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An academic, according to Wikipedia, is a person who works as a researcher (and usually teacher) at a university, college, or similar institution in post-secondary (tertiary) education. He or she is nearly always an advanced degree holder. In the United States, the term academic is approximately synonymous with that of the job title professor although in recent decades a growing number of institutions are also including academic or professional librarians in the category of "academic staff." In the United Kingdom, various titles are used, typically fellow, lecturer, reader, and professor (see also academic rank), though the loose term don is often popularly substituted. The term scholar is sometimes used with equivalent meaning to that of "academic" and describes in general those who attain mastery in a research discipline. It has wider application, with it also being used to describe those whose occupation was researched prior to organized higher education. (http://en.wikipedia.org/wiki/Academia)

Stories from Academia

Bank Lending Increasing, Except for Real Estate
Academia
Friday, June 14th, 2013

Credit is the life blood of a capitalistic system. When consumers borrow money to buy things, it creates growth in America. When business owners can borrow money for growth, that creates jobs too. The good news is that credit is beginning to flow through most sectors of the American economy. The bad news for real estate is that it is one of the only sectors that is still waiting for credit expansion.

Let’s take a look at the charts. Commercial and industrial loans are made to business owners. They use these funds to buy other businesses, vehicles or other buildings and equipment and to hire more people. This is very bullish for the outlook for business growth and expansion. Since the trough in October 2010, C&I loans have increased by 28.3 percent.

http://blog.recenter.tamu.edu/2013/05/bank-lending/

Fannie/Freddie to Homeowners: Do Nothing and Help Will Arrive
Academia
Wednesday, May 29th, 2013

This "Streamlined Modification Initiative" needs a better name, better branding, and at least so far, better publicity. But overall, I am very encouraged that FHFA is adopting this kind of program. It's what I call a "push program," requiring the servicers to deliver relief. We've seen at least two servicers roll out similar push programs as part of the National Mortgage Settlement. Bank of America sent letters to over 100,000 homeowners stating that if the borrower literally did nothing that their second mortgage would be forgiven and released, and the debt reported to credit bureaus paid in full. 

http://www.creditslips.org/creditslips/2013/03/fanniefreddie-to-homeowne...

Zoning restrictions also a key factor in foreclosure crisis, scholar says
Academia
Monday, May 13th, 2013
Arnab Chakraborty, a professor of urban and regional planning at the University of Illinois, has identified another factor in the crisis – neighborhood zoning. According to a study published in the journal Housing Policy Debate, communities that zoned too strictly for the development of large, single-family homes have a higher risk for foreclosure when compared to areas that accommodate a broader spectrum of housing options.
 
The Role of Nonprofit Organizations and Public Programs in Promoting Home Rehabilitation and Repair Activity
Academia
Monday, May 6th, 2013

The approximately $300 billion a year private home remodeling and repair market comprises most of the investment for maintaining and improving the nation’s housing stock. Yet many nonprofit organizations and public agencies also serve vital roles, both direct and supportive, in the broader home improvement and repair industry, fulfilling a need that the private sector cannot or does not meet. Indeed, major nonprofit organizations and public funding programs contribute significant support for maintaining and improving the homes of America’s most vulnerable households—including the elderly, disabled, and those with low-incomes—who might not otherwise be physically or financially able to undertake critical home remodeling and repair projects themselves.

http://www.jchs.harvard.edu/research/publications/role-nonprofit-organizations-and-public-programs-promoting-home-rehabilitation

New research finds disparities in mortgage lending to women
Academia
Monday, April 29th, 2013

Female mortgage applicants are less likely to have their loans originated than are male mortgage applicants, Woodstock Institute finds in a new fact sheet. The Institute also found evidence  that female-headed joint applications (a female applicant with a male co-applicant) are less likely to have mortgages originated than are male-headed joint applications (a male applicant with a female co-applicant).

“We would expect to see no significant difference in the origination rates for male-headed joint applications and female-headed joint applications, since the backgrounds of both borrowers on joint applications are considered by mortgage lenders,” said Spencer Cowan, vice president of research at Woodstock Institute. “The fact that there are such large disparities raises troubling questions about potentially discriminatory underwriting.”

http://www.woodstockinst.org/blog/blog/new-research-finds-disparities-in...

