by keeping the GSES in the CONservatorships than if they were private corporations?
Isn't it true that during COVID, more restrictions and economic burdens were placed on Investor Owned Single Family and Multifamily owners with Government Backed loans?
The federal government got rid of Sallie Mae's Charter to dominate the Student Loan Market in December 2004 and Nationalized Student Loan Lending in the USA. https://home.treasury.gov/news/press-releases/js2173
Today we have Student Loan Forgiveness for Americans.
Why not Home Mortgage's?
Amerika, my kinda place !
Thanks guys, for the kind words! Actually, I've been busy helping others fend off Gubmint overreach of a much more pernicious nature than pecuniary loss!
But I've been reading everyone's posts and you guys are the best!
Wasn't over thrilled by the Supremes lackluster response to the CFPB case, but as we are all aware the Orals aren't necessarily indicative of the final Opinion.
Interesting case this morning involving the Gubmint basically taking other people's property in violation of Due Process, haven't had a chance yet to listen to it but will later.
Why the 8 cent spread between Fannie and Freddie?
Another reason to allow Fannie Mae and Freddie Mac to increase their Portfolio Caps:
"JPMorgan Chase has stepped up the pace at which it is securitising billions of dollars of its loan portfolio in anticipation of proposed new US capital requirements for large banks, according to people familiar with the matter."
"Where today, the risk weight for all mortgages is 50 percent, bank regulators have proposed risk weights from 40 to 90 percent, depending on the mortgage’s loan-to-value ratio. This would take the capital that large banks are required to hold against these mortgages well beyond what is needed to cover the risk, reinforcing the decade-long retreat of banks from the mortgage market (PDF).
This regulatory nudge of the mortgage market from banks to IMBs might not be a problem were it not that the proposal also makes it more difficult for IMBs to support the mortgage market."
Because it would: (1) Get SLT and JY involved with amending the PSPA's (they could also discuss increasing Capital at the GSE'S by a concession or two from Treasury's outrageous defacto Nationalization terms?) (2) Historically the Mortgage Portfolios were a steady and predictable stream of revenues and profits generated through the well hedged Net Interest Income; and (3) lower the Housing Cost Component (by adding liquidity to the MBS market and reducing the 300+ basis point spread) of the CPI and contribute to a reduction in Inflation and that would be good for the current administration and all the American People, which is exactly WHY Fannie Mae and Freddie Mac were created in the first place.
Lifting the Portfolio Caps and having Fannie Mae and Freddie Mac add liquidity to the liquidity constrained MBS market would likely reduce the 300+ Basis point spread between the 10 year and 30 year Fixed Rate Mortgage.
This would help reduce Inflation.
"Housing costs were the biggest driver of inflation last month. Rent costs rose 0.6% for the month and are up 7.2% from the same time last year.
Rising rents are concerning because higher housing costs most directly and acutely affect household budgets. Another data point that measures how much homeowners would pay in equivalent rent if they had not bought their home climbed by 0.6% from the previous month."
"The shelter index increased 7.2 percent over the last year, accounting for over 70 percent of the total increase in all items less food and energy."
With 2 signatues, Sandra and Janet could allow the GSES to increase their Portfolio Caps and reduce mortgage borrowing costs for hard working lower and moderate income American Families.
This would help reduce the 300+ basis point US Mortgage Market spread above the 10 year Treasury Bill caused by the dearth of MBS investors, who are reluctant to buy the current higher coupon MBS because long term inflation expectations in the bond market are low and todays MBS higher coupons will likely be subsequently refinanced at lower rates next year or the year after that.
"But the stars of the term may be a deceptively bland trio of cases that could transform the way the federal government does its work.
A wonky-but-weighty hearing will greet the justices on their second day back in robes. In the snappily named Consumer Financial Protection Bureau (cfpb) v Community Financial Services Association of America, the court will review a decision of the fifth circuit court of appeals, America’s most conservative circuit court, undercutting the consumer-watchdog agency established in the wake of the financial crisis of 2007-08. The fifth circuit ruled that the cfpb has an unconstitutional funding structure. Article I, section 9 of the constitution mandates that “[n]o money shall be drawn from the Treasury, but in consequence of appropriations made by law”. Since the cfpb has a permanent funding stream allocated annually not by Congress but by the Federal Reserve, the plaintiffs argue that its financing is illegitimate."
