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- House GOP support builds for budget deal that would avert shutdown | Dallas Morning News
While the agreement between Ryan and Murray lessens the odds of another shutdown when a temporary spending bill expires Jan. 15, the overall funding measure must pass before that deadline to keep the government open.
That would give Congress relatively clear sailing on the budget until the fall of 2015 — except for the need to raise the federal debt limit, probably sometime in late February or early March.
- Home Buyers Beware Of "Flipped" Properties - CBS Miami
So who's doing the flipping? In addition to "mom and pop" investors, and construction and remodeling professionals, institutional investors backed by Wall Street or foreign investors are jumping in on the action.
"That's a new element we haven't seen before and is kind of creating an assembly line in some cases out of, out of flipping properties," explained Blomquist.
"With a flip, you want to have an inspector come in and pay very close attention to the quality of the work that's been done on that home," explained Blomquist.
Experts say be sure to check the 'bones' of the home, including its foundation, the framing and the crawl space. ...
It's also smart to get a home warranty in many cases. ...
If you want to know if a home you're considering buying has been flipped, ask your realtor to check the sales history.
- It's Official: The Volcker Rule Has Been Finalized - NationalJournal.com
One of Dodd-Frank's most well-known provisions was completed Tuesday, three and a half years after President Obama signed the sweeping financial-reform law.
Five agencies passed a final version of the so-called Volcker Rule on Tuesday. Three of the 20 regulators who voted on the law opposed it.
The Volcker Rule, named for the cigar-loving former Federal Reserve Chairman Paul Volcker, bans banks from making certain speculative bets with their own money. It was an attempt, through the 2010 financial-reform law, to curb risky behavior at financial institutions.
The main difficulty in writing the rule, regulators said, was differentiating between market making and hedging, which are allowed, and proprietary trading, which is not. This is hard, Fed Gov. Dan Tarullo said, because the same trade can be allowed in one context or circumstance, but forbidden in another. The final rule also contains a number of exemptions to the proprietary trading ban, such as trading in various government obligations. Regulators also said they would be open to tweaking the rule as time went on as they received feedback.
The Glass-Steagall Act should have been reinstated rather than doing this Volcker Rule.
- Real Estate Trend: Parking-Free Apartment Buildings | Streetsblog Capitol Hill
A wave of new residential construction projects in places like Seattle, Boston, and Miami are showing that, yes, modern American cities can build housing without any car parking on site.
Eliminating on-site parking brings down the cost of apartment construction, Knoll estimates, between 20 and 30 percent. That makes it possible for developers to deliver more affordable housing. Knoll's California Avenue development, for instance, is targeted at people making 60 percent of area median income, or about $15 per hour.
- A Surprise From Hilton: Big Profit for Blackstone - NYTimes.com
"When they bought Hilton for $26 billion, it was like buying a very big house," said Steven Kaplan, a professor at the University of Chicago Booth School of Business. "And they financed it like a house, taking on debt."
"It was like refinancing your mortgage when interest rates were low," Mr. Kaplan said. "They basically paid off their debt when it was very cheap to do so, because everybody was frightened and the price of their debt went very low."
Considering the timing of their purchase and the real-estate crash, they've done very well.
- Wing Thye Woo lays out the conditions that China must meet to internationalize its currency and turn Shanghai into a global financial center. - Project Syndicate
Wing Thye Woo, Professor of Economics at the University of California, Davis, and at Fudan University, Shanghai, and Central University of Finance and Economics, Beijing:
SHANGHAI — China is increasingly debating whether or not the renminbi should be internationalized, possibly joining the US dollar and the euro as an international vehicle currency (IVC) — that is, a currency that other countries use to denominate the prices of their traded goods and international loans. Related to this is a debate about whether Shanghai can become a first-tier international financial center (1-IFC) like London and New York.
... there are serious pitfalls to avoid in this process. As the Asian financial crisis of 1997-1998 demonstrated, capital-account liberalization could lead to financial meltdowns — a danger that opponents of internationalizing the renminbi often cite. But these risks do not outweigh the potential benefits of financial openness, and they can be minimized with effective monitoring and regulation, including requirements for large capital buffers and low leverage ratios, together with strong crisis-response mechanisms, like a resolution trust corporation.
