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-61490 Sun, 15 Jan 2017 15:06:55 GMT The President Who Wasn't There: Barack Obama's Legacy of Impotence http://implode-explode.com/viewnews/2017-01-15_ThePresidentWhoWasntThereBarackObamasLegacyofImpotence.html Obama assumed the presidency at a moment when much of the nation seemed ready to confront the unwelcome fact that the American project had derailed.... Corporate capitalism just wasn't delivering the goods anymore. Not for the bottom 80 percent, any way. The economy was in ruins, mired in what appeared to be a permanent recession. The manufacturing sector had been killed from the inside-out, with millions of well-paying jobs outsourced and nothing but dreary service-sector positions to take their place. Chronic long-term unemployment hovered at more than 10 percent, worse, much worse, in black America. Those who clung to their jobs had seen their wages stagnate, their home values shrivel and were suffocating under merciless mounds of debt. Meanwhile, capital moved in ever-tightening circles among a new odious breed of super-rich, making sweat-free billions from the facile movement of money.

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With his sunny disposition and Prospero-like aptitude for mystification, Obama should have been able to convert [the discontented] or, at least, to roll over them. Instead, they kicked his ass. How? ... Obama's most grievous political wounds were self-inflicted, starting even before his election when he rushed back to Washington to help rescue Bush's Wall Street bailout. This was perhaps the first real indication that the luminous campaign speeches about generational and systemic change masked the servile psyche of a man who was desperately yearning to be embraced by the nation's political and financial elites.

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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-61415 Thu, 05 Jan 2017 00:39:05 GMT Liberal group's ads urge Republicans to reject Trump Treasury pick http://implode-explode.com/viewnews/2017-01-04_LiberalgroupsadsurgeRepublicanstorejectTrumpTreasurypick.html A liberal advocacy organization on Wednesday launched two six-figure television ad buys urging GOP Sens. Dean Heller (Nev.) and Jeff Flake (Ariz.) to oppose President-elect Donald Trump's choice for Treasury secretary, Steven Mnuchin.

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"Former Goldman Sachs banker Steven Mnuchin raised millions to elect Trump," the narrator says in the ads. "Now Trump picked him to be America's top economic official, even though Mnuchin made millions after his bank foreclosed on homeowners and discriminated against Latinos."

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iehi-feed-61413 Wed, 04 Jan 2017 21:07:29 GMT Trump to tap Wall Street lawyer Jay Clayton to head SEC http://implode-explode.com/viewnews/2017-01-04_TrumptotapWallStreetlawyerJayClaytontoheadSEC.html As chairman of the SEC, Clayton would help police many of the same large banks he has spent decades representing, including Goldman Sachs and Barclays. He also would play a key role in Trump's efforts to dismantle parts of 2010's financial reform legislation, known as the Dodd-Frank Act. Clayton brings "decades of experience helping companies navigate complex federal regulations" and would "play an important role in unleashing the job-creating power of our economy," according to a statement issued by Trump's transition office announcing Clayton's nomination.

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"Mr. Clayton's background is as a Wall Street defense lawyer -- and while that's hardly unprecedented in these kind of nominations, we believe it's not the appropriate background for a top position policing Wall Street," said Marcus Stanley, policy director for Americans for Financial Reform. "We look forward to tough questioning from the Senate regarding his positions on specific issues."

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In addition to replacing White, Trump will be able to fill two openings on the five-member SEC commission. Also, Thomas Curry, the head of the Office of the Comptroller of the Currency, another important Wall Street regulator, has less than six months on his term and Timothy Massad, chairman of the Commodity Futures Trading Commission, announced this week that he will step down. Together, the openings should give the Trump administration wide latitude to change the way Wall Street is regulated.

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iehi-feed-61409 Wed, 04 Jan 2017 15:55:14 GMT Why New York's most beloved stores are dying http://implode-explode.com/viewnews/2017-01-04_WhyNewYorksmostbelovedstoresaredying.html Stores like Gracious Home and Crate & Barrel have suffered, too, because financially strapped millennials have put off buying homes, and buying the furniture and curtains to put in those homes.

These stores serve a shrinking clientele: people financially healthy enough to splurge on a better-quality bathmat, but not so rich that they hire professionals to outfit their homes, and who use wholesale providers to do it.

Finally, these stores struggle because they don't serve the tourist trade. Since the financial crisis, Manhattan's retail market has been defined by overseas tourists who spend hundreds or even thousands of dollars per trip. But tourists want to buy clothes and jewelry and M&Ms, not pie pans.

The tourist trade, too, may be peaking. Fifth Avenue's tenants, from Topshop to H&M, seem increasingly desperate for customers, advertising rock-bottom "sale" prices year-round.

Retail upheaval is showing up in the numbers. In its fall report, the Real Estate Board of New York noted that "a slower retail sales environment," coupled with newly built space, "have started to affect ground-floor asking rents in Manhattan's most prominent retail corridors." Prices fell in 11 of 17 areas.

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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-61384 Sun, 01 Jan 2017 21:29:08 GMT Universal basic income trials being considered in Scotland http://implode-explode.com/viewnews/2017-01-01_UniversalbasicincometrialsbeingconsideredinScotland.html Scotland looks set to be the first part of the UK to pilot a basic income for every citizen, as councils in Fife and Glasgow investigate trial schemes in 2017.

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Drawing on the experience of similar projects ongoing in Finland, Utrecht in the Netherland and Ontario in Canada, Cooke suggests: "It could be funding from particular trusts, it could be individual philanthropic funding, as we have seen in the States, or it could be a redirection of the existing welfare spend." Obviously the latter is much harder to do in a pilot, although that will be happening in Finland next year where the experiment is being taken forward by the national government.

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Scotland was recently added to the list of "places to watch" for basic income activity by the Basic Income Earth Network, founded by the radical economist Guy Standing, whose hugely influential book The Precariat identified an emerging social class suffering the worst of job insecurity and most likely to be attracted to rightwing populism.

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"People relate to the idea that everyone should have a social dividend. Everywhere I go, it's the communities that feel left behind by globalisation that are most interested [in the idea of a basic income]. We have seen a sea-change in attitudes.

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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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