Morning Report: The CFPB warns servicers about foreclosures

Vital Statistics:

 LastChange
S&P futures4,03227.4
Oil (WTI)59.84-1.62
10 year government bond yield 1.74%
30 year fixed rate mortgage 3.33%

Stocks are higher this morning after Friday’s strong jobs report. Bonds and MBS are down small.

The upcoming week is pretty data-light, as is typical after the jobs report. The main thing will be the FOMC minutes on Wednesday and then inflation data on Friday. The FOMC minutes will be interesting to see just how much faith the Fed is putting into the stimulus spending.

Speaking of stimulus, the Biden Admin is trying to sell its $2.5 trillion infrastructure plan both to Republicans and the country at large. The sticking point will be the increase in corporate taxes to pay for the plan, and so far it looks like he isn’t even getting buy-in from his own party on that.

Pension funds are getting into the single-family rental business. “You now have permanent capital competing with a young couple trying to buy a house,” said John Burns, whose eponymous real estate consulting firm estimates that in many of the nation’s top markets, roughly one in every five houses sold is bought by someone who never moves in. “That’s going to make U.S. housing permanently more expensive,” he said. Again, when you look at mid single-digit cap rates, and then tack on double-digit price appreciation for the underlying assets, you have an asset class that has better characteristics than most other investment options out there.

The CFPB wants servicers to be ready for the wave of foreclosures once the moratoriums expire. “There is a tidal wave of distressed homeowners who will need help from their mortgage servicers in the coming months. Responsible servicers should be preparing now. There is no time to waste, and no excuse for inaction. No one should be surprised by what is coming,” said CFPB Acting Director Dave Uejio. “Our first priority is ensuring struggling families get the assistance they need. Servicers who put struggling families first have nothing to fear from our oversight, but we will hold accountable those who cause harm to homeowners and families.”

28 Responses

  1. @brentnyitray:

    Speaking of stimulus, the Biden Admin is trying to sell its $2.5 trillion infrastructure plan both to Republicans and the country at large. The sticking point will be the increase in corporate taxes to pay for the plan, and so far it looks like he isn’t even getting buy-in from his own party on that.

    I was wondering about this. A: Aren’t a non-trivial number of Democrats (and certainly activist groups) kind of beholden to the corporate behemoths out there, especially Big Tech? In one way or another? B: I know there are supposedly domestic chip fabs that would have to shut down with a tax hike, and I would expect there are a non-trivial amount of union jobs that would have to go away as well. Which I imagine isn’t popular with a lot of Democrats.

    I’ve got to think a great deal of that is posturing, with the hope of either (a) blaming Republicans for no corporate tax hike or (b) someone how structuring the tax hike to carve out their donors and supporters specifically.

    Stocks are higher this morning after Friday’s strong jobs report. Bonds and MBS are down small.

    Indeed they are. Any possibility–especially looking at the so-called “infrastructure” bill–that some folks are pumping cash into the market as a hedge against anticipated inflation? Might be revealing my ignorance here about how the world works, but it seems like if you have a lot of cash and you’re expecting the value of the cash to be pushed down by inflation, putting a lot of the cash in the market would be a reasonable way to hedge against a lower-value dollar.

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    • Historically, the dividend yield of the stock market has usually been well below the yield on Treasuries, but that isn’t the case any more. So I think that is part why money is going into the market.

      Also money is going into the market because stocks are going up.

      Liked by 1 person

      • Fair enough. What I take from that is probably there’s no serious hedging against inflation in converting cash-to-stocks, because either it wouldn’t really work or most people don’t think that far ahead. 😉

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    • It will be interesting to see how long Corporate America’s love affair with the left lasts.

      Liked by 1 person

      • I’m thinking it can last a long time if new corporate regulations are essentially written by the biggest players, punish primarily smaller corps (not on the Fortune 100, maybe) and provide carve-outs to the most politically active corps that insulate them from whatever draconian regulations/taxes the left is proposing.