- Title Insurance For Mortgages : Explained In Plain English
Nice job explaining title insurance:
Title insurance is optional coverage for a homeowner. However, title insurance for your lender is required. This is because -- like you -- your lender has an interest in your property.
Also like you, your lender does not want to see your home undefended, and lost, in a valid title claim.
The lender's title policy is sometimes called a "loan title policy" and it functions in much the same way as your owner's title policy. A title search is performed to identify encumbrances and liens and any unsatisfied claims are addressed prior to closing.
With the title policy in place, in the event of an error or claim, your lender can be reimbursed for losses.
Home sellers typically pay for a buyer's lender's title policy. Premiums are paid up-front at closing with nothing due over the remaining years of a loan. The policy expires when the current loan is paid-in-full. When you refinance, you will be required to get a new lender's title policy.
Costs to re-insure a home against title defects are low.
- The Eurozone: If only it were the 1930s | vox
Nicholas Crafts, Professor of Economics and Economic History at the University of Warwick and CEPR:
Debt forgiveness would be very expensive for the creditors — forgiving a quarter of the debts of Greece, Ireland, Portugal, Italy, and Spain would cost about €1,200 billion — and, in the absence of watertight fiscal rules to prevent a repeat, risks a serious moral hazard problem. Paris and Wyplosz (2013) suggest that forgiveness could, however, play a part if the ECB were to buy up government debt in exchange for perpetual interest-free loans — in effect monetising part of the debt.
The implications of this discussion are quite uncomfortable. They are that, under the present agreements to resolve the crisis, several Eurozone economies face a long period of fiscal consolidation and low growth. For these countries, different rules of the game with regard to financial integration and, in particular, a different sort (1950s-style) of central bank would ease the pain. An ECB designed to make life easier for the debtors would have a higher inflation target, hold down interest rates for longer, and help in eliminating some of the debt overhang. Obviously, this is not a central bank for normal times — nor is it a design that Germany could contemplate — but in a depressed economy with a debt problem it might be more appropriate. The implicit fault-line within the Eurozone is evident.
- Crowdfunding startup Patch of Land funding NJ developer rehabs | Inman News
Los Angeles-based crowdfunding startup Patch of Land is employing a little marketing spin on its latest properties — a modest 1,742-square-foot single-family home in Bridgewater, N.J., to be flipped after "minor rehab"; a duplex in a "well-established blue-collar neighborhood" of Jersey City that will require a "full gut"; and another Jersey City home that's being remodeled to bring it up to code as a two-family property.
Would being an early adopter be wise in this field? What's the due-diligence list?
- 500-page mortgage applications have become the new normal - Dec. 12, 2013
A middle-income worker financing a median-priced house may get away with just a few hundred pages, but business owners or wealthy people with several income streams can generate paperwork better measured with yardsticks than page numbers.
What gives? After the housing meltdown, tighter rules were put in place, requiring an explosion of disclosures to be included in mortgage applications. Those alone account for nearly 50 pages, said Grabel.
Of course, you can always pay cash instead. That's what Taylor's brother did recently and it certainly simplified the transaction. "There were only three pieces of paper at the closing," said Taylor.
Do you think that factors into the big institutional investors' decision to pay all cash? We think it probably doesn't because they have other sources of funds they'd use anyway.
- Worst year in history for bond funds: Investors yank record $72 billion - Dec. 13, 2013
It's a stampede tapered off since the May, 2013, taper talk.
Forget about the bond bloodbath in 1994. This is shaping up to be the worst year in history for bond funds.
Investors have pulled out $72 billion from bond mutual funds this year through the first week of December, according to data from TrimTabs.
... ever since Bernanke mentioned the possibility of tapering, bond investors have been spooked. The 10-year Treasury yield rose from 1.6% May to almost 3% by September, when economists and investors initially expected the Fed to take action. In fact, investors had continued to plow money into bonds up until May. The outflows have all occurred in the final seven months of the year.
When the Fed chose not to taper, the 10-year Treasury yield fell back to around 2.5% by October. But rates have crept higher again as taper talk has resumed. The 10-year currently is yielding around 2.88%.
It could represent an overcorrection. Is the economy really on solid ground? Jobs and wages remain a huge problem.
