Trump signs directives on evictions, unemployment and payroll tax deferral

President Donald Trump signed an executive order and three memorandums in a ballroom of the Trump National Golf Club in Bedminster, New Jersey, on Saturday aimed at providing relief to Americans suffering from the economic fallout of the COVID-19 pandemic.

The single executive order was touted by Trump as an extension of the eviction moratorium in the CARES Act that expired in July, but it only directs various federal departments and agencies to “consider” and “review” ways to keep renters in homes using existing government programs.

One memorandum deferred through the end of the year, for employees making less than about $100,000 a year, the payroll taxes that are used to fund Social Security and Medicare – but it doesn’t cancel the taxes. Workers would have to make a lump-sum payment of the deferred tax to the government next year.

During his remarks prior to signing the documents, Trump said there was one way to make sure employees didn’t have to pay it back.

“If I’m victorious on November 3rd, I plan to forgive these taxes and make permanent cuts to the payroll tax,” Trump said, without saying how Social Security and Medicare would then be funded. “I’m going to make them all permanent.”

It’s not clear if employers would cooperate with the plan and pass on the tax deferral to workers because companies could be on the hook to pay the money if a staffer quits. As the president signed that memorandum, he expressed confidence there would be no need to pay it back because he was likely to be reelected.

“This is your deferral of payroll tax obligations, which we’re going to end up terminating eventually, right?” Trump said.

Another memorandum the president signed would provide a $400 a week extra payment for people receiving unemployment benefits, but it requires states cash-strapped by the pandemic to kick in a quarter of the payment. It also means state unemployment agencies would have to reprogram their systems, which could delay its implementation even if states agree to participate.

The money would come from a Federal Emergency Management Agency fund used to provide aid to Americans in disasters such as hurricanes, the memorandum said. The $600 a week payment that was part of the CARES Act expired at the end of July.

Another memorandum extended deferred payments on student loans until the end of the year. Under the CARES Act, the program would have ended in September.

Trump repeatedly referred to the four signed documents as “bills,” but only Congress can pass bills, which the president then decides whether to sign or not. According to the Constitution, only Congress can levy taxes and authorize spending. Because of the COVID-19 emergency, Trump has the power to delay, but not cancel, tax obligations.

Trump got pushback from both parties.

Sen. Ben Sasse (R-NE) called Trump’s directives “unconstitutional slop” in a statement. “President Obama did not have the power to unilaterally rewrite immigration law with DACA, and President Trump does not have the power to unilaterally rewrite the payroll tax law,” Sasse said.

Nancy Pelosi (D-CA), speaker of the House of Representatives, called the directives “absurdly unconstitutional.”

“Either the president doesn’t know what he is talking about – clearly his aides don’t know what he is talking about – or something is very wrong here,” Pelosi said in a CNN interview.

Trump acknowledged his action on Saturday to redirect funds was likely to spark lawsuits, similar to last year when he took funds authorized by Congress to upgrade miliary bases and ordered it to be spent on building a wall on the border with Mexico.

The wording of the executive order addressing evictions is as follows:

The Secretary of Health and Human Services and the Director of CDC shall consider whether any measures temporarily halting residential evictions of any tenants for failure to pay rent are reasonably necessary to prevent the further spread of COVID-19 from one State or possession into any other State or possession.

The Secretary of the Treasury and the Secretary of Housing and Urban Development shall identify any and all available Federal funds to provide temporary financial assistance to renters and homeowners who, as a result of the financial hardships caused by COVID-19, are struggling to meet their monthly rental or mortgage obligations.

The Secretary of Housing and Urban Development shall take action, as appropriate and consistent with applicable law, to promote the ability of renters and homeowners to avoid eviction or foreclosure resulting from financial hardships caused by COVID-19. Such action may include encouraging and providing assistance to public housing authorities, affordable housing owners, landlords, and recipients of Federal grant funds in minimizing evictions and foreclosures.

In consultation with the Secretary of the Treasury, the Director of FHFA shall review all existing authorities and resources that may be used to prevent evictions and foreclosures for renters and homeowners resulting from hardships caused by COVID-19.

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Source: HousingWire Magazine

HUD resumes inspections of public housing units amid COVID-19 pandemic

The Department of Housing and Urban Development said it was resuming in-person inspections of public housing units, though families concerned about the spread of COVID-19 can decline to have a HUD worker in their home.

