Morning Report: CRA regs for non-banks

Vital Statistics:

  Last Change
S&P futures 4,425 3.2
Oil (WTI) 66.24 0.65
10 year government bond yield   1.28%
30 year fixed rate mortgage   2.96%

Stocks are flattish this morning on no real news. Bonds and MBS are up small.


The upcoming week is relatively data-light however we will get some inflation data with the Consumer Price Index and the Producer Price Index. We will also get productivity data as well as plenty of Fed-speak.


Some good commentary from various home builders. It looks like the torrid price growth has eased. While shortages are still an issue, lumber prices have come back to earth.


The MBA is urging New York Governor Andrew Cuomo to veto a bill that would require independent mortgage bankers to follow Community Reinvestment Act guidelines. The MBA called the bill “unnecessary,” and said it “fails to consider the existing legal infrastructure and significant industry efforts that have greatly expanded mortgage lending to low- and moderate-income (LMI) borrowers in New York.” There definitely seems to be a push to institute banking-like regulations on independent mortgage bankers – witness GNMA’s proposals for capital requirements on non-bank servicers.


Rising house prices have an outsized effect on the inflation numbers. The concept is owners equivalent rent, which attempts to come up with a number if a homeowner rented his house out. So far, we haven’t seen much in the way of increased rents during the pandemic, as foreclosure moratoriums have made raising rent difficult. Owner’s equivalent rent has been running at around 3.5% annually, despite double-digit increases in house prices.

13 Responses

  1. Norwegian Cruise Lines wins prelim injunction against Florida after the TRO was overturned on procedural grounds.

    Another interlocutory appeal will follow, as full trial on the merits is a long way off, a very long way off if the Courthouse is closed for COVID.


    • Mark what’s up with this? I thought that the legislature or the governor could order the arrest of fleeing lawmakers to ensure a quorum.

      “Texas judge blocks arrest of Democratic legislators who fled the state to stop voting restrictions”


      • TRO maintains status quo for 14 days, or until Temporary Injunction hearing, whichever is first. TI hearing should reverse or thoroughly narrow this TRO. There is the possibility that Texas will file an interlocutory appeal of the TRO, of course. Remember that a TRO is a one sided deal granted on sworn pleadings of one party. A TI comes after a true hearing.

        There would be limitations imposed on Abbott, I think, after a hearing or even an interlocutory appeal, because the Texas Bill of Rights would not permit any sort of indefinite detention of any person without a trial. Still, sequestering in the House chamber for a vote – through this one vote – seems to me to be the likely result, and an agreed return of the absent legislators is the likely immediate outcome, with no showy arrests and perp walks. Walk into the Capitol, filibuster, lose, and leave.

        Which is what should have happened, really, to begin with.

        But if the D legislators do not obey such a ruling, then they would be in contempt, and I suspect arrested and accompanied and walked into the sequestration for the vote.

        Maybe I am missing something, but while the Courts might clarify the limits of the sequestration power under the Texas Constitution and its BoR they certainly won’t set it aside, because that would overstep separation of powers.

        Note that the Texas Supreme Court has refused the D legislators petition to get paid while they don’t show up.


        • “ Note that the Texas Supreme Court has refused the D legislators petition to get paid while they don’t show up”

          Politicians are something else. They got a lotta nerve.


        • Mark:

          they certainly won’t set it aside, because that would overstep separation of powers.

          And courts never do that!


        • “Politicians are something else. They got a lotta nerve.”

          My approach would be to set a certain time period where if the office holder doesn’t show up for a vote or quorum call, and there’s not any kind of health disability (or maybe that’s not even relevant) then the position that they are representing is declared vacant and a new election is held.


  2. This sounds like another too cute by half move for the Democrats that will blow up in their faces:

    “Newsom urges Democrats to skip recall candidate question
    By JEREMY B. WHITE 08/09/2021 03:42 PM EDT

    BERKELEY — California Gov. Gavin Newsom said Monday that Democrats should not vote for any of the 46 candidates vying to replace him in the upcoming recall election.

    Recall ballots contain two parts: an up-or-down vote on whether to retain Newsom and an open-ended question of who should replace him. Newsom said he was focused on prevailing on the first part and discouraged his base from taking sides on the second.

    “We’re just focusing on ‘no’ on the recall, leaving the rest blank,” Newsom said.

    Newsom’s admonition highlights the strategic gamble his campaign took in dissuading other prominent Democrats from running. Some Democratic officials and campaign operatives believed it was in Newsom’s interest to have a fallback Democrat on the ballot in case Newsom is ousted. But Newsom’s team emphasized party unity and warned that another Democratic candidate could help the recall succeed by fracturing the liberal electorate.

    As a result, recall ballots will list several prominent Republican candidates but no Democrats with political experience. If Democratic voters leave that second question blank, they could effectively be ceding the question of Newsom’s successor to Republican voters and other recall supporters.

    That creates the possibility that a Republican becomes governor with a small plurality of the vote. Conservative talk show host Larry Elder has leapfrogged into the lead among Republicans but has topped out around 20 percent.”


  3. FYI Mark, one of the pay fors in the infrastructure bill that just passed the Senate is to end the Employee Retention Credit provision of the original CARES act.


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