Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-61526 Fri, 20 Jan 2017 23:04:23 GMT Now we care about how Steve Mnuchin at OneWest Bank handled foreclosures? | Mandelman Matters http://implode-explode.com/viewnews/2017-01-20_NowwecareabouthowSteveMnuchinatOneWestBankhandledforeclosuresMan.html iehi-feed-61525 Fri, 20 Jan 2017 22:54:59 GMT Trump takes away FHA mortgage insurance premium cut not long after being sworn into office http://implode-explode.com/viewnews/2017-01-20_TrumptakesawayFHAmortgageinsurancepremiumcutnotlongafterbeingswo.html The move undid the quarter-point decrease in the FHA mortgage insurance premium that was announced earlier in the week by outgoing U.S. Department of Housing and Urban Development Secretary Julian Castro. For most borrowers, it would have been a reduction to 0.60 percent from 0.85 percent.

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House Republicans objected to the reduction because it would have lowered the amount of funds FHA has available to cover mortgage defaults. House Financial Services Chairman Jeb Hensarling (R-Tex.) issued a statement earlier in the week saying, "the Obama administration's parting gift to hardworking taxpayers is to put them at greater risk for footing the bill for another bailout."

... "According to our estimates, roughly 750,000 to 850,000 home buyers will face higher costs, and 30,000 to 40,000 new home buyers will be left on the sidelines in 2017 without the cut," William E. Brown, National Association of Realtors president, said in a statement. "We're disappointed in the decision but will continue making the case to reinstate the cut in the months ahead."

From the perspective of FHA being a bankrupt/fraudulent insurance fund, this is a good thing. However, it's just going to get bailed out anyways (in some form), so this consists of the removal of a marginal amount of housing-finance accessibility for a significant number of people. I.e., it's probably the fiscally right thing to do, but it's pretty interesting how scrooge-like of a move this is for one of Trump's first official acts....

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iehi-feed-61518 Thu, 19 Jan 2017 22:50:47 GMT Mnuchin weathers stormy confirmation hearing http://implode-explode.com/viewnews/2017-01-19_Mnuchinweathersstormyconfirmationhearing.html In a wide-ranging hearing more than five hours long, Mnuchin was pressed by Democrats for details on everything from his thoughts on tax reform to his defense of foreclosures carried out by OneWest Bank while serving as its top executive.

Mnuchin also faced significant pressure over the fact that just one day earlier, he had to update his financial disclosures to include nearly $100 million in previously unreported assets, as well as a fund based in the Cayman Islands, a notorious tax haven.

But like many of Trump's picks, at the end of the day it appeared that Mnuchin could still rely on enough Republican support to win the job.

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Mnuchin took many of [the] critiques head-on Thursday, defending his time as a bank executive and his work in the private sector. While Democrats highlighted individuals who lost their homes to OneWest, Mnuchin emphasized the efforts his bank took to help struggling homeowners adjust their mortgages.

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iehi-feed-61513 Wed, 18 Jan 2017 21:42:45 GMT Credit Suisse finalizes $5.3 billion mortgage settlement with U.S. http://implode-explode.com/viewnews/2017-01-18_CreditSuissefinalizes53billionmortgagesettlementwithUS.html Credit Suisse has formally agreed to pay $5.3 billion to settle with U.S. authorities over claims it misled investors in residential mortgage-backed securities it sold in the run-up to the 2008 financial crisis.

As part of the settlement, announced by the U.S. Department of Justice on Wednesday, the Zurich-based bank acknowledged that home loans it pooled into the securities did not meet underwriting guidelines, with some described by employees as "complete crap" and "[u]tter complete garbage."

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Credit Suisse will pay a $2.48 billion cash penalty and provide $2.8 billion in consumer relief, including loan forgiveness and financing for affordable housing, the Justice Department said in the statement.''

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The settlement clears the biggest cloud over Credit Suisse. However, the total amount in U.S. penalties could climb as the bank is still defending itself against lawsuits by the New York and New Jersey attorneys general over similar claims involving billions of dollars in investor losses.

