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


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


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%

Convenience Fees/Surcharges for using Debit-Credit Card


Whether you are a consumer (like me) or a business owner cost is always a key consideration.

Lately, I have noticed companies adding convenience fees, surcharges for using debit/credit care, health fees to pay for employee health benefits and/or a living wage issue.  No doubt, operating cost are a critical component in pricing a product.  Some merely add the cost to the product, some separate it as a specific cost, some list the cost on your bill but leave it as an option for you to decide, then some absorb it so that customers don’t feel alienated and decide to take their business elsewhere!!!

“my accountant said I need to pass those cost on to my customers,” store owner

“we need to use the fee income to help pay for employee health benefits,” store owner

The practice is not new but as our society relies on technology via credit card, debit card, smartphone app, etc. it is interesting to note the slippery slope businesses must navigate as if not handled properly they run the risk of losing hard-fought customers.

What are your thoughts and/or your experiences?


Fed Reserve:  Will Powell’s be replaced for ignoring Trump?


Above Photo - Federal Reserve Chair Jerome Powell Holds News Conference After Federal Open Market Committee Meeting
WASHINGTON, DC - MAY 01: Federal Reserve Board Chairman Jerome Powell speaks during a news conference on May 1, 2019 in Washington, DC. Powell said the Fed will not raise interest rates this quarter and no rate hikes are likely anytime soon. (Photo by Mark Wilson/Getty Images)

JUST IN



Since assuming the presidency, a lingering quagmire for Donald Trump is understanding running the government is much different than running a closed private business.  The latest example is trying to dictate the actions of  Fed Reserve Board chair Jerome Powell.  Today the Fed rebuffed Trump’s constant badgering to lower the discount rate so that he could claim a political victory by deciding to keep them as-is, until the next meeting.

 

“we reviewed economic and financial developments in the United States and around the world and decided to leave our policy interest rate unchanged” Jerome Powell, Chair of Federal Reserve

 

The Federal Reserve is an august group of professionals charged with managing monetary policy through their Federal Open Market Committee (FOMC).  Their actions are non-partisan and usually free of any political influence.  That is, until Donald Trump came along.  The Fed rate is based on the economic environment.  As  a measure to thwart inflation the rate may increase based on positive economic metrics.

 

Some want it both ways

From a political standpoint Trump is enthusiastic to tout positive economic news.   Unfortunately, those like him dismiss the elementary notion of when and how the Fed rate moves.  For months, Trump has suggested to Powell to keep a lid on increasing the rate.  Not only is that type of communication unwise, it is unethical given the Fed’s core responsibility.  From a practical standpoint the Fed rate only declines based on a sliding economy.  If that were to happen it would contradict Trump’s proposition that all and any news from his administration is positive.

Recently two of Trump’s acolytes; Stephen Moore and Herman Cain had been suggested to join the Fed.  Their selection was fueled by their contempt of Powell’s fiscal leadership of the Board.  Just last week following protesting the criticism he received as being a nominee, Cain’s was abruptly dropped from consideration.  Likewise, Moore’s background has come under fire and it appears unlikely he can further survive the nomination process.  Interestingly, several weeks ago to Trump’s delight he applauded Moore for criticizing Powell’s leadership by penning a controversial opt-ed supporting a decrease in the Fed rate.

 

The next Fed monetary meeting is slated for June 18th & 19th.

Read Powell’s remarks HERE

Trump nominates Stephen Moore to Fed Board.  Does this spell trouble for Jerome Powell?


ABOVE CAPTION.  President Trump Announces The Nominee For Federal Reserve Chair Of The Board Of Governors
Jerome Powell, governor of the U.S. Federal Reserve and President Donald Trump's nominee as chairman of the Federal Reserve, speaks as Trump, left, listens during a nomination announcement in the Rose Garden of the White House in Washington, D.C., U.S., on Thursday, Nov. 2, 2017. If approved by the Senate, the 64-year-old former Carlyle Group LP managing director and ex-Treasury undersecretary would succeed Fed Chair Janet Yellen. Photographer: Andrew Harrer/Bloomberg via Getty Images

“It is my pleasure to announce that @StephenMoore, a very respected Economist, will be nominated to serve on the Fed Board. I have known Steve for a long time – and have no doubt he will be an outstanding choice! @realDonaldTrump “

If your ambition is to serve as part of the Donald Trump administration, it helps to be part of the FOX network, speak negatively about the Obama administration or communicate in the media your disdain for someone in the current administration who happens to be in “hot water” with Donald Trump or his acolyte’s.  This morning it was Steven Moore’s turn to see if he can parlay his loyalty to Trump and go through the nomination process.