The so-called REAC inspections, which stands for Real Estate Assessment Center, are aimed at ensuring HUD properties like rental housing for low-income families, the elderly, and persons with disabilities “meet federal standards of health, safety, and accessibility,” HUD said. REAC visits were paused in March when COVID-19 began spreading in the U.S.

The REAC program will prioritize inspections based on COVID-19 data from Johns Hopkins University and health risk scoring methodology from the Harvard Global Health Institute, HUD said in a statement.

In a “heat map” on the REAC website, states such as Florida, Texas, Arizona and Nevada are portrayed in red, meaning they and six other states have a “high” risk with 25 or more new cases per 100,000 people a day.

Vermont is the only U.S. state that the map shows as green, meaning the state has fewer than 1 new case a day per 100,000 people. States such as New York, New Jersey, Pennsylvania, Massachusetts, Michigan and Colorado are shown in yellow, meaning they are considered to have “moderate” risk with between 1 and 10 new cases a day per 100,000 people.

States including California, Virginia, Ohio, Kentucky, Washington and New Mexico are shown in orange, meaning the risk is “moderately high,” with between 10 and 25 new cases a day per 100,000 people.

“I believe we have found a solution to continue this important function while keeping staff, residents, and inspectors healthy,” said HUD Assistant Secretary for Public and Indian Housing Hunter Kurtz.

The Centers for Disease Control and Prevention has recommended that people refrain from having strangers inside their homes to prevent the spread of the virus. The World Health Organization and the CDC have said the virus can be transmitted through small particles that travel on a person’s breath, as well as through surface contamination.

HUD said the inspectors will use “strict safety protocols,” without specifying what that will entail. One of the challenges of the COVID-19 pandemic is the asymptomatic spread, meaning people who look and feel healthy may be spreading the virus.

Tenants concerned about the spread of the virus can refuse to have a HUD worker in their unit, a HUD spokesperson said in an email, responding to a HousingWire inquiry.

Families “can notify the public housing agency or the owner/agent that they do not want an inspector in their unit,” the spokesperson said. “We have alternate unit selections and this is part of our protocol.”

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Source: HousingWire Magazine

New York extends eviction moratorium again

New York Gov. Andrew Cuomo has extended the state’s eviction moratorium again, as many fear being kicked out of their homes after the federal eviction moratorium and unemployment benefits ended late last month.

In March, the State of New York Unified Court System put in place the first eviction moratorium, effective through June. In May, this was extended but expired on August 5. On Wednesday, it was extended through September 4.

Last week, the New York Department of Homes and Community Renewal extended the state’s rental relief program, allowing renters struggling financially due to COVID-19 to apply for assistance through August 6.

According to Eyewitness News ABC 7 in New York, Cuomo said there will be “no evictions as long as we are in the middle of the epidemic” as he signed a 30-day extension of the eviction moratorium amid the coronavirus pandemic. Cuomo also said he intends to extend the moratorium “until I say COVID is over.”

Meanwhile, New York Mayor Bill de Blasio also signed an emergency executive order on Wednesday, tweeting out that “NO New Yorker should lose their home because they lost their income. It’s a tough time for many families. The pandemic has hit this country HARD,” offering a resource for renters.

In June, protesters across New York called for eviction moratoriums to be extended, but the federal eviction moratorium and unemployment benefit expired in late July.

States like New York have taken action while the federal government debates what to do. The House of Representatives has proposed two different pieces of legislation that address unemployment and other benefits as COVID-19 spreads.

The HEROES Act contains $200 billion of additional funding to consumers, including assistance making mortgage and rent payments.

The HEALS Act doesn’t include an extension of eviction moratoriums and offers $3.2 billion for housing, which includes $2.2 billion for tenant-based rental assistance and $1 billion for a public housing operating fund.

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Source: HousingWire Magazine

Capital One fine is latest wake-up call for banks using the cloud

A year-old data breach, which earned the company an $80 million OCC penalty this week, continues to offer lessons to banks as they put more sensitive information in the hands of cloud vendors.
Source: American Banker

Rocket’s IPO makes Dan Gilbert the 28th richest person in the world

The initial public offering of Rocket Companies, parent of mortgage behemoth Quicken Loans, more than quadrupled the wealth of founder Dan Gilbert and made him the 28th richest person in the world, according to a Bloomberg ranking.

Thursday’s debut on the New York Stock Exchange, trading with the ticker RKT, boosted the net worth of 58-year-old Gilbert to $34.1 billion when the shares closed at $21.51. Quicken, the largest U.S. mortgage lender, originated about $145 billion of home loans last year, according to regulatory filings.

