Daily Mortgage News & Commentary

Halloween: Now is the time to help your national, state, & local organization; Housing policy primer

Neighbors upset at pole dancing skeletons in Houston? Yup. And now for something completely different, overseas! Plenty of mortgage brokers read this commentary, but the self-proclaimed “world’s leading high-net-worth mortgage broker” Enness Global, has pulled together 13 Halloween homes for those looking to buy at the top-end of the global housing market. Good luck pronouncing some of them. The UK and Ireland has Glenborrodale Castle (£3.75m), Devizes Castle, Wilshire (£3.25m), Glandyfi Castle (£2.85m), Glengarriff Castle (£2.492m). In Spain there’s Palma Castle and Avila Castle (a steal at £.488m and £3.171m, respectively). If Germany provides a more haunting feel for a Halloween home purchase, then you can pick up Rhineland-Palatinate Castle for a little under £2.628m or Rheinland-Pfalz Castle for £2.446m. France has an abundance of castles currently on the market and at the top end of the price threshold is Pertuis Castle in Luberon, on sale for £3.534m. It boasts 16 bedrooms, a swimming pool, garages, a tennis court, additional outbuildings and more, all spread over 10.38 acres.

Housing policy

Tuesday is the presidential election, as Volatility Index (VIX) future spreads have climbed higher than at any point in the past three ballots. Although the Federal Reserve does not react to elections, in the interest-rates market, implied volatility is well above levels reached in 2016 or 2012. We have seen four years of Donald Trump’s housing and economic policies, including this housing policy announcement in July, iso let’s examine what former VP Joe Biden has proposed. Some of these would obviously require the Senate to flip to Democratic control in 2021 to enact in full.

There are three main pillars to Joe Biden’s proposed progressive housing & economics path. His tax plan is effectively counting on stimulus from increased government spending to counter the dampening effect of higher corporate and individual taxes on economic growth. The goal would be to reverse, and then some, the current president’s Tax Cuts and Jobs Act of 2017. This would be achieved through taxing upper income brackets to finance new and expanded government spending programs to lift the economy from the post-pandemic hole. People are skeptical if the tax plan will outweigh the spending stimulus. And, as always, enacting these kinds of proposed tax changes is incredibly difficult, even with single party control.

Biden has also pushed a “green” America, open to a tremendous amount of debate. His policy platform for the future of renewable energy as part of his “Build Back Better” economic plan includes a sweeping proposal to promote clean energy and address climate change. Some of these proposals, such as extending renewable energy tax cuts, will be easy, while others, like achieving net-zero emissions economy-wide by 2050, will be harder. The plan is expected to cost roughly $2 trillion over four years, and will be funded largely by taxes on corporations and high-income earners, though it may be framed as an economic stimulus. Renewable energy still makes up only about one-tenth of energy production in the U.S. (less than that of coal alone), so a lot of investment will be required.

 

Biden’s final pillar is his “Buy American” pitch. Following suit of President Trump, Biden has touted this plan to purportedly create jobs, rebuild U.S. manufacturing, and invest in innovation. The proposed policy calls for billions in procurement investment to retool and revitalize American manufacturers, and investment in R&D and breakthrough technologies. The plan also calls for pursuing a pro-American worker tax and trade strategy by investing in the potential of all communities and workers to bring critical supply chains back to America. Biden has pledged to create five million jobs in manufacturing and innovation.

Historically, the economy’s strength has been a key indicator for an incumbent’s presidential election success. A Pew Research Center poll revealed that while Biden garners more voter confidence around issues like race relations and the coronavirus’ public health impact, Trump outperformed on economic policy. Biden’s “Buy American plan targets economic improvement; it doesn’t necessarily improve the manufacturing outlook.

Michael Sema is the President of Get A Rate, opined, “Under a Democratic Presidency, we will see stricter rules and regulations, more monitoring and this could lead the market to slow down. While Republicans feel the opposite, to them too much restriction makes it difficult for businesses to operate in a profitable manner.” May the best team win on Tuesday!

