Rising rates take toll on US housing recovery
A recent drop in single-family home sales dampens housing
Monday Morning Cup of Coffee takes a look at news crossing HousingWire's weekend desk with more coverage to come on bigger issues.
Is HUD’s Section 8 housing program about to go on steroids? That’s the question a writer for the Baltimore Sun alluded to over the weekend while outlining the Obama administration’s planned attempt to use the Department of Housing and Urban Development to "track diversity in American neighborhoods” and back policies to change any areas that look discriminatory from a data standpoint.
The editorial claims a discrimination database could be implemented allowing officials to "seek changes in (local) zoning ordinances, housing finance, infrastructure policy and transportation in order to remedy the alleged segregation," the publication said.
It seems interest rate shocks may have finally taken a toll on the U.S. housing recovery. After a busy week on Wall Street, a new government report showed a 12.4% drop in seasonally adjusted new single-family home sales. The decline prompted market analysts to assume potential homebuyers are beginning to feel the pinch of rising interest rates, the Motley Fool noted. Rates have been edging higher ever since the Fed began teasing the markets with the idea that a curtailment of QE3, or massive Treasury and MBS purchases, could come as early as September.
New York City and the entire state of New York may have lost as much as $100 million in damages stemming from mortgage document fraud, the New York Post claims. The paper reported on an unsealed lawsuit filed by a whistleblower over the weekend. The whistleblower claims dozens of banks and servicers violated the False Claims Act when dealing in mortgage-backed securities during the years 2004 and 2007. The suit has already been partly settled, but the Post says attorneys are still trying to figure out which mortgage-backed securities were purchased in New York to continue on with another critical part of the claim.
A group of students who paid thousands of dollars to learn the art of real estate investing from Donald Trump want a refund, Reuters reports. And it seems New York Attorney General Eric Schneiderman is happy to oblige. The AG filed suit against Trump this past week, claiming Trump University, otherwise referred to as the Trump Entrepreneur Initiative, swindled students out of $40 million by offering courses in real estate investment that were costly and fell short of providing the type of education needed to enter the market as an effective investor.
The housing market has another week of key reports ahead of it, with the S&P/Case-Shiller Home Price Index scheduled for release Tuesday, followed by the Pending Home Sales Index on Wednesday. Visit HW's US Economic Calendar to track these reports and more.
Financial regulators in Arizona and the FDIC shut down Sunrise Bank of Arizona on Friday, Aug. 23, with all deposits transferred to First Fidelity Bank National Association. The former Sunrise branches will reopen as part of First Fidelity Bank.
The FDIC also announced the closing of Community South Bank in Parsons, Tenn., moving all brokered and account deposits to CB&S Bank Inc. in Russellville, Ala.