Morning Report: The CFPB warns servicers to be ready for foreclosures

Vital Statistics:

 LastChange
S&P futures4,03227.4
Oil (WTI)59.84-1.62
10 year government bond yield 1.74%
30 year fixed rate mortgage 3.33%

Stocks are higher this morning after Friday’s strong jobs report. Bonds and MBS are down small.

The upcoming week is pretty data-light, as is typical after the jobs report. The main thing will be the FOMC minutes on Wednesday and then inflation data on Friday. The FOMC minutes will be interesting to see just how much faith the Fed is putting into the stimulus spending.

Speaking of stimulus, the Biden Admin is trying to sell its $2.5 trillion infrastructure plan both to Republicans and the country at large. The sticking point will be the increase in corporate taxes to pay for the plan, and so far it looks like he isn’t even getting buy-in from his own party on that.

Pension funds are getting into the single-family rental business. “You now have permanent capital competing with a young couple trying to buy a house,” said John Burns, whose eponymous real estate consulting firm estimates that in many of the nation’s top markets, roughly one in every five houses sold is bought by someone who never moves in. “That’s going to make U.S. housing permanently more expensive,” he said. Again, when you look at mid single-digit cap rates, and then tack on double-digit price appreciation for the underlying assets, you have an asset class that has better characteristics than most other investment options out there.

The CFPB wants servicers to be ready for the wave of foreclosures once the moratoriums expire. “There is a tidal wave of distressed homeowners who will need help from their mortgage servicers in the coming months. Responsible servicers should be preparing now. There is no time to waste, and no excuse for inaction. No one should be surprised by what is coming,” said CFPB Acting Director Dave Uejio. “Our first priority is ensuring struggling families get the assistance they need. Servicers who put struggling families first have nothing to fear from our oversight, but we will hold accountable those who cause harm to homeowners and families.”

Author: Brent Nyitray

In the physical sciences, knowledge is cumulative. In the financial markets, it is cyclical

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