The boost from the Rocket IPO puts Gilbert’s wealth right behind Michael Dell, the founder and CEO of Dell Technologies, No. 27 in the Bloomberg ranking, and ahead of Colin Huang, at No. 29, the founder and chairman of Pinduoduo, a Chinese e-commerce company backed by Tencent. Huang retired at the age of 33.

It also puts Gilbert ahead of Chinese real estate tycoon Hui Ka Yan, at No. 30, and Laurene Powell Jobs, at No. 31, who inherited the fortune of her husband, Apple founder Steve Jobs, when he died in 2011. Abby Johnson, CEO of Fidelity Investments, is in the #36 spot.

In addition to being the chairman of Rocket, Gilbert is the majority owner of the Cleveland Cavaliers, a National Basketball Association franchise.

He also is chairman of Rock Ventures, which “has invested and committed billions to acquiring and developing more than 100 properties, including new construction of ground-up developments in downtown Detroit and Cleveland, totalling more than 18 million square feet in Detroit’s downtown urban core,” according to the IPO’s prospectus.

Gilbert graduated from Michigan State University with a bachelor’s degree and got a law degree from Wayne State University, according to the prospectus. He founded Quicken Loans in 1985, then named Rock Financial, and served as its CEO until 2002.

Gilbert sold Rock Financial in 1999 to Intuit, a software company that renamed it Quicken Loans. Gilbert bought the lender back three years later and kept the new name.

Gilbert is known as a supporter of President Donald Trump – at least, that’s how the president described him at a White House event – and Quicken donated $750,000 to Trump’s inauguration.

At a June 2017 gathering in the Roosevelt Room of the White House, Trump asked the crowd, “Where’s Dan Gilbert?” and called him up for a photo op.

“He’s a great friend of mine, a supporter, and a great guy,” Trump said of Gilbert.

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Source: HousingWire Magazine

Fannie Mae survey confirms: It’s a seller’s market

After two consecutive months of advances, Fannie Mae’s Home Purchase Sentiment Index, a composite index designed to track consumers’ housing-related attitudes, intentions and perceptions, fell 2.3 points in July to 74.2. Year over year, the HPSI is down 19.5 points but still sits above April’s near-record low.

According to the report, 53% of Americans now believe it is a good time to buy a home – an 8% decrease from June’s 61%. On the flip side, the percentage of people who believe it is a good time to sell increased 4% last month to 45% as July reports reflected a seller’s market.

“Supply constraints appear to be applying upward pressure to consumers’ home price expectations, which in turn has contributed to both a sharp reversal in optimism about whether it is a good time to buy a home and further improvement in home-selling sentiment,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.

Pent-up demand coupled with low inventory created the perfect storm for median home prices to reach record highs in July – and homebuyers took notice. The net share of Americans who said home prices will go up in the next 12 months continued to rise another 3% past June’s survey record increase. The net share of respondents who said those same prices will go down fell 4%.

Last week, Freddie Mac reported the average rate for a 30-year fixed mortgage was 2.88% – the lowest in the series history.  The number of HPSI respondents who said mortgage rates will go down in the next 12 months decreased slightly in July from 17% to 16%, while the number of people who expect mortgage rates to go up increased from 32% to 35%.

“Not surprisingly – more than any other respondent groups – renters, 18-to-34-year olds, and households earning less than $100,000 think it’s a bad time to buy a home, which we believe suggests a less favorable outlook for first-time homebuying activity,” Duncan said.

While  initial jobless claims sat at 1.2 million at the end of July according to the Labor Department, the percentage of respondents who say they are not concerned about losing their job in the next 12 months rose slightly to 76% from 74%. Those who are concerned fell to 23% from 26%.

Duncan said it’s important to note that the July survey was conducted as legislators considered the extension of several provisions in the CARES Act to support household incomes during the pandemic. In the coming months, Fannie Mae expects consumer sentiment to be closely linked to the country’s progress in containing the spread of the virus.

This time last year, 55% of respondents thought the economy was on the right track – today 34% believe that same sentiment.

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Source: HousingWire Magazine

Oversight panel questions value of Fed loan program for midsize firms

At its inaugural hearing, the committee appointed by lawmakers to oversee CARES Act implementation pressed for answers about why the Main Street Lending Program is off to such a slow start.
Source: American Banker

With 20% market share, independent mortgage brokers are competing directly with retail lenders

In today’s low-rate environment, wholesale mortgage lending continues to grow, making up more than 20% market share. Three independent wholesale brokers discuss how they found success in the wholesale channel during a HousingWire webinar on Thursday titled: “Taking the Mortgage Boom to the Next Level.”

