OCC’s mission – protect the dollar’s value
It has been a tumultuous few months at the Office of the Comptroller of Currency (OCC) headed by John Walsh who took office in late 2010 after several years with the agency.
The OCC was originally created nearly 150 years ago to protect the value of the dollar and some critics have said that over the last few years, the agency has been lead by individuals seeking their own agenda outside of currency and economic protections.
Calling for Walsh to resign
This week, Yves Smith of NakedCapitalism.com and Richard Eskow of the Huffington Post both criticized Walsh and called for his resignation, not for being among the American leaders who failed to listen to warnings of impending economic doom but because of his role in the recent investigations and negotiations with banks that illegally foreclosed on homeowners.
We’ve covered in depth the recent role of the OCC in splitting from the fifty attorneys general and dozens of federal agencies that were seeking to investigate and punish banks for illegal foreclosures, but when the OCC split and settled with eight banks rather than finalizing a joint agreement with all agencies involved, critics claim the OCC jumped the gun so to speak and settled with the banks for far less than they would have in a joint investigation. Because of the OCC, homeowners will not be able to file for class action status in suing banks for falsely foreclosing and the settlement of $20 billion split between the big banks is criticized by most entities but the OCC as being far to low and even insulting to the situation.
Walsh’s feet are held to the fire by Smith and Eskow who take issue with Walsh’s politically correct terms like “improper” foreclosures instead of “illegal,” and others write critically of Walsh’s use of the term “bank deficiencies.”
Walsh’s “slippery language”
Eskow writes, “He [Walsh] used slippery language to persuade some senators that only a “small number” of foreclosures were improper, was forced to concede it was a misleading statement, and then used the same language again. He either did that despite the fact that it misled people once before, or because it misled people once before. Whatever his reasons, it’s time for John Walsh to resign.”
Eskow calls Walsh the Patty Hearst of the industry and notes that “people talk of “regulatory capture,” that process where an agency becomes a servant of the industry it regulates.”
Details of “misdirection”
Smith breaks down a recent presentation by Walsh:
“You can see the signs of Walsh’s misdirection and/or complicitness:
The claim that robosigning came to light in September of last year. False, it had been coming up repeatedly in court filings for at least two years before that; the bank regulators chose to ignore it until it erupted into a national scandal.
Characterizing forged documents and false affidavits as “mishandling”. The spin on this gets more and more disconnected from reality. These were systematized, industry-wide practices, not occasional innocent screw ups per the persistent bank Big Lie.
Staunchly supporting the fiction that all foreclosures are warranted, and worse, positive. This is a misrepresentation on two levels. Walsh effectively admits what we’ve long been pretty certain was true: that the touted “Foreclosure Task Force” review of servicer practices last fall was garbage in, garbage out exercise. How did they determine whether the foreclosures were warranted? By looking at ONLY the banks’ records. These same records have produced obvious screw ups like people being foreclosed upon who had no mortgage, plus the more pernicious and from what we can tell, not at all uncommon practice of impermissible application of fees, using suspense accounts to increase fees, holding payments to make them late, using force placed insurance, padding or double dipping (charing the same fee to both investors and the borrower), and applying fees so as to produce fee pyramiding. There are numerous cases where these fees have led to charges that have been larger than the mortgage past due amounts. They can easily escalate to thousands of dollars of unwarranted and illegal charges in a six to eight month time frame.
The second canard here is that borrowers that are behind on their mortgage should lose their house. In every other type of creditor relationship, when the borrower gets in trouble, the first question the lender asks is whether they are worth more to him dead than alive. This isn’t charity, it’s a cold blooded financial assessment. A lender will always restructure a loan if he thinks the borrower can realistically stay current on the new, lower payment amount and it looks more profitable than liquidating the loan.
The reason, as we’ve stressed again and again that banks aren’t modifying mortgages (and remember, the servicers only do the work of restructuring, they don’t eat the cost of the writedown) is the they have terrible incentives. They make money foreclosing and they’ve automated it so it’s profitable to them; they need the proceeds from foreclosures to reimburse themselves for money they’ve advanced to investors; they aren’t set up to do mods, and have no interest in setting up new infrastructure; and if they did enough mods, they’d have to write down second mortgages they own, which they have no intention of doing. So despite the OCC’s claims to the contrary, the parties that have skin in the game, the homeowners and the investors, would benefit from well screened mods, as would the broader housing market. But Walsh is operating from a bogus Mellonite “liquidate the borrowers” logic. The first three years of the Depression tell you how well that idea worked.”
Are homeowners the real victims?
Eskow said, “the U.S. housing market has lost ten trillion dollars in value — and homeowners have been left holding the bag. Homeowners didn’t choose the appraisers, write the loan contracts, or hire PR firms to convince the public that homes were a fail-safe investment. Yet homeowners, not banks, are paying the price.
Some people will point the finger of financial collapse at Obama or Bush, others at Ben Bernanke, others at Barney Frank or David Lereah, but maybe America should take a second look at OCC leadership?
Read RJ Eskow’s Huffington Post column and Yves Smith’s Naked Capitalism column, they’re definitely worth the time and will give you more perspective on the role of the OCC and why they feel Walsh should resign.
Austin tops the list of best places to buy a home
When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?
Looking at the bigger picture
(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).
That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).
They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.
“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”
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.
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
Opinion Editorials6 hours ago
Serial procrastinator? Check your mental energy, not time management
Business Entrepreneur1 week ago
How to effectively share negative thoughts with your business partner
Business Marketing6 hours ago
Video is necessary for your marketing strategy
Business Marketing6 hours ago
Jack of all trades vs. specialized expert – which are you?
Business News2 weeks ago
The future of work from home will be a hybrid, says Google CEO
Business Finance1 week ago
Did… the US government just agree to start funding a cryptocurrency?
Tech News2 weeks ago
What is “Among Us”? The meme sensation two years in the making
Business News2 weeks ago
Cannabis retail trends not as high as you’d expect