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Major U.S. banks, including JPMorgan Chase & Co and Bank of America Corp (BAC.N), have paid a total of $46 billion to resolve similar conduct involving the quality of loans pooled and sold.. While the Credit Suisse settlement will likely be the last under the Obama administration, other banks under investigation include Royal Bank of Scotland, Wells Fargo & Co, UBS Group AG, and HSBC.

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iehi-feed-61512 Wed, 18 Jan 2017 21:29:46 GMT China Housing Bubble Finally Pops: First Slowdown After 19 Months Of Acceleration http://implode-explode.com/viewnews/2017-01-18_ChinaHousingBubbleFinallyPopsFirstSlowdownAfter19MonthsOfAcceler.html iehi-feed-61505 Tue, 17 Jan 2017 21:06:39 GMT Crazy Housing Reality Shows Are Back http://implode-explode.com/viewnews/2017-01-17_CrazyHousingRealityShowsAreBack.html [The shows don't want] too much to think about.  Real estate buying is simple!  It never goes down!  If this dingbat couple bought then surely "I" with my genius IQ and my spouse will live happily ever after so long as we buy.  No one lost buying real estate (aside from the 7,000,000+ recent foreclosures from the latest housing bust).

In the end, no one cares about your financial well being more than you.  In my view, managing your finances wisely is about financial independence, not being locked down as a house slave while having to forge into the toxic freeway wasteland of California.  That financial independence may very well include owning a home.  Heck, in most parts of the country buying is really a no brainer.  But in expensive regions and states, the math isn't so clear. 

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iehi-feed-61483 Sat, 14 Jan 2017 15:03:20 GMT Addicted To Gov? Ben Carson And The 30 Year Mortgage Backstop http://implode-explode.com/viewnews/2017-01-14_AddictedToGovBenCarsonAndThe30YearMortgageBackstop.html iehi-feed-61482 Sat, 14 Jan 2017 03:24:58 GMT Carson will "Examine" FHA Premium Cut http://implode-explode.com/viewnews/2017-01-13_CarsonwillExamineFHAPremiumCut.html iehi-feed-61465 Wed, 11 Jan 2017 23:19:33 GMT Suddenly, Home Sale Agreements Are Falling Apart Across the U.S. http://implode-explode.com/viewnews/2017-01-11_SuddenlyHomeSaleAgreementsAreFallingApartAcrosstheUS.html A Trulia analysis of U.S. listings shows that 3.9 percent of homes that moved from for-sale to pending moved back to for-sale again, nearly double the rate in 2015. Such "failed sales" increased in 96 of the 100 biggest U.S. metros, with big swings in areas large and small, rich and poor. That includes Los Angeles and Charleston, S.C., as well as San Jose and Akron, Ohio.

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The problem of failed sales has been most acute for cheaper homes and older ones: Some 6.3 percent of sales of starter homes fell through last year, according to Trulia's analysis, compared with 3.6 percent of so-called premium home sales. Homes built in the 1960s had the highest fail rates, while sales of newer and older houses were more likely to go through.

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iehi-feed-61464 Wed, 11 Jan 2017 23:17:10 GMT Mnuchin to Divest Stakes in 43 Investments to Avoid Conflict, But Already Talked Up Fannie/Freddie Holdings http://implode-explode.com/viewnews/2017-01-11_MnuchintoDivestStakesin43InvestmentstoAvoidConflictButAlreadyTal.html The disclosures reveal that Mnuchin may have benefited following his comments in a Nov. 30 interview that the government should exit control of Fannie Mae and Freddie Mac. The remarks sent shares of the mortgage-finance giants soaring. Mnuchin's filings show he's invested as much as $2 million in Paulson Advantage LP, which holds a stake in Fannie and Freddie.

The Paulson Advantage holdings are among 43 investments that he has pledged to divest within 90 days of being confirmed. The value of the divestitures is more than $75 million, based on Bloomberg calculations.

Some think Mnuchin won't get confirmed, and some think that Fannie and Freddie can't even be privatized. Interesting times!