Independent wholesale brokers on the webinar included Mike Kortas, CEO of NEXA Mortgage, Tacy Nichols, president of mortgage lending for Gapital Mortgage, and Christine Smallwood, director of operations at United Financial Group. Phil Shoemaker, president of originations at Home Point Financial, also spoke, while Clayton Collins, CEO of HousingWire, moderated the webinar.

Shoemaker predicted low rates will continue through 2021 but said that companies that are going to succeed after a shift to higher rates will be the ones that work on lower-cost platforms, have more flexibility from an execution standpoint, focus on purchase and have a willingness to build relationships with referral partners.

The brokers were in agreement that recruiting talent and maintaining strong partnerships will be key to not only brand development, but a lasting foundation that will continue post-pandemic.

“So really, it’s a team effort, the reason we got to where we’re at is because of the team involved behind it. Because as loan officers, they believe that there’s nothing better than a broker channel, and to them this is most important for their consumers,” said Kortas. “We then make sure we’re absolutely looking out strongly for the loan officers, they trust us that we’re constantly making it better in everything we’re doing.”

Nichols pointed out that after the 2008 financial crisis, wholesale lending began using technology that helped match pace with the processes of retail lenders. Learning to utilize that technology for a database that can be used to maintain constant contact with clients and retain business was crucial, Smallwood said.

“We’re not out building a retail person’s name. We get to build our name with the same great platform and the reality is, you’ve got the technology to really track that business and create a process to foster the relationship for four or five or six times over the person’s life. I mean we’re talking up to 30 years,” Nichols said.

While wholesale brokers lack the support of a physical location like retail, Kortas said virtual platforms help maintain reasonable costs and internal support staff help streamline processes. For Nichols, who runs a smaller setup, transparency, pre approvals and the flexibility of taking loans to other partners has helped create more opportunities for all involved.

When starting out in funding and warehouse lines, Smallwood said the process doesn’t happen overnight, but figuring out what you want for your partners is a huge step toward success – and being in wholesale means more control.

“There are tons of options out there. You can even draw your own docs and you could do your own certificate of deposits. That gives you a little bit more control. When we talk about things like this, it’s huge to me that we have just a little bit more control than a regular broker, being able to pull in, talk to people, and then weigh in because we are funding our own stuff,” Smallwood said.

According to the panel, growing market share doesn’t just come from building relationships with clients, but strengthening the brokerage community overall. Shoemaker said wholesalers will win or lose based on execution – the secret sauce isn’t so secret anymore.

Kortas said he actually trains his competition and his licensing team helps loan officers get licenses because that will make the environment stronger in the long run.

“One of the things I’ve really enjoyed the last few years is if you look at the wholesalers out there, the wholesale lending community and the people that are really focused on expanding market share and wholesale, it’s a very collaborative environment,” Shoemaker said. “The way I personally view it is: Look, there’s no harm in sharing information that makes everyone better.”

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Source: HousingWire Magazine

Google checking accounts, debt collection tech, PPP loan sell-off: Top stories of the week

Why banks want in on Google checking accounts; readying new tech tools to tackle anticipated rise in delinquencies; more institutions opt to sell PPP loans as heavy lifting nears; and more from this week’s most-read stories.
Source: American Banker

iBuyers: Did COVID-19 disrupt the disruptors?

Since the iBuying industry launched in 2014, billions of dollars have poured into companies created to disrupt the real estate industry and transform the way consumers buy and sell houses. These companies promise homeowners a hassle-free experience – one that’s simple, convenient and avoids the uncertainties often inherent in real estate transactions.

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Robyn A. Friedman
HW+ Columnist

But as COVID-19 put a damper on real estate markets throughout the nation, it also impacted iBuyers, which paused their purchasing operations to re-assess local housing market conditions and establish new safety protocols.

Now, iBuyers are back to purchasing homes again, albeit in fewer markets and at a slower pace than before, despite increased demand from homeowners anxious to sell but hesitant to allow strangers into their homes in the middle of a pandemic.           

The response to COVID-19     

Zillow Group, which launched its iBuying arm, Zillow Offers, in April 2018, was active in 24 markets prior to COVID-19. It paused its operations on March 23 due to housing market uncertainty and public health concerns.   

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Source: HousingWire Magazine