Wednesday, October 18, 2017

Marino, Sessions, ICBA, and Corker

Trump Admin Continues Bad Personnel Choices

There is absolutely nothing wrong or untoward about a President choosing close or early political supporters to join him in his Administration, serve as ambassadors, or fill other major posts.

Every President, Democrat or Republican, does it.

But most presidential campaigns—which evolve and become administrations—have fairly vigorous back office vetting procedures that, before the nomination occurs, weed out candidates for obvious flaws and foibles that make them (and the President) look bad when those awkward secrets come out, as often occurs “inside the Beltway.”

Nearly a dozen Trump appointees, post vetting, have pulled back their names or had them taken down for various incidents and issues which should have been spotted by the Trump vetting process.

The latest example of a very flawed Trump review process is Representative Tom Marino (R-Pa.) who this week “withdrew his name” from consideration as “Drug Czar” or head of the Office of Drug Control Policy.

“Withdrew his name,” is the polite way of saying the WH told the poor S.O.B never darken its doorstep, again.

Marino’s Trump-sin exploded in the news when the Washington Post and CBS revealed that Marino, legislatively, was pimping for the big commercial drug makers and succeeded in getting Congress to agree to slow down Drug Enforcement Administration (DEA) corrective actions against the industry.

Despite the facts which caused the President to ax Marino, Trump gallingly uttered, "Rep. Tom Marino has informed me that he is withdrawing his name from consideration as drug czar. Tom is a fine man and a great Congressman!" 

This all came on the eve of President Trump planning in the next few days to declare some major new opioid crisis and heralded White House response.

Never embarrass DJT.

Think “fox and chicken cops” when you contemplate putting Marino in charge of overseeing vast parts of the commercial drug industry-- sometimes called junkies in lab coats--and regulating those powerful companies’ role in the nation’s opioid crisis.

All makes this prickly president look bad and lame.

Previously, Trump defended Marino as “someone who early on supported me.” That’s not good enough. That simple standard has to be higher or Trump’s just adding to the “swamp” which he promised to drain.

DJT’s response about Marino reminded me of the terrible, terrible rumors about the junior Senator from Alabama, circulating Washington, when the POTUS chose Senator Jeff Sessions to be his Attorney General and run the Justice Department.

Sessions, too, had been an early Trump advocate which—in retrospect-- got him a job he wasn’t and isn’t capable of performing—as the President himself suggested when Sessions rather than protect DJT recused himself from the Russia investigation, shortly getting the AG’s job.

The POTUS wasn’t happy then, either.

All of this in turn raises the question—especially given the dozens of vacancies in the Trump Administration and the several officials who have left this Admin or asked to have their nominations dropped--why has the DJT vetting operation gone so slow and why has it missed in the names of those sent to the Hill for Senate approval?
Could it have been an operational breakdown or weakness of the main nut behind the steering wheel?

Mortgage Interest Deduction and the Trades

Will the split in supporting President Trump’s plan to curtail part of or end the mortgage interest deduction (MID) cause trouble/hostility among the Washington housing/mortgage finance trade groups, which have split this year in contrast to their past solid opposition to MID changes?

Here’s one comment from a major Realtor opposing any changes about the Homebuilders who support the change.

“The National Association of Home Builders is all for [the GOP tax plan] because of the part about corporate taxes. If you own a corporation, you want to kiss [President Donald] Trump’s feet. We’re saving people money so they can use it to buy a house,” said Jeff Barnett, a California Realtor and vice chair of NAR’s large firm real estate services committee.

Meow, meow, should be Grrr! Grr!

The always conniving Mortgage Bankers Association also this year jumped from the anti-MID change coalition and hopes to curry WH favor on its broader agenda, i.e. pummel the GSEs, in supporting changes to mortgagors writing off their interest deductions.

