Category: Economy

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First Time Homebuyers – NOW IS THE TIME

~ Fred Thomas, III ~ Leave a comment

If you are trying to buy a home; First-Timer or otherwise and have 20% down and are otherwise receiving assistance (parent, relative, employer, etc.) this article is not for you.  However, if you are one of the millions who struggle with the notion or question if you will ever be able to purchase a home, this article may provide the inspiration you have been waiting for.

The news is the news, and most traditional sources speak to the high cost of buying a home and the difficulty in ever being able to cross the finish line.  Prices are sky high, interest rates are high, the accumulated cost of the mortgage is enough for even the most stealth person to simply give up.  All we hear is the average cost of home ownership, which is high based on the average but that is just one reality, leaving many to scratch their heads, wondering with all the news how in the heck are people buying homes?

NOW IS THE TIME

Dr. Martin Luther King imploring those to remember Now is the Time!!!!

Even though I am retired, my Broker’s License remains active so on occasions I get calls from past clients or referrals seeking advice on home ownership, mortgages, and the like.  My advice is simple and holds true from all the years I was active – Prices are relative.  Some seem to think “yesterday’s prices were so great or so affordable.”  That may be true but try telling that to someone who purchased during those times.  It has always been a struggle, although admittedly, today’s struggle requires more determination.

DO YOU THINK PRICING IS OUT OF YOUR RANGE? ARE YOU WAITING FOR PRICES TO GO DOWN? ARE YOU WAITING FOR INTEREST RATES TO GO DOWN? ARE YOU HOPING TO WIN THE LOTTERY? ARE YOU WAITING FOR AN INHEIRANTENCE? – Assuming you are qualified and truly want to experience home ownership…… NOW IS THE TIME!!!!!!

Here are some basic tips to help those serious about home ownership.

  • Get Qualified.  Know how much you can afford.  There are many direct lenders, including those online as well as certified mortgage brokers who can provide a legitime approval letter.  Remember home ownership is basic.  For most, the two biggest hurdles are down payment and creditworthiness.  Again, you do not necessarily need 20% or have perfect credit.  Even in today’s higher priced environment, there are plenty of low-down financing options. For those lucky enough to have served in the military and have an active DD214, VA loans are available with ZERO DOWN and no maximum loan amount (of course the trade-off may be a higher monthly mortgage payment but the windfall is not having to pay hard cash towards the down payment).
  • Know your budget.  You may be qualified for a mortgage payment of say $5,000 per month BUT your comfort level may be $2,500 per month.  Stay within your comfort zone.
  • Match your qualification with a property.  This can be tricky as even though you may be qualified for more, the lower priced property may seem undesirable but do not look a “gift-horse” in the mouth.  The key is to stay within properties of your comfort zone.  Again, if not now, when?
  • Broaden your net.  MOST IMPORTANT. Like any good fisherman, the wider your net (of information) the more likely you will find success.
  • Staging, Keep moving.  Staging is great because many want a property that is turn-key or providing a vision of what the home might look like.  Who would not want all the modern furnishing, luxury appliances, fashionable interior appointments, etc.?  That may not be your target because most properties that are staged are at the high-end of the market.  Move on.  Look for something that removes the impulse of all the whistle and belles and instead focuses on getting in or affordability.
  • The sign in the front yard.  Data is real but just remember while the majority who purchase a home might very well purchase where there is a “For-Sale” sign in the front yard, there are many more than you might imagine who purchase a home where there is not a for-sale sign.  Yes, it is the needle in the haystack, but you must think out of the box.
  • The average is the average.  Yes, the average home price might be $400,000 but that does not mean you can’t find anything lower.  Like any commodity, the property may have issues or other factors resulting in lower prices.  Again, the goal is not to find the crown jewel, already furnished property, ready to move-in….it is to find a property you can afford.
  • Network and broaden your sources.  Everybody does not need to know about your business BUT let those you trust know (family, friends, colleagues, church members, social groups, etc.) you are seeking to purchase a home. 
  • Distressed properties.  This is not for everybody but there are homes to be had from those who may be having financial distress or even institutional sources that offer Real Estate Owned (foreclosures) from their inventory – FHA, VA, Freddie Mac, Fannie Mae, etc.  Again, the inventory may be thin, but this is part of broadening your net/reach.  You just never know where YOUR deal will come from.
  • Rent to Buy.  This can also be tricky, but it does represent another legitimate way to obtain home ownership.
  • The Neighborhood.  “I don’t care if someone gave me the property, there is no way I am going to live in that neighborhood.”  That is a real sentiment but remember, a neighborhood is what you make it!!!  Now, that is not to dismiss real negatives which may exist but just remember, there are trade-offs to everything.  If you can get your price, that may be motivation to reconsider the hesitancy. 

