Housing markets across the nation and even in strong economies are plateauing.While the jury is out on much of the reasoning, the data points towards the lack of incomes keeping up with ballooning prices as well as borrowing costs. And if you really look at the data, many markets are looking like Miami towards the beginning of the 2008 crisis. The only difference is that the risky lending and overleveraging is not present. That should seriously concern people. Notable, though, Dallas and Denver, the two cities whom suffered dramatically in the Crisis, are now more exposed to risk than ever before. Building upon that, the inordinate speculation upon the gravy train of rentals which have padded the bottom lines of so many firms, may be there own undoing. Seattle, once a beautiful skyline and most well known for Amazon, now looks like a Chinese horizon as it has become the city with the most cranes dotting its skies.
Rents in the San Francisco area jumped 19 percent in the year through July 2015. Now, they have been flat since last July. New York rents, which were up 7 percent in 2015, have been decelerating for a couple years, declining 0.4 percent in July.
Percolating behind the scenes has been the continued offloading of the Federal Reserve’s (Fed) balance sheet with respect to over one trillion dollars worth of toxic residential assets. Now, here is where I want the class to pay close attention. With Quantitative Easing (QE), the Fed created money out of thin air — fiat currency — and bought securities with it — as if the fiat currency were real — to pump up asset prices. The Fed takes the money it receives from the maturing securities and destroys it. This money just disappears to where it had come from. Just like QE added liquidity to the markets, the QE unwind is draining liquidity. Think of it like committing murder with an icicle — you stab a person and there is no evidence remaining. You see, the Fed has created something that does not exist and now is removing the very nature of its creation. (Editor’s thanks to Wolfstreet.com for publishing on this).
Now, we have only shed $47 billion in MBS toxicity, to date. That is a drop in the bucket compared to where we need to be. And with our next crisis on the horizon, there may not be enough time.
Veteran Industry Handicappers have begun to publicly muse that it is the beginning of the end for the National Association of Mortgage Field Services (NAMFS). Even there own lawyer making the Dynamex presentation stated that she had never seen such a disparate model of National providers insulating themselves against those whom actually send out the work orders. Here is what she had to say at the NAMFS #FraudFest 2018 in Denver,
You should place your home and assets into a trust because most if not all Regional providers will be sued.
This wasn’t Foreclosurepedia presenting the issue of Employee Misclassification which we have, for years. This was a woman whom NAMFS brought forward at the request of Kyle Nichols of NY Field Services infamy. And the brutal irony of it all is that I went head-to-head with Kyle, several years ago, discussing all of this with him. He told me I had lost my mind and that this would never happen. And what is dear old Kyle doing today? Attempting to launch a money grab from Minority Females and Labor professing to be an educator. Wow. Really? How many times is NAMFS going to attempt to make money off the backs of their innocent victims? As many remember, yet another NAMFS Board Member, Michael Evangelo, pushed a training agenda — for pay — while simultaneously storing pictures of women and babies on his private company servers.
Evil knows no boundaries. And the fact of the matter is that Justis Smith, COO at Rowe Enterprises and currently the NAMFS President, has been leading the charge of silence surrounding Employee Misclassification. As opposed to focusing upon issues impacting the Industry as a whole, Smith has simply chosen to remain silent and line her pockets.
Why the US Department of Housing and Urban Development (HUD) would pick now as the time to launch the most massive Management and Marketing (M&M) Field Service Manager (FSM) contract in history has many scratching their heads. With volumes at all time lows, many are curious if this massive launch is based, in part, upon a crystal ball which many of us are not able to view. If we run with the theory that a Solicitation for the HUD M&M FSM 3.12 will officially come out in October and then the Awards issued in January, 2019, there may well be a viable need for a pipeline to move newly foreclosed assets from cradle to grave in significantly shortened timelines.
The reality is that current MLS volumes are at record lows coming in with about 30 days of inventory on average. To even remotely contend with any type of crisis, houses would have to come in and immediately exit foreclosure lest we be faced with the potential for civil unrest due to lack of housing.
It is what it is.