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JPM CEO predictions; ex-HUD official; Appraisals; Fannie Mae 😊

By April 8, 2021 No Comments

JP Morgan CEO predicts long-term economic boom, SHARES HOPE

Jamie Dimon, the long-serving JPMorgan Chase CEO and chairman, sees strong growth ahead for the world’s biggest economy, thanks to the U.S. government’s response to the coronavirus pandemic that has left many consumers flush with savings, according to his annual shareholder letter.

“I have little doubt that with excess savings, new stimulus savings, huge deficit spending, more QE, a new potential  infrastructure bill, a successful vaccine and euphoria around the end of the pandemic, the U.S. economy will likely boom,” Dimon said in the letter. “This boom could easily run into 2023 because all the spending could extend well into 2023.”

SHARE HOPE —> Dimon also added in the letter that JPM’s lending business has committed to helping an additional 40,000 Black and Latina families buy a home over the next five years, with the firm dedicating $8 billion in mortgages for this purpose. The firm is committing up to $4 billion in refinancing loans to help an additional 20,000 Black and Latinx households achieve lower mortgage payments. In addition, the firm is working to improve key home lending products and offerings: A $5,000 grant, for example, will help cover closing costs and down payments for people buying a home in 6,700 minority communities in the United States.

Dimon also mentions the threat of fintech against the bank, a common refrain we hear often these days from big bank CEOs.

“Lending in many forms – including mortgage, student, leveraged, consumer and non-credit card consumer – is moving out of the banking system,” he said. “Neobanks and nonbanks are gaining share in consumer accounts, which effectively hold cash-like deposits. Payments are also moving out of the banking system, in merchant processing and in debit or alternative payment systems.”  

Keep ‘em on their toes, fintechs!


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ex-HUD official banned from holding a federal position for the next 4 years

Lynne Patton was a regional HUD official who famously lived in public housing for a month while she held the position.

While seemingly a great way to gain insight into the daily difficulties of those who live in such housing, Patton is charged with using the time for something a little too self-serving.

The US Office of Special Counsel announced that Patton had “improperly harnessed the authority of her federal position to assist the Trump campaign in violation of the Hatch Act” when she was HUD regional administrator and that she had admitted to violating the act when she produced a video about housing conditions for the Republican National Convention.

In the settlement agreement, Patton will receive a $1,000 civil fine and is prevented from working as a federal employee for 48 months.

The video reportedly contains resident testimonials where they declare their lives improved under the former president’s tenure. Patton denies tricking the residents, violating the Act, and blames HUD and her attorneys for giving her bad advice.

“And yes, I received advance permission and written legal guidance from the HUD Office of the General Counsel & Ethics andfollowed their instructions to a ‘T,' which can be confirmed by over 4 hours of independent audio and video,” she said in an email to CNN. “Unfortunately, after consulting multiple Hatch Act lawyers post-employment, receiving incorrect and/or incomplete legal advice, even in good faith, from your own agency does not an affirmative defense make.”


🔥 Housing our Heroes 🔥 

With Josh Pitts & Bryan Bergjans


Housing shortage means bunking with parents? Appraisal waiver share; Fannie Mae

There are three important pieces of content to bring to the attention of Rise&Shred readers.

First, is anyone opposed to bunking with mom and dad until more homes become available for sale? Depends on who youask.

According to NAHB, a multigenerational home is desirable to some buyers, but not to all. Overall, 39% would prefer such a home, but 39% would be against it. The remaining 23% are not sure how they feel about a home designed for three generations.

One of the factors most likely to influence a buyer’s preference for a multigenerational home is race/ethnicity:

  • Among Hispanic buyers, for example, 53% are in favor of buying such a home, compared to 27% who would oppose it. 

  • Among African-American and Asian buyers, 50% and 46%, respectively, would prefer a multigenerational home, significantly higher shares than the 30% and 29% who would be against the idea, respectively.

  • In contrast, among Caucasian buyers, only 35% of buyers would prefer a home designed for multiple generations, compared to a larger 42% who would not prefer that option.

Second, appraisal waivers have really exploded in recent years – especially during the pandemic. 

But how many are there exactly? Take a look at actual numbers to walk away with some perspective, in this post by Ryan Lundquist on Sacramento Appraisal Blog.

QUICK SUMMARY:

  • 47.4% of all Freddie Mac loans had a waiver

  • 44.5% of all Fannie Mae loans had a waiver

  • Waivers are far more common during refinances

  • Only 10-12% of purchases had an appraisal waiver in January

  • Non cash-out refinances have the most waivers (67-69%)

  • The higher your loan-to-value, the lower your chance of a waiver

  • Waivers have seen a dramatic increase during the pandemic

And last but not least! The Fannie Mae Home Purchase Sentiment Index (HPSI) increased in March by 5.2 points to 81.7. 

Four of the HPSI’s six components increased month over month, including the components related to homebuying and home-selling conditions, household income, and home prices. 

The mortgage rate outlook component experienced the only decline, and the latest results indicate that only 6% of consumers believe that mortgage rates will decrease over the next 12 months. Year over year, the HPSI is up 0.9 points.

“The significant increase in the HPSI in March reflects consumer optimism toward the housing market and larger economy as vaccinations continue to roll out, a third round of stimulus checks was distributed, and the spring homebuying season began – perhaps with even more intensity this year, since 2020’s spring homebuying season was limited by virus-related lockdowns,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. 

“Home-selling sentiment experienced positive momentum across most consumer segments – nearly reaching pre-pandemic levels and generally indicative of a strong seller’s market, Duncan added. “Consumers once again cited high home prices and tight inventory as primary reasons why it’s a good time to sell.”


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