What I have communicated is not catch-all or meant for every situation.  It merely represents some basic tips and ideas to encourage you to think out of the box.  Also, just remember, we have not even mentioned the lender incentives but there are enough programs in the marketplace to choke a horse – you simply must be aggressive enough to seek them out and figure how they can apply to your situation.

The Elon Musk and Donald Trump heist

~ Fred Thomas, III ~ Leave a comment

Elon Musk and Donald Trump are running a heist that many knew was coming, yet they accepted it based on their loyalty they would not be the victims.

WASTE – FRAUD – ABUSE

Projection is one thing but when you can convince people there is a high level of Waste, Fraud and Abuse, its better than a pic-pocket. The hustle we are seeing makes three card monte appear legitimate.

Trump wanted back in the White House for revenge and to pillage or continue to steal what he could not take during his first term. In addition to his DOGE lemmings, Elon Musk was his perfect accomplice. Greed is contagious and other billionaire lads were cajoled to join the heist, they were bludgeoned into submission by their own thirst realizing if Musk was successful in accumulating the high degree of waste claimed, the residual benefits to them would fund the promised tax cuts, while the public and the Republican party was left paralyzed wondering what happened?

This heist has affected many with the loss of employment, savings and other critical assets. Some are shocked their guy, Donald Trump would turn on them. But, when asked if they would vote for him again, many more than you might imagine proclaim YES. The blind loyalty is incredible.

This heist is nothing new. What is remarkable is it is happening in broad daylight, while career employees are seeing their aspirations evaporate right before their eyes. Only time will tell but Musk had the cash to buy himself a seat and Trump was the perfect vehicle, complete with a criminal mindset to use the public coffers to pull it off. The question will be when will the public wake up before the goal of achieving the funds from the Waste-Fraud-Abuse ploy occur?

Realtors’ settlement on fees announced – what’s it all about?

~ Fred Thomas, III ~ Leave a comment

Last week the National Association of Realtors announced it settled a lawsuit alleging a monopoly on how broker fees are charged. The result was agreeing to pay $418 million in damages.

Home ownership is the largest investment most of us make and in a consumer economy the impact could be enormous. From the lyrics of one of the hits from the late bluesologist Gil Scott-Heron, “all of us are consumers.”

American singer, musician and poet, Gil Scott-Heron (1949 – 2011, right) performing on stage, circa 1973. (Photo by David Redfern/Redferns/Getty Images)

Education is everything.

Buying or selling a house seems like a basic proposition. However, behind the scenes there are many moving parts and treacherous roads which is why the typical broker fee of six percent has been an acceptable practice. Of course, many states allow the buyer to sell their home on their own. That is great news but there are many technical nuances which is why most simply agree to hire a broker and leave the responsibility to them.

The seller of the property pays the broker fee thus even though you may have two brokers on a transaction; one called the listing broker (the broker who represents the seller) and the other is called the selling broker (the broker who brings the seller into the transaction), it is the seller who pays both fees.  The result is sellers could achieve “free” representation in negotiating to buy the property. Some call it the “fox in the henhouse” but that is a stretch as while both brokers represent the person who pays the commission (THE SELLER), they are bound by a code of ethics which leads to a successful transaction.

