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Posts Tagged ‘mel watt’

Rep Jeb Hensarling Applauds Appointment of Dr. Mark Calabria to Head FHFA

December 12th, 2018 Comments off

 

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The drama of the changing of the guard at the Federal Housing Finance Agency (FHFA) that oversees the Government Sponsored Enterprises (GSEs) of Fannie Mae and Freddie Mac has been duly tracked by the Daily Business News on MHProNews.

 

 

One of those barn-burners around allegations of sex and sleaze is found at the link below.

 

Mel Watt – FHFA and MH Connected Hearing Today to Feature Sexual Misconduct Allegations

 

For those who listened to the Manufactured Housing Institute (MHI) call outgoing FHFA director Mel Watt a ‘champion’ for the industry, the 10-year delay of getting meaningful Duty to Serve for manufactured housing should be the latest reminder of why MHI’s word arguably ought to raise an immediate question mark.

The move to bring Dr. Mark Calabria should be closely watched, because it could signal possible changes over the horizon on the GSEs, including – but not limited to – the Duty to Serve (DTS) manufactured homes.

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A press release today from House Financial Services Committee Chairman Jeb Hensarling is below.  A related report, on DTS is found further below.

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WASHINGTON – Financial Services Committee Chairman Jeb Hensarling (R-TX) issued the following statement today praising the nomination of Dr. Mark Calabria to serve as Director of the Federal Housing Finance Agency (FHFA).

“The American $10 trillion mortgage market is the envy of the world, and to keep us on top we need an FHFA Director who is dedicated to capitalism and economic growth.  Dr. Calabria is that man.  He knows what it takes to re-energize our housing industry and to promote responsible growth that rewards investors and attracts foreign dollars into our economy. At a moment in time when the future of housing finance policy in our country will be permanently shaped by the next FHFA Director, I can think of no better or more responsible person for the role than Dr. Calabria and applaud President Trump for his outstanding pick.”

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See the related reports for more details on the prior and more recent developments on this issue.  “We Provide, You Decide.” © ## (News, analysis, and commentary.)

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“Waste, Fraud, and Abuse” – FHFA, GSE Federal Oversight Announcement

Warren Buffett, Charlie Munger, Fannie Mae, Freddie Mac, Berkshire Hathaway Backstory

“What Are We, Chopped Liver?” MHI Member December 2018 Reactions

 

 

 

 

 

 

Mel Watt – FHFA and MH Connected Hearing Today to Feature Sexual Misconduct Allegations

September 27th, 2018 Comments off


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Mel Watt, who runs the Federal Housing Finance Agency, of sexual” misconduct. “Watt’s accuser, Simone Grimes, requested to testify at the hearing” today, per Roll Call.

Manufactured housing is in the background of this hearing, and MHProNews plans a follow up on this topic.

There are charges of corruption, waste, and fraud involving the GSEs – Fannie and Freddie – and at the FHFA.

See related reports, linked below. “We Provide, You Decide.” © ## (News, analysis, and commentary.)

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Related Reports:

“Waste, Fraud, and Abuse” – FHFA, GSE Federal Oversight Announcement

 

Warren Buffett, Charlie Munger, Fannie Mae, Freddie Mac, Berkshire Hathaway Backstory

Mel Watt Charged With Sexual Harassment – Manufactured Housing Industry Repercussions?

July 30th, 2018 Comments off
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Official photo, Mel Watt, FHFA. Graphic by MHProNews.

The mortgage industry and Washington were rocked Friday by news that Federal Housing Finance Agency Director [FHFA] Mel Watt has been accused by an agency employee of sexual harassment,” wrote Rob Blackwell for AmericanBanker.

 

As many manufactured home industry veterans know, the FHFA was established as the receiver for the Government Sponsored Enterprises (GSEs) of Fannie Mae and Freddie Mac, after the mortgage/housing financial crisis.  It was part of the Housing and Economic Recovery Act (HERA 2008), signed into law by President George W. Bush.

