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

1 comment:

Anonymous said...

Hi Bill,

Do you believe there is any way the shareholders can challenge FHFA's blanket ban on lobbying?

I find it insane that mortgage reform is being discussed, and the two biggest players are not at the table in any way.