One critical component of broker’s justifying the six percent was the ability to market the property. Typically, this was done using a Multiple Listing Service which allowed properties to be listed or made available to the thousands of other brokers who were part of the service.  The result was a quicker and more reliable sell.

Over the years technology has improved and technical information which buyers and sellers did not have access to is now readily available. This is great news, but many went along with past practices simply because the brokers’ commission was tucked into the sales prices and the overall market determined what was a fair price. It was akin to “no harm, no foul.”

It is one thing to have information and it is another to know what to do with it. So, while sellers could effectively sell their property for zero commission or even hire those brokers offering commissions as low as one percent, it boils down to how long will it take to sell the property via marketing?  At the same time, as mentioned, a real estate transaction has legal components and accepting the risk is an individual matter. Some are willing to take the risk and some, even though the savings may appear beneficial, are not willing to take it.

The bottom-line

So, while sellers always had the ability to achieve a lower commission structure, only time will tell what the overall benefit consumers will receive. Will it result in lower home prices? Will brokers suddenly exit the business? Will the marketing of properties be negatively impacted?

CUBATrek 2022

~ Fred Thomas, III ~ Leave a comment

[as a preamble this is written from a United States perspective who are a minority of overall visitors to CUBA.] 

This trek was dedicated to my dear friend, Dr. Esteban Dominguez Morales who passed away earlier this year.  Over the years we developed a great friendship.  He explained how he joined the revolution as a young teenager. As he gained formal education; achieving two pHD's, including one from Russia, he became a leading voice in Cuban social issues and economics.  His seminal work on race helped me immensely in better understanding the culture

My trek to Cuba (Coo-ba) just ended.  I remind those who ask the big difference between a trek and a vacation; is work and sacrifice.  Another critical element is my treks are based on a laser-focused efficient budget.  Many of you who follow my articles already know how my passion for Cuba was developed after my first visit in 2015.  The first year was simply more of a bucket-list adventure: explore the country first-hand.  Upon returning that experience led me to do more research into the culture and the history.  I discovered the book “Race in Cuba” and after reading it I had many questions.  Ever since then I committed to doing solid research on racism in Cuba and the impact of Negro League baseball in Cuba. Based on my progress I have two more treks to complete my research and then I will be able to formally publish

Going to Cuba has fascination for many. As the Caribbean’s largest country at 11 million, like many countries there are contradictions. Currently a small but notable population is fleeing the country and seeking asylum status to whatever country that will accept them. The country is dealing with issues where people must make adjustments. It is not as bad as the 1990’s when the Soviet Union collapsed resulting in them not receiving the financial support they had come to expect. From my real-life interviews that was a brutal period where people were fighting for basic survival. The current situation is tough as shortages and other sacrifices are an everyday reality.

While the Biden administration has clawed back some of the draconian measures the Trump administration implemented, those traveling from the United States must be diligent in understanding approved regulations to visit the country. At the same time I notice some are willing to take the risk and travel as a tourist doing things such as visiting beaches, visiting government run businesses and enjoying the country. They do so at their own peril because while the Cuban government may turn the other way, returning back home may result in severe questioning or imposing financial penalties. Part of the basic requirement in visiting is you must have a bullet-proof itinerary (in your possession at all times with your passport and travel visa) to document your “business.”

I missed my 2021 trek as even though Covid was simmering down, the airlines had elevated ticket prices that my pockets could not handle.  Luckily, 2022 showed greater promise as prices became more affordable.  The biggest hitch was selecting a reliable airline because there are many that claim to accommodate Cuba.  I was looking at United but at the last minute had to switch because they were having logistical issues in flying into Jose Marti International.  Luckily American offered the right combination.  LAX to Miami and then off to Havana.

I normally make my treks in November, before or after Thanksgiving so this time I needed to dedicate the entire month as we added going to Belize to witness the Garifuna Settlement celebration. Around August I had to move it into high gear and move into the final planning phase.  This was critical because going to CUBA is very fluid or everchanging as was the case with money or the value of the U.S. Dollar as well as accommodations.

