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Economic News

Federal Reserve Board to price fix and mortgages to skyrocket

The Fed has a rule that they are making active on April 1 where each mortgage brokerage and banker (excluding banks) set a fixed percentage that they can charge each and every customer regardless of loan amount.

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Is the Federal Reserve Board price fixing the mortgage business in violation of law? The Fed has a rule that they are making active on April 1 where each mortgage brokerage and banker (excluding banks) set a fixed percentage that they can charge each and every customer regardless of loan amount.

So, if a brokerage is made to charge 1% of the loan amount, the people who want a $40,000 mortgage will have to go to a bank that can charge them whatever they want and the person needing a $2,000,000 loan will go to the bank.

In essence, the banks will be able to price fix because the Fed will have taken so many companies out of the loop.

Technically, the Fed is violating many laws and even their own mission. Why are they doing this?

According to Marc Savitt, President of the National Association of Independent Housing Professionals (NAIHP)*, “In my opinion the why is because they want to help the banks. Stronger banks, less time and money for them. Plus, it makes them look like they’re doing their job.”

Savitt goes on to say “the fact the Federal Reserve Board doesn’t have the authority to restrict compensation, we at NAIHP knew for over a year. This has been long planned and it will make mortgages harder to come by and much more expensive.”

“NAIHP is fighting this with everything we have, including a strong grass roots network”  Savitt added.  “Since we represent everyone in the real estate industry including mortgage brokers, real estate agents, appraisers, title insurance, small banks and consumers, we must make sure that mortgages are provided in a fair way to the person buying a small starter home in Missouri and a mansion in Beverly Hills”

The solution?  Savitt has has met with Elizabeth Warren, talked directly with the Fed, looked for guidance from other industry professionals and has had discussions with attorneys to possibly prepare a case or an injunction to stop the Fed from implementation.

“It stinks that we has hard working small business people have to waste our time volunteering to stop the banks from doing what they did to us in the past decade all over again,” said Savitt. “You would think they would want to get their mortgage business from the (now) NMLS licensed mortgage people that have been scrutinized more than a patted-down airline passenger! But no, they keep attacking.”

Savitt continues, “They have even started trying to limit what real estate agents can charge for commisions.  I wouldn’t be shocked if they wanted to try to get  Congress to let them be in real estate business.”

OK, NAR….ready to rock!

*Full disclosure- I am a Board Member of NAIHP and am working on this issue with him.  He just comes off better than I do!

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30 Comments

30 Comments

  1. Nadina Cole-Potter

    November 21, 2010 at 7:58 pm

    If anyone thinks that the Fed is a federal government agency under the control of Congress or the Executive, or even the Supremes, think again. It was formed as a central bank for the benefit of the big banks and everything that gets done is for their benefit, not citizens, not taxpayers, not other businesses, not consumers, and not the economy over all.

    Ultimately, the Fed is not accountable to any body or laws except itself. Folks, we have government by the bankers, for the bankers and of the bankers.

    It might be time to consider how to dismantle the Fed.

  2. Paula Henry

    November 22, 2010 at 5:27 am

    This war was fought years ago and Americans lost. Is it any surprise this is happening as banks end their 100 year charter?

  3. Fred Griffin

    November 22, 2010 at 11:33 am

    The Federal Reserve Bank – is not Federal, it has no Reserves, and it is not a Bank.

  4. steve campbell

    November 22, 2010 at 11:59 am

    isnt the fed just implementing the frank/dodd act ?

  5. Fred Glick

    November 22, 2010 at 4:17 pm

    @Steve. This was not in anyway a part of Dodd Frank. It is something they did on their own and started it over a year ago.

    Parts of DF will temporarily be handled by the Fed until Elizabeth Warren’s organization is started.

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Economic News

Boomers retirement may be the true reason behind the labor shortage

(ECONOMY) Millennials and Gen Z were quick to be blamed for the labor shortage, citing lazy work ethic- the cause could actually be Boomers retirement.

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Older man pictured in cafe with laptop nearby representing boomers retirement discrimination.

In July, we reported on the Great Resignation. With record numbers of resignations, there’s a huge labor shortage in the United States. Although there were many speculations about the reasons why, from “lazy” millennials to the number of deaths from Covid. Just recently, CNN reported that in November another 3.6 million Americans left the labor force. It’s been suggested that the younger generations don’t want to work but retiring Boomers might be the bigger culprit.

Why Boomers are leaving the labor force

CNN Business reports that 90% of the Americans who left the workplace were over 55 years old. It’s now being suggested that many of the people who have left the labor force since the beginning of the pandemic were older Americans, not Millennials or Gen Z, as we originally thought. Here are the reasons why:

  • Boomers are more concerned about catching COVID-19 than their younger counterparts, so they aren’t returning to work. Boomers are less willing to risk their health.
  • The robust real estate market has benefitted Boomers, who have more equity in their homes. Boomers have more options on the table than just returning to work.
  • Employers aren’t creating or posting jobs that lure people out of retirement or those near retirement age.

As Boomers retire, how does this impact the overall labor economy?

According to CNN Business, there are signs that the labor shortage is abating. Employers are starting to see record number of applicants to most posted jobs. FedEx, for example, just got 111,000 applications in one week, the highest it has ever recorded. The U.S. Bureau of Labor Statistics projects that the pandemic-induced increase in retirement is only temporary. People who retired due to the risk of the pandemic will return to work as new strategies emerge to reduce the risk to their health. With new varients popping up, we will have to keep an eye on how the trend ultimately plays out.

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?

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NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<

#CarsonHUD

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Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.

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young executives

job openings

Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

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The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.

#JobOpenings

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