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Too small to fail? Time to call your Senator



nohvccWhile Senators Dodd and Shelby are discussing the Financial Reform bill on both TV and behind closed doors,  TBTF -Too Big To Fail is of primary concern in their macro vision.

But, what about all that has happened in the past few years?  Foreclosures, Short Sales, Modifications, Unrefinancing…..the issue is really TSTF- Too Small To Fail.

The Congress needs to put into the bill law that will get the day-to-day world of Americans that mostly did not choose to be in a negative position able to get their issues squared away quickly and not take the economy down further.

First- repeal the HVCC.  Unbelievable but true, the amount of inaccurate appraising and appraisal fraud has INCREASED since HVCC.  HVCC does not work.  Lenders need to have their own approved appraiser list and make the appraisals transferrable (among other things). DUH!

Short Sale Approvals should happen within 30 days after a full package is submitted.  Legislate it, that’s the only way to get B of A and other banks to crank.  Also, have mortgage brokers/bankers allowed to package the Short Sales because they are the ones that know how to do it. DUH!

Loan Modifications- These are also known as refinances.  Have all mods go through licensed mortgage people and not the scum and scammers that have been doing it.  I sell loans directly to wholesale lenders, why can’t I just package a loan and get it approved in a few days?  DUH!

No Appraisal Refi- How about people who have 750 credit scores, plenty of income and just have a house underwater and a 6.5% loan?  Now, they can’t refi.  How about if they could and then save money each month that can be put back into the economy?  DUH!

Call your Senator and let them know.

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  1. HowardArnoff

    April 25, 2010 at 12:58 pm

    Fred, it amazes me that refinancing requires an appraisal with the likelihood that the borrower, bank, housing market and economy will all benefit. No cash out’s please.

  2. Ben Goheen

    April 26, 2010 at 2:10 am

    Fred: As an appraiser, I’m completely opposed to the HVCC but know that it won’t go away by complaining about it OR even signing an online petition – has that ever worked? What evidence do you site for saying that inaccurate appraisals and fraud has increased?

    Howard: Why does it amaze you that a lender would want to know the current market value of the asset they’re loaning money on?

  3. HowardArnoff

    April 26, 2010 at 5:53 am

    Ben, maybe amaze was the incorrect word but the money is already loaned. And correct me if I’m wrong because I’m not an accountant but if they found out due to an appraisal that the asset was worth less than they originally valued it, do they have to write it down on their financial statement. If so, ah, I get.

  4. Fred Glick

    April 26, 2010 at 8:10 am

    Ben, There are actually 2 studies that reached this conclusion. I am happy to send you details.

  5. Ben Goheen

    April 27, 2010 at 1:46 am

    Fred: Yes, I’d like to see those reports. The link you just cited was written after this article – do you have insider information? 🙂 The report is very interesting but I believe blows it out of proportion a bit. While appraisal fraud has increased, it’s still nowhere close to the amount of application fraud (59%). The press release also states that “the continued increase is believed to be attributed to better industry reporting and policing.” So the increase of appraisal fraud reporting might be directly linked to the HVCC.

    Howard: I’m not an accountant or lender, so I can’t tell you what their procedure is on declining assets. I’m sure a majority of homes are worth less then their original 2004-2007 appraised value. It doesn’t worry them much unless the borrower stops paying the mortgage. I’ve personally seen very little cash out refi’s happening lately. The last one I did, the borrower was taking out $50k on his paid-off $800k home. Needless to say the lender wasn’t worried about the appraised value on that one.

    • Benn Rosales

      April 27, 2010 at 12:12 pm

      You didn’t have to be an insider (although Fred ‘is’ in the know) to have that information (we got the tip on Friday of the report), it’s been a topic of discussion for almost a week on the heels of the released report on Monday.

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The House Judiciary antitrust investigation holds big techs’ feet to the fire

(POLITICS) CEOs of Alphabet, Facebook, Apple, and Amazon set to testify in House Judiciary Committee antitrust investigation hearing today.



house investigation

The House Judiciary Committee is closing in on the end of a year-long investigation into tech giants Google, Facebook, Apple, and Amazon, to evaluate possible antitrust abuses. CEOs from all four companies were set to testify on Monday, July 27, 2020. The hearing has been pushed back to Wednesday, July 29, to allow members of Congress to pay respects to civil rights leader Representative John Lewis (D-GA) who died of pancreatic cancer on July 17.

Jeff Bezos of Amazon, Tim Cook of Apple, Mark Zuckerberg of Facebook, and Sundar Pichai of Alphabet (Google’s parent company) have all agreed to testify. This will be Bezos’ first time in front of Congress, whereas all the others have testified before on different matters. Twitter CEO Jack Dorsey was invited to testify by Representative Jim Jordan (R-OH), but is expected to not attend.

The Antitrust Subcommittee began the investigation in June 2019. Each business has been the subject of scrutiny for their roles in dominating their respective industries and playing an outsized role in market competition for smaller businesses. The Committee is interested in evaluating current antitrust laws and whether they apply to, or should be updated for, these mega corporations. They have already heard testimonies from smaller companies like Sonos and Tile about these companies’ alleged monopolistic practices.

The focus of the investigation for Apple is on the App Store, and whether it has implemented policies that are harmful for app developers. Google has a tight hold on the online advertising market. Amazon – which during a five-week period early in the pandemic saw an increase in value equivalent to the total value of Walmart, the world’s largest firm – has been criticized for its treatment of brands that sell on its e-commerce platform. Facebook is being investigated for its acquisition practices, cornering the social media market with purchases like Instagram.