The Duty to Serve (DTS) manufactured housing and underserved markets also flows from HERA.  Since the FHFA is the regulator of the GSEs, who’s at the top at FHFA matters to the industry’s consumers and professionals.  Numerous non-profits – as well as various associations and industry businesses – have expressed their desire for a robust entry by the GSEs into manufactured home lending.

Much of the focus has been in the arena of chattel (personal property, home only) lending.

Watt was already slated to leave the FHFA in January 2019.  There have already been several names floated for his replacement.  Some, per informed sources, say that while the names are all “familiar faces,” some are “potentially problematic” for the interests of manufactured housing.

If allegations spelled out in Politico prove true, that time line for Watt’s departure could be accelerated.

 

Politico Pounces

Politico obtained transcripts of reported conversations between Watt and an employee, whose name was withheld. In those alleged conversations, Watt appears to be suggesting a relationship with the employee.

Well, you probably want to know what I wanted to talk to you about,” Watt said, according to Politico. I mentioned to you there is an attraction here that I think needs to be explored. In my experience there are four types of attraction: emotional, spiritual, sexual or of friendship. So, the exercise here is to find out which one exists here.”

Watt supposedly noticed a tattoo on the employee’s ankle and asks her, “If I kissed that one would it lead to more?”

The employee’s lawyer, Diane Seltzer Torre, confirmed to American Banker that an Equal Employment Opportunity complaint had been filed against Watt. The FHFA confirmed an investigation is underway,” but Watt’s response is that it was “intended to embarrass or to lead to an unfounded or political conclusion.”

However, I am confident that the investigation currently in progress will confirm that I have not done anything contrary to law,” Watt said. “I will have no further comment while the investigation is in progress.”

Watt’s statement did not specifically confirm or deny claims that he made those suggestive comments to an employee. Rather, he stressed that any actions he took were not illegal.  One question that needs to be asked, who will pay if there is a settlement? Will it be taxpayers, or Watt himself?

Legalities and the truth aside, if Watt made such comments, this may be enough to force him out before his term is up.

As the head of an independent agency, Watt can only be removed “for cause” by President Donald J. Trump.  These allegations could possibly qualify, if the Trump Administration wanted to accelerate his departure for whatever reason.

The president could either allow one of Watt’s deputies to temporarily run the agency if he stepped aside, or appoint an interim head under the Federal Vacancies Reform Act, which allows a Senate-confirmed official to temporarily serve as director,” according to Blackwell.

Mick Mulvaney is a similar case, who has been serving for months as the temporary head of the Consumer Financial Protection Bureau (CFPB).

Whether Watt chooses to leave or is forced out, it is obvious that his days at the agency were winding down.

The transition timeline is likely to be expedited,” said Isaac Boltansky, director of policy research for Compass Point Research & Trading.

 

FHFA, DTS and Manufactured Housing Lending

MHProNews will monitor these developments, as they impact the various efforts to compel the GSEs to do more in the way of supporting manufactured housing chattel and other lending options.

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While the Arlington, VA based Manufactured Housing Institute (MHI) has signaled a level of satisfaction with DTS to date, the Washington, D.C. based Manufactured Housing Association for Regulatory Reform (MHARR) has made it clear they believe the process has been largely stymied to date from doing what Congress mandated a decade ago.

 

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Collage by MHProNews.

MHARR, per sources, has launched several initiatives to compel more lending.

Meanwhile, MHI has given lip service to similar efforts, but there has been signs of foot dragging and posturing, perhaps because of the interests of their dominant Berkshire Hathaway members, Clayton Homes, 21st Mortgage and Vanderbilt Mortgage and Finance.

It should be noted that after numerous offers to publicly respond to or debate the evidence-based reports linked below, neither MHI nor a Berkshire Hathaway owned unit has accepted those offers to respond to these published concerns. Why not?  Is it because the documents and quotes provided are often from 21st, Tim Williams, Kevin Clayton, or Warren Buffett himself? Doesn’t that make it hard for them to refute? “We Provide, You Decide.” © ## (News, analysis, and commentary.)