IFR Scandal: Magnitude of Mortgage Servicing Failure
Academia
Monday, April 22nd, 2013

A remarkable tabulation of the more than 3 million homeowners found to have been victims of mortgage servicing errors or fraud was released last week by the Fed and other bank regulators.  About 25,000 foreclosures were started while homeowners were in bankruptcy, nearly 200,000 foreclosures were completed on homeowners in approved modification plans, and another 168,000 foreclosures sales were conducted while modification requests were pending.  

http://www.creditslips.org/creditslips/2013/04/magnitude-of-mortgage-ser...

Secret Creditor Reports, Overdraft Fees and the New Unbanked: The Perfect Storm
Academia
Thursday, April 18th, 2013

Did you know you have another type of credit report, something just as powerful as a traditional credit report? Your “other” credit report is an account screening report used by financial institutions to assess risk in their account opening processes. While technically not a credit report, this report can have just as much impact as a credit report and can result in denial of access to bank accounts and much higher costs for your everyday banking services. The problem? Most of us don’t even know this other credit report exists.  

http://www.creditslips.org/creditslips/2013/02/secret-creditor-reports-o...

Revenge of the Clerks: MERS Confronts County Clerk and Qui Tam Lawsuits
Academia
Wednesday, April 10th, 2013

ABSTRACT:

Mortgage Electronic Registration Systems, Inc. (MERS) has faced unceasing controversy from litigators and scholars for its role in foreclosures, its effect on public records transparency, and its role in the housing bubble. While scholarly accounts have described the challenges MERS has faced in foreclosure and bankruptcy courts, this essay seeks to examine the most recent burgeoning challenge to MERS' manner of business: county clerk and qui tam lawsuits.

All around the nation, county clerks and qui tam litigants have begun to file lawsuits against MERS, alleging a number of claims, including that (1) MERS violated state laws requiring assignments to be recorded; (2) MERS used deceptive language to avoid recording laws; and (3) MERS has been unjustfully enriched by depriving county clerks of recording fee revenue. Ultimately, the essay finds that most courts have rejected these claims against MERS, but that such lawsuits remain an expensive risk to MERS. 

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2227789

Leading Economic Expert Says New Foreclosure Numbers Contain Hidden Story About Loss of Family Wealth
Academia
Friday, April 5th, 2013

“The fall in foreclosures is a positive sign but the data hide the fact that the housing market is far from recovered and that millions of families remain at risk of losing their homes” explains Jim Carr, distinguished scholar with The Opportunity Agenda.

"The housing market has not recovered to the point where public intervention is no longer needed or warranted. Millions of families remain at risk of losing their homes to foreclosure and effective foreclosure mitigation efforts remain critical to avoid the unnecessary loss of homes, as well as promote the continuing recovery of the housing market. In fact, one contributing factor to falling foreclosures is that lenders have increased short-sales. While short sales are beneficial for families that need to move, they should not be used in lieu of loan modifications where restructuring loans could enable families to retain their properties. “

http://www.paramuspost.com/article.php/20130316144730965

Why the Independent Foreclosure Reviews Were Doomed to Fail
Academia
Tuesday, April 2nd, 2013

Apparently part of the bank flaks' talking points regarding the foreclosure reviews is that to the extent homeowners harmed by wrongful foreclosures, they were actually drug dealers. The message: we didn't foreclose on anyone who didn't deserve it. We were just foreclosing on some scumbags and doing you all a favor by getting the meth lab out of the neighborhood before it blew up. We're part of the war on drugs. 

This talking point is particularly revealing, I think, both about how seriously our largest financial institutions take sanctity of contract, and about the nature of the whole independent foreclosure review sham.  

Running a meth lab in your basement may be an event of default on a mortgage--but if that's going to be the default that triggers a foreclosure, the bank is going to have to prove that you've been running a meth lab on the property. The lender's relationship with the borrower is contractual, not moral.

http://www.creditslips.org/creditslips/2013/03/why-the-independent-foreclosure-reviews-were-doomed-to-fail.html

REPORT: Concentrated Foreclosures Lead to an Increase in Neighborhood Crime
Academia
Monday, March 18th, 2013

Neighborhoods with concentrated foreclosures experience an increase in crime with each new foreclosure notice issued, according to a new report by NYU’s Furman Center for Real Estate and Urban Policy. The study found that the effects are pronounced in hardest hit neigh borhoods; that is, those with concentrated foreclosures and those with preexisting moderate or high crime levels. Using New York City foreclosure data from 2003 - 2010 and crime data from 2004 - 2008, researchers found that for each property receiving a foreclosure notice, the immediate neighborhood saw a 0.7 percent increase in total crime, a 1.5 percent increase in violent crime, and a 0.8 percent increase in public order crime.

