Housingwire – Sarah O’Brien reports in this CNBC report that mortgage lending from a community bank or credit union could become easier, under a provision included in a banking regulatory bill under consideration in the Senate. “The Senate bill now under consideration (S. 2155) would let those smaller banks and credit unions still qualify for those legal protections without meeting all of the requirements that typically go with underwriting qualified mortgages,” O’Brien writes. However, even if passed, the legislation is unlikely to lead to a meaningful jump in mortgage lending from said institutions. “The lender also would be required to keep the mortgage in its own portfolio instead of selling it to investors. That would mean the risk remains with the bank,” O’Brien writes. The idea is that the loans are safer with 100% risk retention, which actually has no basis of proof anywhere in the current mortgage market. But, I guess it’s a start. Congressional efforts to better the mortgage market aside, the city of Miami is looking at proposals to fix its affordable housing crisis. Every idea is being considered, apparently. And Jerry Iannelli, is even sifting through, pulling out the worst ideas, and publishing them in the Miami New Times. He goes into more detail, but here they are in no particular order:
- Letting people live in/on top of parking garages
- Building homes out of shipping containers
- Cramming the poor into tiny homes
- Putting them into dorm rooms
- Asking developers to lose money on affordable housing out of the kindness of their hearts
It would be nice to see some of the good ideas, but these points are pretty awful, especially no. 5. “The state hasn’t helped either. Legislators have looted more than $1 billion from Florida’s affordable-housing fund over the last decade and refuse to raise the minimum wage to a livable level,” Iannelli writes. Everyone needs to check out this blog by Mark Fleming, chief economist of First American Financial Corporation and published in Business Insider. It’s titled: “Here’s what faster inflation and rising mortgage rates mean for housing.” Basically we’re in an environment of both and so far, it’s not having a huge impact, but that may change. “The fate of consumer house-buying power in 2018 will depend on the tug-of-war between rising household income and inflation-driven pressure on mortgage rates,” Fleming writes. And when will Millennials begin to start getting into buying houses? Everyone wants to know, and it’s generating some funny results. One is this satirical article that is titled: “Report: Most popular kink among Millennials is role-playing as a couple that owns a house.” It is seems like maybe it isn’t a joke, but be assured it is: “A published study out of Simon Fraser University on generational sexuality has found that the most popular sexual kink among Millennials is roleplaying as a couple that owns a house,” the article states. “While older generations have often used role-play as a way to simulate various power dynamics or unlikely encounters, Millennials are using the popular kink to indulge their own implausible fantasies, both sexually and monetarily.”
Oil, briefly up on lower rig counts, falls on US output outlook
Oil prices fell on Monday on expectations that US output will rise this year, erasing earlier gains buoyed by lower weekly US rig counts and falling US unemployment. Brent crude futures were at $64.93 per barrel at 1233 GMT, down 56 cents from their previous close. US West Texas Intermediate (WTI) crude futures fell 52 cents to $61.52 a barrel. Helping the dip, hedge funds and money managers cut their bullish wagers on US crude oil for the first time in three weeks, data showed on Friday. The reduction came as gross short positions on the New York Mercantile Exchange climbed to their highest level in nearly a month. “Rising production and inventory in the United States has been reducing fund sentiment since it peaked at the end of January,” ING said in a note. Crude prices had risen on Friday and earlier on Monday after the US economy added the biggest number of jobs in more than 1-1/2 years in February. In oil markets, US energy companies last week cut oil rigs for the first time in almost two months, with drillers cutting back four rigs, to 796, Baker Hughes energy services firm said on Friday. Despite the lower rig count, which is an early indicator of future output, activity remains much higher than a year ago. Then, 617 rigs were active, and most analysts expect US crude oilproduction, which has already risen by over a fifth since mid-2016 to 10.37 million barrels per day (bpd), to expand further. “Permian and Bakken shale basins still saw active oil rigs rising by 2 and 3 last week, respectively, and are likely to keep US oil production on (an) increasing trend,” ING said. The United States has become the world’s no. 2 crude oil producer, ahead of top exporter Saudi Arabia. Only Russia pumps more, at nearly 11 million bpd.
23 big retailers closing stores
Toys R’ Us bankruptcy: Is this a retail apocalypse?
Toys R’ Us has filed for bankruptcy right before the holiday shopping season, becoming the latest brick-and-mortar retailer to fall victim to the growth of e-commerce and discount stores. More than 300 companies have filed for bankruptcy in 2017 so far, here’s a look at the most significant casualties. Some of the United States’ most prominent retailers are shuttering stores in recent months amid sagging sales in the troubled sector. The rise of ecommerce outlets like Amazon has made it harder for traditional retailers to attract customers to their stores and forced companies to change their sales strategies. Many companies have turned to sales promotions and increased digital efforts to lure shoppers while shutting down brick-and-mortar locations.