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SoheylaKovachDailyBusinessNewsMHProNewsMHLivingNewsSubmitted by Soheyla Kovach to the Daily Business News for MHProNews.com. Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.

 

 

 

 

 

Related Reports:

Duty To Serve, “Complete Waste of Time” per Tim Williams, CEO/21st Mortgage; POTUS Trump, Warren Buffett Insight$

 

Manufactured Housing Association for Regulatory Reform (MHARR) Pressing Fannie Mae, Freddie Mac to Fully Engage on Duty To Serve (DTS)

MHI Lender Shakes Up DTS and MLO Rule Discussions

 

Smoking Gun 3 – Warren Buffett, Kevin Clayton, Clayton Homes, 21st Mortgage Corp Tim Williams – Manufactured Home Lending, Sales Grab?

 

Former Head of Ginnie Mae does not Envision GSE Reform Soon

November 11th, 2015 Comments off

joseph_murin__former_ginnie_mae_prez_and_ceo__scotsmanguide__creditThe former president and CEO of Ginnie Mae, Joseph Murin, said the Obama administration is not looking to recapitalize GSEs Fannie Mae and Freddie Mac, preferring to leave them as a conservatorship from which funds can be extracted as needed. Also, he does not believe reform of the government-sponsored enterprises (GSE) will occur under the next administration, scotsmanguide reports.

The Treasury is using them as a cash cow to use their cash flows for other areas of the federal government, where the administration feels that they need funding,” Murin said. “It is a deliberate strategy to be able to keep the GSEs where they are today, let them continue to earn and to transfer those earnings over to the Treasury.

Treasury Secretary Jack Lew said the administration does not want to release the GSEs from conservatorship now would it consider allowing them to retain earnings. He said President Obama wants Congress to take up housing finance reform so taxpayers would not be unduly exposed to risk.

Noting that the status quo is the administration’s policy, Murin does not believe any major reforms to the GSEs will be adopted, although he says it might be more likely with a Republican presidency, but adds, “I think they will continue to kick the can down the road,” Murin said. “Everybody is pointing to a new administration in 2017. However, I am not sure that is something that is in the cards.

He says some mortgage industry people and Civil Rights groups want the GSEs to recapitalize and release. Murin favors replacing Fannie and Freddie with one entity like Ginnie Mae, which insures mortgage securities backed by the federal government, like FHA, but does not purchase mortgages like the GSEs do. You cannot expect private capital to fill the void left by the absence of a government guarantee because without it, mortgage rates would spike 200 to 300 points. He said, “I don’t think that is ever going to happen, where the private marketplace takes over. The cost of liquidity under a private environment will be too high and it will impact in a negative manner the housing and mortgage market in this country.

The NAACP, the Community Home Lenders Association (CHLA) and the Community Mortgage Lenders of America (CMLA) all support a recapitalization of the GSEs. The NAACP and two other progressive groups are concerned that access to credit for lower-income borrowers is at risk under the status quo.

Mortgage trade groups are concerned Fannie and Freddie will be eliminated, especially since Freddie Mac reported a $475 million loss in Q3 2015, as MHProNews reported Nov. 4, 2015, a significant drop compared to net income of $4.2 billion in the same quarter of 2014. While the Treasury will not have to come to its rescue this time, Federal Housing Finance Agency Director Mel Watt predicted the GSEs will likely have to make draws against the Treasury as their capital reserves are decreased to zero by 2018.

CMLA Executive Director Glen Corso says taxpayer-funded bailouts could lead to the elimination of the GSEs. “There are folks out there that would like to see the GSEs shut down, and our concern is that gives them ammunition to argue that, ‘My God, they are at it again; they are losing money, let’s shut them down right now,’” Corso said. “Our members are very concerned about that.##

(Photo credit: scotsmanguide–Joseph Murin, former CEO and president of Ginnie Mae.)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

Freddie Mac Drowns in Red; CEO Layton says Lenders need to Lower Down Payment

November 4th, 2015 Comments off

donald_layton__ceo_freddie_mac__housingwire__creditOn the news of Freddie Mac reporting a net loss of $475 million for the third quarter of 2015, significantly down from the net income of $4.2 billion for the same quarter 2014—the first time in four years– MHProNews has learned from housingwire that Freddie Mac CEO Donald Layton is suggesting lenders lower their down payment when writing mortgages. He says that would help the GSE increase access to credit for possible homeowners.