Amazon is expected to face additional scrutiny for its treatment of warehouse workers during the pandemic. Facebook and YouTube (a subsidiary of Google) have been the subject of regular criticism about monitoring hate speech on their platforms, and their treatment of the workers responsible for doing so (Facebook in particular).

The hearing is set to occur virtually in order to adhere to social distancing guidelines. Watch the hearing live at 12:00 p.m. EST Wednesday, July 29 on the House Judiciary Committee’s YouTube channel. Please do note the hilarious irony of streaming a Congressional antitrust hearing on YouTube, which is owned by Google, which is owned by Alphabet, which is testifying at said hearing. God Bless America.

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Additional unemployment benefits outside of the CARES Act

(POLITICS) Unemployment is at an all time high in the United States and individuals need to be aware of reapplying for additional benefits.



unemployment broke

June saw some additional jobs in the US and unemployment fell as of early July, but CNBC advised pausing on any celebration just yet, saying that “The employment crisis is still worse than any time since the Great Depression, the country’s worst economic downturn in its industrial history.”

The unemployment statistics in our country right now are really scary – especially for individuals and families that see a looming deadline of July 31 for the supplemental $600/week provided by the Federal Government through the CARES Act put in place in March. There are discussions on extending these benefits as many families have not been able to replace their incomes or find new employment opportunities, but it doesn’t seem like anything has been finalized there yet. Congress is in the middle of a variety of options:

  • Discontinue the additional $600/week but allow those on unemployment to continue to file and receive their state benefits (usually up to 26 weeks or possibly extended up to 39 weeks by The CARES act)
  • Send out additional stimulus checks (Congress is currently exploring a $X Trillion stimulus package)
  • Extend the additional funding (on top of the weekly amount allotted by state) but cut it from $600 to $200
  • It’s also been put on the table in the House of Representatives “The Heroes Act” to extend the additional $600/week until January 2021 ($3 trillion).

There are some additional benefits that are available (different than the funds by the CARES Act), but you may have to reapply for them. So, make sure to check your state’s unemployment pages and your filing status. Some states do not require you to reapply and you can continue on with extended benefits.

According to CNBC, “The additional aid expires after the end of the year. (This is a different program than the one paying an extra $600 a week through July 31.) For some reason, the [Department of Labor] has taken the position that people have to file for the additional PEUC benefits,” said Michele Evermore, a senior policy analyst at the National Employment Law Project.”

No doubt that this can cause additional stress and uncertainty especially when you have questions about your filing and are unable to get through to someone on the phone. With the way that the unemployment cycle is setup, technically July 25 is considered the last date for that cycle (and July 26 for New York), so be sure to check and see what the next steps are for you if you are currently filing.

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How will pausing the reopening of states impact the recovery of the economy?

(POLITICS) The resurgence of COVID-19 has left Americans with a lot of questions about our nation’s economic future. That ambiguity is seemingly a feature, not a bug.



COVID-19 reopening economy

The rest of the world watched as the United States dramatically reopened “the economy” last month. Now, it seems we’ve changed our minds about that.

The White House has repeatedly said that it will be up to individual states to form their own pandemic response plans moving forward. But letting local governments devise their own solutions has produced large gaps in their preparedness, as well as profound confusion around the best practices for balancing the country’s public and economic health.

California, which represents the largest economy in the US and the fifth largest in the world, was one of the first states to put serious quarantine restrictions in place. The decision to relax those orders only came after anti-lockdown protestors demanded that Governor Gavin Newsom reopen the state’s beaches, businesses and churches. Newsom may now regret this capitulation as California just called for a second round of statewide lockdowns.

Other state legislators are slowly following their lead, as the threat is becoming very dire in some places. Florida, for instance, is now a global hotspot for COVID-19 and Miami is being called “the new Wuhan”. The state is also currently struggling against another wave of unemployment, partly because their economy is heavily dependent on summer tourism (which has persisted despite the spike in cases, but not nearly at pre-pandemic levels).

Florida, California and Texas are altogether responsible for 20 percent of all new COVID-19 cases globally.

Every state is fighting two battles here. Coronavirus relief efforts in the US are still seriously underfunded, and most health organizations here lack the resources to effectively test and treat their communities. But the problems that have emerged for workers and small business owners, like evictions and layoffs, have also been devastating in their own right.

In essence, the United States reopened in an effort to curb the nation’s financial freefall and ballooning unemployment. Economists predicted at the beginning of July that reopening would allow the US to avoid a recession, and all would go smoothly. These projections likely did not account for a spike in cases that would halt this economic rebound.

That’s not to say the circumstances here haven’t improved at all over the past months; currently there is no acute shortage of ventilators, and doctors have had some time to refine their strategies for treating the virus. Overall, the national unemployment rate is slightly declining, while working from home is going so well for companies like Twitter and Facebook that they will be permanently switching much of their staff to remote work.

By comparison, though, New Zealand took the pandemic much more seriously than the US did, and they are objectively in a better position now in all respects. Prime Minister Jacinda Ardern cracked down hard and early, closing the country’s borders completely, and instituting rent freezes nationwide. As a result they have virtually eradicated COVID-19 within their borders. A report from S&P Global also expects New Zealand’s economy to recover quickly compared to the rest of the world.

While this tradeoff seems like a zero sum game – as if we have to pick either our health, or our wealth – it is not. In fact, we could very well end up with neither if our lawmakers don’t proceed with caution.

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