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iehi-feed-61407 Wed, 04 Jan 2017 15:35:08 GMT TransUnion, Equifax broke federal law by misrepresenting credit score usefulness, CFPB says http://implode-explode.com/viewnews/2017-01-04_TransUnionEquifaxbrokefederallawbymisrepresentingcreditscoreusef.html The Consumer Financial Protection Bureau today said Equifax and TransUnion lied to consumers about the credit scores they paid for. The two bureaus, which are two of the big three, misrepresented that the scores consumers purchased would help them evaluate their own credit standing. In reality, the credit scoring models used by Equifax and TransUnion in these cases aren't even used by banks and other creditors.

Equifax and TransUnion were ordered to pay $17.6 million in restitution to consumers and fines of $5.5 million to the CFPB.

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The CFPB hit on one of the industry's dirty little secrets -- there is no one credit score. Different banks often use different credit scoring models. Meanwhile, the credit bureaus, credit cards and third-party providers like Credit Sesame, Credit Karma and others may provide completely different scores. But they typically don't make it clear that everyone may be singing from a different hymnal. The score that one entity peddles could be useless or even confusing if it's not made clear whether the highest possible score for that model is 850 or 900 or 990 or something else.

TransUnion sells scores based on a model from VantageScore, the CFPB said. "Although TransUnion has marketed VantageScores to lenders and other commercial users, VantageScores are not typically used for credit decisions," the agency said.

Meanwhile, Equifax sells scores to consumers based on its own proprietary model, called the Equifax Credit Score. It's meant to be "an educational credit score," but is not not one generally used by lenders.

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iehi-feed-61397 Tue, 03 Jan 2017 21:40:37 GMT Nation-Wide Luxury Apartment Boom Looks Set to Fizzle in 2017 http://implode-explode.com/viewnews/2017-01-03_NationWideLuxuryApartmentBoomLooksSettoFizzlein2017.html Landlords of upscale properties across the U.S. are bracing for rough conditions in 2017 that will likely force them to slash rents and offer deep concessions as a glut of supply brings a seven-year luxury-apartment boom to an end.

The turnaround follows a more-than-26% jump in U.S. apartment rents since early 2010, far outstripping inflation and income growth. But in 2016, rents rose a modest 3.8%, a significant drop from the recent high of 5.6% year-to-year growth in the third quarter of 2015... the number of upscale apartments coming onto the market appear to be outpacing the number of renters able to move into them: More than 50,000 new units were rented by tenants in the fourth quarter in the U.S.... But that demand was overwhelmed by the 88,000 new units that were completed in the quarter, the most since the mid-1980s, according to MPF.

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That gap looks set to widen in 2017. More than 378,000 new apartments are expected to be completed across the country this year, almost 35% more than the 20-year average, according to real estate tracker Axiometrics Inc... The New York area alone will be flooded with nearly 30,000 new apartments in 2017, double the historical average, according to Axiometrics. Roughly 85% are luxury units.

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iehi-feed-61391 Tue, 03 Jan 2017 15:06:42 GMT Real estate is not local: Housing markets across the US are overheating http://implode-explode.com/viewnews/2017-01-03_RealestateisnotlocalHousingmarketsacrosstheUSareoverheating.html iehi-feed-61385 Mon, 02 Jan 2017 13:52:40 GMT Forecast 2017: The Wheels Finally Come Off - KUNSTLER http://implode-explode.com/viewnews/2017-01-02_Forecast2017TheWheelsFinallyComeOffKUNSTLER.html The American people have been punked by their own government and their central bank, the Federal Reserve, for years and the jig is now up. In 2017 both will lose their authority and legitimacy, a very grave matter for the survival of this republic.

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Get this: the Fed is completely full of shit. It is terrified of the conditions it has set up and it has no idea what to do next. The "data" that it claims to be so dependent on is arrantly fake. The government's official unemployment number at Christmas 2016 was 4.6 percent. It's a compound lie....

In 2015 they didn't do anything until the very last Fed meeting of the year when they raised the Fed Funds rate 25 basis point (that's a measly one-quarter of a percent). They raised, they said, because they were "confident" about the economy. No, that's not why. They did it because they talked about it all year without doing anything and their credibility was on the line. They also promised four rate hikes altogether in 2016, which they then failed to carry out...

