Despite Spain’s dismal economic news last Friday, the DOW still ended up for the week at 12,822 this past Friday. The rain in Spain is falling mainly on Spain-as it were. Stocks rose for the second week in a row following better than expected corporate earnings and the largest weekly jump since June. Fed Chief Ben Bernanke spoke to Congress last week warning them that it is not just up to the Fed to jump start the economy. He did say his group is looking into ways to help but purchasing securities isn’t the only answer. He said Congress has to act on their own in order to direct the U.S. economy.

Real Estate, Mortgage Industry and Other Economic News

“Forecast Sunny for Texas, S.A.” was a headline in last week’s S.A. Express News. The article stated that Texas is forecast to have the third-highest GDP of all the states this year. Only Alaska and North Dakota could make similar claims. In addition Texas’ largest cities were identified as being among the strongest jobs generators in the southern region during the 12 months that ends in June 2013. Austin led the list in job growth, while San Antonio ranked eighth. However, S.A. unemployment rate dropped to 6.7%-the third lowest in the south. Texas also leads the nation in foreign trade.

I usually try not to write about negative news-but this once I ask for your permission. The news I speak of is about the CFPB. The is the newly created regulatory arm of the Dodd-Frank bill that was intended to protect consumers-The Consumer Financial Protection Bureau. This sounds good on the surface but, after reading and hearing of some of the effects this bureau will have on the Real Estate markets are profound. What’s ironic is that Dodd-Frank created a lot of our economic mess back when we had mortgage loans that did not require verification of income or assets. Now, this regulatory seems to be bent on protecting consumers by limiting loans across the board by QM’s-quality mortgages. QM’s will be what lenders are going to be required to prove to the CFPB they are delivering mortgages without risk of failure-and there lies the problem. No lender is going to do such without tightening lending further. By further I mean requiring larger down payments, basically 20 percent down loans. If that is the case-FHA, VA, Texas Vet, USDA will be no more. Imagine the effect that will have on our economy. We all know how Real Estate is tied to our economy. By taking away the American Dream of home ownership is not the way to lead America out of our current doldrums. However, creating an environment that is positive for all American consumers is what our country needs. I ask that you please contact your current State Legislature and U.S. Congress person and tell them to stop this new bureau from destroying our way of life.

(This article is for informational purposes only. Do not use it as financial advice. For questions/comments contact Tony Stevenson at 1.800.460.6990 or email: tstevenson@swbc.com)