Support your local sheriff

I am fortunate to be able to visit (over the phone at this point) with local, state, and national mortgage banker & broker associations, and I have seen their membership ranks swell. Unfortunately, while lenders and brokers around the United States are enjoying record profits, state and local organizations have lost a major source of revenue: in-person conferences. Some organizations are ailing, and now is a great time for lenders and vendors to join or boost their membership level. And I am periodically asked by others, “Why should I, or my company, join an association?” Belonging to the Mortgage Bankers Association is a must, but let’s look at a random sample around the nation.

 

Lisa Vercher, Executive Vice President of the Texas Mortgage Bankers Association) writes, “TMBA membership affords a number of benefits including governmental and legislative advocacy, educational programming, peer interaction, and networking opportunities. Now more than ever membership is crucial to the protection and prosperity of our industry. Mortgage professionals can become leaders in the industry by actively participating as volunteers and committee members. These leaders play an integral role in sharing information, ideas, best practices, and current market developments which are vital for the success of the industry. Such leadership also provides opportunities to target trends and issues relevant to the mortgage industry with other committee members, peers, competitors and potential partners, while providing an opportunity for creative problem solving as well as professional enrichment.”

 

“The number one reason to support your state MBA is for the legislative and regulatory advocacy. Your state MBA is on the front line with policy makers who make decisions that affect your ability to run your companies and provide services to your customers. Just because you don’t have an interest in the political arena doesn’t mean it doesn’t have an interest in you! Support the associations that support you and your business” contributed Susan Milazzo, CEO of the California Mortgage Bankers Association.

 

A while back Kent Carter with the Oklahoma Mortgage Bankers Association sent, “The advantage of receiving ongoing assistance from the MBA as well as critical compliance training at the local and state level allows independent mortgage companies and community banks to remain important resources for consumers. Educational programs and the ongoing dissemination of industry changes makes being a member of state organizations critical to those who intend to remain permanent mortgage lenders. Our advocacy efforts have kept some of the overreaching aspects of Dodd/Frank from harming the consumer with unrealistic demands. You and our state organizations will prosper with the involvement of all mortgage professionals.”

 

Joanne Misuraca, Executive Director of the Michigan Mortgage Lenders Association wrote, “With all the legislative and regulatory changes affecting the industry, being a member of your state or local organization is the best way to keep up with it all! Participating on its committees, attending its educational events, and networking with other members helps you stay connected and informed. The association provides the real estate finance industry access to the Legislature and state regulatory agencies to help produce and maintain the type of legislation and regulatory climate that permits lenders to fully meet the real estate financing needs of residents. It also provides educational opportunities to help members keep abreast of the rapidly changing mortgage origination, underwriting and servicing environment. The MMLA maintains timely contact with its members through newsletters, email legislative alerts and the MMLA website to relate industry trends and developments.”

 

At one point Casey Fleming (California Association of Mortgage Professionals) sent, “I am a member of CAMP because it makes me a better mortgage advisor. My participation in CAMP helps me in three ways. First, education: CAMP offers educational opportunities of higher quality than any other single source, and at very competitive prices. By taking advantage of the opportunities CAMP presents I learn more about best professional practices. This enhances my knowledge and continually improves my skills and my service. The second is information. There was a time when a loan officer only had to take loan applications – that time is past. Today to be successful one has to understand economic trends, regulatory changes, and financial analysis. In CAMP I need do nothing more than attend events to stay current. And the third is mindset. It is easy in our industry to focus on the function of closing loans and to lose sight of the importance of what we do. A mortgage is usually the single largest debt any family will ever have. What we do makes a difference in people’s lives, and how we do it matters. Ethics, competence, and professionalism cannot be taught, but they can be ingrained by associating with others who share noble values. There are many more practical reasons to join CAMP and actively participate.  But for me, I am here because it helps me do what I do better for people I care about.”

