Housing News
Fannie Mae and Freddie Mac executives get another round of huge bonuses
Poor performance still commands millions
It was reported today by Politico that the Federal Housing Finance Agency (FHFA) who regulates Fannie Mae and Freddie Mac has approved $12.79 million in bonus pay after ten executives last year “met modest performance targets tied to modifying mortgages in jeopardy of foreclosure.” Although the agency has not met the expectations of helping troubled homeowners, they have banked an obscene amount of bonuses at the executive level, dipping further into the more than $170 billion of taxpayer money the agency has taken since the FHFA became the conservator of these agencies.
An FHFA Inspector General report released this spring pledged to adjust executive compensation after they found that Fannie and Freddie executives were awarded giant salaries in recent years without proper written procedures or analysis. Between 2009 and spring of 2011, the heads of Fannie Mae and Freddie Mac were paid a total of $17.1 million and the top six executives were paid $35.4 million during the same period.
“FHFA also does not provide sufficient transparency to the public of the Enterprises’ executive compensation program,” the report stated and continued with recommendations that FHFA establish ongoing review and analysis of the process.
Why the bonuses are being questioned
This happened this spring and here we are again with big bonuses during a time that the agencies are already under heavy fire. Critics are irate about the bonuses from taxpayer money because the CEO of Freddie Mac recently announced that he would be stepping down without citing a reason- his portion of the bonuses is $2.5 million after a base salary of $1 million.
Many are angry about the massive bonuses not only because the agencies haven’t performed admirably, but they’ve behaved downright poorly in some cases. The FHFA Inspector General recently reported that Fannie Mae knew about and ignored falsified foreclosure filings under their watch. To add insult to injury, Fannie Mae not only continued to use the same law firms to process foreclosures that knowingly, illegally foreclosed on homeowners, they refused to fire the firms, claiming it was too expensive to transfer the files, to the FHFA responds by completely dismantling the lawyer network serving Fannie and Freddie.
Angry mobs on both sides of the aisle
Ultimately, it is confusing that the FHFA Inspector General that admonished Fannie and Freddie for big bonuses is the same Inspector General that just approved these major bonuses. In response to the discovery of these big bonuses, Senator John Barrasso (R-WY) is calling for President Obama to cancel the bonuses and just last month, angry Democrats called for the resignation of FHFA Director, Edward DeMarco while various entities are continuing to call for the dismantling of Fannie and Freddie altogether.
At such a contentious time, many people believe that it is shocking that the agencies would tempt the angry mobs on both sides by rewarding themselves with taxpayer money.
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Housing News
Average age of houses on the rise, so is it now better or worse to buy new?
With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.
The average home age is higher than ever
(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.
With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.
Prices of new homes on the rise
Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.
Click here to continue reading this story…
Housing News
Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?
The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.
Why Realtors are vulnerable to these rapid changes
(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.
Note: We’ll let you decide which company plays which role in the image above.
So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.
1. Zillow poaches top talent, Move/NAR sues
It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.
Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.
2. Two major media brands emerge
Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.
…Click here to continue reading this story…
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Tina Merritt
November 2, 2011 at 8:58 am
And Fannie Mae STILL won't accept electronic signatures on contracts….FAIL!
Randy Pereira
November 2, 2011 at 11:26 am
Yet, electronic signatures by Fannie Mae are legal.. Epic Fail! haha