But, a possible winner in the trade association wars could be the Independent Community Bankers of America (ICBA) and its Exec Cam Fine

The ICBA is strong on GSE issues and opposes the reduction or dissolution of the MID.

Always a potent ally of the GSEs and very solid in its support of preserving the Mortgage Interest Deduction, the ICBA’s lobbying skill and impact could make some in Congress dubious about riling up the small bankers and going along with the WH on something which could hurt homeowners and homebuyers.

It also could cause some of those smaller MBA members to consider leaving their trade group for warmer ICBA surroundings, if the MBA keeps taking positions contrary to small lenders’ interests to please its big bank members by opposing Fannie and Freddie and supporting MID changes.

Sen. Bob Corker (R-Tenn.) Resurrection?

I’ve been asked if, suddenly, I‘m a Corker friend and ally after what I wrote in my last blog about him looking good in his public complaints about the President and his Administration and more significantly, about Trump’s personal; shortcoming.

So, yes, I am happy Corker spoke out and as a citizen and a voter I appreciate his courage, driven by his Trump-anger and Sectorial perspective.

But no, none of that means Corker will do a 180 degree turn on his GSE animosity or legislative interests.

He still could insist F&F be wiped out and he still could oppose any type of GSE legislative or regulatory relief others might want to extend.
He’s the chairman of the Senate Foreign Committee and reportedly liked and respected by his colleagues.

Until he’s dropped crushing the GSEs as a high senatorial priority, the Trump presidency, Iran, North Korea, Russia, China,  and a host of other foreign policy issues, should take precedence over fixing a national mortgage finance system which many claim is not broken just needing some minor rehab.

Maloni, 10-18-2017

Friday, October 13, 2017

Corker, MID and the Trades, Hill and the Warrants

GSE Dud to National Dude???

Federal public office seekers (and those at most other levels) care only about  getting elected or re-elected. Nothing else matters to those who arrive in DC, no matter what they say about any policy issue.

They spend virtually all of their days scheming and calculating how to achieve that “return me to office” goal.

Until for whatever reason they stop running and that albatross melts from their shoulders and a butterfly appears from that chrysalis.

Once that huge egotistical political engine is removed from their personal calculus, it is amazing what they say and do.

Some even act like statesmen or leaders.

The most recent example of  this “Inside the Beltway” reality, is Senator Bob Corker (R-Tenn.), who announced he won’t seek re-election in 2018.

I have had very little good to say about Corker, whom I believed lied and misled his world with his anti-Fannie/Freddie politics--possibly even personally profiting from his Senate actions and antics--opposing any GSE support or recapitalization.

His famous “short them” call during a national TV interview has been discussed ad nauseum except by the Senate Ethics Committee which has stayed radio silent on the millionaire Senator’s financial foibles.

But, here/now is where I get Corker-friendly and maybe even a little hypocritical--about the guy I’ve demeaned for some many years--since he announced he wasn’t running again, he opened up a verbal barrage on President Donald Trump, which I believe—and still wish for--many of his GOP colleagues should mirror. When Democrats do it, it's all dismissed as poltiics.

Corker questioned Trump’s ethics, character, intellect, maturity, honor, and presidential capacity—to which Trump retaliated--and the brickbats still are going back and forth. That’s weird because Trump needs Corker’s Senate vote for many high priority WH issues, including DJT’s all-important Iran nuclear redo.

Will the diminutive-sized Corker (another Trump derision target) resign before he retires, as many suggest, over some non-GSE financial dealings which could generate criminal sanctions against the Chairman of the Senate Foreign Relations Committee? Or will the Tennessee Senator hang around—continue to speak his mind about Trump’s own shortcomings (not talking about the President’s hands!!)--and further anger the White House by walking the walk and voting the way, i.e. against the President, Senator Corker has talked??

We’ll see. But, Corker’s post announcement actions stripped off some of the phony veneer of political niceties, when--relieved of kissing every butt and face (think $$$$) thrust at him--Corker chose to speak out against this, scary, non-traditional and worrisome US president—who can stumblebum us into a shooting war--and shout out loud what many Republicans and others think.