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      • That’s why I say the Republicans get to the left on all the tax schemes, whatever’s proposed up the rate by 25-50%. Let corporate America and the wealthy embrace their elected officials. It’s an excellent Populist approach with no downside. Make Democrats defend not taking 50% of all assists for those worth more than, say, $25 million. Also, propose tripling the corporate tax rates and let D’s play the supply side game.

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        • I don’t have a problem with that but I don’t think most of the GOP in congress and certainly not the senate are going to go that route. They are largely united with the Dems on the importance of corporate supremacy.

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        • what can he do? nothing.

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        • What would he do if he could? Nothing.

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        • Good!

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        • Good!

          The funniest thing was the replies from liberals hoping that the GOP would now get onboard with gun control.

          Wishful thinking

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        • Whenever I’ve seen articles about minority gun ownership righties tend to say “good” and celebrate the occurrence. I’m sure that’s racist though.

          Liked by 1 person

        • The funniest thing was the replies from liberals hoping that the GOP would now get onboard with gun control.

          Wishful thinking

          It’s not wishful thinking, it’s a sincere belief based in their utter misunderstanding of the people and groups they so routinely malign, but no nothing about because they live in such an insular bubble.

          The reality is that, yes, in the 1960s and early 1970s, white men and women who would now be in their 90s or 100s or 110s got worried about black activists carrying guns in public and agitated for more gun control.

          It is 2021. The number of pro-gun people who would think this is a bad thing is a statistical zero. It’s amazing that supposedly intelligent people don’t know this, and in fact, have no clue about it, but they live in a constant state of religious hysteria where they see demons and aura and portents and hear voices and elevate themselves through the signalling of their virtue.

          I love The Hill’s picture of the militant black activists to go with their story of black gun ownership growing. The vast majority of blacks buying guns aren’t part of a para-military organization, or LARPers or whatever, they are regular people buying guns, primarily for self-protection.

          And I notice that every non-lefty replying on there are saying: great! And replying to the people going “now Republicans will want gun control” saying, “Nope. Not even a little.”

          I understand having political biases consistent with your ideology, everybody does to some extent, but that’s just living in a state of willful ignorance completely detached from reality because your completely imaginary opposition makes you feel better about yourself. For reasons.

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        • And back to The Hill’s choice of a picture of black militants/LARPers with their “black gun ownership” story intended to scare conservative white people into wanting more gun control: there is indeed still institutional racism and systemic racism in this world, and I see it primarily in leftist institutions and left-leaning publications and people.

          In regards to minorities, to be clear. I understand in the current nomenclature there is nothing racist about singling out white people for hate, or hating white people because they are white. But it’s hard not to see so much of what the primarily white progressive left says and does regarding minorities as not being driven by a barely sublimated racism. IMO.

          Maybe it’s not. But I sure get that impression.

          But also back to the actual right wingers responding to tweets about how “nope, we’re glad more black people are arming themselves, and we still don’t want any more gun control”. All the actual right wingers (those few left) on Twitter are correcting them and they still don’t accept what they are being told.

          Lord.

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        • Literally. Every Republican and conservative is saying: “This is great. More gun ownership! Yay!”

          And the lefties are saying, “No, racism is raging as much as ever, white men will now want gun laws when they learn this.”

          It’s bizarre. Also, can’t find any of these (again, almost entirely white) progressive lefties bemoaning this rise in gun ownership. They are entirely focused on their imaginary belief that white conservatives are going to recoil in horror to find out the black people are buying guns.

          The level of out-of-touchness is gigantic. It’s out of control.

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  2. @brentnyitray:

    “There is no time to waste, and no excuse for inaction. No one should be surprised by what is coming,” said CFPB Acting Director Dave Uejio. “Our first priority is ensuring struggling families get the assistance they need. Servicers who put struggling families first have nothing to fear from our oversight, but we will hold accountable those who cause harm to homeowners and families.”

