Posts Tagged ‘financial crisis’

MBA’s Lobbying seeks to ease CFPB’s Mortgage Regulations

October 10th, 2014 Comments off

Dave Stevens-president-and-CEO-of-the-Mortgage-Bankers-Association-MBAAs midterms elections approach, the Mortgage Banker Association (MBA) is seizing the lobbying opportunity to fund Congressional campaigns; hoping to open more discussions to gain relief from the Consumer Financial Protection Bureau (CFPB) regulations currently in place in the U.S..

National Mortgage News told MHProNews that Dave Stevens, president and CEO of the Mortgage Bankers Association (MBA), explained he’s unsure of the results the association’s efforts will receive because of the presidential election is also approaching, which has its own agenda.

Because we’re heading into a presidential election, the longer we go into 2015, presidential politics dwarfs much of the debate,” Stevens stated. “I question how productive the upcoming year will be post-election.

Nevertheless, the MBA is pressing ahead and requesting changes in the strict regulations on loans and mortgages that were implemented following the 2007-2008 financial crisis.

According to the Center for Responsive Politics, the MBA is on its way to setting a new record in fundraising, with contributions of more than $950,000 going to Congressional campaigns.



The MBA’s lobbyists explain their motivation is to allow more people to buy homes and be able to afford mortgage payments. A change in the regulations will clearly benefit the housing market, and thus the broader economy.

Speaking about the Dodd-Frank Act, the MBA recognizes the good intentions of such regulations. However, Stevens and other members point out different consequences. While the act aimed at protecting customers, it turned out they often suffer from these current legislations because of high fees and the too many documents required to prove their ability to repay a loan.

Steven’s point, in the minds of many MH pros, is particularly true in the manufactured housing market.

The uncertainty of regulations offers the Manufactured Home (MH) market the space to attract consumers who in some cases cannot currently access conventional mortgages with bigger down payments on site built homes, as industry leaders like UMH’s Sam Landy have pointed out.

Should the MBA succeed in having Congress make the changes, could offer MH investors, lobbyists and other professionals other opportunities to attract new customers seeking homeownership. ##

(David Stevens photo credit :, chart credit Open Secrets and National Mortgage News)

(Daily Business News article submitted by Lucine Colignon)

Rand Ghayad’s HuffPo OpEd questions Dodd-Frank factor in Lower U.S. Employment

August 26th, 2014 Comments off

rand-ghayad-phd-the-brattle-group=credit-posted-daily-business-news-mhpronews-com-Rand Ghayad, PhD, questions which is adding to the depressed U.S. labor market more, regulations or a lack of demand for goods and services? Writing in the Huffington Post, Dr. Ghayad cites Bureau of Labor Statistics (BLS) figures pointing to only 0.3 loss due to “government regulations/intervention,” vs. “25 percent were laid off because of a drop in business demand.”

A deeper dive by MHProNews into Ghayad’s statements reveals this quote:

The bottom line is an old story: regulation has raised costs and made business opportunities to sell goods and services insufficiently profitable. The new twist is that these fears are suppressing current investments and hiring, and are thus a major cause of our long-term unemployment problem.”

Ghayad also acknowledges that too big to fail, something Dodd-Frank was supposed to help ‘fix,’ has actually resulted in larger financial institutions, not smaller ones. “The U.S. largest banks have grown only bigger since the financial crisis — by as much as a third.”

Ghayad’s survey fails to ask about the impact of other regulatory burdens on business and the economy, such as the Affordable Care Act (ACA a.k.a. ObamaCare). “Blaming” lower employment on Dodd-Frank alone would be an overstatement. But as veteran manufactured housing professionals know, Dodd-Frank is suppressing some loans which where previously being made, which in turn reduces sales and thus the ability for would be financing sources to fill demand. To learn more, see the Industry in Focus report on HR 1779. ##

(Rand Ghayad, PhD photo credit: The Brattle Group)

Offshoring Jobs Dropped Real Income, Housing Sales

November 12th, 2013 Comments off

Paul Ashworth, an economist with Capital Economics, noting real incomes for Americans have been stagnant since the 1970s, says the younger generation cannot afford big ticket items like buying a home. As MHProNews knows, many millennials are living with their parents because they cannot find jobs that can support a mortgage. He says, “The offshoring of relatively low-skilled labour-intensive manufacturing jobs matters because those jobs were, in general, better paid than the new jobs requiring relatively few skills that are being created in the education, health care and leisure sectors.” He adds that this globalization resulted in more Americans earning less, but they continued to take on more debt to achieve homeownership, and that in turn triggered the financial crisis. According to HousingWire, Anthony Sanders of George Mason University suggests as long as real incomes fall we will not be able to generate sustained economic growth, which could lead to a stronger housing recovery. He also states we got inexpensive goods by moving jobs overseas but at the expense of jobs that supported other sectors of the economy.