The NAHB and the True to Form MBA

(First drafted on Thursday afternoon, Oct. 11, see end of this segment for “timing” significance.)

Speaking of transformations, what have NAHB CEO Jerry Howard and the Home Builders been promised by this White House in return for he/them/it abandoning their zillion years support for the mortgage interest deduction (MID) in favor of some other Trump tax schemes which have yet to be fully explained or fleshed out??

In the past all of the major housing, mortgage finance, and building trades opposed ending a borrower’s ability to write off his/her mortgage interest. But that ended this year with the NAHB’s departure from the heretofore insoluble “housers” MID support group.

It maybe that after years of losing influences and being shunted aside by the more aggressive Mortgage Bankers and the omnipresent Realtors, the Builders are trying a new external affairs tact, seeking luster.

But, the Builders are lighting matches in a room filled with gunpowder, if their members grasp all of the implications.

Jerry and the Builders, not to be confused with Gerry and the Pacemakers, must be getting something—or its many members must be sleeping—because the MID has been a major financial reason to permit the average middle class family's desire to have their share of the American dream and, also, buy builder products.

The National Association of Realtors (NAR) has been standing tall opposing the Bush MID proposal, which--when combined with Trump’s desire to end the state and local tax (SALT) deduction-- could dramatically harm the middle class, homeownership and sales, despite Trump National Economic Council (NEC) Director Gary Cohn’s underwhelming promise of a “$1,000 tax savings” for middle income households, earning $100,000 or less.

Pish tush, not much savings especially when compared with what President Trump proposes for businesses and the wealthy!!

The desperate-for-a-legislative-win Trump and his “hide the pea” tax proposal, with scant specific details because the WH wants the booming opposition to his giveaways to stay quiet until the total plan gets revealed when he knows all Hell will break loose.

The not-pushy-enough NAR still has been excoriated by the Koch Brothers for opposing parts of the Admin’s tax reform proposals. Gee, the Realtors may find themselves supporting Democrats before this all is over.

Now, where in this swamp is the ubiquitous Mortgage Bankers Association?

The MBA is calculating how they can leverage their core anti-GSE positions with their need to help the White House or go against it on the MID removal.

My bet is that the MBA and David Stevens will join the Builders to sup with the Administration and find a way to explain ending the MID for mortgagors is good for their members and consumers, just as they argue the same about abolishing the GSEs.

(Reader Warning, “crowing” about to happen.)

No sooner did I draft the above early yesterday then MBA sent its inevitable gushing/spinning letter to GOP officials offering their support for reducing the MID.  Thanks for not disappointing me David Stevens and enhancing my “seer” status!

(See Politico’s Lorraine Woellert’s story, linked below; note the MBA letter only went to Republicans, no Democrats.)

The Hill and GSEs

Despite the fact that Fannie and Freddie still are providing 50% of American borrowers with their mortgage (those are your constituents Senators and Congress people), there is no GSE love on the Hill but this GOP controlled Congress and WH are headed to some monstrous federal deficit spending with all of their promises and that’s before they get to their “tax reforms,” which only will drain the Treasury more.

In my humble opinion, the fact that those looking closely at the GSE issues see the $100 Billion or more the Treasury owned F&F warrants represent will begin to salivate and behave as pigs looking at slop (metaphor stops there) as they struggle to find “pay fors” to meet their spending and tax priorities.

That new revenue will look very tempting.

Republicans will find that huge F&F warrant driven pot of gold near irresistible when they start scrambling over how they are going to pay for their intended Treasury/taxpayer financial ravishings.

The R pols will be torn between covering their asses and seeing a quick $100 Billion but that perpetuates the GSEs. My bet is they will grab for the money but  still and hamstring Fannie and Freddie in some way.

Maloni, 10-13-2017