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» VISIT US ONLINE @ DSNEWS.COM 29 DROP IN REO SALES IS DRIVING CONTINUED DECLINE IN CASH SALES SHARE e share of total residential home sales in May that was made up of all cash sales was 31.9 percent, down from 35.1 percent in May 2014, according to CoreLogic's Cash Sales Data for May 2015. e cash sales share has declined year-over- year every month since January 2013; May's share marked 29 consecutive months of declines for cash sales as a percentage of total home sales. According to CoreLogic Chief Economist Frank Nothaft, a drop in REO sales has been the main force behind the continuing decline in cash sales share. ough REO sales comprised more than half of all cash sales in May, REO sales accounted for only about 6.4 percent of all home sales. By comparison, in January 2011 when all-cash sales made up 46.5 percent of all home sales, REO sales accounted for about 23.8 percent of all home sales, according to CoreLogic. Resales typically account for the majority of home sales, as they did in May (82 percent). "e primary reason for the decline in cash sales share has been the drop in REO sales," Nothaft said. "Since 2009, more than one-half of REO have been bought by all-cash buyers. e REO share of all home sales peaked at 24 percent in January 2011 and fell to 6 percent of sales in May of this year. e drop in REO sales explains most of the 15-percentage-point decline in the all-cash share between January 2011 and May 2015." May 2015's cash sales share of nearly 32 percent was down by 31 percent from the peak of 46.5 percent recorded in January 2011. CoreLogic estimates that if the cash sales share continues to decline at the same rate as it did this May, the cash sales share should fall back down to its pre- crisis level of 25 percent by the middle of 2017. REO sales still had the largest cash share in May, as they have had historically, with 56.1 percent. It was the only category that experienced a year-over-year cash sales share increase in May, according to CoreLogic. Resales had the next highest cash sales share with 31.5 percent. Short sales comprised 30.1 percent of all cash sales in May, and newly constructed homes accounted for 14.7 percent of all cash sales for the month. e states with the highest cash sales share in May were Florida (47.8 percent), New York (45.8 percent), New Jersey (45.8 percent), Alabama (44.2 percent), and Michigan (38.4 percent), according to CoreLogic. Out of the nation's top 100 core-based statistical areas (CBSAs) measured by population, four of the five with the highest cash sales share were located in Florida: West Palm Beach-Boca Raton-Delray Beach had the highest cash sales share with 58.1 percent. North Port-Sarasota-Bradenton was second with 55.9 percent, followed by Cape Coral-Fort Myers at 55 percent, Detroit-Dearborn-Livonia, Michigan, with 54.6 percent, and Miami-Miami Beach-Kendall with 54.6 percent. e CBSA with the lowest cash sales share was Syracuse, New York, with 11.6 percent. FED OIG TO CONDUCT SECURITY AUDIT ON PERSONAL CONSUMER DATA COLLECTED BY CFPB e Federal Reserve's Office of the Inspector General (Fed OIG) recently updated its work plan to include a security audit of the data being collected on consumers by the Consumer Financial Protection Bureau (CFPB). e CFPB collects, handles, and stores various types of consumer information and personally identifiable information (PII) as part of its mission, according to the work plan. e data being collected by the CFPB is defined as data that could be used to identify specific individuals or distinguish individuals from one another. "We will review the extent to which the CFPB has assessed the risks associated with the collection, maintenance, storage, and disposal of privacy data and PII and applied appropriate information security controls and protection over the data to mitigate those risks," the work plan said. "We will focus on (1) CFPB systems that house PII, (2) access to PII, (3) disposal and destruction mechanisms, (4) the handling of privacy incidents, (5) privacy training, and (6) National Institute of Standards and Technology privacy controls." Several lawmakers and other financial industry groups and associations have expressed concern over whether or not the CFPB's collection of personal data is an invasion of privacy. "CUNA (Credit Union National Association) has raised a number of concerns about the CFPB's storage of information in the CFPB's database, particularly if the personal information collected by the bureau is inadvertently disclosed when consumer complaints are filed with the bureau," CUNA said in a press release. "CUNA has urged the CFPB to take steps to minimize privacy risks." In September 2014, the Government Accountability Office (GAO) released the results of a comprehensive study confirming that the CFPB was collecting financial data on 600 million Americans. e study was requested by U.S. Sen. Mike Crapo (R-Idaho), who at the time was the ranking member of the Senate Banking Committee. "e CFPB's massive data collection effort is an unwarranted, unwelcome intrusion into the private financial lives of millions of Americans," Crapo said when the GAO's report was released. "is GAO report confirms what the Bureau would not—that it has been collecting information on up to 600 million American financial accounts, and it does not have the proper safeguards in place to protect the information it is collecting. At a time when data- and identity-related crimes are at an all-time high, the last thing the American people need is one more federal agency collecting their private financial information." e Fed OIG's work plan also listed as one of its ongoing projects the audit of the CFPB's controversial Consumer Complaint Database. "In June 2012, the CFPB became the first federal regulator to publicly share individual- level consumer financial complaint data," the work plan said. "While the Consumer Complaint Database initially contained only credit card complaints, the CFPB has extended the database to other consumer financial products and services covered by the CFPB. Our audit objective is to assess the effectiveness of the CFPB's controls over the accuracy and completeness of the public complaint database."

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