Industry Update: the Future of eClosing and RON

Join industry experts for an in-depth discussion on the future of eClosing and how hybrid and RON closings benefit lenders and borrowers.

DOJ v. NAR and the ethics of real estate commissions

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Road to the one-click mortgage

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Politics & Money

Why Bernie’s plans to pay for mega-policies don’t matter

It’s the executive orders that will count, says Beacon Policy Advisors

It wasn’t a good moment for Sen. Bernie Sanders (I-VT), the frontrunner in the Democratic race to take on President Donald Trump. 

Pressed by Anderson Cooper on 60 Minutes Sunday night about how he would pay for Medicare for all, “housing for all,” canceling student loans, expanding Social Security, plus the Green New Deal and universal childcare, Sanders gave a vague response that ignited fury on the left and the right.

“I can’t rattle off to you every nickel and every dime,” said the senator, who says he’s a Democratic Socialist and does not identify as a member of the Democratic Party – though he often votes with Democrats in the Senate. “We have options out there that will pay for it.”

After the backlash – which came four months after Sen. Elizabeth Warren (D-MA) was forced to nerd out on income specifics for similar proposals – Sanders on Monday night released an outline on his website showing how he would pay for the biggest pieces. Sanders put the federal tab for the costs of the major components at well over $40 trillion. 

Sanders said those funds would come from a tax on Wall Street stock trades, raising taxes on corporations and families earning over $250,000 a year, eliminating federal fossil fuel subsidies, and adding a special “wealth tax” on people who have a net worth of more than $32 million.

Reacting to the Sanders statement on revenue sourcing, Beacon Policy Advisors, a Washington policy research firm, had some interesting advice on Wednesday: Ignore it. 

“We urge investors to largely ignore any impulse to analyze how [Bernie’s policies] would be paid for since most require legislation from Congress (and a Democratic takeover of the Senate), as well as a large enough majority to weather likely Democratic defections in the face of inevitable universal Republican opposition,” the firm wrote in a note to clients. 

In other words, a Sanders administration would never get the legislation through Congress.

Instead, look for executive orders coming out of a Sanders White House, Beacon Policy said.

“If Sanders were to win the White House and see his key campaign promise stymied, we expect that he will want to preserve his political capital for other controversial actions, including the Green New Deal,” the note said. “We predict that he would start his first 100 days with a series of `shock and awe’ executive actions that would tangibly improve certain aspects of healthcare.”

The Beacon Policy specifics focused on healthcare policies, saying Sanders likely would shore up Obamacare through executive actions and using existing laws to force drug companies to lower prices – such as the 1980 Bayh-Dole Act that allows the government to end patents and force the issuance of generics if drugs are not being sold on “reasonable terms.”

While Beacon didn’t analyze the housing sector, the clues about potential executive actions are in Sanders’ “Housing for All” plan. They could include: 

  • Creating an independent National Fair Housing Agency similar to the Consumer Financial Protection Bureau. It would be “dedicated to protecting renters from housing discrimination, investigating landlords who misuse Section 8 vouchers, and enforce housing standards for renters,” according to the Sanders housing plan. It would also conduct audits of landlords and home sales to make sure anti-discrimination laws are followed.
  • Creating an office within the Department of Housing and Urban Development “to coordinate and work with states and municipalities to strengthen rent control and tenant protections, implement fair and inclusive zoning ordinances, streamline review processes and direct funding where these changes are made.”
  • Using federal regulatory power to prevent exclusionary zoning for luxury developments.
  • Requiring recipients of federal funding from the Department of Transportation and HUD to end restrictive zoning ordinances and replace them “with zoning that encourages racial, economic, and disability integration that makes housing more affordable.”
  • Prioritizing 25,000 National Affordable Housing Trust Fund units in the first year to house the homeless.

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