Abercrombie & Fitch
The once-prominent fashion retailer said during its fourth quarter earnings call that it would close as many as 60 US stores in 2018 through expiring leases, while also adding 11 US-based full price store locations. Abercromie has placed an increased emphasis on its direct-to-consumer efforts, with CEO Fran Horowitz called the brand’s “biggest storefront.” Abercromie & Fitch shuttered about 40 store locations in 2017.
The New Jersey-based women’s footwear company filed for bankruptcy last year and announced plans to move forward with a “significant reduction” of its retail locations. While it’s unclear how many of Aerosoles’ 88 locations will be affected, the chain said it plans to keep four flagship stores in New York and New Jersey operational, NJ.com Opens a New Window. reported.
A fashion brand known for its edgy offerings, American Apparel shuttered all of its 110 US locations last year after filing for bankruptcy. The brand has since been acquired by Canada-based Gildan Activewear, which acquired its intellectual property in an $88 million deal.
The Los Angeles-based brand listed liabilities of more than $500 million when it filed for bankruptcy last February. The chain closed 118 store locations nationwide last year, though more than 300 remained in operation under a company-wide reorganization.
The women’s apparel chain closed all of its remaining 168 stores by last May, days after it said it was exploring “strategic alternatives for the company” amid plunging sales.
Bon-Ton Stores Inc.
The struggling department store filed for Chapter 11 bankruptcy, according to court papers filed in February. The chain, which operates 256 stores in 23 states, also announced it plans to close 42 stores in 2018 as part of a restructuring plan.
The Children’s Place
A fixture at shopping malls, the children’s clothing retail said it will close hundreds of store locations by 2020 as part of a shift toward digital commerce.
The pharmacy retailer said it would close 70 store locations in 2017 as part of a bid to cut costs and streamline its business. CVS still operates thousands of stores nationwide.
The sports retailer told investors on March 1 that it would shutter about 110 stores in a push to focus on higher-performing store locations while also opening about 40 new stores. Foot Locker closed more than 140 stores globally last year. “We continue to prune the fleet of under-productive stores and open a few select, high-profile stores,” CFO Lauren Peters said in a call with investors.
Guess announced plans to close 60 of its struggling US store locations in 2017 as part of a plan to refocus on international markets.
The kids clothing retailer confirmed last July that it would close 350 of its more than 1,200 store locations to streamline its business and achieve “greater financial flexibility,” according to CEO Daniel Griesemer.
The electronics retailer said it would close all of its 220 stores and lay off thousands of employees when it failed to find a buyer after bankruptcy proceedings.
The preppy icon, which once thrived under the direction of retail guru Mickey Drexler, is thriving no more. During a November conference call, COO and CFO Mike Nicholson said the number of planned store closings will move to 50 up from the 20-30 originally announced. “We are committed to driving outsize growth with strong e-commerce capabilities complemented with a more appropriately sized real estate footprint” said Nicholson as reported by Fashionista.com. Opens a New Window.
The department store chain closed 138 stores last year while restructuring its business to meet shifting consumer tastes. The retailer also announced plans to open toy shops in all of its remaining brick-and-mortar locations.
After a brutal holiday season in 2016, the clothing chain closed all 250 of its physical stores last January as part of a bid to focus on ecommerce. The closures reportedly resulted in the loss of about 4,000 jobs.
The major retailer said this month it would shutter an additional seven stores that were previously undisclosed and lay off some 5,000 workers as part of an ongoing effort to streamline its business and adjust to a difficult sales environment. Macy’s says it has now revealed 81 of the 100 store closures it first revealed in an August 2016 announcement.
With same-store sales plunging, the upscale fashion retailer said it would close as many as 125 stores to adapt to a difficult, promotional sales environment.
The discount shoe retailer filed for bankruptcy last April and has moved to close about 800 stores this year.
The once-prominent electronics outlet shut down more than 1,000 store locations earlier this year. The brand now operates just 70 stores nationwide, down from a peak of several thousand.
The specialty teen clothing retailer confirmed last April that it would close up to 400 of its more than 1,100 locations and later filed for bankruptcy last May.
Sears Holdings is one of the most prominent traditional retailers to suffer in a challenged sales environment. The brand shuttered 35 Kmart locations and eight Sears stores last July and has closed more than 300 locations last year amid pressure from ecommerce outlets, USA Today Opens a New Window. reported.
Toys R Us
The venerable toy outlet filed for bankruptcy last September amid mounting debt and pressure from wary suppliers. For now, the company says its 1,600 store locations will remain open and operate “as usual,” with no changes to organization structure or payroll. Following the 2017 holiday season, the future of the stores remains unclear.
The teen fashion brand shuttered its 171 stores last year after previously filing for bankruptcy in 2015. Declining foot traffic at malls and pressure from competitors like Zara and H&M contributed to Wet Seal’s demise.