My itinerary was solid as I planned for meetings, interviews and other interactions.  The focus of this trek was to visit Matanzas; San Severino Slave Castle and Palmarde Junco, which in 1874 became Cuba’s first baseball stadium. I am proud to report, even today it stands in its glory as games are still played there.  Additionally, there was much to do in Havana as well as Camaguey and then on to Santiago.  The notion of understanding racism goes back before the revolution which is why it was important for me to see the Moncada barracks as it became a pivotal moment in history. My initial goal was to travel using the updated train system but my host in Matanzas convinced me it was too perilous as schedules were unpredictable.  After acquiescing I made my journey from Havana to Santiago via the Viazul.  Below are highlights of my trek.

Tourist Visa

Assuming you meet one of the twelve categories to travel to Cuba, a tourist visa is basic documentation U.S. citizens will also need to travel.  From my experience pricing will range from $25 to $100.  Staff is generally positioned adjacent the airline you are flying to enter CUBA.  The lower prices are generally available for non-US flights. Unlike past years there is no fear by having your passport stamped by Cuban immigration or suffering the rath once you return to the U.S. and being questioned, “what were you doing in Cuba?”

Inflation

For those whining about inflation I would encourage them to visit Cuba.  As mentioned there are severe shortages of the most basic commodities.  The CUP (Cuban peso) is very fluid and fluctuates daily.  You can exchange on the informal market but like most things – Buyer beware!  In other words, you need to develop a reliable source, or the alternative is simply to exchange at Cadeca’s or banks.  During my visit the rate was ranging $1 equal 110 pesos.  My rate on the informal market was $1 to 150 pesos.  This is a tremendous benefit assuming you are comfortable doing business with the local economy, but you must ditch any resemblance as a tourist.

You will notice national products (i.e., tabac [cigars], rum, coffee and other items) can only be had with an international card.  That can spell trouble as the card is pegged almost dollar to dollar as many of the products are marked in that currency.  One thing I did notice is a few shops at the airport accept CUPs, so that is another opportunity to stretch your buying power.

Shortages

As you’re doing your research on Cuba you will discover lots of news on shortages.  They are real and for most Cubans it remains a nagging headache to wait in endless lines to try and retrieve basic goods.  The other shortage which was new during this trek was the power.  Until you witness it, it is hard to phantom.  The solution is exceptional organizing of your day as well as your resources in preserving power (mobile phones, computers, etc.)

Transportation

Trekking is not for the week and feeble.  For this trek based on my Epson smartwatch I pegged 96 miles of walking!!!!!  The rest was cabs and motorcycles (rider).  For this trip I had planned to ride the local buses, which are now 2 pesos, but logistics prevented that experience.  I journeyed from Havana to Santiago and provinces in between via the Viazul bus system.  Interestingly, locals are prevented from riding the Viazul and must travel on the national buses.  The reason I was told was because the country is trying to ramp up tourism and needs every available seat to those visiting the country. Here is the bottom-line, the country of Cuba is wide and from Havana to Santiago is about 15 hours (except flying which is prohibited from my budget). YOU MUST PURCHASE YOUR TICKETS IN ADVANCE OUTSIDE OF CUBA (online) and in my case as mentioned I was planning to take the train from Matanzas to Camaguey so I had to do some quick thinking. I contacted my daughter in the US and gave her my Viazul credentials and she was able to secure the ticket and email it to me so I could travel. The cost was:

  • Havana to Matanzas = $21
  • Matanzas to Camaguey = $31
  • Camaguey to Santiago = $21
  • Santiago to Havana = $56

So for $115 I was able to literally go across-country. Of course some chose to fly or hire private taxis. That was not my reality as I opted for the more affordable option. As stressed, this type of travel is not for everyone but for me it is perfect. It does make stops along the way. You are able to go into towns you probably never would have the opportunity to go. THERE ARE NO RESTROOMS ON THE BUS. A smart traveler will always sneak some tissue into their luggage as the custom in Cuba when there are stops is to pay to use the restroom (10 pesos). Also, it is not uncommon for the bus to pull over in the rural terrain to allow those who simply can’t wait to relieve themselves.

