Round up of real estate, housing and economic news for 5-4-2016…
The Family That Plays Together Also Goes to Jail Together
For Mohsin Raza, his wife, Humaira Iqbal, and her brothers Farukh Iqbal and Mohammad Ali Haider, committing mortgage fraud really was a family affair. And, as it turns out, the family that plays together also goes to jail together. According to the U.S. Attorney’s Office for the Easter District of Georgia, Raza, his wife, Humaira, and her brothers will each serve time in federal prison for their roles in a scheme that saw the group falsify loan documents and commit mortgage fraud . . .
I have never understood why people insist on breaking the law when it is possible to make money in real estate honestly.
Important Issue for Real Estate Agents to Watch
On April 29, 2016, NAR President Tom Salomone sent a letter to the Department of Justice (DOJ) asking for guidance regarding the application of Title III of the Americans With Disabilities Act (ADA) to a business’ website. A number of demand letters, which include the threat of litigation, have been sent to NAR members alleging that their real estate websites violate the civil rights of individuals with disabilities. The lack of federal regulation governing website accessibility has encouraged these lawsuits. NAR members are confused about what is required of real estate websites under the ADA. NAR urges the DOJ to issue a final rule providing clear guidance as soon as possible.
Glad to see NAR is watching our backs on this one.
Home Prices Increasing Faster Than Inflation and Income
From Mises Institute:
For people who bought a home in 2000 (in the right neighborhood) and have bought and sold at the right times, this will not be a problem. However, household formation has continued unabated, so new households today looking to save money before buying a home will not be well-rewarded. With the Fed’s war on saving, and low-risk investments (like savings accounts) paying at well under one percent, saving money the old-fashioned way is a rather useless endeavor. So, instead, we’ve replaced saving with consumer debt (i.e., mortgages) and a hope that people can continue to make the high payments every month. It’s not a terribly wise long-term economic strategy, but it’s one the Fed is banking on.
I think about people that want to own a home but because of the economy, rising rents and stagnant incomes, may NEVER be able to achieve the American Dream.
The Reality of the Economy
From Wolf Street:
The meme that 14 million jobs have been created since the Great Recession is constantly held up as proof that the labor market has healed, or has practically healed, even if there are a few soft spots left over – such as the pandemic lousiness of the jobs that have been created. Turns out, the US population, currently at 323.2 million, has grown by 16.5 million people since the Great Recession. Which is exactly why the unemployment problem has become so intractable: job growth has been less than population growth!
Sadly, I do not have a warm fuzzy feeling that ANY of the popular candidates running for President can or will help this situation. IF some one is elected that truly wants to improve things, can they when it means getting Congress to do the right thing?
Good News for Manufacturing
Economic activity in the manufacturing sector expanded in April for the second consecutive month, while the overall economy grew for the 83rd consecutive month
A healthy manufacturing sector means good paying jobs. As I have preached for years, we MUST have good paying jobs and not just profits for Wall Street to see a healthy economy. A healthy economy means a healthy real estate market.
Looking at the Recent Black Knight Mortgage Monitor
From Black Knight:
- Home price increases muting affordability gains from low interest rates
- Overall mortgage delinquency rate now below pre-crisis average
- It will take over 2 years for seriously delinquent inventory (including foreclosures) to reach normal levels
A mixture of good news and bad without a doubt.
Low Home Construction for Sale For Decades?
From Fabius Maximus:
The refusal of housing construction to join the boom has baffled economists and investment experts. Demographic change explains much of this puzzle, and suggests that housing construction — a major driver of the post-WWII boom — will remain in the doldrums for several more decades.
I wonder about the existing homes that will become unwanted due to changes in technology and climate change?
Lack of Investigation Speaks Volumes
From a must read article in Fortune, we recently learned that in 2012, the SEC inexplicably backed off on an investigation into a disastrous Goldman mortgage bond deal.
It really is sad to see the same big banks mentioned over and over again.
And yet no execs goes to jail…
Another Mortgage Settlement
Bank of America Corp reached a $190 million settlement with a federal home loan bank over four mortgage-related complaints, according to a securities filing on Monday.
I know some states have 3 strikes laws.
Why don’t we have something similar for banks and financial institutions?
US Home Prices Up 6.7 Percent
Home prices nationwide, including distressed sales, increased year over year by 6.7 percent in March 2016 compared with March 2015 and increased month over month by 2.1 percent in March 2016 compared with February 2016
Remember this is talking about the entire US. While this is great news it does NOT explain what is happening in every local real estate market.
Construction Spending Rises
The Census Bureau just reported that March 2016 construction spending is 8.0% above the March 2015 level. Residential construction in March 2016 was 7.6% higher than March 2015.
Good news and I hope this keep up as it will help the economy as well as housing.
Well that is it for today as I have to run!
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