MMCC: CFPB adds new leadership; Millions of prevented foreclosures
Drastic climate changes impact housing
Monday Morning Cup of Coffee takes a look at stories across the HousingWire newsdesk, with more coverage to come on bigger issues.
Five years past the financial crisis and families are still battling with the aftermath, but according to a new study in the New York Times, some families were fortunate enough to avoid the foreclosure pipeline due to emergency extensions of unemployment benefits.
Researchers from the Federal Reserve Board of Governors, in Washington, and the Kellogg School of Management, at Northwestern University, conducted the study and estimate that between July 2008 and December 2012, the $250 billion paid out in federal-funded unemployment benefits helped prevent an estimated 1.4 million foreclosures.
As a result, the article noted that it also saved $70 billion in social costs, including the cost of foreclosure transactions to the lender and borrower, property depreciation and declines in neighboring property values.
“That’s a meaningful amount you’re getting back in social benefits,” said Brian Melzer, an assistant professor of finance at Northwestern and a co-author of the study.
The Consumer Financial Protection Bureau is reported to have a new member joining its team, according to an article in The Wall Street Journal.
Patricia McClung is expected to join the bureau next month as assistant director of mortgage markets, replacing Peter Carroll.
McClung will be responsible for leading the agency's efforts in monitoring the rules' impact on the market for home loans.
However, this comes during a time the housing watchdog is under a lot of fire for the way it treats its employees.
Back in June, two CFPB employees – current bank examiner in the enforcement and fair lending division Ali Naraghi, and former quality monitor in the office of consumer response, Kevin Williams – were subpoenaed to testify before Congress about a “culture of intimidation and retaliation” at the agency.
While the majority of the housing market continues a slow trudge forward, the sale of high-end homes is surging.
According to an article in CNBC, whether fueled by foreign buyers or cash-heavy, investment-hungry Americans, multimillion-dollar homes are seeing the biggest annual sales jump of any other housing segment.
Although homes priced above $1 million represented just 2.5% of overall sales in July, according to NAR, their volume jumped 8.5% from a year ago.
Meanwhile, sales of the lowest-end homes fell by just as much.
To help put it in perspective, existing homes sales grew to 420,000 in June from 409,200 in May, but is down from 430,000 for the same period a year prior, the latest data from the National Association of Realtors said.
Furthermore, new home sales climbed to 33,800 in June, down from 36,800 in May and 38,300 in June 2013, the U.S. Census Bureau and HUD posted.
Having an underwater mortgage is one thing, but due to drastic changes in climate, the term underwater mortgage might take on new meaning, an article in Bloomberg reported.
Climate reports tend to project dramatic changes over the next 50 years, and given that current life expectancy is hovering around 80, millennials will likely be around to see it. So where should they move to?
According to the article, people should strike the Deep South off the list, along with the Southwest, Arizona, New Mexico, California and Nevada by dint of temperature increase alone.
On the positive side, most of the coast is here to stay and the challenged areas are well known.
As a result, majority of the states left on the list are in the North but is this enough to drive Generation Y to move?
So far in August, the Federal Deposit Insurance Corp. has not closed a bank.