“This research indicates that foreclosures are not just a n issue affecting individual homeowners; they threaten the stability of the surrounding neighborhood as well,” said Furman Center Co - Director Ingrid Gould Ellen.
 
The Bubble According to Todd
Academia
Friday, March 1st, 2013

Todd Zywicki has a long blog post criticizing the CFPB's Qualified Mortgage (QM) rule and using it as a jumping-off point for a call to transform the CFPB's leadership from a single Director to a commission.  Zywicki's primary criticism of the QM rule is that it fails to address what he believes was the root cause of the mortgage default crisis:  strategic borrower behavior, which he believes needs to be addressed through down payment requirements and real liability for mortgage deficiency judgments, so that there is borrower skin-in-the-game.  As Zywicki sees it, the housing bubble and its collapse as the result of ruthlessly strategic borrowers playing lenders.  In other words, the bubble was a safety-and-soundness problem, not a consumer protection problem.  The lenders were just helpless dopes, fooled by coldly rational borrowers.

The blame the borrowers move we see here is the same one Zywicki pulled during the bankrutpcy reform debates leading up to BAPCPA, and again it is made without an empirical basis.

http://www.creditslips.org/creditslips/2013/01/the-bubble-according-to-t...

Too Big to Regulate? The Warren Debut
Academia
Tuesday, February 26th, 2013

Elizabeth Warren’s questioning of financial regulators at her first Senate Banking Committee hearing got a lot of attention for her pointed question about when was the last time any of their agencies had taken a large bank to trial.  It was a telling exchange, but I think the attention it received overshadowed her even more interesting second question (here at 04:29):  why is the market capitalization of the major banks lower than their book value?

Typically companies' market cap is above their book value, but for many large banks, it has been below since 2008. JPMorgan Chase, however, has a book value of $195 billion, but a market cap of just $186 billion.  (Market:Book of 95%)  And Bank of America has a book value is $218 billion, but the market cap is only $129 billion.  (Market:Book is just 59%.)  What accounts for the staggering $89 billion gap? To put things in perspective, a bank with $89 billion in assets would be the sixth largest in the US, just behind Goldman Sachs, and just ahead of MetLife and Morgan Stanley. 

http://www.creditslips.org/creditslips/2013/02/too-big-to-regulate-the-w...

NCCU School of Law Receives Grant to Provide Foreclosure Aid
Academia
Tuesday, February 19th, 2013

The North Carolina Central University School of Law has received $800,000 to provide critical foreclosure assistance to individuals across North Carolina. The funds are provided by the N.C. Housing Finance Agency and originate from a landmark national mortgage settlement with the country’s five largest loan servicers.

Beginning in March, law school will provide foreclosure defense and prevention services to citizens in the Durham area and across the state through its nationally recognized legal clinic and TALIAS (Technology Assisted Legal Instruction and Services), a high definition video-conferencing project that enables clinic attorneys to meet with clients at four partner universities, Elizabeth City State, Fayetteville State, N.C. A&T State and Winston-Salem State, as well as at Legal Aid and Legal Services offices across the state.

http://www.nccu.edu/news/index.cfm?ID=451ACA4B-F5C0-A320-C919BEBCF4BE74F5

Significant Enforcement Mechanisms To Deter Careless Foreclosure Practices In California
Academia
Wednesday, February 13th, 2013

With foreclosures in the United States rising to over 3.9 million since 2008, the residential mortgage industry has come under public scrutiny.1 New legislative and regulatory enactments have followed, and mortgage servicing practices are undergoing significant changes. Under the National Mortgage Settlement (NMS) negotiated by a coalition of state attorneys general and federal agencies, five major mortgage servicers agreed to abide by new servicing standards of conduct and allocate significant financial resources to loan modifications.