Still, if the Fed shifts to tapering and interest rates really do heat up, bonds will suffer.
Mortgages would become more costly; and if wages weren't to keep up and construction weren't to get ahead of rising housing prices, the housing market would slow, which would make bonds look good again and would likely cause the Fed to get back in.
We shall see.
- New Office Designs, Amenities are Redefining the Meaning of Class-A | Office content from National Real Estate Investor
... park spaces, retail, restaurants, fitness centers and rooftop gardens. Office buildings need to embrace the new urban paradigm that fits the "live/work/play lifestyle" of today's workers, adds Kanner.
Sustainable building and LEED certification is a standard component to the next generation of office buildings. But, tenants view that as more than a requirement that they need to check off the list. Tenants want natural light and fresh air, and they recognize that those are important qualities for workers and can be a real asset and not just a marketing gimmick, adds Kanner.
Modern designs clearly reflect the shift to a higher density workplace and different work styles. New office buildings have to include all of the infrastructure that supports that shift to higher density space in terms basic infrastructure such as floor loading, restrooms and HVAC systems, as well as space that allows for more collaboration. "The next generation of employees feed on proximity to each other," says Kanner. It is a very collaborative work model that the office space now has to support."
- Rohit Anand: Customizing Amenities for Apartments - YouTube
Multi-Housing News speaks to architect Rohit Anand, principal of KTGY Group Inc., at the recent National Multi Housing Conference OpTech Conference 2013. Anand discusses the importance of tailoring amenities for specific multi-housing target groups, next-generation trends in amenities, and an apartment community KTGY is designing in California in conjunction with Facebook.
- Treasury Urges More Federal Oversight of Insurance - NYTimes.com
The United States Treasury called on Thursday for a greater federal role in the regulation of insurance, particularly in areas like mortgage insurance, the collection and use of personal data to set prices, and the use of secretive entities known as captives to keep risks off the books of insurers.
But the Treasury's wide-ranging report on how to strengthen regulation still leaves broad areas of the $7 trillion industry under state oversight, as it has been for the last century.
The report, which was ordered by the Dodd-Frank financial overhaul law, said it was time to stop debating which level of government should be in charge and instead build a hybrid model that would give duties to both. Michael T. McRaith, director of the Treasury's Federal Insurance Office and a former state regulator from Illinois, led the effort to research and write the report.
It's not a one-size-fits-all recommendation.
Concerning AIG, we'd like to point out that the traditional-insurance side of that company was never in trouble. It was the unregulated-derivatives side that ran into all the problems.
That said, that market should never have been allowed to function in an unregulated environment.
However, there is something to be said for the idea that AIG should have been allowed to fail via a federal takeover and complete unwinding. The "Too Big To Fail" model was, and despite Dodd-Frank, still remains, a serious moral hazard.
- Multifamily Investment Trend | On the Edge of Their Seats: Why the Multifamily Inventory Has Investors Anxious - Apartment Intelligence™
Senior vice president of KeyBank Real Estate Capital, Clay Sublett, credits what he calls a "confluence of demand" in that the "Millennial generation" has hit the prime renters age of between 20-34 at the same time empty nesters are looking to downsize their living situation, while strict mortgage underwriting and the increasing interest rates have forced everyone else to look to renting as their only viable solution.
The anxiety investors and developers are feeling might also be attributed to the lingering possibility that the anticipated demand of these young renters might be "shallower" than expected as research shows that 36% of their target group is choosing to remain living at home with their parents out of sheer affordability.
If rents drop enough, the young will move to rentals. What's your view?
- 8 Ways to Spot a Sloppy Seller When Buying an Investment Property
There are a lot of investment properties out there for sale. Many of them are owned by savvy sellers, shrewd in the ways of property sales. There's a certain percentage, though, that are owned by people who quite plainly have no idea what they're doing.
You can often spot a sloppy seller in a few ways. ...
1. Unflattering Photos. ...
2. Unkempt Grounds. ...
3. Race to the Bottom. ...
4. Stale on the Sale. ...
5. Ready to Be Rid of It. ...
6. Asset Liquidation. ...
7. Unskilled Representation. ...
8. No Representation. ...
The article fleshes out those 8 points.