Internet

I surely do not come to Cuba to lay on the internet but you do need that resource for communication. The system has greatly improved in Cuba. You now have several options which include getting a sim card, getting a phone, internet cards, etc. I selected internet card and to my surprise the prices have greatly decreased. In the past it was not uncommon to pay 1:1 or with US Dollars. As an example 5 hours would cost $5. Of course some access cards on the informal market. For me I prefer to go to the Ectesa office. Expect a wait should you use this option as there is usually a line to get into the office. I waited about three hours but it was worth it as to my surprise three 5 hour cards cost 375 pesos the equivalent of $2.50 based on my exchange rate. One important thing while the service has greatly improved part of your logistics planning is to map out available hotspots based on your travels.

PHOTOS

Photos of the trek can be accessed by clicking on the appropriate link

California Real Estate Market Booming Even As COVID-19 Pandemic Continues

~ Fred Thomas, III ~ Leave a comment

The above headline is what scares the hell out of would-be homebuyers. As real as the numbers are they are just another hurdle which must be navigated to achieve homeownership.

In December, the statewide median home price was $717,930, up 16.8% from December 2019. But the high prices are not driving buyers away.

The notion of buying a home at $700,000 is one factor which scares many potential buyers into paralysis. While financing is attractive there are hurdles which cause some to simply throw in the towel before even trying. Make no mistake, the aspiration of purchasing a home can be a daunting experience. Several important factors to consider:

  • The story projects great news for those who have succeeded in purchasing a home during this worldwide pandemic. But who has the $140,000 or even $70,000 or $35,000 required down payment stashed away?
  • Using the “average” sales price as a barometer, how many first-time, would-be buyers can afford a monthly mortgage payment of approximately $3,700?
  • Further, based on the above how many “average” people have the income to qualify for a mortgage? Using the above illustration you would need a combined annual income of approximately $115,000.

THE BOTTOM LINE

There is no need to stay discouraged. Even in the best of times acquiring a home requires planning, persistence and laser-focused attention on succeeding. While the numbers are the numbers the fascination in purchase a home is there is the “average” and then there are options. It may mean you will have to do more research. Think out of the box. Be creative. All, with the focus of getting in, somewhere!!!!!! The one constant is however you achieve it, homeownership is a coveted goal and despite the nerve-wracking numbers in the long-haul you can position yourself for financial mobility while meeting a very basic demand………securing shelter.

The last critical point is to network and align yourself with professionals who can help to minimize the myths and set you on the path to achieve, and that may not be the $700,000 home but whatever it may be, it will be yours. Why? Because not everybody sells for the same reason or has the same motivation other than to sell to the buyer who can meet their price and their timeline.

HR2161 saves First-Time homebuyers approx. $5,000.  Will McConnell highjack?

~ Fred Thomas, III ~ Leave a comment 

Above image courtesy of Photographer: Matthew Staver/Bloomberg

[Washington, D.C.]  Today First-Time homebuyers received more welcomed news at Nancy Pelosi’s (Speaker of the House/D-CA/12th) House of Representatives passed HR2161.  Labeled as the “obstruction party” by leaders of the Trump administration the bill was passed and headed to the Senate where members are hoping majority leader Mitch McConnell doesn’t try and high jack the bill.  Lately he has proudly accepted the moniker to be known as ‘the grim-reaper.”

WASHINGTON, DC – JUNE 04: Senate Majority Leader Mitch McConnell (R-KY) speaks to the media after attending the Republican weekly policy luncheon on Capitol Hill June 4, 2019 in Washington, DC. McConnell took questions on various subjects including President Trumps proposed tariffs with Mexico. (Photo by Mark Wilson/Getty Images)

The bill essentially can result in borrowers using FHA mortgages saving $5,375 and is based on an average loan of $211,000.  Current FHA borrower must pay three percent which is known as the standard rate for mortgage insurance or the program which allows the agency operate.   Unlike conventional mortgages where insurance is normally mandated if the mortgage exceeds 80% of the value of the home, FHA mortgage through their mortgage insurance premium (MIP) is mandated regardless of loan to value.