Referring to the loss, Layton, calling it “accounting noise,” said the real economics going on is that lenders are not fully exploiting the three percent down payment mortgages that Freddie will now bundle and securitize. He said mortgage lenders are unduly afraid of representation and warrants claims, but in fact, that activity has declined, he noted.

He did describe the loss thusly: “This $0.5 billion loss was caused mainly by the accounting associated with our use of derivatives, whereby the derivatives are marked to market but many of the assets and liabilities being hedged are not. He added, We’re sampling performing loans earlier to test for defect in manufacturing. All this is designed to have lenders feel more comfortable.

Freddie’s net worth is $1.3 billion, and it has repaid $96.5 billion to taxpayers and received $71.3 billion from the Treasury.

Federal Housing Finance Agency Director Mel Watt, noting the decrease was not a decline in credit quality or an increase in credit losses, said as the GSEs transfer credit risk away from the taxpayer to the private sector, their revenues will of necessity decline.

A U. S. Treasury official who says the loss is not indicative of a weakness, stated, “The prospect of any material losses by the GSEs is another reminder that comprehensive housing finance reform is necessary. Taxpayers remain on the hook for losses incurred by the GSEs, whether through the capital buffer or the ongoing, $258 billion backstop under the PSPAs.

Suggesting this could be the first shot in a return to the housing crisis, Rep. Ed Royce (R-CA) has introduced legislation to limit the pay of GSE CEOs. He said, “Losses like this combined with multimillion dollar CEO salaries at the GSEs are the warning shots of a return to the pre-crisis model of private gains and public losses that wrecked the economy. We can’t simply put the blinders on and say that Fannie and Freddie are just like other companies when taxpayers are on the hook if they go in the red.

His bill would limit compensation to $600,000 instead of the $3 million proffered by the FHFA earlier this year.

Meanwhile, Freddie’s comprehensive loss for Q3 2015 was $501 million, as compared to comprehensive income of $3.9 billion for Q2 2015. Freddie’s single-family rental business’ purchase climbed to $90 billion, a 50 percent increase compared to the same period 2014. ##

(Photo credit: housingwire–Freddie Mac CEO Donald Layton)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

Final “Duty to Serve” Rule Planned; Average MHC Site Cost Nearly Doubles in 18 Months

October 22nd, 2015 Comments off

federal_housing_finance_agency__logoRecalling a story MHProNews posted Sept. 5, 2014 regarding Mel Watt, then the new FHFA head, who said the “duty to serve” (DTS) rule as it impacts manufactured housing will be “revisited,” now says, In 2016, we also plan to finalize a Duty to Serve rule, which will encourage Fannie Mae and Freddie Mac to innovate responsibly in the areas of affordable housing preservation, housing in rural areas, and manufactured housing.

The sector has seen an upward trend in occupancy and improvement in rent growth since 2012. The trend is likely to continue in the near to mid-term as demand for affordable housing is expected to increase,” according to Watt.

MHPronews reported Oct. 16, 2015 that Freddie Mac multifamily has financed $1 billion in MHC loans in 18 months, representing over 25,000 home sites. During those 18 months, according to costar, “The average sale price per manufactured home site has jumped from $19,144 to $32,092 per pad site,” according to CoStar COMPs data.

Kelly Brady, Freddie Mac’s multifamily vice president, stated “MHC loans are an example of how we are serving new geographic markets where added liquidity is critical and where manufactured housing provides an important source of affordable rental housing, especially in rural and non-metro areas.