Stephen Moore, visiting fellow at the Heritage Foundation, listens during a Bloomberg Television interview in Washington, D.C., U.S., on Friday, March 22, 2019. President Donald Trump said he’s nominating Moore, a long-time supporter of the president, for a seat on the Federal Reserve Board. Photographer: Andrew Harrer/Bloomberg via Getty Images

Powell’s dilemma

The Federal Reserve is an independent body with the task of establishing monetary policy.  Currently there are two openings on the board.  Current Board Chair Jerome Powell has been in the crosshairs of Donald Trump for some time.  It doesn’t matter that Powell, a life-long Republican was recently nominated by Trump to his current post less than two years ago.  During that period the stock market hit some low marks.  Rather than blame himself for the policies he adopted which most economist indicated was the reason for the decline, Trump found a new foe in Powell and suffered the wrath and the blame.  Similar to so many officials Trump has appointed, many are independent and do not report or work for the White House.  Their role is to work on behalf of the citizens of the United States of America.   

Unfortunately as soon as whatever work they are doing intimates something Trump or the White House dislikes, they are admonished and chastised for not being a “team player.”

I only hire the best!

During the 2016 presidential campaign and leading up to naming key administration staff, Trump would boast, “he’d “surround myself only with the best and most serious people” — adding: “We want top-of-the-line professionals.”

That may result in a good sound-bite but the results to date have been a big flop.  More than a few people who had the aspiration to be part of team Trump has resigned, summarily shown the front door or indicted due to criminal behavior, while their dreams went up in flames.

Being a panderer has its benefits

In some circles, Moore has been viewed as the ultimate panderer known for making nervous smiles during his stint as a cable-news analyst.  He has demonstrated the willingness to support anything and everything spouted by Donald Trump.  His behavior has been very similar to those who are publicly interviewing for administration post’s knowing full-well of Trump’s appetite in spending as much time as possible consuming media.

The editorial

Up until this morning Moore was an analyst for CNN.

“Moore joined CNN as a contributor in early 2017. Given this news, he is no longer with the network, a CNN spokeswoman confirms.” CNN Chief Correspondent @brianstelter

He was known for his commitment to never admit anything negative about Donald Trump or his administration.  Despite tremendous documentation and evidence to the contrary, Moore’s would presents arguments that might result in an “F” grade in the most basic debate class.  His position was to always deny the obvious.

As mentioned, similar to other appointees Moore’s performance caught the attention of Trump.  But perhaps the thing that sealed his nomination was his March 13, 2019 editorial to the Wall Street Journal which blasted current chair Powell and blamed him for the concern about Wall Street.  This surely supported Trump’s attitude who in turn suggested to Economic Advisor, Larry Kudlow that Moore is just the type of person to fill one of the Fed vacancies.

Interestingly, many view the Federal Reserve as a prestigious organization where top economist who hold pHD’s wind up.  Moore’s resume does not compare to those who currently sit on the board.  Absent of a pHD, for the past three years his core employment was being a pundit for the Trump administration.

 

While Trump’s tweets are considered official communication, Moore indicated he has not received a firm offer.  Assuming it comes later today or within the next several days the next step is to go through the nomination process.  The big question is whether Trump is appointing Moore because he truly is competent and can improve the body or is he being positioned  to promote his views as articulated in his March 13th op-ed.

 

 

 

 

African-American Med students find life-raft in CUBA


About seven years ago I first heard of a program that seemed too good to be true!  Simply, the country of Cuba had a program where students could gain their medical education, training and degree at no cost to them.  Med school cost are crippling for most and range from $140,000 – $175,000 and that is just tuition.  When you factor in room & board, meals, supplies and other things the cost can easily skyrocket to nearly $500,000.

My treks started in 2014 and due to needing laser-focus energy on my two topics; Race in Cuba and the Old Negro Leagues in Cuba, I forgot about the program.

 

Fiction or Non-Fiction

Just like you I love entertainment.  The problem I have is limited time so when it comes to reading or viewing screenings, as a historian I tend to focus on non-fiction or real-life issues.  Maybe that is the reason I prefer documentaries?  The Pan-African Film Festival (PAFF) kicked off its 27th year last Thursday.

Lo and behold one of their features is “Dare to Dream.”  It is a riveting documentary that chronicles med students earning their credentials in Cuba.

(courtesy of Pomona Valley Med Center) Completing his residency at Pomona Valley Medical Center. Resident Year: 2019 Undergraduate School: The University of Oklahoma, Norman, Oklahoma Medical School: Escuela Latinoamericana de Medicina

In 2000, a delegation representing the Congressional Black Caucus had the courage to visit Cuba and meet with Fidel Castro.  Part of their discussion was the pathetic health care African-Americans and other minorities had to deal with.  Later that year members of the Cuban Health ministry visited the group in New York and announced Castro was creating a program for the population affected to complete their studies in Cuba and the cous de gras was there was absolutely no cost.

