Monday Morning Cup of Coffee: Government freeze close to reality; Housing nears a bubble
Monday Morning Cup of Coffee takes a look at stories across the HousingWire news desk, with more coverage to come on bigger issues.
The U.S. House of Representatives brought the federal government closer to a shutdown, as it voted to delay President Obama’s landmark healthcare law for a year as part of an emergency spending bill, Reuters reports.
In preparation for a potential government shutdown, many housing agencies, including the Federal Housing Administration and Department of Housing and Urban Development, have put into place strategic goals to combat a government shutdown.
To put it into perspective, a government shutdown will mean FHA-insured loans will cease production and only 350 HUD employees will be able to continue working.
Home prices are rising rapidly — so much so that industry participants are warning that housing is entering another national bubble, according to the New York Times.
While the market is not in a bubble quite yet, there are troubling signs that housing is heading down that path.
Many homeowners anticipate housing prices will increase 5.7% next year, a dramatic hike when compared to the 4% expectation for 2013, Yale professor Robert Shiller explained.
"People who are now inclined to buy a home are most often just thinking that we are gradually recovering from a recession and that this is a good time to buy," Shiller wrote in the article.
He concluded, "The mental framing still seems to be about economic recovery and the likelihood that interest rates will rise. People mostly don’t seem to be prompted by the anticipation of another housing boom."
Mega bank JPMorgan Chase (JPM) could reach a multibillion deal that settles claims of mortgage-related investigations as early as Tuesday, the New York Post reported this week.
The banking giant is expecting to cut a deal to settle the bulk of claims related to the sale of mortgage-backed securities leading up to the housing meltdown for $11 billion.
JPMorgan CEO Jamie Dimon has been in talks with U.S. Attorney General Eric Holder to try and hash out a settlement with various parties, including the Department of Justice and the Federal Housing Finance Agency.
As Colorado attempts to shake off the lingering effects of a recent flood, many are weary distressed borrowers will have a hard time establishing their old lives again, the Denver Post writes.
There are concerns over whether communities will be affordable for low-income residents who lost properties in the floods. Affordable housing is already scarce in some Colorado communities.
Currently, Colorado has not issued any official plan to assist those displaced by the flooding.
The Federal Deposit Insurance Corp. did not close any banks during the week ending Sept. 27.