 

Some years ago Candice Nicodin, President of the Mortgage Bankers Association of the Carolinas penned, “Membership either at the state or local level is more diverse than ever. Each sector has wants and needs, therefore our paint brush must cover a broader area. As our members expand, we keep an open ear and welcome change. Coming together as one unifies our position and allows for our voice to be heard. Our arsenal of defense for our members includes education, legislative issues, or networking. It is our responsibility to keep our industry healthy and that is done with active participation within our membership.” And Rhonda Marcum, Executive Director of MBAC adds, “Membership in the state association amplifies the voice of the individual members on state and federal legislative issues impacting our industry. It provides access to the educational venue provided through the state and serves as an excellent opportunity to network with other industry professionals.”

Al Thorup is the Chairman of the Indiana MBA. “As a professional trade group, the Indiana MBA serves as a resource and advocate and is the preeminent association representing real estate lending in Indiana. Throughout our history, Indiana MBA’s purpose has been to serve the mutual interests of its members in order to preserve, enhance and advance the mortgage banking and real estate finance business in the State of Indiana. The Indiana MBA supports the highest professional and ethical standards while promoting development and prosperity among the industry as a whole. The Indiana MBA provides valuable and timely industry training, professional development opportunities, and up-to-date information on regulatory changes to expand the knowledge base and scope of mortgage bankers. Forums covering origination, compliance, secondary marketing, servicing, technology, closing, and mortgage fraud are offered throughout the year.”

Sergio Murer is the President of the Illinois Mortgage Bankers Association. “The IMBA provides industry-wide networking opportunities at association meetings, seminars and conferences, and industry training, education and professional development. Members enjoy participation in forums on regulation, legislation, secondary markets, mortgage fraud and more, along with timely updates on events and issues affecting the mortgage industry.”

Susie Mize is the Executive Director of the MBAKC in Kansas. “Our mission is to preserve and improve the mortgage banking business and to encourage its use in the making and servicing of mortgage loan investments. We encourage sound business practices and methods in the making, marketing and servicing of real estate mortgage loans, and inform members of changes in mortgage laws and as to pending legislation affecting the real estate and mortgage business. The MBAKC sponsors educational meetings for the discussion of real estate mortgage problems, and cooperates with public and private agencies in the establishment of sound real estate practices.”

 

Check out your state’s organization and join. Plain and simple.

On the outskirts of a small Wisconsin town, there was a big, old pecan tree just inside the cemetery fence. One day, two boys filled up a bucketful of nuts and sat down by the tree, out of sight, and began dividing the nuts.

“One for you, one for me, one for you, one for me,” said one boy. Several of the nuts dropped and rolled down toward the fence.

As they were dividing the nuts, another boy came riding along the road on his bicycle. As he passed, he thought he heard voices from inside the cemetery. He slowed down to investigate. Sure enough, he heard, “One for you, one for me, one for you, one for me.” In an instant he just knew what it was. He jumped back on his bike and raced to find someone to tell about what he had heard.

Just around the bend he met an old man with a cane, hobbling along. “Come here quick,” said the boy, “you won’t believe what I heard! The devil and God are down at the cemetery dividing up the souls!”

The man snapped back, “Beat it kid, can’t you see it’s hard for me to walk.” When the boy insisted though, the man hobbled slowly to the cemetery.

Standing by the fence they heard, “One for you, one for me. One for you, One for me.”

The old man whispered, “Boy, you’ve been telling me the truth. Let’s see if we can see God.” Shaking with fear, they peered through the fence, yet were still unable to see anything. The old man and the boy gripped the wrought iron bars of the fence tighter and tighter as they tried to get a glimpse of God. At last they heard, “One for you, one for me. That’s all… Now let’s go get those nuts by the fence and we’ll be done!”

They say the old man had the lead for a good half-mile before the kid finally passed him on his bike.

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Do Lenders Care About Forecasts or Predictions?”

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