Arizona pair accused of posing as Realtors, lenders, defrauding Hispanic families

Families thought they were buying a home, but were actually leasing it

The owners of a Phoenix-based real estate consulting company stand accused of posing as both Realtors and mortgage lenders, and defrauding a number of Hispanic families by convincing them that they were buying a house, when, in reality, they were only leasing the house.

According to the office of the attorney general for the state of Arizona, Mark Brnovich, Ruben Diaz and Rodrigo Diaz, the owners of ProSolutions, LLC, preyed on Spanish-speaking families who wanted to buy a home.

Brnovich’s office filed an Arizona Consumer Fraud and Civil Racketeering Lawsuit against ProSolutions and its owners, accusing them of acting as a home loan financing officer, thereby taking thousands of dollars in down payments from families who thought they purchased a home but later discovered they never owned the home.

According to Brnovich’s office, the Consumer Fraud Lawsuit alleges ProSolutions misrepresented the nature and terms of various home financing transactions for the company’s own financial gain.

“In several instances, ProSolutions allegedly mischaracterized lease agreements as purchase agreements and accepted hundreds of thousands of dollars’ worth of home payments from consumers before consumers learned that they did not hold the title to their homes,” Brnovich’s office said.

Here’s how much the big bank CEOs made in 2015

The chief executive officers of the largest four banks benefited from a strong year last year, with all but one bank CEO benefitting from a pay hike in 2015, an article in Reuters by Ueslei Marcelino said.

Here are each CEOs pay ranked from smallest to largest, according to the article:

4. Bank of America’s CEO Brian Moynihan’s made the lowest amount, with his total compensation rising to $16 million for 2015, up from $13 million for 2014.

3. Next, Citigroup CEO Michael Corbat received a sizeable pay raise in 2015, increasing by about 27% in 2015, earning about $16.5 million last year, compared with $13 million in 2014, the article stated.

2. While ranked second, Wells Fargo Chairman and CEO John Stumpf’s pay was unchanged from last year at $19.3 million in 2015.

1. Coming in first, JPMorgan Chase CEO Jamie Dimon, chief executive of the largest U.S. bank by assets, had his 2015 pay surge 35% to $27 million.

Fannie Mae: Expect Fed rate hikes in June and December

Wishful thinking on display

Despite the Federal Open Market Committee announcing earlier this week that it felt that current economic conditions did not warrant another increase of the federal funds rate, Fannie Mae’s Economic & Strategic Research Group still expects that the FOMC will increase rates at least twice in 2016.

According to Fannie Mae’s March 2016 Economic and Housing Outlook, economists at the government-sponsored enterprise expect the FOMC to raise rates in June and December, despite “flat” economic growth in 2016.

“Financial market conditions appear to be improving as 2016 progresses, but economic growth is expected to remain flat at 2% this year,” Fannie Mae’s report states. “Weakness in net exports and oil-related nonresidential investment, as well as the ongoing inventory correction process after unsustainable accumulations during the first half of 2015, should combine to drag on growth.”

Despite those headwinds, the economy isn’t without its positive indicators, the report shows.

According to Fannie Mae’s report, “strengthening domestic consumer and business spending and a healthy labor market” should help to outweigh the negative factors.

“We see lingering effects of the strong dollar, low oil prices, and soft overseas demand creating a drag on economic growth,” said Fannie Mae Chief Economist Doug Duncan.

“However, the economy appears to have regained some footing after a slowdown in the fourth quarter of 2015, as stocks bounced back and oil prices have risen amid a strengthening labor market,” Duncan continued.

Duncan added that the current labor market and inflation conditions continue to support Fannie Mae’s expectation of a federal funds rate hike of 25 basis points in both June and December.

“A less optimistic outlook for future wage gains, especially among small business employees, coupled with continued strong home price appreciation boosted by lean inventory, is adding to the housing affordability challenge,” Duncan said.

“Our latest Home Purchase Sentiment Index shows that high home prices are a top reason for consumers’ perception that it’s a bad time to buy a home,” Duncan continued. “However, low mortgage rates should help support moderate housing expansion as we move through the year.”

GOP chairman: Banks are facing ‘regulatory waterboarding’

feel-good story of the day

A top House Republican on Tuesday accused the Obama administration of engaging in “regulatory waterboarding” when it comes to monitoring banks.

House Financial Services Committee Chairman Jeb Hensarling (R-Texas) vowed that he would soon unveil a proposal to replace the Dodd-Frank financial reform law. He portrayed the 2010 regulatory overhaul as a boondoggle that has put smaller bankers out of business.