The Fed Funds rate is one thing. As it happens, the Fed does not directly control the interest rates on US treasury bonds, and they have been rising shockingly through the second half of 2016. The crucial ten-year treasury rate has gone up a hundred percent since the summer. Because bond values move inversely to bond rates, the price of ten-year treasuries has tanked, inducing trillions of dollars in losses to bond-holders around the world. The bond market is many times larger than the stock markets. Bonds have been in a bull market since the early 1980s and that bull rolled over in mid-2016...

A sharply rising interest rate on the ten-year Treasury bond will thunder through the system. A lot of other basic interest costs are keyed to the ten-year bond rate, especially home mortgages, apartment rentals (landlords hold mortgages), and car payments. When the ten year bond rate goes up, so do mortgage payments. When mortgage rates go up, house prices go down, because fewer people are in a position to buy a house at higher mortgage rates, and rents go up (more competition among people who can't buy a house). Zero Interest Rate Policy (ZIRP), in force for ten years, has driven house prices back to stratospheric levels. They are now primed to fall, perhaps severely, leaving many homeowners "underwater," with houses worth way less on the market than the amount of mortgage left to pay off. The re-financing market is dead. Housing starts were already down by a stunning 19 percent in November. Automobile sales are rolling over. Manufacturing and retail sales numbers are down at year end. What's up: stocks, stocks, stocks.

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iehi-feed-61374 Thu, 29 Dec 2016 11:58:30 GMT Innocuous Proclaimations | Michael Hudson http://implode-explode.com/viewnews/2016-12-29_InnocuousProclaimationsMichaelHudson.html iehi-feed-61370 Wed, 28 Dec 2016 08:56:51 GMT Housing affordability drops to 8-year lows while mortgage rates surge http://implode-explode.com/viewnews/2016-12-28_Housingaffordabilitydropsto8yearlowswhilemortgageratessurge.html iehi-feed-61360 Thu, 22 Dec 2016 10:34:56 GMT It's the END OF HAMP... And the Beginning of a New Era in Loan Modifications | Mandelman Matters http://implode-explode.com/viewnews/2016-12-22_ItstheENDOFHAMPAndtheBeginningofaNewErainLoanModificationsMandel.html HAMP is ending this year, as of December 31st, it will be history.

What won't be history, unfortunately, are the foreclosures that we've been trying to prevent since 2008.  Sure, the numbers of new foreclosure filings have fallen as compared with the numbers reported in 2009 or 2010, but that doesn't mean the foreclosure crisis is over... Looking at RealtyTrac's foreclosure chart for 2016, it appears that we still had almost a million foreclosures this past year. Yeah, it's not two million or four million, but it's still a million, which works out to 2740 a day, 365 days a year... and seems like too many at least to me.

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The good news, however, is that the end of HAMP does not necessarily mean the end of loan modifications. Last week, Fannie Mae and Freddie Mac announced a HAMP replacement called the "Flex Modification" program, which Fannie says, "leverages components" of HAMP with those of Fannie's "Streamlined Modifications."

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iehi-feed-61359 Thu, 22 Dec 2016 10:24:30 GMT Italy Aims €20 Billion "Bazooka" at €360 Billion Problem: Bail-ins Coming, Expect More http://implode-explode.com/viewnews/2016-12-22_ItalyAims20BillionBazookaat360BillionProblemBailinsComingExpectM.html iehi-feed-61337 Fri, 16 Dec 2016 18:16:29 GMT U.S. housing starts tumble from nine-year high http://implode-explode.com/viewnews/2016-12-16_UShousingstartstumblefromnineyearhigh.html last permit data point was revised down too....]]> iehi-feed-61328 Thu, 15 Dec 2016 15:45:51 GMT Home builder sentiment soars to 11-year high as developers bank on a Trump bump http://implode-explode.com/viewnews/2016-12-15_Homebuildersentimentsoarsto11yearhighasdevelopersbankonaTrumpbum.html Home builder confidence soared in December to a level last seen at the heights of the housing bubble as construction firms anticipated less red tape under the presidency of Donald Trump.

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"Builders are hopeful that President-elect Trump will follow through on his pledge to cut burdensome regulations that are harming small businesses and housing affordability."

Boy, now things look peakey...

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