(Image credit: FotoSearch–question mark houses)


FHA’s Carol Galante: Stable Housing Finance Awaits

October 29th, 2013 Comments off

The members of a panel at the Mortgage Bankers Association (MBA) annual convention say the 30-year fixed rate mortgage (FRM) is so ingrained in the system that removing it would have unintended consequences. William McCue of McCue Mortage says nearly all of his loans are for Federal Housing Administration (FHA)-insured loans, like an enveloping institution that gives consumers comfort, as nationalmortgagenews tells MHProNews. Adding there may be multiple ideas good for the market, he says the mentality of policy makers needs to change after acknowledging the housing industry caused the second worst financial crisis in the nation’s history. FHA Commissioner Carol Galante says there is the opportunity to create a stable housing finance system in the coming year.

(Image credit:


CFPB Sues Lender for Violating Compensation Rule

July 25th, 2013 Comments off

A mortgage lender is being sued by the Consumer Financial Protection Bureau (CFPB) for allegedly paying bonuses to loan originators that charged consumers higher interest rates in violation of the loan officer compensation rule. The 85th largest lender in the country, Castle and Cooke Mortgage LLC of Salt Lake City is said to have paid 150 loan officers quarterly bonuses ranging from $6,100 to $8,700 for leading borrowers into higher-priced loans. The Bureau


says loan officers who did not charge higher rates did not receive bonuses, and that 1,100 of the loans were illegal. According to what MHProNews has learned from nationalmortgagenews, C&C originated $332 million in loans in the first quarter. The lawsuit seeks restitution and civil penalties, and specifically cites company president Matthew Pineda and senior vice president Buck Hawkins. “We are taking action against the type of practices that precipitated the financial crisis,” said CFPB director Richard Cordray.

(Photo credit: top, ABCNews; bottom, HousingWire)

CATO CEO Says Free Markets Are the Answer

September 26th, 2012 1 comment CATO Institute’s CEO, John A. Allison, is making the case that free markets not government are the solution to what caused the banking crisis. In his book,”The Financial Crisis and the Free Market Cure: Why Pure Capitalism is the World Economy’s Only Hope.” In a column to AB, Allison states that: “Many life insurance companies and other investors like having government guarantees on their assets (via Freddie, Fannie, or the FHA). However, this is very destructive public policy because it pushes the risk to taxpayers and not market participants.” Alison also said, “A major component of the solution will be provided by existing commercial banks that retain home mortgages in their portfolios the way the S&Ls did. One of the few major economic systems to have limited problems as a result of the financial crisis is Canada. One reason the Canadian banks did relatively well is that they portfolio home mortgages. While there are some housing subsidies in Canada, the banks do not have to compete with the government, that is, Freddie, Fannie, and the FHA. Also, since the banks were holding the mortgages on their books, they cared about the credit risk and underwrote the risk rationally.”
(Photo Credit: United Liberty)

FSOC Regulators Losing Sight of Purpose

July 25th, 2012 Comments off

MHProNews has learned at a hearing on the Financial Services Oversight Council (FSOC), the “super committee” of regulators established as part of the Dodd-Frank Act to provide comprehensive monitoring of our nation’s financial system, House Financial Services Committee Chairman Spencer Bachus (R-AL) said there is little evidence the FSOC has accomplished what it was created to do because their regulators are so busy writing hundreds of new rules required by Dodd-Frank. Noting the failure of FSOC to protect customers of MF Global and Peregrine Financial Group, Rep. Bachus said, “It seems regulators are so busy trying to write rules against things like proprietary trading – which even Chairman Volcker agrees was not a cause of the financial crisis – that they are failing to fulfill their primary mission. Are they so busy writing tickets for jay walking that they’re letting the robbers and thieves run loose? Rather than pass massive new laws that require hundreds of new regulations, it’s a better use of limited resources to make sure regulators are enforcing the rules we already have.”

(Image credit: Facebook)

Q2 2012 has Few Economic Bright Spots

July 16th, 2012 Comments off

AnchorageDailyNews reports retail sales fell for the third consecutive month in June, the first time that has happened since the fall of 2008 at the height of the financial crisis. Sales of furnishings, appliances, garden and building supplies, and at department stores all declined, leading to an overall drop of 0.5 percent June over May. Although auto sales were up 22 percent over the same month last year, it was not enough to offset the drop in retail sales, which drives 70 percent of economic activity. The $0.50 a gallon drop in gasoline prices since April did not compensate for the lackluster job growth in the second quarter. Costco, Target, and Macy’s all reported less than expected revenues.

(Image credit: HousingWire)

Credit Union Loaning to Lower Denominator

March 5th, 2012 Comments off

A credit union in Michigan is reaching out with their Turning Point Home Loan to people with lower credit scores but with enough financial stability worth the risk. Michigan First CU’s vice president of lending, Chris Maynard says, “Take members who lost their job at the height of the financial crisis. They may have a low credit score because they were forced to make some difficult decisions, and now are back on their feet. But their credit score has yet to catch up. These people are good risks. They have verifiable income and the capacity to pay. We believe it is a good move to give them a chance a little bit ahead of schedule. By starting now at 580 we feel we can appeal to this new and growing segment of borrowers.” The 2010 census indicated 20,000 fewer homes in the Detroit metro area than ten years ago. “So many homes are vacant and Turning Point will help a lot more people get into a home,” he says. NationalMortgageNews tells Michigan First offers five to six percent APR loans for 10-, 15- and 20-year fixed rate terms with a ten percent down payment.

(Graphic credit: Michigan First CU)