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The Business of Real Estate

Could the Court vacate 18 months of financial regulations? Should it?


I have commented here before that government policy was largely responsible for the subprime mortgage meltdown and its aftermath throughout the housing sector and the U.S. economy generally.

The saga continues:  I got a chuckle recently about a new federal regulation requiring mortgage lenders to confirm borrowers’ ability to repay their loans.  Seems pretty reasonable, huh?  That’s what lenders always did, and what underwriters still want to do, what they get paid for.  But when the mortgage industry was mandated to make mortgage loans more widely available, and when the secondary markets for mortgage loans began buying those more risky loans, the result was predictable.  All the reward with none of the risk?  Make the loan!

To compensate for past sins, the Dodd-Frank Act purported to create new-found sanity among lenders, and created the Consumer Financial Protection Board (CFPB) to create and enforce rules toward that end.  As it happens the director of the CFPB was a “recess appointment” simultaneous with those at the National Labor Relations Board that recently lost their own test in court.

Against that backdrop, foreclosure specialist RealtyTrac published this viewpoint yesterday:

Are we about to see a massive setback in the housing sector?

It’s an interesting question.  I don’t know anybody in the mortgage business with praise for Dodd-Frank or the CFPB.  They have processed and implemented hundreds of “significant” new rules, and more were just approved.  But it is true that markets abhor uncertainty.  What if the result of all that time and effort and change is a court-ordered “Never mind!“?

I won’t attempt to answer that for now.  An ancient proverb comes to mind, though:   “May you live in interesting times.”

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About Bill Morris, Realtor

More than thirty years of business experience (high tech, client service, business organization and start-up, including many years in real estate) tell me that service is the key to success and I look forward to serving you. I represent both buyers and sellers throughout the Austin metropolitan area, which means first-hand market knowledge is brought to bear on serving your needs: -- Seller Representation is a comprehensive process that begins with thorough market analysis and consultation, continues with properly staging the home to achieve the highest price possible in a reasonable time on market, a complete program of marketing and promotion, ongoing updates and communication, closing coordination, and follow-up throughout (and after) the sale. -- Buyer Representation is also full service: shopping, previewing, price and market consultation, contracting, negotiating, coordination of inspections, appraisals, repairs, and closing details, and follow-up beyond the closing of your purchase to ensure your lasting satisfaction. Because the real estate industry is becoming more sophisticated and challenging every day, you need a professional that understands the industry and is positioned to stay ahead of the game. I go the extra mile to help you achieve your goals. That's why I constantly research the market and property values so your home is priced effectively from day one. I also make sure the public knows your home is for sale by using innovative advertising and marketing techniques to attract potential buyers.

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