Building on the settlement, California enacted the Homeowner's Bill of Rights (HOBR), which imposes many of the same servicing standards on other residential mortgage servicers.2 At the federal level, the Consumer Financial Protection Bureau, an agency created by the Dodd–Frank Wall Street Reform and Consumer Protection Act, recently proposed new regulations that would require compliance with many of the same standards. Collectively, the result will be a host of changes in mortgage servicing and foreclosure practices in California, which will have a significant effect on homeowners and those in the residential mortgage industry.

http://www.lacba.org/showpage.cfm?pageid=14584

The CFPB's Ability to Repay Mortgage Rule
Academia
Monday, February 11th, 2013

The Dodd-Frank Act requires that mortgages be underwritten based on the borrower's ability to repay. Failure to do so is an absolute defense against foreclosure.  There is an execption allowed, however, for Qualified Mortgages.  The CFPB rulemaking defined the term Qualified Morgage. Oversimplifying (but only slightly), a QM is defined as a mortgage that has regular payments that are substantially equal excepting ARMs and step-rate mortgages, and that are always positively amortizing, have terms no longer than 30 years, limited points and fees, and are underwritten in a certain fashion (qualification for purchase/guarantee by Fannie/Freddie/FHA/VA will suffice).  

http://www.creditslips.org/creditslips/2013/01/usury-laws-are-dead-long-live-the-new-usury-law-the-cfpbs-ability-to-repay-mortgage-rule.html

Hackers, Bank Records, and Going Paperless
Academia
Friday, February 8th, 2013

The traditional allocation of losses at a bank was first loss bank, second loss government, but never losses to insured depositors. To wit, if Willie Sutton robs a bank, the money lost is the bank's, not that of any particular depositor.  If bank fails, then the FDIC steps in pays out the insured depositors. It does so on the basis of the bank's books and records.  

The phenomenon of hacking strikes me as changing this loss allocation paradigm:  the hacker might steal from individual customers' accounts, not from the bank vault. If the hacking can be identified, then the traditional loss allocation kicks in. But this depends on the bank having an uncorrupted set of books and records that the hacker hasn't accessed. If the hacker can both grab money from the account and mess with the bank's books and records, then there's a royal mess.  

This scenario doesn't strike me as a major concern for a simple thief whose primary goal is stealing money. The only reason the thief would mess with the books and records would be to cover his trail in an Ocean's 11 type move.
 
http://www.creditslips.org/creditslips/2013/01/hackers-bank-records-and-going-paperless.html
Inside the Foreclosure Reviews
Academia
Wednesday, January 30th, 2013

Yves Smith has a pair of damning posts about the OCC foreclosure reviews (part I and part II). Yves is compiling an extensive documentary record about the way the foreclosure reviews were structured to guarantee a whitewash that would provide little assistance even to borrowers who were seriously harmed. There's plenty of material here for any investigative journalist or Congressional committee to run with, and I really hope that this story gets picked up elsewhere.  

That said, I suspect that the complexity of the review process combined with the general ennui about foreclosure shennanigans will mean that the story doesn't go much further. After five years of regulatory tolerance of outrageous behavior involving loan modifications and foreclosures, it's hard for anyone to get excited about the problems with the review process.  I'm afraid it's become a dog bites man story. This isn't to say that it isn't all awful, but just to express my sense that media--and political--interest in the issue is waning.

http://www.creditslips.org/creditslips/2013/01/inside-the-foreclosure-re...

NLRB and CFPB: Recess Appointments
Academia
Tuesday, January 29th, 2013

The DC Circuit's decision in Noel Canning v. NLRB invalidated an National Labor Relations Board ruling on the grounds that three of the NLRB's five members were not validly appointed, so the NLRB lacked the necessary quorum to act.  The DC Circuit's held on two separate grounds that the NLRB members were not validly appointed.  All of the NLRB members in question were appointed as so-called "recess" appointments by the President, meaning that they were appointed without the advice and consent of the Senate.  First, the DC Circuit held that these appointments were invalid because they were appointed under the Recess Appointments power at a time when the Senate was not in recess.  And second, the DC Circuit held that the appointments were invalid because the Recess Appointments power only applies to vacancies that arise during a recess, not vacancies that are continuing during a recess,

http://www.creditslips.org/creditslips/2013/01/nlrb-and-cfpb-recess-appointments.html

Strategies to Improve the Housing Market
Academia
Tuesday, January 22nd, 2013

Strategies to Improve the Housing Market is a summation of recommendations from experts representing the mortgage origination, servicing and insurance industries, investors, industry associations, federal agencies and regulators, and nonprofits. The key strategies outlined in the paper focus on practical solutions that can be implemented quickly and rehabilitate the housing market to get it on a sustainable path going forward.

http://www.pewtrusts.org/our_work_report_detail.aspx?id=85899443825