Here's a case that will decide WHEN the Statute of Limitations begins when challenging a federal agency act as Constitutional:
"In Corner Post v. Board of Governors of the Federal Reserve System, the justices agreed to decide when the six-year statute of limitations to challenge an action by a federal agency begins to run: Is it when the agency issues the rule, even if the plaintiff has not yet suffered any injury from the action; or is it instead when the plaintiff is actually injured?"
Bill Ackman: "We have about 1% of the portfolio in Fannie Mae and Freddie Mac, it's an option on the eventual release from the Government Conservatorships."
CNBC Alpha 30 minute interview with BA, around 5 minute mark.
Pershing Square Portfolio is $7.625B x 1% = $76.3 m
MCLEAN, Va., Sept. 28, 2023 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing the 30-year fixed-rate mortgage (FRM) averaged 7.31 percent.
“The 30-year fixed-rate mortgage has hit the highest level since the year 2000,” said Sam Khater, Freddie Mac’s Chief Economist. “However, unlike the turn of the millennium, house prices today are rising alongside mortgage rates, primarily due to low inventory. These headwinds are causing both buyers and sellers to hold out for better circumstances.”
30-year fixed-rate mortgage averaged 7.31 percent as of September 28, 2023, up from last week when it averaged 7.19 percent. A year ago at this time, the 30-year FRM averaged 6.70 percent.
15-year fixed-rate mortgage averaged 6.72 percent, up from last week when it averaged 6.54 percent. A year ago at this time, the 15-year FRM averaged 5.96 percent.
The PMMS® is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. For more information, view our Frequently Asked Questions.
Freddie Mac’s mission is to make home possible for families across the nation. We promote liquidity, stability, affordability and equity in the housing market throughout all economic cycles. Since 1970, we have helped tens of millions of families buy, rent or keep their home.
WSJ: "The median American household needed 44% of its income to cover annual payments on a median-priced home as of July, according to the Atlanta Fed, the highest level recorded in data going back to 2006."
"And more broadly, the case is the first of several on the court’s docket this term in which the justices will weigh in on the division of authority between the three branches of government, as well as the power of administrative agencies."
"From the beginning of the country’s history until now, the challengers emphasize, no other agency “was permanently ceded the power to choose the amount of its own governmental funding for core executive powers.”
That's right! It's more like Fannie Mae and Freddie Mac securitize 1 out of 3 US residential Mortgages!
Ed Demarco and Bob B of the MBA 11 years ago thought the Net Worth Swipe would usher in Private Capital, THE EXACT OPPOSITE HAS HAPPENED!
RELEASE THE TWINS!
Many Americans have been fortunate enough to have paid off their Mortgages and own their primary residence FREE AND CLEAR.
But, the local Gubmint continues into perpetuity extracting Property Taxed and then there's Insurance, maintenance and repair, etc.
"Many Americans are house-rich, at least on paper. Thanks to skyrocketing housing prices, homeowners are now sitting on nearly $30 trillion in home equity, according to the St. Louis Federal Reserve — just shy of the 2022 peak.Sep 7, 2023"
So, 52T less 30T equals 32T/8T equals 25%, therefore approximately 1 out of 4 American Homes WITH MORTGAGES are securitized by the Defacto Nationalized GSES.
Some portion of the $7.6T in loans will keep making their payments (who wants to lose their home?), why that calculation is ignored is crazy.
They could be easily released tomorrow, but DC decision makers will keep dragging this out under a 'more capital is better' mantra.
If they get any questions as to why they won't release them, Janet and Sandra can simply say in unison, "We're waiting for the US Congress to decide the future of the US Housing Finance Market."
"The company also announced an expansion of its Special Purpose Credit Program (SPCP) pilot to provide downpayment assistance to eligible first-time homebuyers living in majority-Latino communities."