HR2161 would allow borrowers who successfully complete authorized counseling to have their premiums reduced to 2.75%.  If passed and Donald Trump signs it into law you could see millions of buyers enter the marketplace.

 

Many borrowers use FHA insured mortgages as their entry into home ownership.  Contrary to popular belief, especially political leaders who have attempted to vilify the program, historically it helped the United States of America define a middle-class standard.

Mortgage News: Discount Rate, Weekly Survey & D & I

~ Fred Thomas, III ~ Leave a comment

The Feds led by Jerome Powell announced yesterday, discount rates would remain unchanged.  Although Donald Trump has been up to his usual antics of butting in to agencies which demand independence, Powell has been clear and intimated to Trump to stop harassing him or threatening to fire him.

Here is his remarks about why there was no need to change rates.

This week’s mortgage rate survey

June 20, 2019

30-Yr FRM 15-Yr FRM 5/1-Yr ARM
Average Rates 3.84 % 3.25 % 3.48 %
Fees & Points 0.5 0.4 0.4
Margin N/A N/A 2.76

Diversity & Inclusion

While some will swear congress, specifically the House of Representative is doing nothing for the people was they are mired down in whether to impeach Donald Trump or not, in fact there is lots going on.

One such group, the Financial Services Committee has been busy (in addition to coordinating impeachment discussion) hold critical hearings about financial issues affecting the American people.  Today, they held a very important hearing on Corporate Diversity & Inclusion.

Here is the full hearing

Fed Chair Jerome Powell on the skids……again

~ Fred Thomas, III ~ Leave a comment

Some baby-boomers like myself or those who are music aficionados remember the rock group Blood, Sweat & Tears.  In 1968 they produced a hit called “spinning wheels.”  It was a melodic tune that caught your attention.

“What goes up must come down
What must rise must fall
And what goes on in your life
Is writing on the wall!

In the world of Donald Trump those lyrics are a no-no especially when it comes to communicating about the economy as well as regulators who are charged to keep our system running smoothly.  The economy is cyclical.  Some metrics which guide it are up, meaning others must be down in order to maintain fluidity.

Photographer: Aaron P. Bernstein/Bloomberg via Getty Images

As the economy improves regulators such as Jerome Powell who is chair of the Federal Reserve must guide against inflation or pumping too much money into it.  At the same time, when the economy is struggling as was the case with our financial meltdown of 2008, the Feds were charged with lowering the discount rate to make funds more affordable for commercial banks.  Now that the economy is doing well there is very little justification it needs a boost or having the rate lowered.

 

Unfortunately, that is not the case in Trump world.  He likes to tout everything is the best, the greatness on and on, so in his mind Powell needs to lower the discount rate immediately.  It is no surprise that president’s in the past understand the protocol of the Fed and make it a point to allow them to operate from a non-political position.

“Trump is not planning to demote Powell.” Larry Kudlow, director of the National Economic Council

 

For the past year Trump has intimated his disappointment of Powell while suggesting he might fire him.  This is due to the Feds raising the rate as a protection of maintaining a strong economy.  Fortunately for Powell, his position is not a cabinet level.  However, just as Trump harassed and badgered Jeff Sessions, James Comey and other leaders within his administration until they finally departed, he appears to be using the same antics against Powell.

 

Imagine waking up everyday hearing or reading the boss is unhappy with your performance, even though there is no justification, let alone using common sense to communicate the decision.

 

Today and tomorrow the FOMC (Federal Reserve, Federal Open Market Committee) is holding their regular meeting to discuss monetary policy.  The bottom-line announcement usually follows the conclusion of the meeting.  While Trump has communicated his desire that rates must be immediately lowered, most financial experts agree that is unlikely.  They do look to the meeting in July with the assumption things stay the way they are; there may be a lowering in the discount rate.