“Washington’s regulatory waterboarding is drowning community banks and small businesses,” he told bankers gathered in Washington. “On behalf of every hardworking, struggling American — I will not rest until Dodd-Frank is ripped out by its roots and tossed on the trash heap of history.”

Speaking before members of the American Bankers Association, Hensarling said the long-awaited GOP alternative to Dodd-Frank would be simpler but no less effective.

Calling Dodd-Frank a “modern day Tower of Babel,” Hensarling argued the complex new rules mandated by the law are making it impossible for small banks to meet all their legal requirements.

“You’ll see us offer a bold alternative to the sclerotic status quo of our financial markets,” he said. “I can report to you today that we are deep into our planning, and you will soon see our bill.”

Tapping into the populist anger that is a force on both the right and the left, Hensarling vowed that his bill would be even tougher on Wall Street’s bad actors than the current law. But it would also subject regulators to stricter oversight in their efforts to craft new financial rules, requiring them to go through rigorous analysis of every new initiative.

Hensarling’s plan would also allow banks to obtain “vast regulatory relief” if they are willing to hold higher amounts of capital to guard against risks.

“If a bank chooses to have a fortress balance sheet that protects taxpayers and minimizes systemic risk, then bankers ought to be allowed to be bankers,” he said.

And Hensarling vowed that the Federal Reserve’s operations would be overhauled as part of any regulatory push from him. Long a critic of the central bank’s policies, the Texan has repeatedly pushed bills that would limit the institution’s powers and subject it to extra outside oversight.

And the conservative lawmaker heaped plenty of scorn on one of Dodd-Frank’s biggest pieces: the Consumer Financial Protection Bureau. He reiterated longstanding GOP gripes with the regulator, calling it far too powerful and severely lacking in outside checks on its abilities.

“The Bureau operates with such secrecy, unaccountability and bureaucratic tyranny it would make a Soviet commissar blush,” Hensarling said.

Despite Hensarling’s vow to act, any GOP effort to revisit Dodd-Frank will face Democratic opposition. Rep. Maxine Waters (D-Calif.), the top Democrat on Hensarling’s panel, dismissed his plan later Tuesday.

“This is just another attempt by the majority to gut administration policies that have helped millions of Americans,” she said in a statement. “Any plan that repeals the heart of Dodd Frank is a futile exercise that could jumpstart another financial crisis.”

Housing starts growing, but 21% below a 50-year average

New housing starts continue to grow strongly. The 12-month rolling total of starts which is a more statistically robust measure of trends in housing start data ­grew 11.9% year-over-year in February to 1,131,400 starts. This represents the most starts in a 12-month period since June 2008. Though the upward trend is good news for the housing sector, the 12-month rolling total is still 21% below a 50-year average of 1,444,619 starts. However, this is up from 23% below the 50-year average in January.

Donald Trump just threatened more violence. Only this time, it’s directed at the GOP.

Donald Trump romped to victory last night in Florida (effortlessly swatting Marco Rubio out of the race), North Carolina, and Illinois, and the resulting delegate count now means that Trump has a very plausible route to winning an outright majority of the delegates, securing the nomination. However, this is far from assured, and Trump’s latest vault forward has only intensified conversations among Republicans about how to stop him at a contested convention.

But no sooner had this chatter started, then Trump dropped another bomb, by suggesting this morning on CNN that if he finishes with the most delegates, and the nomination goes to someone else, that violence could result:

Trump said Wednesday that a contested GOP convention could be a disaster if he goes to Cleveland a few delegates shy of 1,237 — and doesn’t leave as the party’s nominee.

“I think you’d have riots,” Trump said on CNN.

Noting that he’s “representing many millions of people,” he told Chris Cuomo: “If you disenfranchise those people, and you say, ‘I’m sorry, you’re 100 votes short’…I think you’d have problems like you’ve never seen before. I think bad things would happen.”

It’s hard to say whether this is intended as a threat or a prediction. But the unsettling fact of the matter is that there is no particular reason to rule out the former — that it was indeed intended as a tacit threat, as least of a certain kind. Trump has been playing a clever little game where he hints at the possibility of violence while stopping short of explicitly threatening it — yet he also doesn’t denounce such an outcome as unacceptable, so his hints effectively function as a threat.

California home prices decline 4.7% from January

After accelerating for five straight months, the median price of an existing, single-family detached California home fell 4.7 percent in February to $446,460 from $468,330 in January. February’s median price was 3.8 percent higher than the revised $429,930 recorded in February 2015.

