FHFA: CARES Act helped homeowners dodge a bullet
The FHFA is touting the success of the CARES Act in preventing what otherwise would have been a disaster for many American families.
“We estimate that at the end of October 2020 the past due rate would be about 3 percentage points higher if waivers allowed under the CARES Act were not allowed,” they wrote in a blog.
“This would imply a significant increase in the share of mortgages past-due in 2020,” they add. “ The long-run implications of these changes may not be known until after the COVID crisis is over.”
While the preliminary result is encouraging, there are several negative observations to consider.
Yes, on the surface, these results might imply many borrowers are having little trouble paying their mortgages. However, because of the changes in reporting due to the CARES Act, this conclusion may be misleading, the FHFA said.
Furthermore, the long run implications may not be known until after the COVID crisis is over.
“In the interim, it is important to remember that traditional metrics of mortgage performance may not have the same interpretations as they have in the past,” the FHFA said.
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Experts: Homeowners are not fully informed on flood risk
A Federal Emergency Management Agency advisory panel says in a new report that prospective buyers cannot “make a fully informed decision” about whether to buy a property in states that do not require sellers to disclose flood history.
The disclosure can help buyers determine whether a property has been previously damaged by flooding, is at risk of future flood damage and whether new owners should buy flood insurance.
This also poses a threat to lenders, who in turn, aren’t factoring in flood risk appropriately when lending on home purchases.
States are increasingly enacting laws requiring some type of flood disclosure during a real-estate sale. But in the 29 states with requirements, the disclosure “is often extremely deficient” and lacks “valuable information” about a property’s flood history, the 20-member council said in its 2020 report, approved last week.
The council, composed of national experts on flooding, advises FEMA on its flood mapping program.
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Jeff Bezos steps down as Amazon builds up new HQ
Jeff Bezos, the founder of Amazon, will step down as chief executive of the e-commerce giant, turning over the reins to the company’s longtime cloud-computing boss Andy Jassy. (Read his letter to employees here.)
Bezos will transition to the role of executive chair in the third quarter, the company said as it announced fourth-quarter earnings.
The looming transition marks the most radical shake-up in Amazon’s corporate ranks in its nearly 30-year history. Under Bezos’s stewardship, Amazon evolved from an upstart online bookseller into one of the world’s most popular Internet marketplaces able to quickly deliver a vast catalog of products and services — which at one time threatened the mortgage lending industry.
It also developed a massive, profit-driving cloud computing business that now powers websites around the world.
“For this project, we’re doubling down on the importance of fostering an open and inviting community by creating a new destination for local residents,” said Amazon. “Our plans also infuse nature into the urban landscape and create a unique, sustainable environment where our employees can work and invent for our customers.”
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