 

In the meantime, as for economic issues Trump should hum the lyrics of Spinning Wheel to appease his desire to invoke another rash move

Mortgage news: GSIBs as a group have paid at least $163.7 billion in fines!!!

~ Fred Thomas, III ~ Leave a comment 

above photo - House Financial Services Committee Holds Hearing On Keeping Megabanks Accountable
WASHINGTON, DC - APRIL 10: (L-R) Michael Corbat, chief executive officer of Citigroup Inc., Jamie Dimon, chief executive officer of JPMorgan Chase & Co., James Gorman, chief executive officer of Morgan Stanley, and Brian Moynihan, chief executive officer of Bank of America Corp., listen during a House Financial Services Committee hearing on April 10, 2019 in Washington, DC. Seven CEOs of the country’s largest banks were called to testify a decade after the global financial crisis. (Photo by Alex Wroblewski/Getty Images)

The news was initial reported in April but it is worth repeating today because at first the amount seemed like a prank but it truly is real!  Ever since the Democratic party assumed control of the House of Representatives they have moved quickly to implement more accountability as part of their oversight.  Global Systemically Important Banks known as GSIB’s make us some of the largest U.S. commercial banks.

The TARP Bailouts

During the financial crisis or mortgage meltdown of 2008, in 2009 the GSIB’s as mentioned appeared before the Financial Services Committee to discuss the bailouts they received.  On April 10th they reappeared before the committee chaired by Rep. Maxine Waters.  The purpose was to discuss “lessons learned” as well as steps they have engaged to balance the lending spectrum across the nation.

WASHINGTON, DC – APRIL 10: Chairwoman of the House Financial Services Committee Rep. Maxine Waters (D-CA) speaks during a House Financial Services Committee hearing on April 10, 2019 in Washington, DC. Seven CEOs of the country’s largest banks were called to testify a decade after the global financial crisis. (Photo by Alex Wroblewski/Getty Images)

$163.7 in FINES

As a group to date they have paid $163.7 BILLION in fines for various consumer abuses and other violations of the law.  Questions remain but one thing is clear; many banks chalked up the fines as the cost of doing business as evidenced by their current behavior and fact collectively they have made over $780 billion in profits.  Has anything changed?

The hearing shed light on why accountability is critical.  The committee has more hearings planned to address specific steps the banks plan on incorporating to benefit all consumers, particularly those that have been historically marginalized.

Here is a list of the fines some of the largest banks have paid in the last ten years:

  • Bank of America has paid $76.1 billion in fines.
  • JPMorgan Chase has paid $43.7 billion in fines.
  • Citigroup has paid $19 billion in fines.
  • Wells Fargo has paid $11.8 billion in fines.
  • Goldman Sachs has paid $7.7 billion in fines.
  • Morgan Stanley has paid $5.4 billion in fines.

Here is the full hearing on video

Mortgage rates continue to drop

~ Fred Thomas, III ~ Leave a comment 

Above photo -  David Paul Morris/Bloomberg via Getty Images

Mortgage rates dropped to lows not seen in nearly two year.  This morning Freddie Mac announced the benchmark 30-year mortgage fell to 3.820%.   The rate is from data collected as part of their weekly rate survey of lenders who sell mortgages to them.

 

There are $2 Trillion dollars’ worth of mortgages that are eligible for refinancing.

 

According to Mortgage Bankers Association the lower rates reflect to spike in mortgage activity for those refinancing.  Unfortunately, the activity for those purchasing a property has held flat or declined.  This could be due to many borrowers feeling priced out of participating in homeownership?

 

 “Coming out of the Memorial Day holiday, and likely impacted by the financial market volatility caused by the trade tensions, purchase application volume declined for the week. Potential homebuyers may be more cautious given the heightened economic uncertainty.” Mike Fratantoni, MBA Senior Vice President and Chief Economist. 

 

Here is a snapshot of this week’s rate survey:

  • 30 year fixed – 3.820%
  • 15 year fixed – 3.280%
  • 5/1 ARM – 3.520%