“February’s home price increase was the slowest rate of growth in six months, reflecting a shift in sales toward lower-priced, inland areas as buyers feeling the affordability crunch and tight supplies move away from urban cores to find affordable housing,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Home buyers in the Bay Area are seeking to buy in Contra Costa, Solano, or Sonoma counties, rather than San Francisco, and Southern California home buyers are moving inland to Riverside, San Bernardino, or Central Valley areas, where housing inventory is more abundant and affordable.”

Economic Index Creeps Up After Two Months of Decline

The Conference Board reported Thursday that its Leading Economic Index® (LEI) for the U.S. increased 0.1 percent in February to 123.2 (2010 = 100), following a 0.2 percent decline in January, and a 0.3 percent decline in December.

“The U.S. LEI increased slightly in February, after back-to-back monthly declines, but housing permits, stock prices, consumer expectations, and new orders remain sources of weakness,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “Although the LEI’s six-month growth rate has moderated considerably in recent months, the outlook remains positive with little chance of a downturn in the near-term.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.1 percent in February to 113.3 (2010 = 100), following a 0.3 percent increase in January, and a 0.2 percent increase in December.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.4 percent in February to 120.4 (2010 = 100), following a 0.1 percent increase in October, and no change in December.

The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. The leading, coincident, and lagging economic indexes are essentially composite averages of several individual leading, coincident, or lagging indicators. They are constructed to summarize and reveal common turning point patterns in economic data in a clearer and more convincing manner than any individual component – primarily because they smooth out some of the volatility of individual components.

Bay Area home sales: Second-slowest February in eight years

A shortage of Bay Area homes for sale … kept sales low in what was the second-slowest February in eight years, according to a report released Thursday.

Sales of single-family homes were flat from a year ago across the region, the real estate research firm CoreLogic said, but it was a mixed market.

First-time buyers were moving eastward, keeping sales robust there, said Andrew LePage, a research analyst with CoreLogic.

“There’s more activity in some of the inland markets because of affordability,” he said. But overall, sales “are off to only a slightly stronger start than in 2015,” LePage said.

“A lot of people are dropping out of market,” said Lynne French of Windermere Real Estate in Clayton in Contra Costa County. “For first-time buyers, $739,000 for a house is tough.”

“Affordability is the issue,” said Jennifer Branchini, a real estate agent in Pleasanton. “First-time buyers are being pushed really far out.”

“It’s a difficult market,” Lisa Johnson said. “It’s just highly competitive. You’re fighting off 10 to 15 other people who want the exact same house. And then there are the people purchasing houses to flip them. It’s crazy.”

These Are the Cities Where Rich Millennials Live

Millennials are giving up on getting rich and more likely to identify as working class than other generations, according to recent research.

Just not all millennials. Lots of young bankers and lawyers and software developers are making big bucks, and they’re especially likely to be your neighbors if you live in Arlington, Va. Aaron Terrazas, an economist at Zillow, compiled a list of the cities in which the most rich millennials live 1, defining millennials as 22 to 34 years old and “rich” as households earning at least $350,000 a year. His research offers one finding you’d expect and another that’s a little more surprising.

Tech hubs dominate the list, which makes sense, since San Francisco, Sunnyvale, Calif., Seattle, and Denver are full of software companies that pay high salaries to young workers. Arlington, Va., is slightly less obvious: It’s a well-off inner suburb of Washington, where the median income is $109,000 and 19 percent of households earned at least $200,000 in 2014. Perhaps more importantly, the median home value is a bit more than $600,000, according to Zillow, making it a likely stopping point for Beltway professionals on their way to bigger homes in other suburbs.

Huntington Beach, Calif., which once waged a gnarly trademark dispute with Santa Cruz, Calif., over who had the right to the moniker “Surf City,” seems like another outlier. The median income is $85,000, and 12 percent of households earn $200,000 or more. Terrazas points out, though, that Huntington Beach is next door to Newport Beach, home to Pimco and a host of other high-paying financial companies.

Terrazas also created a breakdown of cities in which millennials are more likely to be wealthy than members of their parents’ generation. Of the 73 cities in the Zillow survey, in only 13 was the share of millennials earning at least $350,000 higher than the share of boomer households at the same income threshold. Millennials are most often wealthier than their parents in tech towns and close suburbs of major cities, such as Yonkers, N.Y., or Jersey City, N.J., where well-paid bankers and lawyers and other professionals are likely to live before outgrowing their abodes when they start a family.