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Home appraisal’s ugly history and uncertain future

This is Part I of a deep dive into the home appraisal industry. Today we explore the origins of the appraisal industry and its current lack of diversity.

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Politics & MoneyInvestmentsMortgage

Would Janet Yellen want to serve another term as Fed chair?

Yellen's future is a hot topic during annual Fed retreat

Speculation about whether or not Janet Yellen will serve another term as Federal Reserve chair has been swirling around for months.

And with the central bank’s annual retreat this week at Grand Teton National Park, an article in The Wall Street Journal by Nick Timiraos explains that while Yellen's future isn't on the official agenda, it will likely dominate conversations at the conference.

Yellen’s term as Federal Reserve chair is currently set to expire in January 2018, and she has said on multiple occasions that she intends to fulfill her term.

But it’s uncertain whether or not her time as Fed chair could extend beyond that.

When President Donald Trump was campaigning, he said that he planned to fire Yellen early on in his presidency. But, his comments as of late counter that.

In a previous interview with the Wall Street Journal, Trump said that keeping Yellen as Fed chair is certainly a possibility, but added that Gary Cohn, who currently serves as the White House National Economic Council Director, is also a possibility to lead the Fed.

The statement also echoes his comments from April, when he said that he may keep Yellen as Fed chair due to his preference for “low-interest rate policy.”

The latest WSJ article debates if Yellen would accept the nomination if asked by Trump. From the article:

People who know Ms. Yellen say even if she were ready to retire when her term as chairwoman ends, her long record of public service suggests she could be persuaded to stay. Given the additional turnover coming among top Fed officials, “it would be a leadership challenge like she’d never had before, but my own instinct—whether she wanted to do it or not—is she would,” said Christina Romer, a friend of Ms. Yellen’s and economics professor at the University of California, Berkeley.

The economy has given Trump added incentive to keep Yellen, the article stated:

In recent weeks, Mr. Trump has boasted about a range of economic benchmarks, which helps explain why he would seriously consider asking Ms. Yellen to stay on. Stocks have hit new highs this summer despite the risk of less Fed-induced stimulus. The U.S. economy is growing slowly but steadily, and job growth has pushed the unemployment rate down to 4.3%

Meanwhile, in her speech at the event, she did include brief comments on the state of the mortgage industry.

In the speech, titled, “Financial Stability a Decade after the Onset of the Crisis,” Yellen discusses how far the economy has come over the last decade.

From the speech:

In retrospect, mortgage borrowing was clearly too easy for some households in the mid-2000s, resulting in debt burdens that were unsustainable and ultimately damaging to the financial system. Currently, many factors are likely affecting mortgage lending, including changes in market perceptions of the risk associated with mortgage lending; changes in practices at the government-sponsored enterprises and the Federal Housing Administration; changes in technology that may be contributing to entry by nonbank lenders; changes in consumer protection regulations; and, perhaps to a limited degree, changes in capital and liquidity regulations within the banking sector. These issues are complex and interact with a broader set of challenges related to the domestic housing finance system.

The comments serve as a quick status update on the state of the mortgage industry and feed into a larger call to action.

Yellen concluded her speech saying:

We can never be sure that new crises will not occur, but if we keep this lesson fresh in our memories–along with the painful cost that was exacted by the recent crisis–and act accordingly, we have reason to hope that the financial system and economy will experience fewer crises and recover from any future crisis more quickly, sparing households and businesses some of the pain they endured during the crisis that struck a decade ago.

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