Approximately half of the initial scholarships were targeted for African-American students.  The remainder were for Latino and other ethnic minorities who came from underserved communities.

 

The Escuela Latinoamericana de Ciencias Médicas (ELAM) program initially offered 500 scholarships total for US students.  Thus far nearly 200 US students have graduated and nearly 30,000 students from over 100 countries worldwide have benefitted.  IFCO is the organization which identifies and places students in the program.

 

As for those from the United States, they are placed in hospitals all over, including Pomona Valley Medical Center.

 

The first class of 1,498 ELAM doctors graduated on August 20, 2005, with 112 from other Cuban medical schools: 28 other countries in Latin America, the Caribbean, and the United States were represented by the graduates. The ceremony was led by Castro and Venezuelan President Hugo Chávez. Reportedly attending were Prime Minister Baldwin Spencer of Antigua & BarbudaPrime Minister Roosevelt Skerrit of DominicaPrime Minister Keith Mitchell of GrenadaPresident Martín Torrijos of PanamaPrime Minister Denzil Douglas of St. Kitts & Nevis and Prime Minister Ralph Gonsalves of St. Vincent & the Grenadinesas well as high-ranking government representatives of The BahamasBarbadosBelize, the Dominican Republic, EcuadorGrenadaGuatemalaGuyanaJamaicaSt. LuciaSuriname and Trinidad & Tobago.

 

The documentary has two more screenings before PAFF ends.  To be informed and see for yourself this remarkable program I would encourage you to attend PAFF or purchase the video.

  • Friday – Feb. 15th 4:30pm
  • Saturday – Feb. 16th 6:30pm

 

Here is the trailer

Dare to Dream: Cuba’s Latin American Medical School from Jennifer Wager on Vimeo.

 

 

January jobs report a positive mark for the Trump administration


“Reporters anti-Trump bias has spiraled out of control.” White House press secretary Sarah Sanders


Yesterday, the Bureau of Labor Statistics released its jobs report reflecting data compiled for January 2019. Great news for the 304,000 who are now employed. The report was also a positive shot in the arm for the Trump administration.

During the two-years the administration has been operating, they have accused the media of only focusing on negative news about the antics that Donald Trump belts out on almost a daily basis. Unfortunately, that is not true as over that period there is plenty of positive news the administration should be proud of.

The jobs report is just one marker. Eyebrows get raised when Trump and those who support him focus their retort primarily on African-American employment data as if they are some primitive group or the only group mentioned in the report. It is silly and many wonder why they don’t simply communicate an argument that includes everybody?

News such as the jobs report would lead media on a more frequent basis, if not for the self-inflicted wounds the administration consistently makes. Their blunders dampen the positive news they create resulting in them communicating a false narrative that “everybody is out to get them.’

The effects of the Government shutdown

WASHINGTON, DC – JANUARY 28: Despite Friday’s end to the longest-ever partial government shutdown, federal employees continue to line up outside outside the World Central Kitchen for free food and coffee January 28, 2019 in Washington, DC. Founded by celebrity chef Jose Andres, World Central Kitchen is a not-for-profit non-governmental organization devoted to providing meals in the wake of natural disasters. The kitchen has been providing meals, non-perishable food and other services to workers affected by the shutdown since January 16. (Photo by Chip Somodevilla/Getty Images)

The January report is positive news. However, in a more thorough analysis you will see the unemployment rate ticked up to 4.0 percent. Again, that is not alarming as it merely is a data point. It must also be noted the number of unemployed persons rose to 6.5 million. Among those, 175,000 are in the “temporary layout” category.

Despite the shutdown, the January report is good news and some political leaders can’t fathom why Donald Trump doesn’t spend more energy on building on positive reports instead of being obsessed with watching cable television or trying to figure out ways to continue to hold the taxpayers hostage on a wall he proudly stated and his supporters echoed that “Mexico would pay for?”

Special Report – THE DEVALUATION OF ASSETS IN BLACK NEIGHBORHOODS


Above photo The Brookings Institute is an independent, nonprofit organization that analyzes public policies and publishes its findings in relation to scholarship and public policy. (Photo by © Shepard Sherbell/CORBIS SABA/Corbis via Getty Images)

[Washington, DC]  This special report is provided courtesy of the Brookings Institute and explores the case of residential properties.