Freddie Mac’s research indicates occupancy in MHCs has increased in the last six years. In last month’s multi-family outlook, Freddie noted MH offers a less expensive alternative to most conventional multifamily and single-family rental units. ##

(Image credit: Federal Housing Finance Agency)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

Secondary Market for Manufactured Home Loans Coming from FHFA

October 2nd, 2015 Comments off

federal_housing_finance_agency__logoAccording to nationalmortgagenews, the Federal Housing Finance Market (FHFA) will issue a final rule within the next 12 months requiring Fannie Mae and Freddie Mac to better serve the manufactured housing market and rural markets, and increase the preservation of affordable housing under the “duty-to-serve” mandate.

The rule will therefore provide a secondary market for manufactured housing loans, lower financing costs and providing better protection for consumers, long sought goals of the the manufactured housing industry.

The agency also intends to update its the GSEs credit scoring models. FHFA will “continue to assess the feasibility of leveraging alternative credit scores for underwriting, disclosure and pricing purposes, including operational and system implications.

FICO has made significant changes since the FICO 4 credit scoring model was introduced in 2004, as MHProNews has learned. Different groups have suggested more current credit scoring models should be introduced, but FHFA Director Mel Watt said updating the FICO of developing an alternative is a complicated process, and there was no immediate indication that will be done within this fiscal year, which began Oct. 1.

The agency also intends to work on different remedies for dealing with lender disputes with Fannie and Freddie. ##

(Image credit: Federal Housing Finance Agency)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

Secondary Market for Manufactured Home Loans Directive Due Soon

August 13th, 2015 Comments off

mortgageorb  creditWhile the “duty to serve” mandate requiring loans be made available for manufactured home purchases has been on the books since 2008 but never enforced, it may soon see the light of day. The Federal Housing Finance Agency (FHFA) is set to require Fannie Mae and Freddie Mac to purchase manufactured home loans from lenders, thereby creating a secondary market, presumably like the one for site-built homes.

Some 2.9 million households are sited in 45,000 manufactured home communities across the nation, and this proposal would improve lending standards and credit availability for manufactured home (MH) owners, according to nationalmortgagenews. Developing a secondary market could lower finance costs and improve consumer protection for MH consumers.

Ishbel Dickens, executive director of the National Manufactured Home Owners Association, says the relationship between the MHC owner and resident is a bad business model, although many states have ordinances that protect residents, and reimburse them if they have to move. She also opposes regulatory reform that would protect the values of the four million people who live in manufactured homes valued at $20,000 or less, thus harming the people she alleges to assist.

At one point she says the manufactured home is nearly worthless after ten years. Do not say that to Cavco, or Clayton, or Deer Valley or Skyline, or any other manufacturer of HUD Code homes. Studies have shown that new manufactured homes do not depreciate any faster than traditional site-built homes.

Dick Ernst, chairman of the Manufactured Housing Institute’s (MHI) financial services committee, and a long-time veteran of manufactured home lending, says the government-sponsored enterprises (GSEs) are supposed to have been making a market for all forms of housing. While they do participate in lending to owners of MHCs, they’ve done little with individual consumers.

We are very, very close to meeting with Mr. Watt to begin serious discussions on Fannie and Freddie providing a secondary market for home-only or chattel transactions, which is a big part of our industry,” Ernst said.

Doug Ryan, director of affordable housing initiatives at the non-profit Corporation for Enterprise Development, noting one of the reforms will be an extension of leases in MHCs beyond the standard one-year, said, We do see this as an impetus for the industry to offer longer-term leases. The lease must be as long as the mortgage. We are committed to that.

Although Freddie balked at the duty to serve proposal in 2009, saying “loans not secured by land present substantially greater risk compared to land-owned homes,” and that the availability of mortgage insurance is uncertain, the FHFA under the direction of Mel Watt will likely prevail.

Meanwhile, as of Jan. 2014 chattel loans are now under the Home Ownership and Equity Protection Act (HOEPA), but manufactured home loans of $20,000 or less are not economical to make under the new rules, depriving approximately 1.7 million owners of MH the ability to finance the sale of their homes. It is not profitable for lenders to make these types of loans.

