Category Archives: Servicing

Acting comptroller of the currency: Here are ways to reduce regulatory burden

Acting Comptroller of the Currency Keith Noreika sat before the Senate Committee on Banking, Housing, and Urban Affairs on Thursday to discuss ways to promote economic growth and reduce regulatory burden, expanding on comments he made shortly after accepting the position.

During his opening remarks before the committee, Noreika focused on two issues. The first issue involved reducing regulatory redundancy that results in waste and hinders economic growth. The second related to tailoring regulation to fit the size, complexity and risk of regulated institutions to prevent over-regulating or under-regulating particular entities and activities, the OCC explained.

Even though Noreika hasn’t been in the position long, he made clear in his first speech to Office of the Comptroller of the Currency staff that now is a good time to take stock of the rules implemented and actions taken after the financial crisis.

“Regulation doesn’t work when it chokes investment, and banks can’t fulfill their public purpose if they can’t support their local customers, business, and communities,” said Noreika in the introduction speech.

“At a very high level, we should seek opportunities to eliminate burden that does not make sense, while recommending and championing changes to legislation and regulation where it promotes the health and vitality of the federal banking system,” he continued.

Noreika’s call for change echoed similar comments from other top Trump administration officials. The U.S. Treasury Secretary Steven Mnuchin recently unveiled the much-anticipated report on the department’s assessment of the financial market as ordered by President Donald Trump earlier this year.

And similar to Noreika’s call for change, Mnuchin’s report detailed potential executive actions and regulatory changes that can be immediately undertaken to provide much-needed relief to the financial system.

Now nearly two months later, in a speech before the Senate Banking Committee, Noreika gave a list of ideas on how to address these financial issues.

Noreika’s full written testimony went more in-depth, but for time’s sake, he highlighted four ideas in his oral testimony before the committee on Thursday:

1. Streamline smaller, less complex bank regulation

Congress could streamline the regulation of smaller, less complex bank holding companies by amending the law so that when a small depository institution constitutes the majority of its holding company’s assets, the federal regulator of the depository institution would have sole examination and enforcement authority for the holding company as well.

2. Eliminate 19th century impediments

Congress could eliminate 19th century impediments for smaller, less complex national banks to operate without a holding company by allowing these banks to have the same access as state banks to the publicly traded markets.

3. Barriers to entry for community banks

Congress could eliminate a statutory barrier to entry for new community banks by allowing de novo banks to obtain deposit insurance automatically when chartered by the OCC.

4. Clarify the Volcker Rule

A bipartisan consensus is emerging that the Volcker Rule needs clarification and recalibration to eliminate burden on banks that do not engage in covered activities and do not present systemic risks. Various options exist that can be pursued at both the Congressional and agency levels. I hope that we, the agencies, can move forward on seeking public comment on this topic soon

“During my service, I look forward to engaging with my colleagues, stakeholders, and Congress to initiate a robust dialogue and explore opportunities to foster economic growth. For our part, we at the OCC will move ahead to do what we can within our current authorities to foster economic growth and opportunity,” Noreika said. 

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Douglas Elliman Real Estate wins $4.75 million from rival agency over agent poaching

One of the nation’s largest real estate companies is in line for a nearly $5 million payout after a jury found that a rival agency poached a dozen agents from the company.

Earlier this week, a jury in New York Supreme Court, Westchester County, ruled in favor of Douglas Elliman Real Estate and ordered William Raveis Real Estate to pay $4.75 million in a lawsuit stemming from a new office that William Raveis opened up directly across the street from a Douglas Elliman branch in Westchester Country, New York.

According to details provided by Douglas Elliman, the company sued William Raveis Real Estate and Lisa Theiss, who managed Elliman’s Armonk branch office until 2015.

Around that same time, William Raveis opened up a new office across the street from Douglas Elliman’s office.

And after a four-week trial, the jury found that while Theiss was still the manager of the Elliman branch, she and William Raveis conspired to unlawfully move a dozen sales agents, including Elliman’s four top producers in the office, to Raveis’ new office.

The jury found Theiss liable for breach of fiduciary duty, while Raveis was found liable for aiding and abetting breach of fiduciary duty, and both Theiss and Raveis were found liable for tortious interference with business relations.

The jury returned a $2.25 million verdict in Elliman’s favor, along with $2.5 million in additional punitive damages.

In a statement, Howard Lorber, chairman of Douglas Elliman Realty, said that the company is obviously pleased with the jury’s decision.

“I am extremely pleased that the jury saw fit to rectify the egregious and outrageous actions of William Raveis Real Estate,” Lorber said. “Such deception does not serve our industry and it is my hope that today’s verdict will help deter others from similar practices.”

The Real Deal reports that William Raveis plans to appeal the jury’s decision. 

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Economists draw mixed conclusions over May new home sales report

In April, home prices dropped, followed by an increase in home prices in May, according to a joint release from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. One expert explained the volatility in certain areas of the U.S. are to blame for the shifting home sales market.

“Much of the movement in new home sales the past two months can be traced to volatility in reported sales in the Midwest and West,” Nationwide senior economist Ben Ayers said. “Whereas sales in the West rebounded sharply in May, Midwest new home sales slipped again to a multi-year low.”

He explained the jump in home sales is led by other areas of strength in the economy.

“When combined with the reported jump in existing home sales on Wednesday, total home sales continue to trend higher this year,” Ayers said. “Sales activity is being led by strong homebuyer demand for single-family homes in response to job market gains, low mortgage rates, and faster household formation.”

But, as another expert pointed out, the market is far from reaching its historic norms.

“Despite May’s good news, new home sales still have a long way to go to reach historic norms,” Trulia Chief Economist Ralph McLaughlin said. “When taking into account the U.S. population, new home sales are still about 69% of the long-run average.”

“However, we think this reflects fundamental supply, rather than demand, problems in the housing market, as buyers look for any inventory relief they can get,” McLaughlin said.

And the report has its share of disappointing news, despite the increase posted in new home sales.

“Ultimately this report is a disappointment for those looking to builders to meaningfully help solve the pressing supply issues in the market overall, especially for entry-level buyers,” Zillow Chief Economist Svenja Gudell said. “The median price of a new home sold in May was close to $350,000, by far the highest it’s ever been and likely well beyond the budget of younger, first-time buyers that make up a sizable portion of the market right now.”

But one expert pointed out that the new home sales report continues to show positive results, hitting post-recession highs and increasing significantly from last year.

“May new home sales reflect an ongoing, positive trend for 2017, in line with NAHB’s forecast,” said Robert Dietz, National Association of Home Builders senior vice president and chief economist. “The April sales rate was revised up, and on year-to-date basis sales of new, single-family homes are running 12% higher than this time in 2016. The three-month moving average of new home sales is near the post-recession high mark.”

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