What if I'm not Latino, can I still get a federal subsidy from Uncle Suggy?
20-1199 Students for Fair Admissions, Inc. v. President and Fellows of Harvard ...
Were US Taxpayers in Florida paying for NJ and IL residents who got a yuge write off on their Federal Income Taxes, via Form Schedule A, Itemized Deductions for exorbitant local Real Estate Taxes that paid for extensive local government services, prior to the recent tax changes?
Incentivize the market (e.g., LIHTC) don't punish investors in affordable housing (e.g., RENT CONTROL).
It's pretty simple really. Just have the local, state, and/or federal government pay for the subsidies they wish to grant to the American People instead of off the budget subsidies paid for by those who own property.
Would you give up a 30 year prepayable at anytime Fixed Rate Mortgage of below 4% to put your home on the market and buy a new one at over 7%?
Isn't it better to pay back your Fixed Rate Mortgage with dollars that are worth less each year?
Some of these below 2% 30 year Fixed Rate Mortgages from the pandemic era are sitting on banks assets books at 50%-70% of principal.
Basic Economics tells us if you want more of something like affordable housing, then don't artificially through a government mandate disincentivize the market by capping rents below market rents.
It's like Nationalizing Private Corporations, the Government gets a short term gain for society but the long term losses are substantially greater.
With 'rent stabilization' or rent control, the fairness issues seem to focus on (1) these mostly mom and pop rental housing operators being deprived of excluding others from their property and (2) not being able to receive rents at full fair market value and providing a public good (below market rents, a subsidy) for ZERO Compensation.
There's plenty of examples besides those below. So a majority of people on a City Council can choose to ignore the 5th Amendment Takings Clause and provide Social Welfare for free at little or no expense to the City, State, or Federal Government?
Here's some examples:
Petitioners in the Pinehurst case—the
Panagoulias family—have twice been unable to
recover their own property for personal use due to the
RSL. In 1974, Dimos and Vasiliki Panagoulias bought
a 10-unit apartment building in Long Island City after
moving to the United States from Greece. Pinehurst
Pet.App. 170a-171a. They raised their family in the
building and own it today. Id. Their son, Dino, lives
there with his family and manages the apartment in
his spare time. Id. Dino knows the tenants well and
considers them his extended family. Id. Around 2011,
Dino applied to New York housing regulators for
permission to recover a two-bedroom rent-stabilized
apartment for use as his family’s home. Id. at 187a.
But the regulators rejected his application, concluding
that, if Dino needed an apartment, he could have
taken possession of a different, one-bedroom
apartment that had previously been available, even
though that smaller apartment would not have suited
his family’s needs. Id. The family ran into a similar
problem when Dino’s sister, Maria, attempted to move
back into the apartment building in 2019. Id. at 187a-
188a. Due to the RSL’s restrictions on recovering rent-
stabilized apartments, the Panagouliases have not
been able to set one aside for her. Id.
The burdens imposed by the RSL, and rent control
generally, inevitably fall most heavily on smaller
“mom and pop” property owners. See Alabama Ass’n
of Realtors, 141 S. Ct. at 2489 (noting that “many
landlords have modest means”). Individuals, as
opposed to businesses, own the vast majority of the
nation’s rental properties."
"Petitioner Constance Nugent-Miller
was unable to reclaim possession of her first-floor
apartment despite severe leg pain that makes it
difficult to walk up to her second-floor apartment. Id.
at 167a-169a. Another petitioner has housed three
generations of a tenant family in a rent-stabilized unit
since 1975 at what is now half the market rental value.
Id. at 159a-160a. A family purchased a building with
the intent of combining several units into their new
home, only to have the 2019 Amendments thwart
their plan and tank the value of their investment. Id.
at 169a-170a. Another property owner has housed a
tenant for four decades at a rent far below market
levels and has been unable to evict the tenant despite
numerous complaints about the foul odors emitting
from the dogs kept in her apartment. Id. at 131a-132a.
When the unit becomes vacant, it will be more
economical to keep the unit vacant rather than make the necessary repairs and rent it out again at a rent-
stabilized level. Id. at 132a."