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Opinion, commentary, and analysis on everything that makes the U.S. housing economy tick -- not to mention the ghosts in the machine, too. Written by HW's team of editors and reporters each business day.
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Monday Morning Cup of Coffee: Representative continues attack on CFPB in local op-ed

Plus, who is the man behind reforming Fannie Mae and Freddie Mac?

April 10, 2017

Monday Morning Cup of Coffee takes a look at news coming across HousingWire’s weekend desk, with more coverage to come on larger issues.

Rep. Ann Wagner, R-Mo., doubled down in her battle to unseat Consumer Financial Protection Bureau Director Richard Cordray and overhaul the bureau in a guest commentary for her local publication, the St. Louis Business Journal.

Just last week, Wagner grilled Cordray on the bureau’s lack of initiative in the massive Wells Fargo fake account scandal.

Wagner argued that the CFPB touts its “independent and comprehensive” review in the Wells Fargo case, and yet they only interviewed three people.

“This does not seem very comprehensive to me sir,” said Wagner at the time. “The CFPB was asleep at the wheel. Your investigation was far from independent and comprehensive.”

Wagner's new commentary gave a broader overview of her thoughts on the CFPB, and what she calls a complete lack of accountability at the expense of American taxpayers.

And Wagner is not pulling her punches.

From the commentary:

Unelected bureaucrats at the CFPB have spent years removing choices and making access to financial products more difficult for you, all under the well-messaged guise of consumer protection. Since the CFPB’s creation, we have seen egregious regulations put in place that make it harder for you to qualify for a mortgage, obtain an auto loan and access other forms of credit that families depend on every day.

Additionally, the CFPB has continually shunned due process in bringing enforcement cases against businesses. And if the unconstitutional and unaccountable shortcomings weren’t bad enough, racial, gender and age discrimination run rampant within the bureau, as well as the more than $200 million wasted on the CFPB’s lavish headquarters at taxpayer expense.

Ouch.

Wagner pointed to the Financial CHOICE Act as the best remedy for the CFPB, noting that the “act does not eliminate the CFPB, but instead empowers it to be more accountable and focused on actually protecting consumers.”

House Financial Services Committee Chairman Rep. Jeb Hensarling, R-Texas, spearheaded the Financial CHOICE Act and is supposedly working on an even more aggressive version of the Act. Wagner also sits on the House Financial Services Committee.

People are familiar with Steven Mnuchin, secretary of the Department of the Treasury, but what about Craig S. Phillips?

An article in The New York Times by Gretchen Morgenson stated that people are probably not familiar with Phillips because he was not a political appointee. However, as special counselor to Mnuchin, he is in charge of directing the nation’s housing policy.

But like Mnuchin, who received a lot of backlash for his involvement in the financial crisis, the article questioned Phillips’ background, giving a detailed description and timeline of his past.

From the article:   

Mr. Phillips certainly knows a thing or two about Fannie and Freddie. As the leader of Morgan Stanley’s mortgage desk during the peak mortgage-mania years of 2004 and 2005, he ran the operation that bundled loans and sold them to the two government-sponsored enterprises. When those loans blew up and the government sued Morgan Stanley, Mr. Phillips was a named defendant in the initial case — a case that resulted in the firm paying a $1.25 billion settlement.

While the article said Phillips wasn’t willing to chat, it did state that Phillips has been “conducting meetings with people including officials from the Mortgage Bankers Association and think tanks, as well as low- and middle-income housing advocates who want to ensure that Fannie and Freddie remain available as a source of mortgage funding.”

Moving away from politics, as baseball season gets rolling, Guaranteed Rate founder and CEO Victor Ciardelli sat down with Hinsdale Magazine to give the story behind Guaranteed Rate Field, the lender’s new stadium sponsorship deal with the Chicago White Sox.

Back in August 2016, the White Sox and Guaranteed Rate announced that the Chicago-based mortgage lender was buying the White Sox stadium’s naming rights for at least the next 13 years.

Here’s how Ciardelli described the partnership.

“The White Sox actually approached us,” he said. “Brooks Boyer, the White Sox chief marketing officer, said they would be interested in a partnership–and we immediately thought it was a perfect fit. They wanted a local company that had a great reputation in the marketplace, had customer engagement, and would be able to bring some energy to the park.’’

And so far, it’s paying off for Guaranteed Rate, with the company receiving enhanced brand recognition, increased web traffic and boosted employment applications.

Interesting enough, Ciardelli also stated:

“The White Sox did ask us to modify our logo to make it look more like home plate, but we wanted to be true to our company brand,” he said. “The red arrow is our identity, and so we wanted it to stay.’’

Ciardelli stood by his commitment to his company’ s brand, and signed the Chicago-based mortgage lender to a 13-year naming rights agreement. The 50-year-old entrepreneur told Hinsdale Magazine that White Sox fans are smart baseball fans that understand the game, and know baseball is won and lost on the field, regardless of whom the stadium sponsor is.

The topic of “housing inventory” shows up in countless housing articles since it’s the main roadblock holding the market back.

But to even begin to get housing inventory up, the market needs to have construction workers to build houses. As it stands, there is a major labor shortage in the home building industry.

So how does the industry start to fix this labor shortage? Well, future college students aren’t a bad place to start.  

Given the current need for more workers in the industry, the National Association of Home Builders keeps track of industry scholarships available for students interested in pursuing a career in residential construction.

In its latest post, it highlighted the American Council for Construction Education’s annual scholarships, which focus on supporting students interested in pursuing teaching opportunities in the field.

Here are some details on the scholarship:

The Dupree Construction Education Fund Scholarship provides up to $5,000 a year to help with expenses for a candidate for an advanced degree in construction management who desires a career as faculty in an ACCE-accredited construction management program. Applicants must have been accepted in an advanced degree program in construction management at an institution with an ACCE-accredited undergraduate program.

If you know anyone who might want to go into residential construction, point them this way. It will take time to rebuild America’s inventory, but this is a place to start.

Finally, as heads up as you start the week, it’s time for progress reports on the industry again as earnings season starts on Thursday. Check back later this week to see how the big banks like Wells Fargo and JPMorgan performed, which tend to set the pace for the rest of the industry.

Until then, enjoy the start to your week!

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