Presented by the following authors:

  • Andre Perry
  • Jonathan Rothwell
  • David Harshbarger

READ THE FULL REPORT HERE

2018.11_Brookings-Metro_Devaluation-Assets-Black-Neighborhoods_final

Conforming Loan Limits increased


above photo Mel Watt, director of the Federal Housing Finance Agency (FHFA), from left, Jerome Powell, chairman of the U.S. Federal Reserve, Steven Mnuchin, U.S. Treasury secretary, and Jay Clayton, chairman of the Securities and Exchange Commission (SEC), listen during a Financial Stability Oversight Council (FSOC) meeting at the U.S. Treasury in Washington, D.C., U.S., on Tuesday, Oct. 16, 2018. Powell said at the meeting he is worried about a spillover from hard Brexit, but stocks and Treasuries showed little reaction. Photographer: Andrew Harrer/Bloomberg via Getty Images

 

Today, the Federal Housing Finance Agency (FHFA) announced conforming loan limits would increase from $453,100 to $484,350.  For higher cost areas (see map below) the new limit will be $726,525.  FHFA was created as the umbrella agency for the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).

Fannie Mae Headquarters, Washington, DC (Photo by Alex Wong/Getty Images)
Freddie Mac Headquarters, McLean, VA (Photo credit should read PAUL J. RICHARDS/AFP/Getty Images)

They purchase home loans from a network of lenders across the nation.  The lenders originate the loans from consumers who are seeking to finance their home purchase or to refinance their existing mortgage.  The lenders also work with mortgage brokers, credit unions and other organizations who have direct contact with consumers.

Once the loans are funded, they are packaged and sent to respective investors (i.e., Fannie Mae and Freddie Mac) and sold as securities, which are backed or collateralized from the property.

 

The Impact

Nationally the average loan amount is $229,000.  The new guidelines take effect for mortgages that originate starting January 1, 2019.  The increase will help those who see home prices continue to rise.

Conforming loans are those where the loan amount is $484,350 OR LESS.  Any loan amount in excess of that loan is defined as a “Non-Conforming” loan.  For borrowers the impact is typically ½ point or 50 basis points on the interest rate.

 

As an example based on current limits

Loan Amount Rate Payment Mo. Difference
$453,100.00 4.81% $1,816.00 -$188.00
$453,101.00 5.31% $2,004.00

The bottom line difference could be approximately $190 each month.  So, while the monthly payment is crucial, the move also provides those with higher loan amounts an additional $31,250 to deal higher prices, while being able to obtain more affordable interest rates.

 

Positive Jobs Report.  Can that save Trump from being snakebit?


Today the Bureau of Labor Statistics (BLS) released its jobs report which surpassed expectations.  250,000 new jobs were reported for October.  In the political world that is good news.  You would think with employment, the economy and other measures Donald Trump and the GOP (Republican party) brag about, they would be hard pressed for both houses of the chamber (Congress) to be in jeopardy?

 

A woman walks to cast her vote while other people fill out ballots during early voting October 25, 2018 in Potomac, Maryland, two weeks ahead of the key US midterm polls. (Photo by Brendan Smialowski / AFP) (Photo credit should read BRENDAN SMIALOWSKI/AFP/Getty Images)

The mid-term vote is just days away.  Surely you would think the positive jobs report might be the fuel needed to keep the chamber.  Unfortunately, Trump has communicated very little  to voters about the economy.  Perhaps in doing so and if they are honest, he and his supporters feel they would have to credit the Obama administration with establishing a positive foundation for them being able to reap the benefits they are achieving?   In the world of Trump, that is a no…no.

 

The snakebite effect

Instead of the economy, Trump feels he must feed his base one dish; Immigration.  He feels that subject will be enough for his base to out vote the Democrats and opposition voters to keep the chamber.  Some in the GOP aisle are frustrated that he has blown the opportunity gained in 2016 and feel he has been snakebit. They point to his antics and bombastic behavior that will lead many voters to insist a change is the best option to end the polarization he has created.

 

As it stands right now, despite the jobs report and other economic news, when Trump wakes up next Wednesday the Democrats, who need 23 seats to claim control of the House of Representatives, might wind up with approximately 35.  The Senate is expected to remain in GOP control.  The result will be voters have recognized that a check or balance on the Executive is needed versus having one party controlling all three branches?  At the same time, it must be noted Trump and his supporters are hoping for the same “shocking” result they achieved in 2016, when they faced long odds of winning, yet came out ahead.

Democratic congressional candidate the Midterm elections, Ilhan Omar, speaks to a group of volunteers in Minneapolis, Minnesota, on October 13, 2018. – Somali-American state legislator Ilhan Omar claimed victory in her primary in Minnesota in August, putting her on track to become one of the first female Muslim members of the US House of Representatives. (Photo by Kerem YUCEL / AFP) (Photo credit should read KEREM YUCEL/AFP/Getty Images)


**MORE HISTORIC VOTING NEWS**

Political history is being made in Harris County as a record 19 Black women are running for judge in the upcoming Nov. 6 election. It also marks the first time in history that 19 Black women are running for judicial seats in one county, which happens to be the third largest county in the United States. Courtesy of Defender.com