As MHProNews knows, lenders are thus pushing legislation in congress, the Preserving Access to Manufactured Housing Act, which will raise the HOEPA threshold for smaller loans and which the House passed in April. The Senate version passed the Senate Banking Committee but has yet to reach the Senate floor. Consumer groups, however, oppose this legislation because of the higher interest rate.

At a Senate Banking Committee hearing, Senators Tom Cotton (R-AR) and Bob Corker (R-TN) told CFPB Director Richard Cordray that families in rural areas often depend upon MH as affordable housing. Said Sen. Cotton, In rural areas, there is not a lot of new single-family homes or a large stock of multifamily rental units.

Cordray responded, “I do remain concerned that credit is tight at the lower dollar level. I think we should look at it some more. Maybe there should be changes there.

For L. A. “Tony” Kovach’ thehill blogpost, Regulations for Manufactured Home Loans, which documents the  continuing need for Congressional action, please click here. ##

(Image credit: mortgageorb)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

FHFA Director Wants to Step Up Efforts To Increase Affordable Home Ownership

January 20th, 2015 Comments off

mel-watt-fhfa-housingIn an effort to help underserved borrowers, Director Melvin L. Watt of the Federal Housing Finance Agency (FHFA) has ordered the GSEs, Fannie Mae and Freddie Mac, to increase the use of housing counseling. It is hoped that this will assist entry-level borrowers to get into the housing market by educating them about the process.  Watt also wants to “review new ways of evaluating borrowers’ creditworthiness.”

He also stated that he believes these goals will help FHFA and the GSEs to “build a strong, vibrant national housing finance market, which will create new homeownership and rental opportunities for existing and potential borrower.”

Bloomberg News tells MHProNews that the FHFA hopes this process will enable more people to buy affordable homes including manufactured homes.

Watt, who took over at FHFA a year ago, has been reversing previous policies that emphasized shrinking Fannie Mae and Freddie Mac. The two companies, which were seized by regulators in 2008, buy more than half of the new mortgages in the United States and package them into securities.

In an attempt to boost funding for affordable rental housing, the two companies will each be limited to buying $30 billion in apartment building loans unless the loans are for affordable housing projects or manufactured housing rental communities. ##

(Photo Credit: Wikipedia).

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Article Submitted by Sandra Lane to – Daily Business News- MHProNews.

Relaxed Credit: Kickstart Housing or Overheat the Housing Market?

September 12th, 2014 Comments off

dice_rolling___housingwire__creidtRegulators have been encouraging mortgage lenders to relax credit, saying that will fuel the tepid housing market, while others say lowering FICO scores to include more low-income borrowers will lead to more defaults. “We simply don’t have enough qualified homebuyers even with mortgage rates getting as low as 3.25%,” says Logan Mohtashami, a senior loan officer at AMC Lending in Irvine, Calif. “We’re coming off a debt-asset bubble and deleveraging of mortgage debt is still going on. How much more risk do regulators want lenders to take?”

As MHProNews recently reported, the Federal Housing Administration (FHA) is aiming at borrowers with credit scores below 680 who have been passed over. Federal Housing Finance Agency (FHFA) director Mel Watt recently reduced the risk to lenders of having to purchase defective loans in an attempt to stimulate lending to low-income borrowers. Some analysts note the Dodd-Frank Act and other reforms eliminated the bad actors who pushed many borrowers into foreclosure, and lenders now being required to determine the borrower’s ability to repay should help pave the way for a normalized market. Mike Calhoun of the Center for Responsible Lending says loans to people during the crisis did well, and it was bad products that were the culprit causing the crisis, according to nationalmortgagenews.com.

Still, unemployment remains stubbornly high, falling some analysts say only because people quit looking for work; and the lack of wage growth will continue to stymy demand, regardless of historically low interest rates artificially maintained, that ultimately could result in a slow-growing economy, if not another recession. ##