Category Archives: Mortgage & Real Estate

Democrats fight back against Dodd-Frank replacement act

Financial Services Committee Democrats are not going to let the Republicans easily shut the door on discussing the Financial CHOICE Act, the Republican-led act to replace the Dodd-Frank Wall Street Reform and Consumer Protection Act.

House Financial Services Committee Chairman Jeb Hensarling, R-TX, released an updated version of the Financial CHOICE Act, H.R. 10, earlier this month, simultaneously announcing that there would be only one scheduled committee hearing to discuss the act. The one and only hearing didn’t sit well with committee Democrats.

During the hearing, Rep. Maxine Waters, D-Calif., ranking member of the Financial Services Committee, submitted a letter to Hensarling requesting an additional hearing.

“Following the worst financial crisis since the Great Depression, this committee held 41 public hearings related to financial reform prior to the passage of the House version of the Dodd-Frank Wall Street Reform and Consumer Protection Act,” the letter stated. “Mr. Chairman, while Democrats may not always agree with your policy proposals, we should all agree that the American public deserves nothing less than full transparency, accountability, and debate of the matters before this Committee.”

The follow-up hearing, held on April 28, referred to as a “Minority Day Hearing,” is the first hearing before the Financial Services Committee under the 115th Congress where Democrats could select the panel of witnesses.

“Today, Democrats are going to set the record straight. We’ve asked for this second hearing to hear from experts and well-informed witnesses who know, understand and appreciate the importance of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and who can point out the dangers of the Wrong Choice Act,” Waters stated in her opening remarks.

“Now, even with this additional hearing, we cannot fully cover all of the many ways this bad bill would hurt hardworking Americans. We would need dozens more hearings to do that. But with this slate of outstanding experts here today, we will have the opportunity to educate the public about some of the harmful repercussions of the Wrong Choice Act,” she continued.

The Democrat’s witness list is significantly more packed compared to the first hearing and includes:

  • The Honorable Elizabeth Warren, United States Senator
  • Rohit Chopra, senior fellow, Consumer Federation of America
  • Corey Klemmer, corporate research analyst, Office of Investment, AFL-CIO
  • Rev. Willie Gable, pastor, National Baptist Convention USA, Inc.
  • John C. Coffee Jr., Adolf A. Berle Professor of Law, Columbia University
  • Rob Randhava, senior counsel, Leadership Conference on Civil and Human Rights
  • Melanie Lubin, Maryland securities commissioner, North American Securities Administrators Association
  • Emily Liner, senior policy advisor, Economic Program, Third Way
  • Amanda Jackson, organizing and outreach manager, Americans for Financial Reform
  • Ken Bertsch, executive director, Council of Institutional Investors
  • Sarah Edelman, director, housing policy, Center for American Progress

Most notably, the witness list includes Sen. Elizabeth Warren, D-Mass., since the CFPB is, in many ways, the brainchild of Elizabeth Warren.

Although Dodd-Frank goes way beyond outlining the Consumer Financial Protection Bureau, it does face some of the most drastic changes, which includes a name change.

For added background, in September 2010, the Obama administration appointed Warren to serve as the architect of the bureau.

Warren, who was then a Harvard Law professor and is now a U.S. Senator, was a top candidate to lead the CFPB, but the role of director eventually went to former Ohio Attorney General Richard Cordray.

Warren left the CFPB shortly after it officially opened for business on July 21, 2011.

The hearing, however, was met with no support from committee Republicans, who chose to not attend the hearing.

Hensarling provided the following comment in response to the hearing, stating, “Barack Obama is pocketing $400,000 for a Wall Street speech and Professor Warren is joining Wall Street CEOs in defending Dodd-Frank. How awkward for the Democrats. The Financial CHOICE Act ends bailouts for Wall Street and imposes the toughest penalties in history for those who commit financial fraud and insider trading. Community banks and credit unions are supporting the Financial CHOICE Act. Wall Street CEOs and Democrats are the ones saying, ‘Don’t repeal Dodd-Frank.’”

The tweets below show snippets from the hearing through committee Democrats.

Here is a tweet from the committee Democrats’ twitter account on Waters’ opening remarks:

The following tweets are from other commmittee Democrats on the hearing:

This final tweet comes from Third Way Economic, which was featured on the panel.

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Consumer optimism sees slight uptick in April

Consumer optimism increased slightly in April, jumping just 0.1 percentage point, according to the Survey of Consumers conducted by the University of Michigan.

The Index of Consumer Sentiment increased to 97 in April, up 0.1% from 96.9 in March and 9% from 89 in April last year. However, it is down from the beginning of April when the index increased to 98.

“Consumer sentiment continued to travel along the high plateau established following Trump’s election, with only minor deviations from its five month average of 97.4,” Surveys of Consumers Chief Economist Richard Curtin said. “There was widespread agreement among consumers on their very positive assessments of the current state of the economy as well as widespread disagreement on future economic prospects.”

An article by Jill Mislinski for Advisor Perspectives explains what this means historically:

The Michigan average since its inception is 85.4. During non-recessionary years the average is 87.6. The average during the five recessions is 69.3.

The Current Economic Conditions section slipped 0.4% from March’s 113.2 down to 112.7, but up 5.6% from 106.7 last year.

The Index of Consumer Expectations increased 0.6% from March’s 86.5 and 12.1% from last year’s 77.6 to 87 in April.

“Although the partisan divide has slightly narrowed in recent months, it still reflects a very pessimistic economic outlook among Democrats and a very optimistic outlook among Republicans,” Curtin said. “The partisan divide on the Expectations Index was 51 points in April, 61.4 versus 112.4, down from last month’s 63.1, 59.4 versus 122.5, with Republicans moderating their optimism more than Democrats reduced their pessimism.”

Curtin explained the divide is due to American’s selective perception of news.

“Favorable economic developments were cited by nearly all Republicans in April, while three-quarters of Democrats reported hearing negative news about the economy,” he said. “It is of some interest to note that the Expectations Index among self-identified Independents, who may be less susceptible to traditional political ideologies, rose to a very favorable 91.3 in April, up from March’s 85.8 and well above the pre-election October reading of 73.1.”

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Ten-X predicts existing home sales will drop in April

April is set to see a decrease in existing home sales, according to Ten-X, an online real estate transaction marketplace.

Ten-X’s Residential Real Estate Nowcast indicates a slight decrease in existing home sales in April that will fall between 5.4 million and 5.76 million with a targeted number of 5.66 million. This is a decrease of 0.7% from the National Association of Realtors’ reported March sales.

“We anticipated a strong Spring selling season, driven primarily by pent-up demand and accelerating household formation numbers, and sales activity in March and April has been the best we’ve seen in a while,” Ten-X Executive Vice President Rick Sharga said. “But some of this activity may also be due to buyers jumping into the market before interest rates rise any higher, so it’s possible that we may see sales slowdown later in the year.”

Pending home sales dropped in March, an indicator that April’s existing home sales will slip lower.

Last month, the company predicted home sales would fall between seasonally adjusted rates of 5.41 and 5.77 million with a targeted number of 5.59 million. NAR’s report came in at 5.71 million.

Ten-X predicts April’s median home price will increase to between $230,050 and $254,266 with a targeted price of $242,158. This would mark an increase of 2.4% from March and 4.2% from last year.

“The US housing market continues to advance, owing to a strong labor market and rising wages,” Ten-X Chief Economist Peter Muoio said. “Though low inventory levels remain a constraint and have spurred strong price gains, further eroding affordability, demand remains healthy and housing fundamentals continue to improve.”

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