    What exactly is the CFPB proposing they do here? “Voluntarily” extend moratoriums? It doesn’t sound like they’re asking them to get their ducks in a row for quick and speed foreclosures.

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    • I suspect the message is “don’t try and skip any steps in the foreclosure process, and try to do a loan modification first.”

      Liked by 1 person

  3. A great article by Taibbi, again:

    https://taibbi.substack.com/p/is-traditional-liberalism-vanishing?token=eyJ1c2VyX2lkIjo4NTc0NzI2LCJwb3N0X2lkIjozNDY2MjY2OSwiXyI6ImlqVWlBIiwiaWF0IjoxNjE3NjQxNTY2LCJleHAiOjE2MTc2NDUxNjYsImlzcyI6InB1Yi0xMDQyIiwic3ViIjoicG9zdC1yZWFjdGlvbiJ9.vVr7MESKGuexvP4qa-ad4OYonm4_9MpIUrCQrOx6aL4

    When I followed the link, Safari on the Mac warned me that I was clicking a link to a “Malicious” website. But maybe it was some new response to the user key that’s part of the URL? Anyway, first time I’ve seen that, and I found it odd.

    Although I still don’t think he understand the right wing. or conservatives generally:

    Therefore, the only way to guarantee society’s safety is to empower the right people to take matters into their own hands, a blunt right-wing message that would later be tweaked for blue-leaning audiences.

    These are not right-wing messages and certainly not conservative messages. Typical narrative tropes for a show that wants an audience, yes, but not a platform of the right. Then or now.

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  4. Always assume the media is lying unless proven otherwise:

    https://reason.com/2021/04/05/60-minutes-ron-desantis-vaccines-florida-publix-sharyn-alfonsi/

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    • Always assume the media is lying, and if it is somehow proven that it’s not lying, then double-check that proof as the logical conclusion is that there’s probably something wrong with it and needs to be verified.

      I’ve always thought the media was biased but considered that more either “by omission”, coverage choices, who they let have the last word, use of talking points, etc.

      At this point it feels to me the media is both unfamiliar with any details or history or undergirding principles/mechanisms of literally any topic it provides coverage on, and is wholly bought into the notion that objective truth doesn’t exist and so feel entirely right reporting entirely from a concept of subjective moral truth. Which is, from an informational standpoint, entirely worthless.

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      • The media is the left. Always assume bad faith when dealing with the left. That one simple rule has never let me down.

        Liked by 1 person

        • Well, 20 years ago I assumed inaccuracy and bias from the media (and incompetence, and structural problems in journalism as a concept, generally) but not bad faith.

          I may have been naive but it’s impossible for a rational actor, IMO, to assume anything but bad faith from the mainstream media in the present era.

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    • Related:

      https://greenwald.substack.com/p/journalists-attack-the-powerless

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  5. The Court says legal stuff about Big Tech censorship and sections 230:

    Click to access 040521zor_3204.pdf

    A couple of observations:

    Google search—at 90% of the market share—is valuable relative to other search engines because more people use it, creating data that Google’s algorithm uses to refine and improve search results.

    It has been at least a decade since Google has done anything to refine and improve search results. In the past year or two, they’ve been actively making here search results worse by excluding the most relevant results for many political searches due to wrongthink. That does not improve search results.

    This is, I expect, Thomas teeing up the shot:

    It changes nothing that these platforms are not the solemeans for distributing speech or information. A person always could choose to avoid the toll bridge or train and instead swim the Charles River or hike the Oregon Trail. But in assessing whether a company exercises substantial market power, what matters is whether the alternatives are comparable. For many of today’s digital platforms, nothing is.

    We’ll see if anybody takes it.

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  6. Speaking of the CFPB

    New proposal would ban most foreclosures until 2022.

    https://www.bloomberg.com/news/articles/2021-04-05/mortgage-firms-face-foreclosure-ban-until-2022-under-cfpb-plan

    Like

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